The Secretary of State may by order establish a body corporate to be known as “the Scottish Further Education Funding Council” (referred to in this Part of this Act as the “Funding Council”).

An order establishing the Funding Council shall prescribe such of the functions of the Secretary of State under this Part of this Act, not being functions mentioned in subsection (3) below, as may be exercised on his behalf by the Funding Council.

For the purposes of subsection (3) above, the functions there specified include such functions as applied or modified in pursuance of an order made under this Part of this Act.

The Funding Council shall, notwithstanding that they are exercising functions on behalf of the Secretary of State, be entitled to enforce any rights acquired, and shall be liable in respect of any liabilities incurred (including liability in damages for wrongful or negligent acts or omissions), in the exercise of those functions in all respects as if the Funding Council were acting as a principal; and all proceedings for enforcement of such rights and liabilities shall be brought by or against the Funding Council in their own name.

Schedule 1 to this Act shall have effect as regards the constitution and supplementary powers of and other matters relating to the Funding Council.

Without prejudice to section 7 of this Act, the Funding Council shall provide to the Secretary of State advice and assistance in connection with such of his functions under this Part of this Act as he may, from time to time, determine.

The Funding Council shall provide to the Secretary of State such information and advice as he may, from time to time, require as regards the provision of further education (within the meaning of section 1(5)(b) of the 1980 Act) in Scotland.

The Funding Council may provide to the Secretary of State such information and advice as they think fit as regards the provision of further education (within the meaning of section 1(5)(b) of the 1980 Act) in Scotland.

Advice, assistance or information provided by the Funding Council in pursuance of this section shall be provided in such manner as the Secretary of State may, from time to time, determine.

The Secretary of State may give the Funding Council directions of a general or specific character with regard to the discharge of their functions, other than their functions under section 8 of this Act; and it shall be the duty of the Funding Council to comply with such directions.

A direction given under subsection (1) above may be varied or revoked by a subsequent direction so given.

Nothing in section 7 of this Act or in any order made under that section shall be taken to prohibit the exercise by the Secretary of State of any function conferred on him by this Part of this Act whether or not such function has been or has purported to have been exercised by the Funding Council in pursuance of that section or any such order.

The Secretary of State may pay to the Funding Council in respect of any expenditure incurred or to be incurred by them in connection with their functions under or by virtue of this Part of this Act grants or other payments of such amounts as he may determine.

The power of the Secretary of State under subsection (2) above to impose conditions shall include power to impose a condition requiring the Funding Council to impose, in such cases as may be specified in the condition, a condition under subsection (2B) below in relation to any grant, loan or other payment made by the Funding Council in the exercise of any function prescribed by an order under section 7(2) of this Act.

No condition under subsection (2B) above shall apply in relation to any fees which are payable, in accordance with regulations under section 1 of the M1Education (Fees and Awards) Act 1983 (fees at universities and further education establishments), 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 (persons connected with the United Kingdom etc.).

A condition under subsection (2B) above shall impose, in the event of a failure by a board of management mentioned in paragraph (a) of that subsection or, as the case may be, of such other person as is mentioned in paragraph (b) of that subsection to comply with the requirement specified in that subsection, such further financial requirements on that board or person as may be specified, which may include requirements relating to the repayment, with or without interest, of the whole or any part of any sums received by that board or person in respect of the grant, loan or other payment in question.

Where the functions of the Secretary of State under section 4 of this Act are exercised by the Funding Council, the prohibition contained in subsection (3) of that section shall not apply in relation to conditions imposed under subsection (2B) above.

A condition imposed in pursuance of subsection (2) above shall not have effect as regards anything done, or omitted to have been done, before the date the condition was imposed.