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Sale of Students Loans Bill

My Lords, I hope I can offer the noble Baronesses, Lady Verma and Lady Sharp, some concrete encouragement, in my few remarks here, that we should have a fruitful discussion at Third Reading on this matter. As we have heard, the amendment sets out the principles of how to ensure good value for money in any loan sale. The Government are wholeheartedly behind these reasons and endorse them. Indeed, they closely follow the principles that we have placed on the record during earlier stages of the Bill as central to our approach to loan sales. At this stage, however, we need to resist the amendment, and I shall take a few moments to explain that apparent paradox. For each sale of student loans there will be a rigorous assessment of value for money. There is no question of a fire sale or of the Government not being prepared to wait. With regard to any continuation of the current market turbulence, as I said in Committee, so far as that turbulence translates into poor value for money of any sales of student loans, we would of course not go ahead with a sale at that time. I stress that again for the record. Let me be clear: for the sale of student loans, there will be a rigorous assessment of value for money. If Ministers and the departmental accounting officer judge that a sale at any given time does not represent good value for money, it will not go ahead. That follows the required procedure used in every public sector organisation. We have set out the principles of our approach to value for money. I appreciate the concerns of the noble Baroness, Lady Sharp. We are talking about extremely large sums of money and I recognise the House’s concerns about the order of magnitude here, but our view is that these principles should not be translated into a set of statutory tests to be passed in advance of a sale. We think it is right for that judgment to be exercised by the accounting officer and the Government of the day, and for Parliament subsequently to scrutinise that judgment. If, in contrast, we create a set of legal tests to be met before a sale could be deemed lawful, we risk taking that decision away from the accounting officer and Government and taking away the security that Parliament will have to scrutinise the terms of that sale. The amendment would significantly increase the level of uncertainty about the sales process for purchasers, something that will undermine the drive for value for money. Purchasers may feel uncertain about the prospect of a judge examining the particular considerations surrounding the sale, finding that the tests had not been set and potentially striking down the sale. Any such uncertainty could deter the purchasers or affect the price they would pay. Far from guaranteeing good value for money, which we are all aiming to achieve, the test in Amendment No. 2 could work against that aim. It would also undermine the responsibility of the accounting officer, which underpins current procedures for protecting public funds from misuse, but I reiterate that we are completely at one on the thrust of what the amendment is trying to achieve. Over the long-term programme of sales, we envisage that the Government will be able to draw on the expertise of the National Audit Office evaluation and continuing parliamentary scrutiny to ensure the best possible approach to obtaining good value for money. Establishing a set of tests in primary legislation at the outset—