Further Education Colleges: Recovery of VAT

Debate between Lord Livermore and Lord Mohammed of Tinsley

Tuesday 9th June 2026 Lords Chamber

[Lord Livermore (Lab)]

There is a lot there. I am confident that HMRC accepts the law and is following the law, but I am more than happy to look into the points that the noble Lord raises.

[Lord Mohammed of Tinsley (LD)]

My Lords, I will return to colleges and the original Question from the noble Lord, Lord Forbes. I want to follow up on the issue that he raised about the amount of VAT that is collected from colleges—about £200 million, if I heard the noble Lord right. What assessment have the Government done of the opportunity cost in improved facilities, more equipment and staff training that could be delivered if colleges were able to get that £200 million in VAT refunded?

[Lord Livermore (Lab)]

As I have already said, the Government are aware of this issue and we are looking into the VAT position of these colleges. As I have also said, we have significantly increased the amount of funding that is going to FE colleges to do the exact things that the noble Lord is asking for: £1.7 billion to support colleges to maintain their estates and £375 million to expand capacity for post-16 education, among other investments.

Regional Growth

Debate between Lord Livermore and Lord Mohammed of Tinsley

Thursday 5th June 2025 Lords Chamber

[Lord Livermore (Lab)]

I very much agree with the noble Lord in what he says about bringing people in. We have far too many people inactive in our labour market. I think we are the only country in the G7 where inactivity rates have not returned to where they were prior to the pandemic, for example. At a time when, as the noble Baroness, Lady Pigeon, mentioned, we need the workforce there to build this infrastructure, there are far too many people who are currently inactive, and it is a huge waste of potential. We have started, with the welfare reforms that we have set out, to get more people back into the labour market. There will be more detail in the spending review next week, or perhaps following the spending review, on the settlement that the Department for Education and the Department for Work and Pensions will be receiving to ensure that we get more of those people who are not in education or training back into the workforce.

[Lord Mohammed of Tinsley (LD)]

My Lords, like my noble friend Lady Pidgeon I support the announcement from the Government. I also support her call for the reinstatement of the £2 bus fare cap.

I listened with interest to the Minister’s comment about connectivity in city regions. I want to press him regarding South Yorkshire. I welcome the tram renewal. However, in addition to tram renewals, did the ask from the regional mayor include tram extensions? The Supertram system in Sheffield has been in place since the early 1990s, albeit that a small extension from Meadowhall in Sheffield to Rotherham was done during the coalition years. Was a tram extension asked for?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his support for what we have set out and for connectivity in general. We announced £1.5 billion for South Yorkshire, to support the reopening of Doncaster Airport and to renew the existing and now publicly controlled Supertram network with track replacements, overhead line maintenance, rolling stock renewal and a full fleet of new vehicles by 2032, linking jobs and homes in Sheffield and Rotherham. It was also to reform South Yorkshire’s buses—the noble Baroness, Lady Neville-Rolfe, is keen on buses—with franchise buses operating in Sheffield, Doncaster and Rotherham by 2027 and across South Yorkshire by 2029.