Mr Robin Walker (Worcester) (Con)
I am very grateful to the Backbench Business Committee and the Liaison Committee for their support in approving this debate.
I congratulate the hon. Member for Wirral West (Margaret Greenwood) on her powerful opening speech on the hugely important topic of adult education, which forms one of the themes that we are debating today. She and I were before the Backbench Business Committee with our respective applications for debates on FE and college funding, and on adult education. We both agreed that, as both applications related to the education estimates, we would be happy to combine them. I share her admiration for the work of FE colleges and the community education sector in this space, as well as the important online work that they do. I echo her comments about the huge importance of adult literacy.
I hope that the House will forgive me if I focus mostly on the 16 to 19 element of this debate. I thank the Education Committee Clerks and members for the huge work that they have put into our report on the future of post-16 qualifications, which I hope we can discuss at some length today. I also thank the House of Commons Library and the Association of Colleges for the valuable briefings that they have provided.
Before delving into the detail, I should say that, as Chair of the Education Committee, I welcome the fact that the overall estimate for the Department for Education has increased, and that we are debating estimates today that see the total amount, across resource and capital, rise from £100 billion to £110 billion. We are spending substantial amounts of money on education. The Minister for Skills, Apprenticeships and Higher Education, my right hon. Friend the Member for Harlow (Robert Halfon), has been a tireless advocate for the FE sector, which he has often described as the “Cinderella sector” of education. As he has pointed out many times, that reflects not just how much it is asked to do with so little resource, but that there is no limit to its potential. As he has often said, Cinderella herself ended up marrying into royalty.
My right hon. Friend’s campaigning helped to secure extra hours for post-16 students as part of the catch-up programme, and his determination to support lifelong learning is as welcome for the FE sector as it should be for higher education. As Chair of the Education Committee, he recommended that the Department make the case for a three-year funding settlement for community learning at the next spending review, and reduce unnecessary bureaucracy for providers. Part of the reason that I—his successor as Chair of the Committee—wanted to debate the funding for that vital sector, and indeed for wider post-16 education, is that it has been, and still is, facing a very real funding squeeze.
The Institute for Fiscal Studies has reported that the FE sector has experienced a prolonged period of reduced funding, and concluded in December 2022 that 16 to 19 funding had experienced the biggest fall in real-terms funding of any education sector, in contrast with real-terms growth in primary and secondary schools, and a rapid and welcome growth in early years investment.
Darren Henry (Broxtowe) (Con)
Having further education facilities is so important for developing new skills, unlocking careers and training people for new industries. We are soon to lose our main FE provider in my Broxtowe constituency, as Nottingham College moves out. On the point that my hon. Friend was making, does he agree that we need to increase FE funding so that we can provide more FE and skills provision for local communities?
Mr Walker
I agree. I am sure that my hon. Friend will champion the need for FE in his area, under whatever branding or name it might come. I absolutely agree that we need to see an increase. I will come to more of the reasons for that shortly.
The IFS also reported that colleges and sixth forms have seen a long-term decline in spending per student relative to schools. That goes all the way back to the 1990s, when their funding was around double that of primaries. In 2022-23, it was lower than spending per pupil in secondary schools and only 11% to 12% higher than spending per pupil in primary schools. The report noted that although extra funding in the 2019 and 2021 spending reviews meant real-terms increases in funding per student up to 2024-25, those will only partially reverse previous years of cuts and the impact of increasing numbers up to 2030. It is important to note that that analysis came before the high and persistent rates of inflation that we have seen over the past six months. In real terms, the analysis from the IFS shows that both sixth forms and FE colleges have seen a substantial reduction in per pupil funding since 2018, and have lost close to £1,000 per pupil since 2015.
Why does that matter? We will all know from our constituencies—my hon. Friend the Member for Broxtowe (Darren Henry) has just given an example—about the hugely important work of the FE sector and local sixth forms in preparing students for academic and vocational qualifications that offer them a brighter future. They are quite literally engines of social mobility.
I am incredibly proud of the work of Heart of Worcestershire College in my constituency and the excellent Worcester Sixth Form College, and I regularly visit both institutions to celebrate their students’ success. I put on record my thanks to the recently departed principal of Heart of Worcestershire College, Stuart Laverick, who was a great champion for the college and the sector. I look forward to working closely with his successor, Michelle Dowse. We also have a number of smaller providers, including schools that operate sixth forms—Christopher Whitehead Language College and Tudor Grange Academy—which, alongside our popular and successful sixth-form college, increase the choice and range of options for post-16 pupils in Worcester. It is fair to say that all those schools regularly raise with me their concerns about funding.
Caroline Ansell (Eastbourne) (Con)
I will take this opportunity to put on record my thanks to East Sussex College. It is equally as high-performing as Worcester and is the social mobility engine that my hon. Friend described. However, the finances, which he referred to, mean that it is in a very competitive field for the workforce. It is squeezed between schools and higher education. That means they struggle to recruit the quality, highly skilled staff that it needs to take us further and higher and to deliver on the Government’s priorities. Does he recognise that scenario?
Mr Walker
I absolutely recognise that scenario, and I welcome that contribution from my hon. Friend, another Education Committee member. We heard that loud and clear as part of our inquiry and I continue to hear it from local providers. They compete not just with schools and higher education, but with the businesses for which they provide the skills, so there is an extra retention challenge for this sector.
This is a crucial part of our education system: the pathway for some between school and higher education; and for others, between school and vocational success, whether that is through apprenticeships or T-levels; and for others still, an introduction to the world of work. For many students who find schools hard to engage with, colleges can also provide a welcome cultural shift, with greater flexibility and independence as they move towards adulthood. Colleges play an essential and increasingly valuable role in preparing young people to be the workforce of tomorrow.
The Prime Minister has described education as “the closest thing we have to a silver bullet”, and in that respect the challenge he has set for more people to study mathematics until age 18 is welcome. However, that challenge can be met only if we fund post-16 education properly.
The Minister has never made any secret of his passion for vocational education and of his determination to see it gain parity of esteem in our education system. He has championed FE and colleges through a long and distinguished career as a Minister and a Select Committee Chair. It is from him that I inherited the inquiry into post-16 qualifications, on which the Education Committee recently reported. I have to say, with the greatest respect, that we were disappointed with some elements of his response to the inquiry, which the Committee published today.
The Committee heard evidence from a wide variety of post-16 providers, from colleges, academics, teaching unions and educational experts, and we heard a great deal that is positive about the direction of travel and the drive to raise attainment. However, we also heard consistent and extensive evidence on the resource, recruitment and retention challenge.
We made two particularly important recommendations: for a widespread review of spending on FE and post-16 education, which goes to the heart of today’s debate; and for a moratorium on defunding advanced general qualifications until the T-level route has been more firmly proven. Both recommendations were agreed unanimously by every Committee member from both major parties—seven Committee members are on the Government side of the House—at the end of a long and detailed inquiry. I am disappointed that amid much interesting commentary on the detail of our report and the Government’s position, the Minister appears to have accepted neither of those key recommendations.
Mrs Flick Drummond
As a member of the Education Committee, may I say that my hon. Friend is making some excellent points? Another point about the roll-out of T-levels is that there may be no places for people doing advanced general qualifications because they do not cover the same subjects. Quite a lot of 16-year-olds will therefore miss out on the areas that they particularly want to study, because the T-levels have not been rolled out and yet AGQs are being defunded.
Mr Walker
My hon. Friend reflects the concerns—amply spelled out in the report—about not removing pathways to success and routes forward for students while the T-level programme is, as yet, not fully developed and not fully proven. I think we all accept that T-levels can be a very valuable part of the landscape.
Mr Perkins
I am very grateful to the hon. Gentleman for allowing me to intervene. Regarding his Committee’s call for a moratorium, the Labour party is committed to that. We entirely agree with him, and while he will not be in Parliament after the next election, he can be assured that if we have a Labour Government, the call he has made today will be supported.
Mr Walker
I am grateful to the hon. Gentleman for that clarification. I am sure my right hon. Friend the Minister is listening carefully. I know he is not averse to making the case to the Treasury for funding, so I urge him to take from this debate the strong cross-party consensus, reflected in the Committee’s recommendation in paragraph 179 of our report, that:
“To prevent a further narrowing of 16-19 education, the Committee urges the Government to undertake a wholesale review of 16-19 funding, including offering more targeted support for disadvantaged students.”
Caroline Ansell
Before my hon. Friend moves any further into his excellent speech, the witnesses to our inquiry were compelling when describing the impact of defunding on particular cohorts of students. On the impact of defunding BTECs, for example, they talked about vulnerable groups, including those with special educational needs. Does my hon. Friend agree that for those groups, it is especially important that we keep open those pathways to success?
Mr Walker
Yes, absolutely. My hon. Friend is right to draw attention to that specific issue; I was going to come back to it later and touch on the fact that it was partly the equalities impact of those decisions that led the Select Committee to its unanimous recommendation.
I will focus briefly on the element of targeted support for disadvantaged students in our recommendation that I just touched on. I recently took part in an inquiry of the all-party parliamentary group for students, alongside my hon. Friend the Member for Sheffield Central (Paul Blomfield)—I should call him the hon. Gentleman, but I call him my hon. Friend because we have worked together for a long time. That was an eye-opening inquiry, which reinforced the need for an urgent review of support for the most disadvantaged in the FE sector.
The Government have rightly increased the level of pupil premium in schools, and have used programmes such as the holiday activities and food programme and the levelling-up premium to keep up a relentless focus on tackling disadvantage. However, there is concern about the support available for disadvantaged students in FE, and widespread worry that the available bursaries just do not go far enough. The extension of the pilot for pupil premium-plus to post-16 students was welcome, but we have to query why the extra support for that age group is so much lower than the extra support available to pupils under 16. My constituent Harrison Ricketts, who was in Parliament today to support a Youth Employment UK event, gave powerful and reasoned testimony to the APPG’s inquiry about the pressures facing students. I hope Ministers will look carefully at some of the recommendations in that report, which are pretty reasonable and not necessarily very expensive.
In fairness, there are elements of the Minister’s response to the Education Committee report that I welcome. The response expanded on investments for the financial year 2023-24. The Government state that they
“will invest £125 million in increasing funding rates for 16-19 education, including a 2.2% increase in the national funding rate for academic year 23/24…and an increase in funding for specific high value subject areas in engineering, construction and digital to help institutions with the additional costs of recruiting and retaining teachers in these vocational areas.”
With regard to supporting pupils from disadvantaged backgrounds, the Government draw the Committee’s attention to the 16-to-19 bursary fund, and state that in the last academic year,
“almost £152 million of 16-19 Bursary funding has been allocated to providers to help disadvantaged 16-19-year-olds with costs such as travel, books, equipment and trips, an increase of over 12% on the previous year.”
The response also states that the Government will continue to approve the international baccalaureate diploma for funding, and clarifies that they did not say—as I think the Committee took them to have said—that they will withdraw funding for the international baccalaureate careers programme.
I want to expand on the recommendation about the level 3 qualifications review, which we have debated at some length. The concern of the Committee is not that we do not believe in pursuing high-quality and high-value qualifications such as T-levels; we are concerned about the pace with which the Department is pursuing that course, and the risks of removing advanced general qualifications where students currently find them a valuable pathway to progression. A wider review of funding could help find the resource to maintain a wider choice for students, more flexibility and a range of routes to progression, including T-levels. We have highlighted significant equalities concerns if Ministers persist with the current approach, and we do not feel that those concerns were properly or fully addressed in the Government’s response, which we published today.
I do not have time today to detain the House on all the recommendations in our report, but I will highlight the need to address the issue of workforce if we are to deliver on the Prime Minister’s very worthy ambition of more people taking maths to the age of 18. In our inquiry on teacher retention and recruitment, we have heard worrying evidence about the extent to which the Department has missed its targets on maths teacher recruitment, and in the first session of that inquiry the Committee heard from the FE sector that whatever problems exist for retention in the schools system are compounded in the post-16 space. Around 25% of college teachers leave the profession after just one year compared with around 15% of teachers in schools, and three years in, around half of college teachers have left compared with around a quarter of schoolteachers.
In fairness, I should acknowledge some welcome elements in the Minister’s response in this regard, such as the updated teacher support fund, the national professional qualification for leaders in primary maths and the expansion of the Taking Teaching Further programme for further education, but I am not convinced that these small initiatives fully address the scale of the challenge.
Mrs Drummond
My hon. Friend is making some good points, but there are two issues. First, bursaries to do maths are £29,000, yet when maths lecturers go into the workplace they only get £26,000, so their pay is automatically reduced. The other problem is that the pay rise for further education was only 2.5%, when of course teachers got 5%. That is one reason why retention is so poor.
Mr Walker
My hon. Friend raises two very valid challenges. It is also worth noting that the IFS analysis shows a significant disparity in pay between college teachers and schoolteachers, even before that pay rise issue. That gap has grown over time, rising from 14% in 2010 to 21% today. These are, of course, the very teachers we rely on to get our children the highest qualifications in their time in school or college, to achieve the Prime Minister’s levelling-up ambitions and to inspire the workforce of tomorrow.
To touch on that very briefly, in our inquiry into careers education, advice and guidance, we heard from young people around the country who told us how much better in many cases the careers advice and guidance they received was in college than in school. The consensus was that many of them were only properly exposed to vocational opportunities, apprenticeships or the importance of the world of work once they reached college. Surely where our colleges are succeeding, we should ensure that they are rewarded for that work, and where they are not being given parity with other parts of the education system, this should be queried.
Just yesterday, I attended the launch of the Foundation for Economic Development’s latest report on a national education consultation, and heard its call for a long-term plan for education. This highlighted the importance of parity across all areas of education and the strong case for levelling up both early years and post-16 funding. It called for a 10-year plan for education to match the ambition of the very welcome long-term plan for the NHS workforce that the Government delivered last week.
The Association of Colleges has made the case for a five-step plan, which I believe the Government should carefully consider and to which I would be very grateful for the Minister’s response today. The hon. Member for Wirral West has already mentioned raising the 2023-24 funding rates in line with inflation, which is its first recommendation.
The second recommendation is to allow colleges to reclaim VAT. Colleges are now public sector organisations, but unlike councils, schools and academies, they cannot reclaim VAT. They spend an estimated £210 million a year on VAT that they cannot reclaim, and they see this as a tax on FE students. This strikes me as a sensible and timely recommendation, following the Office for National Statistics’ decision to reclassify the FE estate, and it would appear to be an opportunity to give the sector a much-needed Brexit bonus, given the greater flexibility the Treasury now has on VAT rules.
The third recommendation is to ensure that 50% of the apprenticeship levy is spent on apprentices at levels 2 and 3 and below the age of 25, echoing a concern picked up in the Select Committee report that so much of the apprenticeship levy is now going to older students. We do not begrudge the fact that there are higher apprenticeships and opportunities for people to go further, but we do want to make sure there is a balance that keeps the door open for people to enter the workplace through an apprenticeship.
The fourth recommendation is the need for a bigger skills fund to support skills in high priority areas, and the fifth recommendation is about the college pay analysis, which the hon. Lady has already addressed. While I appreciate that the Minister will face many challenges in delivering on all those recommendations, I believe that they merit careful consideration and a full response.
I believe that responding to those recommendations could make a real difference for my constituents. I have spoken to the new principal at the Heart of Worcestershire College about what could be achieved if they were addressed, and I was given the following examples. The college has had to limit growth in electrical installation due to its inability to attract additional staff in this area. If the college could attract one additional staff member, it could train an additional 30 students per year in electrical installation to meet the growing demands in that sector.
The college aims to have a gas centre in Worcester for conventional gas fitting, but also to take advantage of the developments in hydrogen-ready and hydrogen boilers and other sustainable technologies. It has advertised a position for that role on many occasions, but the low salaries just are not attracting candidates, and the gas centre project has therefore had to be put on hold.
Construction is a key growth area in our economy in Worcestershire and across the UK. Heart of Worcestershire College has struggled to recruit staff, so there have been ongoing delays to apprenticeships. As a result, the college has had to recruit several short-term agency staff.
Heart of Worcestershire College has struggled to recruit learning support staff, at a time when young people need more support than ever, post covid, to ensure that they reach their maximum potential and are work-ready. As part of its special educational needs and disabilities work, the Committee heard about the crucial importance of young people getting the right support in the right place at the right time, and that absolutely must include our colleges.
I urge my right hon. Friend the Minister to keep making the case, as I am sure he will, for an increase in the estimates for FE, post-16 education and colleges, but also to consider again the detailed proposals from the Select Committee inquiry he launched and from the Association of Colleges and so many others. I welcome the fact that the Government have set out to create a ladder of opportunity for students, and I recognise my right hon. Friend’s passion for delivering that. I also welcome the fact that much has been done for the colleges in my constituency, including the consolidation of Heart of Worcestershire College on its riverside site, the refurbishment of its apprenticeship training centre and the delivery of a skills centre, as well as the expansion of our sixth-form college and much-needed improvements to its buildings and facilities. I am also grateful to the Minister for his detailed response to the Committee’s report, but I am disappointed that he could not go further on a funding review or on the moratorium on defunding advanced general qualifications, and I challenge him to make the case for both with the Treasury on the back of this debate.
The Minister himself has described this sector as having been a Cinderella sector for too long. It is high time we gave post-16 education the parity of funding and the parity of esteem it deserves. It is time for Cinderella to go to the ball.
Andrew Western
My hon. Friend makes an important point, and he is a champion for further education in his constituency. I quite agree that pay for the further education teaching workforce has lagged behind teaching salaries more broadly for some time. This is a growing crisis, which is leading to a loss of opportunities for our young people. I absolutely agree that the Government are failing on that and need to address it urgently.
Holding colleges back with inadequate funding to both address their workforce crisis and reverse the cuts since 2010 is the ultimate false economy, but that is exactly what is happening. Despite recent uplifts, the truth is that further education funding compares extremely unfavourably with both university and school funding.
The latest IFS annual report on education spending in England found that further education spending per student aged 16 to 18 in 2022-23 was £6,800, which is lower than spending per pupil in secondary schools and only 11% to 12% greater than per pupil funding in primary schools, having been more than two times greater in the early 1990s. The hon. Member for Worcester (Mr Walker) made a similar point with that data earlier.
Andrew Western
The report acknowledged that extra funding announced in the 2019 and 2021 spending reviews would result in real increases in funding per student up to 2024-25. However, that only partially reverses earlier cuts, and increasing numbers of 16 to 18-year-olds up to 2030 will put further pressure on finances after 2024, when departmental spending plans have been scaled back. The director of the IFS has himself said the Government’s real-term cuts to further education are:
“not a set of priorities consistent with a long term growth strategy. Or indeed levelling up.”
In contrast, the Labour party sees how a thriving further education sector is essential to growth. That is why a Labour Government will create a skills system that works for businesses and for people across our country, by reforming the apprenticeships levy, devolving skills budgets and delivering a national mission to upskill, led by a new Skills England. Devolving skills budgets in particular is something I would welcome after seeing, from my time leading Trafford Council and as the work and skills lead for Greater Manchester, the real need for skills policy to be better aligned and integrated with regional economic policy and local labour markets, to deliver a more localised, tailored approach to skills provision. In short, colleges, like those currently doing great work in the Trafford—and indeed Stockport—area, have a critical role to play in any plans to grow the economy, but they need support and investment to be able to do that after years of declining funding for adults’ and young people’s education.
I hope that when the Minister replies, he will set out what further support and investment will be provided to Trafford College, and colleges like it across the country, to tackle the workforce crisis that is holding them back, holding students back and holding our local, regional and national economy back, too.
Lia Nici (Great Grimsby) (Con)
I have worked in the further education sector for 22 years—I hear the Minister’s inner voice saying, “No! Surely that means my hon. Friend started teaching in FE when she was still at primary school,” but unfortunately that is not the case—so I have a lot of experience of the absolutely glorious things that further education can do, but I have also seen it warts and all.
People seem to forget that the further education sector, alongside schools, interacts with more members of the public than any other sector. Adult education, community education, 16 to 19, apprenticeships and higher education are all provided for within the further education sector. Even when I was learning to be a lecturer and doing teacher training all those years ago, the sector was called the Cinderella sector. It has always been acknowledged that it has done a lot of the heavy lifting from an educational perspective, but it has rarely been given the same funding as schools and, in particular, universities. The university sector does a wonderful job, but a university lecturer will generally deliver about half as many hours of actual contact time in a year as a further education lecturer.
The teams do a fantastic and very varied job, but I have heard a lot about how we need more funding, and of course every sector will always ask for more funding. I am pleased the Department for Education is increasing funding into all the sectors mentioned, but we do have a particular issue, as many Members of the House have said, about how much salary we are able to pay people coming into teaching, or taking part in teaching, and to technicians, assistants or whatever it might be in the further education sector. We might want to attract engineering lecturers, for instance, but someone would have to be crazy, or have a private income that meant they could just work as a hobby, to even look at doing an engineering teaching job if it did not start at £55,000 a year at least. That is because they could go and work anywhere else and start at that salary or a lot more.
That is a perennial problem in the industry, and I would like the Government to look at it. I understand that the issue really is challenging in the current climate, but if we do not start to look at it, we will end up with an ever-increasing problem. We already have skills shortages, ergo, in five, 10, 15 or 20 years’ time, not only will even fewer people want to go into further education but even fewer will have the skills and industry experience to do so. As a country, we really have to take this issue seriously in order to see where we are going.
Mr Robin Walker
My hon. Friend is making an excellent speech, as I knew she would given her experience in the sector. We see this particular challenge in engineering, maths and physics. Does she agree that the Prime Minister’s aspiration of getting everyone doing maths until 18 is exciting in that context, but that it requires supporting the workforce in our FE colleges to deliver it? We need that breadth of teaching of mathematics, alongside other key skills.
Lia Nici
I thank my hon. Friend for his expertise, and he is absolutely right. However, many students when I was teaching struggled with their maths GCSE. They struggled with their basic skills and functional skills in numeracy. There was still a fairy tale, seemingly, that if someone had studied mathematics for 11 years in school and failed their GCSE, magically the further education sector—everybody seems to think it can do everything magically and often it does—in less than one year can produce a grade C or above, or a grade 4 or 5 and above, as the grades are now. There was this idea that someone who had failed at maths, hated maths and was scared about it could study for nine months part-time—maybe for one hour a week—in their college and would suddenly and magically have a maths GCSE. That is not the reality.
When I was head of department, all the mathematics we used to teach was applied, and further education has still not been able to do that across the board. That is often because we cannot find people who can teach maths confidently. Certainly we find it difficult to find people who can teach functional skills, numeracy or maths that is applied to the industry for which the students are coming to study. We have some real problems. For instance, I taught a group of level 2 media students once. I said to them, “I am giving you a tape measure, and I want you to go into the studio. We are going to calculate the square meterage of the studio so that we can do a lighting plan.” The students went off and within a minute they came back. They said, “Lia, we are having a problem here.” I said, “Why?” They said, “Because the tape measure is not long enough.” Think about that for a moment. Those students did not think that perhaps they had to measure it multiple times with one tape measure. Those are the basic skills we are talking about. I had to go into the studio and talk about it. That is the level we are at.
Schools are struggling to recruit maths teachers. I love the aspiration that everyone can be better at maths through to 18, but I always have the analogy of saying, “If you do not feel you are good at maths, equate that to something that you really don’t like”, because a lot of people have a fear of maths, or have been told over years, “You are not good enough at it”, so it becomes a self-fulfilling prophecy. I say to people, “Do you like horses?” They say, “No, I’m scared of horses.” I say, “Okay, so you’re scared of horses and horse-riding. You’ve never wanted to do it, or when you’ve tried it, you’ve hated it, or you’ve fallen off or you’ve never dared to get on. Tomorrow, I will make you go to a horse and get on it. You are going to have to ride it for an hour every week for nine months, but boy, you will be an Olympic showjumper by the end of it.” We need to think about how we will do these things, because we know as a country that we are a potential powerhouse in so many areas, but we have to think with common sense about how we will overcome some of the difficulties that we have.
Jane Hunt (Loughborough) (Con)
I thank the Chair of the Education Committee, my hon. Friend the Member for Worcester (Mr Walker), and the hon. Member for Wirral West (Margaret Greenwood) for initiating this useful debate.
Further education colleges have a wealth of experience in delivering learning, training and qualifications in their local communities, and that includes the fantastic Loughborough College in my constituency. They have a unique understanding of the skills gap through their relationship with businesses, industry and other local stakeholders, which enables them to adapt the courses they offer to help to skill young people, as well as upskilling and reskilling workers to meet the needs of the local economy in real time and prepare for the challenges of tomorrow. That makes them essential to our local communities and crucial to economic growth.
The country should make much more of, in particular, the flexibility of FE colleges to tailor the skills and training made available to meet local need, although we have already done that to some extent through the Skills and Post-16 Education Act 2022. Let me give an example involving Loughborough College. Not long ago, a business was thinking of coming to the area, but needed a workforce that was skilled in a certain way. I contacted the principal of Loughborough College by email, and she came back to me within about 10 minutes, having already contacted the business and reached an agreement on what they would do. Such flexibility and deliverability of that kind are available to the whole town of Loughborough and the local area because of what the FE college can deliver.
As the co-chair of the all-party parliamentary group on T-levels, I am also immensely proud of the fact that at the heart of Loughborough College is one of the first T-level centres built with town deal funding. The college will have an institute of technology, which it will be building along with Loughborough University, the Derby College Group and Derby University. The Minister, very kindly, officially opened the centre, and broke ground at the IOT not long ago. All those developments have been brought together by a phenomenal staffing team, and an equally phenomenal principal and chief executive, Jo Maher. I have named her because I want to thank her very much: she has done an enormous amount for people in Loughborough, and has achieved a huge amount in a very short space of time. She is moving on, but thankfully she is staying in Loughborough to become the university’s pro vice-chancellor for sport—and it doesn’t get much better than being in charge of sport at Loughborough University, let’s put it that way. She has achieved an amazing thing, along with all her staff, the governors and others. It is an amazingly proud moment for the town. The college has everything from T-level engineering to courses on health and social care and training for electricians and nursery staff. There are people who are going to make fantastic emergency service workers, prison officers and so on. It is a wonderful draw for the whole region to get those skills into the area.
For FE colleges to continue to deliver much-needed skills education, we must ensure that they are placed on a sustainable footing by addressing their historic levels of underfunding. Despite recent uplifts, FE college funding compares unfavourably with funding for universities and schools. As colleges spend 67% of their income on staff, current budgets are having a detrimental effect on recruitment.
Many colleges are being constrained in their ability to provide training at the level necessary to address skills shortages, because they cannot offer salaries competitive enough to attract the right people, who can earn far more in industry and even in schools. To reinforce that point, the Association of Colleges has informed me that, on average, teachers in schools are paid over £8,000 more than college lecturers, despite many college lecturers being more specialised and bringing real-life industry experience to their roles. That concern has also been raised with me locally. Salaries in the private sector are used to attract people with skills and knowledge; the same should be true in FE colleges.
Alongside the issue of additional funding in these areas, Loughborough College has highlighted to me that despite now being considered essentially to be public bodies by HM Treasury, colleges are not able to reclaim VAT as the vast majority of public bodies do. I have been told that this tax currently uses up 3% of a college’s income. The money voted for by Parliament for 16 to 19 education in a wide variety of key sectors is being taxed, which is disproportionately affecting those from disadvantaged backgrounds, who make up the majority of those attending college. It is compounded by the fact that, following ONS reclassification, an immediate block on commercial borrowing was placed on colleges.
That has left colleges stuck between a rock and a hard place: unable to receive private funding, as they are considered to be a public body, but having to pay VAT as if they were a private entity. It is therefore important that due consideration is given to including colleges in the VAT refund scheme. That simple change would go a long way towards helping colleges to provide the high-quality skills training that our economy needs.
Mr Robin Walker
In these debates, we have heard a lot about parity. Does my hon. Friend agree that now that there is greater flexibility, the Government should look across the education sector and ensure that early years settings, colleges and others are given parity with schools in their treatment for VAT purposes?
Jane Hunt
I absolutely agree. I thank my hon. Friend for his intervention.
FE colleges such as Loughborough College are our greatest asset in local communities and the best conduit for social mobility. Let us reform the sector for the future, so that they have the tools and resources in place to make the difference to the lives of their students and to the businesses where they will go on to work. I want to put it in a positive rather than a negative way: yes, we need to look at the money and look at the VAT, but there is such fantastic resource within FE colleges. It is all there to be had. Let us do that, and let us help them.
The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)
I am pleased to respond to the debate. When my hon. Friend the Member for Worcester (Mr Walker), the former Schools Minister and now the Chair of the Education Committee, said that he had applied for the debate, I welcomed it because I wanted a good debate on further education. Despite the kind words of the right hon. Member for Hayes and Harlington (John McDonnell), I do not know if he is quite the secret weapon I would take with me when I have negotiations with the Treasury, but his point was well made.
I heard a lot of rhetoric from the shadow spokesperson, the hon. Member for Chesterfield (Mr Perkins). Warm words butter no parsnips. Last year, FE Week reported that:
“Labour cannot commit to boosting FE funding levels”.
The article went on to say that speaking to FE Week, the hon. Member for Houghton and Sunderland South (Bridget Phillipson)
“said the economic landscape had changed significantly and could not pledge any uplift in cash for further education or address the disparity between FE and higher education funding until the economic outlook was clearer.”
So despite what the hon. Member for Chesterfield says, the Opposition are not guaranteeing any uplift in further education funding.
I thank the hon. Member for Wirral West (Margaret Greenwood) for opening the debate. She is passionate about adult education; I am with her and I understand the absolute importance of community learning. I have seen that in my own constituency and I champion it in the Department. I will say more about adult and community learning later in my remarks, but looking at all the programmes together—the skills boot camps, the level 3 offer, Multiply and adult apprenticeships—we are spending well over £3 billion.
My hon. Friend the Member for Waveney (Peter Aldous) as well as the hon. Member for Wirral West raised the issue of community learning, which has actually increased over the past year. If we look at the key focus, we will see that, in the 2021-22 academic year, 304,000 learners participated in a community learning course, compared with 243,000 in the 2020-21 academic year. That is an increase of 24.9%. I have other figures that I could quote, but that does not mean that everything in the garden is rosy. We are doing a lot of work to try to support adult and tailored learning, which I will go on to discuss a bit later in my speech.
I am experiencing a bit of déjà vu here. This time last year, I believe that I was the Chair of the Education Committee leading the estimates debate, and my hon. Friend the Member for Worcester was answering it. What we say here is, I think, touché. What I would say to him is that, absolutely, he has made a valid case for funding for further education, as have many other Members. I will go on to talk about that a bit later in my remarks. I also think that it is important that we do not paint just a partial picture. We should look at the 10% uplift in T-level funding, the £300 million that we are spending on institutes of technology, the £115 million spending on higher technical qualifications, which are now being taught in more than 70 institutions, the £2.7 billion that we will be spending on apprenticeships by 2025, the up to £500 million that is being spent on Multiply, and the many millions of pounds being spent on boot camps. Billions and billions of pounds are being spent on skills, which is absolutely right. It is right, too, to make the case for ever more resources—I always champion more resources—but it is important to paint the whole picture, not just a partial one. There are many good things happening, and it is fair to acknowledge that.
The hon. Member for Twickenham (Munira Wilson) raised the issue of BTECs, as did my hon. Friend the Chair of the Select Committee. He was resolute on this, so I will be quite resolute in return. BTECs have already been delayed. They have already been reviewed, and are being reviewed. There will be a significant number of BTECs that remain. We have specifically introduced the T-level transition year, the whole purpose of which is to prepare those students for T-levels, because, as was rightly said by my hon. Friend the Member for Great Grimsby (Lia Nici), T-levels are harder. But there is now a T-level transition year, and more than 60 institutions are teaching it, and there will be another 70 along the way to prepare students.
Importantly, we are removing some BTECs and other qualifications that have low uptake or poor progression. The hon. Member for Twickenham mentioned the tourism qualification. I shall write to her with the details and the figures. I shall also come on to childcare in a bit because of the brilliant speech by my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom). As I was saying, though, we are removing T-levels that have low uptake or not great progression, or that significantly overlap with other T-levels. The whole purpose of this is that we have created employer-led qualifications through our apprenticeship reforms. The T-levels and the higher technical qualifications are all employer-designed with the Institute for Apprenticeships and Technical Education; I was proud to legislate for them in my last stint in this role. Employers will be able to develop new qualifications. For example, if they wanted to, they could develop a new tourism qualification.
There is another important issue, which has come up time and again. I have said that some BTECs will remain. I recognise that disadvantaged students are doing some of these BTECs, but we go down a very dangerous road if we say that we want to keep some qualifications because disadvantaged students do them, and the other ones, the middle class and everybody else can do. That is a dangerous road, because I do not want to have two-tier qualifications: some for the disadvantaged and others for the middle class and the well-off. What I want, and what I have devoted my whole parliamentary life to, is to develop state of the art, world-beating vocational and technical qualifications that are as good as, if not better than, A-levels. That is what is important. That is how I would respond, politely but robustly, to my hon. Friend the Chair of the Select Committee.
Mrs Drummond
That is a very interesting comment on the people who are doing BTECs at the moment. We were told by several people that T-levels had a very high entry requirement. Can my right hon. Friend confirm that that is no longer the case? The other point we heard in our inquiry was that 20% were dropping out of T-levels. What will they be doing if they are not able to carry on with T-levels?
Robert Halfon
First, as I say, a significant number of BTECs remain and will remain. There are new qualifications that can be developed so that those who do not pass will be able to do some other qualification at level 3, or they may want to do a level 2 or level 3 apprenticeship instead. There will be options for those people, but we could make the same arguments about those people who fail A-levels. We should not just have one rule for T-levels and another rule for those doing A-levels.
I will come on to funding, because every hon. Member has raised that. The hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss) talked about it, and I am pleased that she has had more £7 million invested in Sheffield City College. My right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) was thoughtful as always; we have talked a lot about skills over the years and I reiterate that we are championing quality qualifications, which will address the skills deficits, and introducing lifelong learning through the lifelong loan entitlement.
The hon. Member for Stretford and Urmston (Andrew Western) again talked about funding; I will come on to that, and I am happy to write to him about the specific issue that he raised regarding Trafford College. I was pleased to meet my hon. and learned Friend the Member for Eddisbury (Edward Timpson) and the principal of Reaseheath College. Land colleges have been beneficiaries of important capital funding and I know the college has received more than £6.5 million. I said in that meeting that I would work with my hon. and learned Friend on the issues he has raised and I will continue to do so as much as I possibly can.
The hon. Member for Twickenham talked about the skills wallet, and we do have a difference here. I have sympathy with many of the things she says and I genuinely admire her for her knowledge of education and skills, but we looked at the skills wallet and, as I understand it, it gives every adult £10,000 to spend on training, but with incremental payments, starting with £4,000 at age 25, £3,000 at age 40 and the final £3,000 at age 55. That would mean that learners would be constrained by when the funding became available. We want to be fair to students and fair to the taxpayer. Our lifelong loan entitlement will be transformative, because everyone will have access to up to £37,000 that they can take any time up to the age of 60. There are 12 entry points and they can do short courses or modules of courses.
I have nothing but incredible admiration for the way my right hon. Friend the Member for South Northamptonshire champions early years. I have good news for her, because when I found out she was on the list to speak in this debate, I wanted to be sure about what we were doing on early years skills—as my Department officials, who are watching, will know.
To let my right hon. Friend know what is going on, there is a lot. The first-ever national professional qualification in early years leadership cohort began in October 2022 and the second cohort commenced in February 2023. The employer trailblazer groups have developed level 2 and level 3 apprenticeships, but we now have a level 5 apprenticeship and we fund more than 20 childcare courses through our free courses for jobs offer. Some 2,000 learners started T-levels in education and childcare in September 2022, and there is a load of early years higher technical qualifications. There is masses going on, so we will have the trained workforce that she passionately and rightly talks about, right across that sector.
My right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett) has great experience and wisdom. He too talked about funding, and he will know that his college—I think it is the London South East Colleges group—has had £24.5 million since 2020. I think the shadow Minister has also had £18 million in capital funding for Chesterfield College in his constituency; again, that is a brilliant investment by the Government that no doubt he will be celebrating to the rafters.
I have mentioned the right hon. Member for Hayes and Harlington. I appreciated the way in which he said what he did. We have spending constraints, but I will talk more about those in a moment. My hon. Friend the Member for Waveney spoke powerfully about the skills revolution in his area.
My hon. Friend the Member for Great Grimsby made a brilliant speech. There was a lot that I agreed with. On the maths to 18 issue, I was one of those people who had a fear of maths. I passed my maths O-level, but it took me three months and a second time around—I was slightly dyspraxic; it was a nightmare. It is wrong that I was told that I would never have to do it again. We should have practical numeracy—basic numeracy, times tables and so on—and what I call numerical literacy, so that people can read bills and understand budgets. That would help those who have difficulties. Of course, any maths teaching should promote careers in mathematics. I think that the Prime Minister is right: we must have maths to 18 along the principles that he set out in his speech. I absolutely believe in that. The experience of my hon. Friend the Member for Great Grimsby was clear to see.
This is an estimates day debate, so we have to talk about facts and figures. The DFE’s resource budget is about £86 billion—an uplift of more than £2 billion since the spending review—and £9 billion is directly linked to apprenticeships and further education. Apprenticeships are a key rung on what I call—colleagues have nicely quoted it back at me—“the ladder of opportunity”. We redesigned the programme in partnership with industry. There are now accredited routes to more than 670 occupations, from entry level to expert. Government funding for apprenticeships will reach £2.7 billion by 2024-25, as I have mentioned, and that money is reaching the economy.
The hon. Member for Twickenham mentioned the apprenticeship budget. We spent 99% of the apprenticeship budget, and let us not forget that we send hundreds of millions to the devolved authority, so the levy is being used. I can give her a raft of quotes from businesses that are supportive of the levy. The Opposition quote one or two businesses here and there that perhaps want it to be a skills levy, but—I have to disagree with the hon. Lady and the shadow Minister—a skills levy would mean no apprentices or a diluted number of apprentices. We are spending billions of pounds on skills. I have already given the figures on that.
As the Chair of the Education Committee, my hon. Friend the Member for Worcester, mentioned, the Association of Colleges has called for 50% of the apprenticeship levy to be spent on apprentices at levels 2 and 3, who are below the age of 25. Under-25s made up 50% of starts in 2021-22; 70% of starts were at levels 2 and 3, providing an entry-level springboard into work. Contrary to the bad news set out by the shadow spokesman, we have had a 22% increase in apprenticeship achievements in the academic year—that is what counts: achievements. The 90% who achieve get good jobs when they finish their apprenticeship. There were 8.6% more starts in 2021-22 than in 2021. We are pushing and encouraging more degree apprenticeships. They are a brilliant route up the ladder. We are now putting in £40 million over the next couple of years—it was £8 million previously—to encourage providers to take up more students for degree apprenticeships.
My goodness, what a brilliant visit we had to the college in the constituency of my hon. Friend the Member for Loughborough (Jane Hunt). Anyone who wants an example of T-level success should go to Loughborough College, where state-of-the-art T-levels are being taught brilliantly—including healthcare T-levels, creating a pipeline for future NHS workers—and an institute of technology is being built. It was an honour to lay the groundwork. As I mentioned, we are spending £300 million on 21 institutes of technology around the country, of which there are already 12. They are the Rolls-Royce of further education in collaboration with higher education and big and small businesses, and an example of the Government’s commitment to skills and of the investment in the skills that we need for the future. Sadly, I understand that the principal is leaving Loughborough College, but I am sure that the college will find a principal who is just as brilliant as her to take over.
I mentioned the higher technical qualifications and new and existing levels 4 and 5. We have the T-levels. Yes, there are delays in some of them, but we want to get them right. We have 164 providers across the country, and 10,000 students started T-levels in 2022—that is more than double the 2021 figure. We will roll out T-levels in 2024-25 so that more young people can benefit from those high-quality qualifications. More than 92% of students achieved a pass.
Robert Halfon
I want to come on to FE funding, but I cannot not let the hon. Gentleman in.
Mr Perkins
I am grateful. There is much I would like to come back to the Minister on, but I want to ask specifically about T-levels. He mentioned that 10,000 people are starting them, and many of the T-level students I have met have very much enjoyed their courses. However, at the moment, 230,000 students do applied general qualifications whereas 10,000 are doing T-levels. In two years’ time, the vast majority of those 230,000 students will not have that course to study. Does he not hear why the call for a moratorium, for him just to take his time, is so powerful and why that view is so widely held?
Robert Halfon
I absolutely understand the reason why. There will, of course, be some worry when we change to a new system, but we have already delayed the onset under the previous Secretary of State for Education. We want to encourage people to do T-levels. They are world-beating qualifications, and those students will also be offered the chance to do a T-level transition year. As I said, new qualifications can be developed.
I want to talk about funding, because it has been raised significantly. We are allocating £3.8 billion more to further education and skills over the Parliament. We announced the final stage of the FE capital transformation programme, worth £1.5 billion. We are investing up to £584 million in skills boot camps. There is an extra £1.6 billion in 16-to-19 education. Many Members have raised the issue of VAT for colleges, and of course, that needs to be considered in the context of wider public finances. As hon. Members know, those things are decided by the Treasury. The Financial Secretary to the Treasury recently responded on this issue in a Westminster Hall debate, but the views of Members across the House will have been heard by the Treasury today.
We are offering tax-free teacher training bursaries of up to £29,000 in priority subjects to encourage more people to come into FE. There are other funds, including a Taking Teaching Further incentive payment of £6,000 for those coming from industry into FE. We are doing a lot to try to encourage more teachers, and we have spent a fair bit of money on advertising to try to encourage more FE teachers, even with the financial constraints that we have.
Robert Halfon
The hon. Member for Wirral West spoke passionately about adult education, and I want to let her know about the five pillars that I have for adult education: community learning; careers support; learning for jobs; the lifelong loan entitlement, lifelong learning; and empowering local decision making. I will briefly explain what I mean by them, but first I will answer the question from the right hon. Gentleman.
John McDonnell
Before the Minister moves on from FE, it is worth acknowledging that only a few weeks ago, the University and College Union decided that it will ballot its members in September, with the potential result being industrial action in October if there is not some realistic offer with regard to pay and working conditions. Is the Minister addressing that at the moment?
Robert Halfon
The right hon. Gentleman will know that FE colleges are autonomous on these matters, so they have to make their decisions with the UCU. However, I certainly urge members not to strike, because it causes significant damage to students and learners, many of whom have suffered enormously during covid because of the lockdown.
Let me go through the five pillars that I mentioned to the hon. Member for Wirral West. Community learning refers to the education that we provide for adults in the community. It forms part of the overall adult education budget of £1.34 billion a year. We will continue to use the skills fund provision to support learners furthest from the workplace who may need a stepping stone towards formal learning. The provision is not qualification-based and is part of what we call tailored learning. She will know that there are a significant number of courses that people can do, if they do not have those qualifications or have not done those courses already, that are completely free. That supports adults to access further learning and employment, and their wellbeing. I accept the hon. Lady’s argument that adult community learning is vital for wellbeing.
Careers support is another issue that was raised by the Select Committee Chair, my hon. Friend the Member for Worcester. I am considering the Committee’s report carefully. We are investing over £87 million in high-quality careers advice, both for adults and for young people. We have careers hubs in over 90% of secondary schools; we have the new Baker clause, which means that schools have to have encounters with apprentice organisations or technical colleges as well; and we have the National Careers Service providing advice to adults. The Apprenticeship Support and Knowledge network is also going around schools and colleges, promoting careers.
Learning for jobs is the third pillar—all of the pillars are linked. I have talked about the Multiply programme, the free courses for jobs—there are over 400 courses—and skills boot camps, in everything from engineering to heavy goods vehicles and the green economy. We also have the local skills improvement plans, which ensure that communities can advise on what skills they need in their local areas, and when we have skills deficits, we have the Unit for Future Skills to look at the national situation. We have the lifelong loan entitlement, which I have spoken about briefly. That entitlement will be very powerful and absolutely transformative, because it will allow people to have the end destination of a qualification, but to get on and off at various stations along the way by doing short courses and modules of courses.
The final pillar of adult education is empowering local decision makers: Mayors, learners and employees. As the hon. Member for Wirral West pointed out, we have devolved 60% of the adult education budget to 10 areas of the country, amounting to almost £800 million going to the mayoral authorities, but empowerment is not just about devolution to local government. The lifelong loan entitlement will devolve power to individuals, and apprenticeships devolve power to employers, allowing them to develop the skilled workforce that their businesses need. We plan to publish the mandatory FE workforce census findings later this year as experimental statistics, which will include findings on workforce sector pay—I think it was the hon. Member for Wirral West who raised that issue.
To conclude, we are investing in FE and skills in difficult circumstances. I absolutely recognise the pressure on resources, and will do everything I can to champion resources with the Treasury and elsewhere. I welcome the thoughtful cross-party debate that we have had right across the House of Commons. I have a picture of John Kennedy in my office at the Department for Education, because I am a big fan. He said that “We choose to go to the moon, not because it is easy, but because it is hard.” Like JFK, this Government are unwilling to postpone our FE and skills reforms because they are difficult. In testing times, we know how much the benefits that they will bring to our nation’s economy and prosperity are needed. We are determined to build an apprenticeship and skills nation.