After section 12 of the 2005 Act insert—

“12ARegional strategic bodies: administration of funds

(1)

A regional strategic body is, for the purposes of—

(a)

providing support (whether financial or otherwise) for the activities specified in subsection (3); and

(b)

exercising its other functions,

responsible for administering the funds mentioned in subsection (2).

(2)

The funds are—

(a)

all funds made available to it under section 12(1)(c); and

(b)

any other funds made available to it for those purposes.

(3)

The activities are—

(a)

the provision of fundable further education and fundable higher education by the regional strategic body's colleges;

(b)

the undertaking of research among those colleges;

(c)

the—

(i)

provision of such facilities; and

(ii)

carrying on of such other activities,

by those colleges or any other person as are necessary or desirable for the purposes of or in connection with an activity specified in paragraph (a) or (b);

(d)

the provision of services by those colleges or any other person for the purposes of or in connection with an activity specified in paragraph (a) or (b).

12BFunding of assigned colleges

(1)

A regional strategic body may make grants, loans or other payments—

(a)

to any of its colleges in respect of expenditure incurred or to be incurred by the college for the purposes of any of the activities specified in subsection (3)(a) and (b) of section 12A;

(b)

to—

(i)

any of its colleges; or

(ii)

any other person,

in respect of expenditure incurred or to be incurred by the college or person for the purposes of any of the activities specified in subsection (3)(c) and (d) of that section.

(2)

A payment made under subsection (1) may (in addition to any condition which is imposed in pursuance of conditions imposed on the regional strategic body under section 9) be subject to such terms and conditions as the regional strategic body considers it appropriate to impose.

(3)

Terms and conditions imposed under subsection (2) may, in particular, relate to—

(a)

the repayment (in whole or in part) of a payment in such circumstances as the regional strategic body may specify;

(b)

the interest payable in respect of any period during which a sum due to the regional strategic body is outstanding.

(4)

A condition imposed on any of the regional strategic body's colleges in pursuance of section 9(5A) is to make provision that is to apply if the college fails to comply with the requirement referred to in section 9(6).

(5)

A condition imposed on any of the regional strategic body's colleges in pursuance of section 9(5A) does not apply in relation to any fees which are payable, in accordance with regulations under section 1 (fees at universities and further education establishments) of the Education (Fees and Awards) Act 1983, by students other than those falling within any class of persons prescribed by such regulations for the purposes of subsection (1) or (2) of that section.

(6)

Terms and conditions imposed under subsection (2) may not relate to the application by the college of any sums which were not derived from the Council.

(7)

Before imposing terms and conditions under subsection (2), a regional strategic body must—

(a)

except where it considers that it is not expedient to do so, consult the college to which the payment is to be made; and

(b)

if it considers it appropriate to do so, consult such persons as appear to it to represent the interests of its colleges or any class of them.

(8)

In making payments under subsection (1), the regional strategic body is to have regard to the desirability of—

(a)

encouraging its colleges to maintain or develop funding from other sources;

(b)

preserving any distinctive characteristics of particular colleges.”.