Further Education Funding

Wednesday 4th November 2020 Westminster Hall

[Stewart Hosie in the Chair]

14:30

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

I beg to move,

That this House has considered funding for further education.

It is a pleasure to serve under your chairpersonship, Mr Hosie.

The question before the House today is one that has been considered many times over recent years, which is testament to its importance. I am grateful to hon. Members for participating in this vital debate. Indeed, the debate might never have been so necessary because, as for all aspects of society, coronavirus has shone a light on the devastating impact of austerity and the rampant inequality in our society. That is particularly apparent in the further education sector.

Education is potentially the most powerful tool for lifting people out of poverty, with further education presenting unique opportunities to do just that. Not only does FE prepare many school leavers for higher study and provide them with the skills for meaningful employment, but it allows many adults to learn, whether that means new skills or building on existing ones. The FE sector and the many colleges and sixth forms within it have proven an accessible source of further and higher education, providing opportunities for learning to students who are disproportionately from more deprived areas and disproportionately from black, Asian and minority ethnic backgrounds. It is of note that the 16 to 19-year-old students in colleges are twice as likely to claim free school meals as those in schools or sixth forms.

Given the deep cuts that the sector has experienced in recent years, it has attracted many nicknames. I agreed with the Secretary of State for Education when, in what can only be described as a total lack of self-awareness, he came up with one more, saying that the FE sector stood for “forgotten education”. I am sure that many other Members have reminded him that he has voted for cut after cut to the FE sector since 2010 but, in case they have not, I will take this opportunity to detail briefly the impact that forgetting the sector has had.

The Government have started talking up further education and skills, but colleges and sixth forms continue to have to deal with the lingering reality of austerity, with grave concerns about the prospects of many colleges in the future. As schools and colleges began to return, the Association of Colleges estimated that colleges face a £2 billion shortfall this academic year, despite the Government investing an extra £300 million for the year. An assessment by the Institute for Fiscal Studies found that to bring spending in the FE sector to 2010-11 levels would cost a total of £1.1 billion. The citing of such vast sums from the AOC and IFS shows as plainly as possible the enormity of the challenges that face us.

I do not doubt that the Government want to see the potential of the further education sector utilised fully. Time and time again, however, it feels like the issues that have arisen because of prolonged underfunding are papered over, instead of addressed fully. A report from the National Audit Office found that although there were strong measures to prevent colleges falling into financial difficulties, they were extremely costly. Many colleges remain in financial difficulty.

I agree with the assessment of the Select Committee on Education which, in its report on a 10-year plan for school and college funding, said that the post-16 education sector had not moved on following the financial crash in the same way that other sectors had, that political decisions had created the lag in post-16 education and that that had a detrimental impact on outcomes while undermining efforts to tackle social justice. Without delving into the lack of lack of funding for managing estates, and the additional costs incurred by colleges and sixth forms, the further education sector clearly needs serious investment, not only to survive in the long term but to deliver the widespread upskilling that our country needs to see as we come, I hope, to the end of the coronavirus pandemic.

I cautiously welcome the Prime Minister’s announcement of a lifetime skills guarantee. With such significant job losses across the country, people need the opportunity to learn new skills or improve existing ones. I also welcome the devolution of funding for adult education, such as the £36 million that Sheffield city region is set to take responsibility for. Local leaders understand the needs in their area best and are most connected to those who will benefit from these funds. However, I do not believe that these funding streams are a fix-all that addresses the serious need for a financial overhaul of the further education sector, which must come from a national approach.

The skills package fails to address the key skills challenge and the 68% drop in qualifications for health and social care workers since 2010. Funding for Sheffield city region is not available to be used until August 2021. While its promises seem bold, I fear that it is too little, too late. For all the talk of ambition, the plans coming forward are too slow and not bold enough in what they hope to achieve.

The Association of Colleges has once again highlighted the enormity of the task at hand. It has called for an extra £3.6 billion to upskill those at greater risk of the economic impact after the coronavirus pandemic moves on—whenever that will be—as well as ensuring quality places for every 16 to 18-year-old and expanded traineeships and apprenticeships. That is echoed by the Association of Employment and Learning Providers, which goes further, calling for a one-off skills package of £8.6 billion and urging Government to allocate £4.5 billion of that to address the serious underfunding of adult education.

The coronavirus pandemic has highlighted and exacerbated the digital divide in the country. When schools and colleges are shut, students have to adapt to online learning overnight, which requires access to good quality IT equipment and reliable broadband. However, many students from low-income backgrounds, who did not have access to a laptop or PC at home, and had until then relied on using library computers, were left unable to complete remote learning or had to work from a unsuitable device, such as the small screen of a phone.

During the lockdown, I had a Zoom call with the Red Cross, which works very successfully with hard-to-reach learners. I was told that many of those learners’ parents only had a pay-as-you-go phone. If they were to take part in the Zoom call and get the support they needed, their data could be gone in minutes, because a mobile phone is not a way to try to learn. That makes it even harder for young people to access the learning that their better-off peers can.

The Government have made clear that they expect colleges and sixth forms to use existing funds, namely, the 16-to-19 bursary and the adult education budget, to purchase IT equipment. There is concern among the industry that further education providers may struggle to meet this cost, and that the provision of pre-16 schemes should be extended to the further education sector.

Students without access to effective equipment are at real risk of being left behind if the Government do not step in to ensure that every further education student has the tools that they need to complete their education in these challenging times. Funding for colleges to supply students with this equipment has fallen short of what is necessary. Although colleges have welcomed back students, many are moving once more to online learning.

The Government announced, at the 11th hour, changes to the criteria for schools to receive laptops, a decision that the NASUWT says has meant schools receiving up to 80% less than promised. With many pupils and students having to self-isolate, remote learning will be a feature of our educational system for a long time to come. The issue is, therefore, still pertinent, and it is not too late for the Government to step in and fix it while the academic year is still quite new.

We are at a crossroads. The country has faced and continues to face one of the greatest challenges in living memory. After the second world war, our leaders knew that we could not go back to business as usual and, in the wake of such destruction, rebuilt our country. The economic challenge we will face in the months and years to come cannot be overcome by bringing public funding back to 2010 levels. We must go further to meet the challenges that lie ahead, and that takes vision; I know that the Minister has that vision, but I fear the Treasury does not share it.

I am looking forward to hearing the contributions in this debate, and hope that the Minister will listen to the wide range of voices in support of the FE sector ahead of the publication of the White Paper. I hope that when it is published, it will finally provide the funding the sector has been calling for, year in and year out, and that this funding will allow it to play its part in rebuilding our economy. I hope that our people, young and old, will be supported by the Government to face a very different post-coronavirus world in which they will thrive, and I urge the Minister to ensure they are not abandoned to a future without hope.

[Stewart Hosie (in the Chair)]

Before I call the next speaker, I want to start the summings-up at around 3.38 pm, but given that we are slightly sparse, I am not going to put on a time limit at the moment, even an informal one: just ca’ canny.

14:41

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

As usual, it is a pleasure to serve under your chairmanship, Mr Hosie. As my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) has said, at a time like this, with so many people losing their jobs, further education and its ability to agilely shift to retraining people are particularly important. It is very concerning that we have seen real financial sustainability issues in FE, a topic that the Public Accounts Committee has raised a number of times. That sector has come into this crisis working from a challenging base, with its funding base for adults in 2020 still at 2013 levels.

As the Minister knows as a former member of the Public Accounts Committee, this sector has been on a difficult trajectory for seven years. She has been involved in some of those discussions, so I do not need to run through the figures with her: I am sure that as a former member of the Public Accounts Committee and with her business background, she is hot on the numbers, and the numbers matter here. That base funding causes a lot of the difficulty and the inability to be as agile as the sector can be, because of the way in which the sector is used to working with adults—of course, it works with young people as well, but I am mainly talking about adults today. Those adults have sometimes come from challenging or different educational backgrounds, and have not followed a traditional trajectory in training: level 2, level 3, and so on.

We on the Public Accounts Committee will be looking again at this topic; that inquiry is coming up, and we will increasingly be looking at sixth-form colleges as well, because that is obviously a concern. However, I particularly want to talk about FE today. There are particular issues with the covid pandemic, so I will talk about funding first, and then some of the practical issues.

[Mr Toby Perkins (Chesterfield) (Lab)]

We are here for a debate about funding for further education, which my hon. Friend is coming to, and many of us are concerned about the overall amount of funding. However, alongside that, we are seeing things such as the Government sending £330 million allocated for skills back to the Treasury because it has not been able to be spent under the apprenticeship levy. There are other examples, which I will come on to, where the issue is not just the overall amount being spent, but the fact that how it is being spent means that it ends up not being used.

[Meg Hillier]

I thank my hon. Friend for his intervention, and I am going to touch on the apprenticeship levy. It was an interesting and bold policy initiative, but as he has rightly highlighted, it has its pitfalls and, indeed, is not always going to the right places. If I have time, I will touch on that as well, but I want to get the immediate funding issues around covid on the record first.

As the Minister will know, the last time that FE colleges were encouraged to come together to save costs—part of the challenge of living on a low funding basis—Hackney College became part of New City College, a consortium of colleges. It has been keen to keep recruiting 16 to 18-year-olds, because in the current climate it wants to make sure that it does not turn students away. It has managed to recruit 200 above its funded target, which is costing it £1.2 million a year: that is a cost to the college directly, money that it is having to take out of its own base costs if it is not funded, and I hope that the Minister will look at that issue. We should not be turning people away from study, and it is great that New City College is not turning people away, but obviously that money has to come from somewhere, so another part of the system is losing out.

The funding tolerance for adults is also a very interesting point. In London—this is a happy circumstance for my constituency—if the colleges meet 90% of their adult rate, meaning that they keep those students in place, they get 100% of the funding. Nationally, the figure is 97%. It is difficult enough to keep in place adults from a different education trajectory who are perhaps juggling families and sometimes jobs as well as study; it is harder than if people are in compulsory education. Add to that the complexities of covid: ill health, and people perhaps dropping out after having to self-isolate because they had covid or have long covid. They can enrol and lose out. That means the figure can very quickly drop below 97%.

Nationally, the Minister needs to look at the tolerance level. As she knows, I am not for wasted money or deadweight money; it is certainly not something I would advocate. There is a very high threshold at the best of times but, with covid, it is particularly challenging. A bit more tolerance would enable colleges to plan and focus. As agile and clever as they are, I am sure they could find ways to fill gaps in those places. I will come to explain how they can be really agile by providing short courses for people.

The costs of covid compliance have to be mentioned, because it is expensive. Fewer people are in the building, and there is less activity in some ways. New City College spent £200,000 from its reserves to support students in the first lockdown. As the Minister knows, many colleges up and down the country have run out of money due to their challenging financial circumstances. There will be a crisis point if those colleges are not supported to survive.

We do not ever want to see a college go bust. Colleges are the main education providers in small towns, but they might be hampered by previous loans from Government, some of which we know have been converted to grants. Even then, however, such colleges are in great difficulties financially. If they go bust, where will the adults in that area go? The Government have an agenda of levelling up areas of the country that have traditionally not recovered from some of the post-industrial job losses in previous decades. If they lose their FE colleges, where will the training come from for the people who are now losing jobs in some of the sectors that are particularly suffering because of covid?

I want to touch on capital funding. It is good that the Government have said they will match-fund capital expenditure to ensure that colleges can patch themselves up, but the constraint of having to spend the funding in the current financial year is challenging. We are already in November. Although the announcement on funding was made a while ago, some of the projects that could be delivered are a bit longer range or are very disruptive to the working of a college. Add in the covid measures and it becomes even more challenging. We all know that a lot of work goes on in schools and colleges during the long summer recess or the breaks, but the summer recess comes after the end of the financial year. Although I recognise that it is difficult in some ways, it is not beyond the wit of Government to look at extending the deadline and perhaps making it a two-year capital funding programme, so that colleges can plan.

The Minister knows as well as I do that if things are done in a rush because the money has to be spent by a certain point, they are not necessarily done well, or the right things are not necessarily done. We should allow colleges to spend that capital money as effectively as possible. It could be spent on better covid measures to enable people to work more easily in those circumstances, or on enhancing facilities for the sort of job creation that we will need and that they will need to train for. I will touch on that in a moment.

It would be good if we could have more flexibility. An example of why this is needed comes from Hackney College, where there is an atrium with a leaking roof. It is a £500,000 job. The matched funding is very welcome, but it is a big job and will really disrupt things. If that has to be done before the end of the financial year, it will be challenging—if it even gets done.

I will move on to how we train people for the jobs that will still exist after covid, and for the ones that will emerge. I hope the Minister will tell us what shared intelligence there is of the local and regional skills that will be needed. Having a strong London authority means that there is some understanding of the jobs that are available in London but, given the nature of their work, a lot of London workers now do not have to live in London. There will be an interesting and challenging job for everybody in working out where people will be and where the jobs will be available. If somebody is working in care or certain other jobs, they clearly have to be physically present, but that is not the case for lots of jobs.

There really needs to be some analysis. I hope the Minister can shed some light on what analysis is being carried out not just in her Department, but across Government, about what jobs and skills might be needed. It might seem early to start thinking about that, but it is never too early to start planning. Things might shift and they might change, but if we do not start thinking about it now, there will be far more people without jobs in the right places. Imagine retraining for a job that does not exist in a year’s time because we have not got it right. We need to be thinking about that and sharing intelligence as much as we can. I am not saying the Government have all the answers, but they have a very strong role in co-ordinating this effort.

We need to move quickly. Existing mechanisms for funding new courses are very slow. Let us consider some of the jobs for which need might be rising. With Brexit looming, the health and social care sectors face a real struggle. I know from looking at the issue with the Public Accounts Committee that getting people to work in social care in the Minister’s own constituency is very challenging because of the costs. If the Government are serious about levelling up and investing in infrastructure projects, construction will be vital. Digital enablement of all sorts of careers will also be important. I happily represent Hackney South and Shoreditch, where understanding how to work digitally and adapting quickly has been a hallmark of people’s success in surviving and coming through the pandemic so far, so it is definitely something in which we need to train people.

Those examples are the reason for my hunch about what might be necessary. Putting people on six-month intensive courses—my local college reckons that that could be done for between £3,000 and £3,500 per person— could quickly get them out of unemployment, off benefits and into work. Alternatively, as they may still be on furlough with their job winding down, facing redundancy even if their sector survives, it might be better to train them before they have to claim support from the state.

There is a constraint, however, about which I hope the Minister will give us some reassurance, even though it is not her remit alone. Those six-month intensive courses, for which I just gave the costs, would entail only 15 hours per adult per week, because under the current rules the college cannot start planning a longer course. If anyone studies for 16 hours or more, they are no longer eligible for benefits. That trap will be devastating as we come out of covid. People will be trapped on benefits because they have lost their jobs, but they will not be able to train for other jobs because they would no longer be able to claim benefits. We would find ourselves in a Kafkaesque circle of doom.

I hope the Minister will try seriously to tackle that. If that time threshold were raised, colleges could be so much quicker and more efficient in targeting and supporting adults back into work. Funding for that sort of short-term, swift reskilling would usually come from the approved national skills fund, which is, again, something over which the Minister can have some very direct influence, I hope.

That fund is normally released in the summer. We are now in November and already in our second lockdown, meaning that people will lose their jobs. The Minister knows that one of my bugbears about all Governments is what I call cost shunting, which is something that the Public Accounts Committee highlights all the time. If we do not get that money to train people now, many of them will start claiming benefits and there will be all sorts of ramifications for their lives, homes, livelihoods and so on. That will cost them, the state and the taxpayer a lot more in the long run.

My hon. Friend the Member for Sheffield, Brightside and Hillsborough mentioned the apprenticeship levy. The Public Accounts Committee has looked at this and we were concerned that, in order to get the money out of the door, it is quite easy for companies to put money into MAs and other higher-level apprenticeship programmes. I think we would all acknowledge that the levy was really intended to train people in much lower-level careers, so that they could either reach higher levels or change career.

I do not have all the answers, but the Government need to look at how the levy works. As the shadow Minister, my hon. Friend the Member for Chesterfield (Mr Perkins), has said, it is criminal for that money to be levied, only to then go back into Treasury coffers. I am sure that we would all back the Minister if she took on the Treasury and demanded that that money be syphoned back into education. We might find a harmonious point of cross-party agreement in these challenging times. I launch that campaign here and now, and tempt the Minister to agree with it when she responds.

I am sure that the Minister has our support to act fast. We need safeguards in place, but I have no desire to see more of my constituents lose everything just because we have a bureaucratic deadline of next summer rather than November and the 16-hour rule that prevents those who are studying from claiming benefits. We need to unjam the system so that people who want to work and retrain are encouraged to do so with every tool in the box. Colleges stand ready and waiting. I pay tribute to East London Advanced Technology Training, which trains people in my constituency but is already losing students because of the loan scheme.

Will the Minister also look at the loan scheme for level 3? Many people will not take on the debt now, but they need support to ensure that they are retrained and can work and support themselves. My constituency is poor, but there is no poverty of ambition. I now have the new poor: people who had good jobs and want to work again. They just need a little leg up. They do not want a handout—they want a hand up. I hope that the Minister has heard me and will answer my questions.

14:55

[Anthony Mangnall (Totnes) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) on securing this important debate. I also congratulate the hon. Member for Hackney South and Shoreditch (Meg Hillier). She made all the points that I intended to make, so I can be nakedly self-interested about my own constituency and one of my FE colleges. She raised a number of very important issues, not least this Kafkaesque circle of doom, which I am not sure any of us would want to see our constituents in. I thank her for her comments and look forward to listening to the other speeches. I apologise that I may have to leave early, as my name is on the call list for the main Chamber.

All of us across this House recognise the power of education in boosting the life chances of young people across our country and for growing our economy. None of us can question the importance of higher education, not least in light of the covid pandemic. The progress being made towards delivering mass testing, new and more effective treatments, and, most importantly, a vaccine that will allow us to resume our normal daily lives, is being led by British scientists with first-rate degrees from our world-leading universities, which are frequently in the top 100 of the global league tables. Graduates are supporting cutting-edge technology sectors, including in the photonics industry, which has a strong presence in my constituency through the Electronics and Photonics Innovation Centre in Paignton.

That said, it is fair to say that successive Governments have focused too much on higher education to the detriment of our further education system. In our eagerness to send as many young people to university as possible, we have failed to deliver sufficient options to empower those who do not feel that higher education is right for them.

In my previous life, I worked in Singapore. Any Member doubting the transformational impact of further education on boosting life chances and economic growth should look to that country. In the immediate post-war period, Singapore was less wealthy than Jamaica. It had no natural resources and so Singapore’s first Prime Minister, Lee Kuan Yew, set out a strategy to develop the country’s only available natural resource—its people. Between 1960 and 2010, Jamaica’s GDP per head of population increased by 30%. Singapore’s increased by 1,100%. A journal article produced by the University of Southern California compared the two countries’ approach to education and the economy across this period. It concluded that the different outcomes were largely as a result of Singapore’s heavy investment in vocational and technical education, and its approach of actively seeking to boost the prestige of VTE. We must and can learn from Singapore by their example, and by investing more into further education and championing the role it plays in helping young people to achieve their dreams. The hon. Member for Hackney South and Shoreditch made a good point that there is no poverty of ambition anywhere in this country and that is something we should harness.

I am fortunate to have in my constituency South Devon College. It is the jewel in the crown of FE colleges and I am working closely with the principal, Laurence Frewin, and his staff to ensure that it has further support and opportunities now and in the future. Each and every time I visit, I meet young people who are aspiring to become engineers, boat builders, thatchers, plumbers, electricians, coders—and anything else imaginable. This college is helping to create a new workforce that is in demand now. It is focused on producing opportunities for those industries and sectors that are the backbone of south Devon’s economy, as well as championing innovation and creativity for tomorrow’s businesses and industries. The latest figures show that 90% of apprentices in Torbay, in my constituency, go on to find sustained employment within a year of completing their courses. As such, it is clear that the first-rate further education providers, such as South Devon College, play a pivotal role in empowering these young people to achieve their dreams.

That is why I welcome the Government’s lifetime skills guarantee, set out by the Prime Minister at the end of September, offering adults without A-levels or equivalent qualifications a free and fully funded course, which will help those who missed out on further education to boost their skills and achieve those opportunities before them. I look forward to looking at what will be available within that scheme. Of course, more can be done.

I would not be representing the people of Totnes and south Devon if I did not speak about our fishing sector, which will have the opportunity to regain access to the catches denied to us for more than 40 years by the common fisheries policy. Our fishing fleet has fallen by almost one third since 1996, which raises the question whether we still have the capacity to take full advantage of our new-found freedoms. Put simply, we need more fishermen. To encourage people into this fantastic and in many cases lucrative sector, we need a maritime college as part of South Devon College. I am working with the principal and the staff on implementing a fishing school at Noss on Dart. That school will help encourage people into the industry, teaching them the required skills and giving them the opportunity that comes with such an important sector. I hope the Minister will visit when the maritime college is developed next year.

The Government should not waste the opportunity to support the FE sector. I know from my conversations with her how dedicated the Minister is to driving it up the agenda. More funding in both capex and opex will see us create the homegrown skills and talent that we have had in the past and that we will so desperately need in future. The hon. Member for Sheffield, Brightside and Hillsborough said that she welcomed the FE White Paper and looked forward to seeing it. I agree with her, because the sooner we can see it, the sooner it will help shape the future of our colleges. I commend the Government for ensuring match funding on capital spending. We have a unique opportunity to provide and help people into a different range of jobs. I hope the Government will work with all Members across the House to develop a strategy that will be efficient and effective at getting people back into the workforce and give them the security that they so desperately need.

15:01

[Wera Hobhouse (Bath) (LD)]

It is a pleasure to serve under your chairmanship, Mr Hosie, and to follow the many good points that we have already heard this afternoon.

I have been a strong supporter of further education and Bath College, which I visited almost immediately after I became a Member of Parliament. It has been pointed out, and I think it is absolutely true to say, that we talk about schools and universities and often leave out further education colleges. We should always say “schools, further education colleges and universities” in one breath. Indeed, it has been a struggle to get the significance of further education colleges into our minds. I do not think we need to go as far as Singapore to see examples of how education is done well. This country has looked with envy at the skills training and technical and vocational training across the continent, and has wanted to follow it. We have talked about it, but it never seems to happen, which is a shame. I hope that the Minister can make her voice heard and make sure that the Treasury is listening, because, in the end, investing properly in further education will be a financially clever thing to do.

There is no better time to talk about the importance of properly funding further education. The pandemic brings with it a great deal of financial uncertainty for many people across the UK. It is more critical than ever that we invest in helping workers to retrain and reskill. Our workforce and our economy must be ready to adapt to a post-covid world. Also, in the context of the climate emergency, we keep talking about how important it is to prepare for the jobs of the future in order to get to net zero. I have spoken before about the excellent work of Bath College. In my constituency, our local universities, businesses and the council are working on exciting ways to address the pandemic’s economic impact on our city.

In addition to the many points that have already been made, I want to draw attention to the value of the union learning fund, co-ordinated by the TUC. The fund supports more than 200,000 workers a year in job-relevant learning and training, guided by trade union reps who understand the nature of the workforce, the business and the skills gaps. When I talked to a TUC rep, I learned that Ministers had for a long time been looking at cutting the union learning fund, but then they decided that that was not a good idea and have kept it going. I want to use my time today to make this strong plea. It is clear that the model works. On average, training volumes are 19% higher in unionised workplaces. It is counterproductive that the Department for Education has decided to end the ULF from March 2021. Union learning gets working people into skills and training that they would not otherwise access. It reaches people that other Department for Education programmes do not. Despite Government funding, the take-up of English and maths qualifications for adults has declined by 30% since 2010. By comparison, ULF projects continually exceed annual targets for these learners.

My constituency of Bath has been no exception. Local members’ learning events have included IT and management skills, apprenticeships and CV writing workshops. Providers have also responded rapidly to covid. Unison worked alongside our local authority during lockdown to help start book clubs in the workplace. Unionlearn launched a new campaign promoting online learning for furloughed workers, those working from home and those who have been made redundant. Again, that shows the need for a flexible response and the fact that Government need to understand that covid demands that we act flexibly.

Courses and initiatives such as the ones I have described provide huge benefits to my constituents and thousands of others across the country. Research from the University of Leeds shows that 77% of employers believe that union learning has a positive effect on their workplaces, and 68% said that unions could reach and inspire reluctant learners to engage in training. More widely it is estimated that the ULF contributes about £1.4 billion to the UK economy through a boost to jobs, wages and productivity. Again, I hope that the Minister will take the message back to the Treasury that such learning ultimately helps to save taxpayers’ money.

A recent CBI report suggests that nine in 10 UK employees will have to reskill by 2030 as a result of the pandemic. Unless we invest properly and strategically in adult education, we risk skills shortages and long-term unemployment. As I understand it, the Government are focusing particularly on FE colleges for 16 to 19-year-olds, but the beauty of FE colleges is that they are about lifelong learning. It is no good giving to Peter to take away from Paul. I hope that the Ministers understand that the decision to stop the union learning fund is clearly not a good one and should be reversed. Please do the right thing and make sure that the ULF is reinstated.

15:07

[Rachael Maskell (York Central) (Lab/Co-op)]

It is pleasure to serve under you, Mr Hosie, and to follow the hon. Member for Bath (Wera Hobhouse). I wish to start on the point with which she ended. I have seen the power of the union learning fund and how it can transform people’s lives and prospects. At a time such as this, when we know that so many people will lose their jobs, we see the importance of the fund. It is not just about the fund; it is about the union learning reps who accompany people into training and support them through it in the workplace. That is the transformative element that the trade unions have worked on, offered and developed, It is not just a beacon in the workplace, but a springboard to take people forward in their career.

[Meg Hillier]

I thank my hon. Friend and the hon. Member for Bath (Wera Hobhouse). The fund is so much better value for money because through it people can be properly supported into training and that does not involve throwing good money after bad. Someone is properly trained and qualified when they have completed their course.

[Rachael Maskell]

I thank my hon. Friend for that point. She is absolutely right. When a course is completed, we see the impact on productivity. We know that the Government have had a real problem improving productivity, so I would have thought that would have seen the value of something that helps them with that. If the ULF is ending, I trust that a Rolls-Royce version of a new fund will come forward that embraces the value of trade unions on the ground. They are there to work alongside workers.

I want to touch on my local colleges in York. We are fortunate to have two: York College under its principal, Lee Probert, and Askham Bryan College, our agriculture college under its principal, Tim Whitaker. They face specific challenges in this covid period and I thank them both for their leadership and all the staff for what they have done over the past few months. It has been a really challenging time in ensuring that their environments are covid secure and that they are gearing up to support our economy. They certainly need help.

The two colleges have come together with York’s two universities to form Higher York, which does not look inwards in education, but looks out to localities, society and the economy to see how we can rebuild our city’s economic base, which is so important at this time, and so release the potential opportunities for our community. That will be particularly important at a time when unemployment in York will be absolutely devastating—among the worst in the country. We are staring down that barrel at the moment, and it is deeply disturbing. Higher York needs more support to deliver that transformative agenda, which we desperately need.

Higher York can drive the economic recovery in our city, and I believe that further education, blended with higher education, is the key that is needed to unlock our economic recovery at this time. As Higher York is proving, we need colleges to be at the heart of shaping the local economy and the skills base that will be required in the future. Taking a local economy place-based approach to skills planning is so important. I recognise the matrix of needing to look at sector skills, which has very much driven skills strategy for a long time, but we also need to look at local place. With devolution and many other measures being put in place, the local economy is very much coming to the fore.

Given how our economic base is developing, with specialism in particular segments of the economy, skills provision can really boost the local economy and blend with employers’ opportunities and needs now and in the future. A lot of work has been done in York on the green economy and how we can sustain the bioeconomy, which I spoke about in this Chamber only a few weeks ago. That could see a growth of 25,000 people through a skills process to enhance skills. That is at the root of how we build a recovery into the future.

I want to address a number of things with regards to covid. The first is what I shall call the basic need of having a covid-secure environment. The Government have come forward with the obligation to provide that, and rightly so, but there are costs, none of which are recoverable at the moment. York College, for example, has spent £400,000 on becoming a covid-secure environment. That is money that the college wants to put into education, and therefore it is important to see some of it recovered.

Secondly, cash-flow issues are particularly acute at the moment. My colleges have come forward with a simple solution to help—something the Minister probably barely needs to ask to change, but it could make a real difference—which is the alignment of the economic cycle between the Education and Skills Funding Agency, the funders of FE, and the colleges. The ESFA funding year runs from April to May and the colleges’ from August to July. That causes a real cash-flow difficulty. A little tweak to the system would make a world of difference.

On the issue of capital funding, which my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) mentioned earlier, Askham Bryan College in particular is an old college. The facilities are tired and yet the match funding is prohibitive, especially at a time such as this, with the additional pressures the college is facing. I ask that the issue is revisited, so that some more capital grants can be made available to FE, because the estate is important to delivering vital education to young people and adult learners.

The fourth issue is the wider funding formula, which we know is crucial in order to gather skills. We often look at the minimum cost of provision, but there is a wider cost. We need to look at the wider costs of not investing in our learners, particularly in things such as the recruitment and retention of staff—technical as well as teaching staff—which is really important. Obviously the wider economy is a draw, but we must ensure that we can deliver classes. Class sizes at the college in York are getting bigger and bigger, and the opportunities in the curriculum are getting smaller and smaller, in order to try and balance the books. This should be a key investment. I would therefore welcome a further education White Paper if it had a proper funding formula for FE hardwired into it.

My fifth point is about mental health investment. Many young people have felt the stress and strain of covid. I know from discussions with the principal and previous principals that York College has had challenges around the mental health of its students. We need to ensure proper mental health facilities are in place. It does not have the resources that are invested in universities and is not benefiting from any of the investment in the schools mental health programme. I ask the Minister to look at a mental health approach for FE, and for proper resourcing for facilities.

Finally, I want to talk about the longer-term opportunity and planning for further education. We have a really big challenge ahead in the skills that people are going to demand for the new economy. As I have said, it is for local areas to plan their approach. It will improve productivity and rebuild the economy, but, more importantly, it will give people a bridge from their current place of employment into new employment, without having to go through the massive dip of unemployment. That is what I fear. That linking through for every person on the cusp of losing or their job—or even before that, as my hon. Friend the Member for Hackney South and Shoreditch pointed out powerfully—would enable us to sustain our economy and protect people. Everything should be done to enable that process. I am working with the trade unions and the local not-for-profit sector, as well as Citizens Advice and the jobcentre, to see how we can ensure that there is a skills-based approach to recovery injected into our city, but we need support from the Government.

I was concerned about the impact of the apprenticeship levy being returned to the Treasury; it is a lost opportunity for investment. Back at the beginning of the current crisis, there was a call-out for shovel-ready projects to try to kick-start the economy and build skills. I would ask for shovel-ready apprenticeships and opportunities in order to use that money wisely and to invest in the skills that are needed now. Colleges would welcome the opportunity to reach out further.

I have a final point on asylum seekers, who are arriving at this very difficult time and are being placed in difficult circumstances. There is a lack of connectivity into FE. In my city, young people have been placed in a hotel, without a connection into college and skills. I appreciate that that could be quite a transient group, but there is an opportunity to engage young people who are coming here and to ensure that they are on that learning journey. It is a good use of resource and time, but the connectivity between the Home Office and education is not there. It would be really good to see more investment in those connections at a time when people are waiting for their applications to be processed, not least because it is taking so long at the moment.

15:18

[Rachel Hopkins (Luton South) (Lab)]

It is an honour to serve under your chairship, Mr Hosie. I thank my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) for securing this important debate.

I speak as one of the vice-chairs of the all-party parliamentary group on sixth form education. We have heard much that I agree with around FE colleges, Unionlearn and covid-secure colleges, but I want to focus on sixth-form colleges; I am a governor of the fantastic Luton Sixth Form College.

While the covid-19 health restrictions have been critical to tackling the spread of the virus, the Institute for Fiscal Studies states that school shutdowns are likely to have accentuated the socioeconomic divide in educational attainment. We need immediate action to tackle that widening divide—that point has already been well made—particularly the digital divide.

Increasing the national per-pupil funding rate for 16 to 18-year-olds would be a considerable step forward to closing the divide. Education funding for 16 to 18-year-olds has been cut since 2010, alongside rising costs, an increase in the complex needs of students and the Government demanding more from colleges and schools. The national funding rate for 16 and 17-year-olds was frozen at £4,000 per student in 2013, and was actually reduced to £3,300 per year for 18-year-olds in 2014. While in 2019 the Government announced that they would raise the rate for 16 and 17-year-olds to £4,188 per student, that was only a one-year deal, in contrast with the three-year funding deal for five-to-16 education.

Will the Minister explain why the rate was not increased for 18-year-olds? Particularly in the context of this year and the coming year, many students have been impacted— for example in terms of exams—and may well need that extra year at sixth-form college to ensure that they can progress on to the right next step for them, be that an apprenticeship, further education college, higher education college or the world of work. I also want to ensure that the rate increases in line with inflation each year. In January, the Government confirmed that the national funding rate of £4,000 per student in 2013 amounted to £4,435 in 2019 prices, so even the recent increase falls well short of meeting the cost of inflation since 2013.

Sustained under-investment in sixth-form funding over the past decade continues to impact on the education of students. A funding impact survey carried out by the Raise the Rate campaign in 2019 showed that, as a result of funding pressures, 51% of schools and colleges have dropped language courses, 38% have dropped STEM subjects—science, technology, engineering and maths—78% have reduced student support services or extra-curricular activities and 81% are teaching students in larger class sizes. Those last two points are particularly important to reflect on in the context of the impact of covid-19. My hon. Friend the Member for York Central (Rachael Maskell) talked about the mental health of students and the support that they need, as much as the costs of covid-secure teaching environments.

Research from London Economics found that £4,760 is the minimum level of core funding required to increase student services such as mental health support to the required level; to protect subjects such as modern foreign languages from being dropped because they are deemed unviable; to increase the time available for extra-curricular activities—for example, around employability, skills and work experience; and to improve the range of enrichment activities, particularly for 16 to 18-year-olds in the state sector, so that they can get that social capital to compete with their better-funded peers in the independent sector.

High-quality education that equips young people with the knowledge, skills and experience that they need to flourish in higher education and skilled employment will be critical to our recovery from covid. That point has been expressed in many ways during the debate. I press the Minister to explain whether the per-pupil funding rate will be increased in the comprehensive spending review. Others have talked about the relationship with the Treasury in finding that out.

The Sixth Form Colleges Association estimates that the number of 16 to 18-year-olds participating in full-time education will increase over the next eight years by about a quarter of million. It also states that capital funding for 16 to 18-year-olds is insufficient and calls on the Government to create a dedicated expansion fund to cater for this increase.

The Sixth Form Colleges Association estimates that it costs around £2.5 million to expand an existing sixth-form institution to accommodate an additional 200 students, which works out at about £12,500 per student. However, analysis of Department for Education data indicates that the average 16-to-19 free school costs about £11.5 million to build, including land purchase, and educates on average 397 students, which works out at about £29,000 per student.

The absence of a dedicated capital fund for sixth-form providers means that expansion is simply not an option for many institutions, as sixth-form colleges and academies must bid from a single condition improvement fund for all phases of education, with the vast majority of funding directed to capital improvement, rather than capital expansion projects. The creation of a dedicated capital expansion fund for high-performing sixth-form providers should be a major priority in the comprehensive spending review and could be modelled on the existing expansion fund for grammar schools.

I ask the Minister again to outline what plans the Government have to increase capital funding for sixth forms.

00:02

[Mr Toby Perkins (Chesterfield) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hosie. I thank my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) for securing this timely debate and for the passion and determination with which she continues to speak up for the further education sector. It is hugely welcome that for the second time in two weeks we are here to debate the sector. I know how important it is to many Members.

Our colleges are incredibly important. They are at the heart of all our communities. They are an education and skills hub relied on by employers and learners. They are crucial providers of skills and play an incredibly important role in bringing employers and learners together. They are the institutes of second chance for many people who have had their lives turned around by the further education sector—even in my own family. My son went to an FE college and subsequently went to university, which would not have been predicted when he left school. I know that his experience is commonplace.

People who go to our colleges can study vocational or academic subjects, and foundation and life skills. Colleges are incredibly important for adult education. People who go to colleges are more likely to be younger, and more likely to be black or from an ethnic minority, than the average population. Colleges are an incredibly important cog in a functioning education system. I think that the passion for that has come across today.

I was particularly struck by what my hon. Friend the Member for Sheffield, Brightside and Hillsborough said about the extent to which the skills and productivity crisis that we face existed prior to coronavirus. It has been much exacerbated by the virus, but many of the issues existed long before, and it is important for us to focus on that. As we think about the value of adult education, and learning at all stages of our lives, I am sure I am not the only one who has today learned, in far more detail than they knew it before, the geography of Wisconsin and what the obscure states around America are all about. It just shows that every day is a school day.

It is important to make the point that we already had a skills and productivity crisis before coronavirus. We already had an apprenticeship levy where there was a huge reduction in apprenticeships at small and medium-sized enterprises and in the number of 16 to 19-year-olds obtaining access to one of them. We already had an underfunded further education college sector. We already had a huge flight of experienced college lecturers, after years of real-terms pay cuts. They left the profession and left colleges less able to provide the support that is needed. We already had a Government who were making further education the enemy of higher education, rather than seeing them as complementary providers whose success depends, in part, on each other.

Coronavirus has only exacerbated those challenges, with a huge reduction in apprenticeship starts. The colleges that focused most on apprenticeships and commercial partnerships are the very ones with the biggest financial challenge. Many apprentices’ college courses were suspended, and they were either furloughed or made redundant, and a generation of workers of all ages who need retraining find that the careers and adult education offers that would help them right now have been obliterated.

On finances, the Ney report exposed the fact that the Government’s destruction of the civil service and its capacity means that the Department for Education has been ill equipped to work with colleges that hit financial trouble. On capital funding, which other Members have referred to, the Minister’s written response to my recent question exposed the unprecedented capital funding cuts we have seen over the last 10 years. This debate is timely, Mr Hosie.

In the last decade the further education sector has seen its funding slashed by a third, but adult education, which is so crucial at this time, has taken an even bigger hit, with a 50% reduction. By the end of this year, an estimated 1 million young people will be neither in employment nor education and training, and will be facing the toughest jobs market in a generation. Even when faced with the urgent need to act this spring, Ministers ignored calls from the Association of Colleges to have that education and training offer in place for September, at the start of this academic year.

On capital funding, £2.61 billion was invested in further education capital expenditure in the final five years of the previous Labour Government. In the five years that followed, the Government reduced that spending in actual terms by a shocking 64%. When we hear the Government now proudly boasting about a £200 million increase in capital funding, we need to place that in the context of the cuts we have already had. Even with the additional money that has been spent, Government are spending less now than they were 10 years ago—purely in cash terms, not even taking into account inflation.

When colleges urgently need funds to make structural changes to cope with the demands of coronavirus, it is staggering inaction on the Government’s part to say that there will be a plan coming along in April. The Association of Colleges has exposed that the average college has spent between £200,000 and £300,000 on covid-related improvements to keep their college safe, as my hon. Friend the Member for Luton South (Rachel Hopkins) reflected.

A powerful point was made by the Chair of the Public Accounts Committee, my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who brought her experience to bear, as well as her passion for the sector. In her contribution she talked about the frustration that we all feel when money that has been allocated by the Treasury and is finally in the skills sector is then subject to systems that mean we cannot use that money, and it is sent back to the Government. It is infuriating.

My hon. Friend the Member for Sheffield, Brightside and Hillsborough spoke powerfully about the digital divide. In this crisis, we have seen the importance of young people being able to access broadband and devices. The case she made about the lack of laptops was powerful.

On the subject of money being sent back, in a debate a couple of weeks ago I asked the Minister about the “Get Help to Retrain” scheme, which was being wound up after its pilot. She said that it had not been scrapped, but was being incorporated into the national retraining scheme. FE Week recently published evidence that the leftover cash from the £100 million, earmarked for the retraining scheme, would not be added to the new skills fund and Ministers have confirmed that the money will be sent back to the Treasury. Once again, we have a situation where money has been allocated and it ends up not being spent on our young people, when it should be. That is becoming something of a pattern.

The tweaking of the apprenticeship levy to enable large employers to pass levy funds down to companies in their supply chains is welcomed. The hon. Member for Totnes (Anthony Mangnall) talked about the importance of his college in Devon. He made a powerful case for the importance of the FE sector, focused on local needs, in small towns and rural communities.

The hon. Member for Bath (Wera Hobhouse) spoke about adult education, as I have, and she referred to the decision to scrap the union learning fund. I see that decision as entirely vindictive. The fund is a tiny proportion of the money being spent on skills, and it is being scrapped at a time when we know that the Government cannot even spend the money that they have. The decision does not seem to be based on any evidence that shows that the programme does not work—it does work—but on the Secretary of State’s antipathy towards the trade union sector.

In a wide-ranging speech, my hon. Friend the Member for York Central (Rachael Maskell) once again demonstrated what a great advocate she is for her local college, and spoke about the state of the college estate. The FE colleges that have been hit hardest by the pandemic are those that took the Government’s advice, developed training in association with large employers locally, focused on apprenticeships and built up commercial partnerships. It is a tragedy that those are the ones most badly affected.

As the Secretary of State focuses his aims in the White Paper on creating a German-style education system, it is important that the Government should have cognisance of the difference between the kind of economy we have and that of Germany. I would love to see more of a skills-based approach, but it will not stand in isolation from a proper industrial strategy.

It is clear that Ministers’ rhetoric about FE funding is a long way from the reality of the policies we have seen over the last decade. This Government are constantly keen to distance themselves from the last 10 years of their own record. However, whether they have really made a damascene conversion to FE remains very much to be seen.

15:36

[The Parliamentary Under-Secretary of State for Education (Gillian Keegan)]

It is a great pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) on securing this important debate. I know that FE is close to her heart; she has first-hand experience, having served on the board of governors for Sheffield College. I am delighted to be discussing the vital issue of funding FE for young people and adults, and agree with all hon. Members who have said that it is especially important as we seek to recover from the impact of the global pandemic.

FE delivers not only high-quality provision for our 16 to 19-year-olds, but lifelong learning for adults. It provides learners with fundamental skills and gives them the opportunity to partake in learning that they may have missed out on in school, giving them a vital second chance, as the hon. Member for Chesterfield (Mr Perkins) said. Equally, it gives learners the opportunity to retrain, to learn new skills, to go on further in learning and to progress in their careers.

All hon. Members here are passionate about this issue—that comes through in their speeches—and their constituents are really focused on it as well: it means such a lot for their everyday experiences and for the opportunities of their children. I am personally truly committed to the sector, having left school at 16, started an apprenticeship and been trained by an FE college in Merseyside that unfortunately is no longer there—much like most of my schooling, actually; none of the places I went to are there any more. Hopefully, there is no correlation between that and the fact that I attended them.

Over the last decade the level of FE funding has fallen, and Governments have had to make difficult choices about public spending, but we are now making real, positive changes for the FE sector and I know hon. Members will all be delighted with what they see in the FE White Paper. The spending review of 2019 saw the first FE funding uplift in a generation, and we have increased 16 to 19-year-old funding by £400 million. Of course people will call for more, but that is a 7% increase—the biggest injection of new money in a single year for a very long time, with funding increasing faster for 16 to 19-year-olds than for five to 16-year-old schooling. That has been welcomed by the sector.

[Meg Hillier]

I cannot let a figure glibly spoken like that pass—it may be, in percentage terms, the biggest injection of cash in a single year, but that is because for at least seven years, if not more, there has not been even an inflation-level rise in funding for local authority FE colleges. The Minister should be a bit more cautious about how excited we are supposed to be about even trying to begin levelling up FE to where it should be.

[Gillian Keegan]

I appreciate the hon. Lady’s comments. FE funding is quite complex, because at the same time over this decade we have also invested £2.5 billion in apprenticeships, and we will come to the many new areas of investment, all of which have benefited FE colleges. We have already announced one of those: the £1.5 billion capital programme for the transformation of the FE college estate to make colleges great places to learn. That will enable our colleges across England to have buildings and facilities that can deliver world-class tuition. We are not limiting ourselves to a single country, but we want to be world class, and I am committed to that.

We want to give people of all ages the opportunity and means to participate in lifelong learning, to learn valuable skills and to have the confidence to retrain in new areas. That is why we have also committed £2.5 billion to the national skills programme. The hon. Member for Chesterfield (Mr Perkins) mentioned the national retraining scheme, but we have replaced what was left of the £100 million with that £2.5 billion, which is a massively increased investment. There is no way that that is not an increase.

[Wera Hobhouse]

I am listening with interest to where the Government are putting money in, but I still cannot quite understand the reasoning behind taking away the union learning fund. I would be interested to hear why that decision was made.

[Gillian Keegan]

I was going to come to that, but I will address the hon. Lady’s question. Effectively, we have increased a lot of the basic entitlements—obviously with English and maths, and with the digital entitlement. We are trying to streamline the delivery partners, including to the devolved areas, to ensure that it is simpler for people to get easy and broader access. That was the decision, and I have communicated that personally to the general secretary of the TUC.

I recognise the challenges that providers face as a result of covid-19. My hon. Friend the Member for Totnes (Anthony Mangnall) mentioned the response to covid and the world-leading scientists working on vaccines, and so on. However, I also want to mention—as he has given me the opportunity—the many apprentices working on our response to covid, whether they are lab technicians, science and engineering apprentices, or those in nursing, health, social care, everything digital, and many, many more areas. As he also mentioned fishing, I should also tell him that a level 2 fisher apprenticeship is under development, and I am sure there will be many more to come as we develop the sector.

I thank the FE sector for its continued hard work to make sure our learners can continue to access high-quality education and training, which includes the move to remote learning. The hon. Member for Hackney South and Shoreditch (Meg Hillier), who I always seek to remain harmonious with, mentioned that. We have introduced a lot of flexibilities to shift towards online and blended learning and to increase the flex vis-à-vis attendance. Many of the colleges have appreciated the flexibilities that we have introduced, and we have done that all the way along.

In June, I had the pleasure of meeting students and leaders from Barnsley College, who, from the first day of lockdown, successfully moved 100% of their curriculum online. We have heard from many colleges about how covid-19 forced a behavioural and cultural change towards a more flexible approach of blended learning, which might otherwise have taken years. I have been so impressed by the sector. In fact, I know that it has even surprised itself, given how well the whole sector has moved to absolutely excellent interactive online learning.

We are helping to ensure that all young people and adults can access the skills and training they need to get on in life, despite all the economic and other challenges posed by the pandemic. That has included giving people access to digital devices and dongles, which goes to the point that the hon. Member for Sheffield, Brightside and Hillsborough made. Data is vital. We know that, which is why part of what we have broadened access to, for those who need them, includes data, PCs and dongles. We have enabled the discretionary bursary fund to be used for that and have also put in place a very simple business case to enable providers to ask for an uplift if it runs out, because it is being used for different things, and 38 have benefited from that uplift.

Of course, we recognise the impact of lockdown. As part of the £350 million national tutoring programme, we have made available a one-off ring-fenced grant of up to £96 million. Those are important additional funds to help students who, in some cases, may have missed the last six months or the last year of their GCSEs, as the hon. Member for Luton South (Rachel Hopkins) referred to. We know this is always a challenge for colleges, so we have specifically put that funding in place for them to provide small-group tutoring activity, to enable our most disadvantaged students to catch up.

There have been some additional costs, and we have looked at making sure we provide financial support, as the hon. Member for Hackney South and Shoreditch mentioned. The financial health of colleges is absolutely vital and key, so we have put that support in place, and we have a team of people who have been there to support colleges. As those colleges’ funding has changed—their commercial income and sometimes their apprenticeship income—that has impacted their overall income, so that support is in place, as is emergency funding. To date, five colleges have requested that emergency funding and have received it, but we are ready to help others, and keep very close to the sector to make sure that no colleges close. Clearly, we need to keep learners in focus throughout this period.

[Mr Perkins]

The Minister has previously spoken about the five colleges that have had direct financial support, and 40 colleges she has identified that might need that support. Can she update us a bit more on what progress is being made, and how many more she thinks are likely to need further support?

[Gillian Keegan]

I am very happy to, because I asked that question just as I was leaving to come here, and the number of requests for emergency funding has not changed: it is still just those five colleges. However, things clearly will change, and we are now going through other changes as well. Another month’s lockdown could have impacts on other incomes, apprenticeships and so on, so we keep this issue constantly under review, and keep a team in place to help people and make sure we are aware of any stresses and strains on the system.

[Meg Hillier]

The Minister obliquely referred to the 97% tolerance level—that is, where 97% of students stick to their course, the funding is given at 100%, whereas in London if 90% of students stay, the colleges get 100% of the funding. Is that something that she will be looking at, or can have a discussion about? That little bit of tolerance can give a little bit of flexibility to colleges, and perhaps prevent them from getting to the point where that is a contributory factor in their coming to the Department for emergency funding.

[Gillian Keegan]

The flexibility that we have introduced is to make sure that attendance is not impacted by coronavirus, through having blended learning and dual systems in place. That is going to be increasingly important, because some people may be shielding or may be with people who are shielding, and will have concerns. That is why we have insisted on having the capability and flexibility to offer that learning in many different ways.

For those people who are not able to take up a job or a work-based learning offer when they come to the end of their learning, we are investing over £100 million in a brand-new offer of classroom study in high-value subjects to support 18 and 19-year-old college and school leavers to progress into employment. These courses are aligned to priority areas for economic recovery and well-paid, rewarding jobs, and as the hon. Member for Hackney South and Shoreditch mentioned, in some cases that could lead to increased numbers for those particular courses. We are considering the impact that this will have, and are considering providing extra funding during the year to help support those colleges.

For those who have minimal work experience and lack the skills or confidence to enter employment or start an apprenticeship, we are making £111 million available to triple the scale of traineeships. These are like pre-apprenticeships, and they can be very flexible, specifically tailored to the needs of young people and adults to help them into the workplace. They provide opportunities to develop further skills, work preparation training, work placements and sector-focused vocational learning or support a transition into work or an apprenticeship. They are also designed to help people get on to the next stage of an apprenticeship.

A number of hon. Members have mentioned apprenticeships. Some £2.5 billion a year is invested in apprenticeships, and we have introduced a lot more levy flexibilities to try to ensure that all that money can be utilised. We have put in place 25% to transfer within a sector or a supply chain, which I know has been welcomed. We need to work more to make this function better, because it is a bit clunky at the moment.

We need to focus on SMEs and the opportunities that they provide for apprenticeships. We also have a redundancy service, which we have just put in place, for apprenticeships. There are some signs of good news. More than 1,000 employers are advertising vacancies and opportunities at the moment on that service for those who find themselves redundant.

It is essential that every young person has access to an excellent education when they finish compulsory schooling at 16. The Government plan to spend over £7 billion this academic year to ensure that there is a place in education or training, including apprenticeships, for every 16 to 18-year-old. I appreciate that the base rate of 16 to 19 funding has been static for many years, so I am pleased that we were able to increase it by 4.7% this year.

We are also transforming technical education in this country, providing a lot more opportunity, particularly through the introduction of new T-levels. These pioneering qualifications will create a highly skilled generation of students who are able to meet the needs of industry. It is fantastic to see that providers have begun the roll-out of T-levels for 16 to 19-year-olds. I am sure hon. Members will visit their local colleges and I urge them to see the students there. It will give hon. Members a real boost. One chap said to me, “When I saw the curriculum and I heard about it in my school assembly, I thought it was too good to be true. Now I am on my eighth week and it is even better than I thought.” To hear young people so excited about those qualifications is amazing. They are also welcomed by the sector, because they attract a significant amount of funding and capital investment. I look forward to rolling those out, because that will provide another stream of funding—up to £500 million per year when they are all rolled out.

I recently visited my local college in Chichester and met some of the trailblazing students. Their enthusiasm and excitement is really catchy. The state-of-the-art technologies that they are using are brilliant to see. I have seen the latest equipment in manufacturing and the latest technology and software. I have seen them using virtual reality and immersive technologies. Those are the gold standard in technical education, which is why I feel confident that we will have a world-beating system.

We want to support and encourage providers to deliver programmes that will really help young people and adults to succeed in the labour market and, in particular, are valuable to employers, even if they cost more to deliver. That is why we have introduced a premium pay to providers to deliver level 3 qualifications, which are of high value to businesses but cost more to deliver

We need to provide the skills that employers and businesses are looking for. It is vital that we are in step. It is such a fast-moving market; we have seen that even more with coronavirus. I have worked for 30 years, and technology has impacted businesses’ operating models unbelievably quickly. We need to ensure that we keep in step.

The lifetime skills guarantee will give adults who missed out on that first opportunity the chance to succeed by fully funding their first full level 3 qualification, as was mentioned by the hon. Member for Hackney South and Shoreditch. I hope that is welcome, because it is a breakthrough and it is something additional. It will really give adults a great chance to progress further in their careers or change careers completely.

[Rachael Maskell]

In the light of the current economic situation, will the Minister look at extending that opportunity to allow people who have already achieved a level 3 qualification to change the direction of their career and secure future employment?

[Gillian Keegan]

I think the hon. Lady will accept that we have only just announced this initial opportunity. We are considering providing other opportunities to upskill and reskill. We are providing digital bootcamps and we are providing learner loans for levels 4 and 5. Digital bootcamps can really help to provide opportunities to fill in-demand vacancies. Those will be targeted. The digital bootcamps will start first of all in some of the areas in the west midlands, Greater Manchester, Lancashire and Liverpool city region. They will then be developed out to Leeds city region, heart of the south-west, Derbyshire and Nottinghamshire.

We will keep that model under constant review. It is quicker to respond. The courses are intensive over 12 to 16 weeks and are delivered in a specific way. If the model works, we will look to expand those courses further. We are also looking at other industries that may benefit from that approach. We are trying to respond quickly.

[Meg Hillier]

A few moments ago, the Minister said that there would be some discussion about potential in-year funding for colleges. Does she have a date for that, or do we need to wait? Is she expecting it to be announced in the forthcoming spending review?

[Gillian Keegan]

I do not have a date right now—I will come back to the hon. Lady—but it is something that we are discussing and it has been raised a number of times.

We are acting quickly, and in a way that we have not had to do and have not done before. The skills toolkit, which we have put together to give people something to do while they are on furlough, is a great example of that. We have discovered that during the last lockdown about 22 million people took to learning, so there is a massive appetite among people to learn. We need to look at those opportunities, and the skills toolkit offers many different courses. I encourage hon. Members to promote that far and wide to their constituents, and to the many people in their constituencies who may want to signpost people to those courses, because they have been developed by employers and with employers, are of a really high quality and can help people to upskill in their own time.

The Government are committed to supporting and encouraging high value, but of course we do not want to neglect the basics; the basics are important. A digital entitlement has just been introduced—from August—and that is key. Half the adult education budget is devolved, including to the Sheffield city region, from next year, which is in line with the commitments. Of course, we also have the European social fund, which is in place till 2023, and the UK prosperity fund, which will increase it.

I want just to touch on capital, which was mentioned. The £200 million is the initial £200 million of the £1.5 billion, so there is £1.3 billion still to go—I am proudly boasting that we have £1.3 billion more to go. We brought the £200 million forward for two reasons. One was that there are a lot of repairs and day-to-day things that colleges want to do; but also we wanted to encourage them to kickstart some of the local market in terms of construction, so there was a “Build, build, build” element to that as well.

We are also investing up to £290 million in institutes of technology. Those are across the country; there will be 20 of them. That fantastic collaboration will make a massive difference to the opportunities for young people as well.

Our FE sector is diverse and resilient. It supports learners of different ages and backgrounds to develop the vital skills that they need, including for green jobs.

[Meg Hillier]

Will the Minister give way?

[Gillian Keegan]

I will not, if the hon. Lady does not mind, just because I want to give the hon. Member for Sheffield, Brightside and Hillsborough some time at the end of the debate.

The policies that I have outlined highlight the Government’s commitment to making FE a more attractive choice for all, improving the quality of provision and providing more flexible ways to learn. I again thank the hon. Member for initiating this important debate. My message to her, as well as to colleagues across the House, is that we will continue to work with you to improve our FE sector, to take advantage of the new funding, to shape the new funding and particularly to shape it in response to coronavirus. We will soon publish an FE White Paper, which will set out how FE is absolutely central not only to our economic recovery, but to reskilling and levelling up the nation and ensuring that high-quality technical education is available throughout the country.

15:58

[Gill Furniss]

I thank everyone who participated in the debate, because at the moment this issue of the utmost importance. I pay tribute to the Sheffield College, where I worked and was also a governor. A big shout-out also to Longley Park Sixth Form, which I am immensely proud of, because that sixth-form college is only there because of a Labour Government. One of my predecessors, David Blunkett, ensured that our constituency, our area, where there are low-income families, got a fantastic facility. I was at the opening, which the then Prime Minister, Tony Blair, attended. That was some years ago, and during the time that that sixth-form college has been there, it has transformed people’s lives. It has enabled people from non-traditional backgrounds, who would not be expected to get to university, to get to university, including two of my own children, who attended as well. We can never overestimate the part that such a facility can play in regenerating that sort of society.

As I am from Sheffield, and Sheffield is obviously associated with steel, I used to be the shadow Minister for steel. In the late 1970s, the steelworks were, very sadly, closed. That was when I first went to work in FE, and there were some fantastic schemes whereby the steelworkers were brought into college on nine tenths of their salary. It was a construction college, and they learnt different trades in order to get over that bump in their lives and move on to a better future. That is what I would like the Minister to ensure is there for people today—more and more of them, as each day goes by, finding themselves in circumstances they never expected.

[Stewart Hosie (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).

16:00

Sitting suspended for a Division in the House.