The Parliamentary Under-Secretary of State for Education (Josh MacAlister)
I am grateful to the hon. Member for Runcorn and Helsby (Sarah Pochin) for securing this timely and important debate. I have not had the chance to speak to her since her powerful and moving contribution earlier. FE colleges are engines of economic growth and social justice. They are anchor institutions, bridging talent with opportunities. While often overlooked, they are central to our very success and prosperity as a country.
I know full well the power of further education from my own local college, Lakes college in Cumbria, which, with the power of the Dispatch Box, I will declare is the best in the country. It has a distinctive national specialism in nuclear skills and engineering. But it is essential that everyone—whatever their background and circumstances and wherever they live—can access the opportunities of excellent further education.
Madam Deputy Speaker
Order. Minister, I am not sure exactly what you are trying to achieve, but the best colleges are in my constituency of Sussex Weald.
Josh MacAlister
I am just relieved, Madam Deputy Speaker, that you were not ticking me off for something else. [Interruption.] Okay. It is a growing list.
It is essential that everyone, wherever their background and wherever they live, has access to excellent further education funding. That point was made by a number of Members in the debate. Just yesterday, the Government announced an additional £120 million for further education in 2026-27, rising to £365 million in 2027-28.
Matt Turmaine (Watford) (Lab)
This Government have rightly made capital investment decisions for the long term. Does my hon. Friend agree that it is vital to properly plan further education provision with the skills and jobs needed for long-term growth in infrastructure?
Josh MacAlister
I do, and it is only possible with the funding that I was setting out that the Government have secured.
Funding per student aged 16 to 19 will have increased by over 12% in two years. That comes at a time of significant growth in student numbers. As a result, total 16-to-19 funding will increase from £7.6 billion in 2024-25 to over £9 billion in 2026-27, which is a material increase. This is timely because of the current challenge we face of the rising number of young people not in education, employment or training. The number is too high, and the consequences are serious.
The Government have a comprehensive plan for further education and post-16 education and skills overall to support young people into rewarding careers and tackle high rates of young people not in education, employment or training. As well as technical excellence colleges—specialist further education colleges in England designed to deliver high-quality training in priority sectors—we are introducing the new V-levels, which will sit alongside T-levels as the technical route and A-levels as the academic route, which Members will be familiar with.
The youth guarantee is this Government’s commitment to ensure that all young people can access education, training and apprenticeships, employment support or work opportunities. We are supporting 50,000 more young people into apprenticeships and offering a £2,000 hiring payment for small businesses. This is complemented by the jobs guarantee, which provides eligible young people with a guaranteed six-month paid job, helping them gain work experience, skills and a route into sustained employment.
The hon. Member for Runcorn and Helsby highlighted the need for capacity in FE. Demographics mean that this is a national challenge, but we expect 67,000 additional 16-year-olds and 17-year-olds to enter the post-16 system in 2028, which is very soon. That means we are investing £570 million to create the space that is needed in FE. Post-16 providers that are not in mayoral strategic combined authorities—I believe that the hon. Member’s constituency is not—have been able to bid for the construction skills capacity fund, the outcome of which will be revealed very shortly.
My hon. Friend the Member for Stafford (Leigh Ingham) raised the variation in the cost of payments per pupil. High-cost 16 to 19 courses do receive more money. For example, engineering attracts 73% more funding than base cost classroom courses.
The hon. Member for Gorton and Denton (Hannah Spencer) was right to highlight the problems with the apprenticeship levy as was. We are making big changes to make it less bureaucratic for small businesses, in particular with the growth and skills levy. My hon. Friend the Member for Camborne and Redruth (Perran Moon) highlighted issues with transport, as did many other Members. He was right to say that bus access is integral to opportunities at further education colleges. I know that from my own constituency.
Jayne Kirkham
I would just like to highlight a point of inequity. Mayors sometimes subsidise buses for young people aged 16 to 19, which means that young people in urban areas are better set than those in rural areas where the councils cannot afford to do that and young people have much further to travel.
Josh MacAlister
As a Cumbrian MP, I know that problem all too well, and I know that many in Cornwall experience that too. We are building back our bus system in this country. There have been significant increases in funding for local authorities to build back that bus system. We do need to go further on it, and I completely recognise the connection that has been drawn by my hon. Friend.
The hon. Member for Harrogate and Knaresborough (Tom Gordon) asked about funding. About 70% of FE funding comes from the Department for Education through the funding for post-16 courses. Earlier in my speech I set out the 12% increase over the last two years. Because that is such a large proportion, I recognise the other issues with adult skills budgets, but overall FE college funding is going up as a result of all of that.
Gareth Snell
I appreciate that this is the responsibility of our noble Friend in the other place, but if the Minister’s officials could write with an answer, I would be grateful. It is reported that pension contributions in the college sector will likely drop by about 8% as a result of the funds doing very well. There is a rumour that some of the colleges’ dividend from having to pay less into pension funds will be clawed back mid-academic year as part of the Department’s negotiations. I appreciate that he cannot answer that now, but that would be incredibly damaging to colleges. Any way of mitigating it would be welcomed across the sector.
Josh MacAlister
I was about to turn to my hon. Friend’s question. He is right to recognise the limits of my knowledge, given that my noble Friend in the other place has responsibility for that issue. I will happily ask for officials to write to my hon. Friend about that concern. He is also right to highlight the need for care in handling the transition in qualifications—a point he has made many times and on which he has helped the Government get to a sensible place. I will also ask my noble Friend, given her responsibility for this brief, to contact my hon. Friend the Member for Mid Cheshire (Andrew Cooper) about the issue in his constituency.
The Lib Dem spokesperson, the hon. Member for St Neots and Mid Cambridgeshire (Ian Sollom), rightly highlights issues around funding. I believe I have covered that in relation to yesterday’s excellent news on FE teacher pay, overall funding and the population at post-16 settings; there will be a 12% increase over the next two years. The hon. Member and I spend quite a bit of time exchanging ideas and comments about each other’s plans; I have stopped keeping a tally of spending commitments from the Liberal Democrats, because they are racking up.
I congratulate the spokesperson for the official Opposition, the hon. Member for Bromsgrove (Bradley Thomas), on his first time at the Dispatch Box. I can tell him that my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) and my right hon. Friend the Member for Makerfield (Andy Burnham) are of one mind on the need for a transformation in further education. I do not have time to tackle the hypocrisy of the Conservative party’s student loans plan, because I have been asked to wrap up.
With that in mind, let me finish by saying that further education colleges are a manifestation of so much that we value as a Government and as a country. We back them with the money, reform and status they rightly deserve. There will be more to come, but change is already afoot. I thank the hon. Member for Runcorn and Helsby for securing the debate and all Members for contributing.