Further Education Funding

(Limited Text - Ministerial Extracts only)

Wednesday 4th November 2020 Westminster Hall

[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?

--- Later in debate ---

[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.