Lifelong Learning (Higher Education Fee Limits) Bill (Fourth sitting)

Andy McDonald Excerpts

Committee stage
Thursday 23rd March 2023 Public Bill Committees

[Mr Perkins]

It is a great pleasure to serve under your chairship, Mrs Cummins. I rise to speak to my hon. Friend’s amendments. I think that he has already made the case well, but there are a few points that I would like to add, particularly regarding the financial sustainability of further education colleges and independent learning providers.

The amendments absolutely speak to the heart of our reservations about the approach being taken. They are quite modest in their scope, but given the evidence that we heard in the evidence sessions, which was touched on in earlier discussions on other amendments, they do, as I say, cut to the heart of our concerns. Amendment 7 asks the Secretary of State to have regard for additional costs associated with the delivery of the course, and amendment 8 asks the Secretary of State to have regard to the financial sustainability of providers.

I will speak to amendment 7 first. In the evidence session, David Hughes explained that colleges,

“do not have any of what the private sector might call risk capital”.––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 50, Q105.]

Given that FE college funding has fallen by 27% in real terms between 2010 and 2019, according to the House of Commons Library, and given the increasing financial pressures—with the booming energy prices and wage inflation all affecting colleges too—the financial picture for many of our colleges, crucial as they are, is very difficult indeed.

For that reason, David Hughes told us that the risk appetite of colleges for putting on courses that they do not know that anyone will study is likely to be pretty limited and restrained. As my hon. Friend the Member for Warwick and Leamington said, with colleges now being inside the public sector and therefore unable to seek private-sector borrowing, and being forced to run balanced budgets, colleges will just not be able to run courses that they cannot be pretty certain will have learners taking them.

[Andy McDonald (Middlesbrough) (Lab)]

My hon. Friend is making an excellent point about the difficult landscape that FE colleges find themselves in, but is he as surprised as I was to hear that Eton College was proposing to enter into the fray across the country—my own constituency included, notwithstanding that there was an oversupply in the sector already—thereby adding to the difficulties and undermining existing colleges? Is that not exactly the wrong way to go when the landscape is already so difficult?

[Mr Perkins]

My hon. Friend makes an interesting point. I am not specifically aware of the intended provision that he raised but, absolutely, the strength of his oratory on the issues facing further education colleges is absolutely right, and I would be very interested to learn more about what it is that Eton College believes it can offer that is not currently being provided.

Returning to the point I was making, there is a real need for somebody to step in and provide the certainty of funding that might allow more courses to be put on. Realistically, this legislation will not even come into force until 2025, so it will fall on the next Government to make this work, not the current Government, with all their best intentions. It will fall on the next Government to ensure that our constituents and learners across the country can actually take advantage of what is being offered.

Over the course of the 13 years I have been a Member of Parliament, I have become used to quizzing Ministers on pieces of legislation: “How is it going to work? What are you going to do?” This is one of those situations where the Minister is laying out what he anticipates might happen with the legislation, but all these questions will probably be for his successor. He may still be the Minister—no one knows the outcome of a future election.

However, as His Majesty’s Opposition, as a responsible Opposition, we have to think carefully about the fact that we might inherit this legislation and inherit responsibility for ensuring that these courses are available, that colleges and independent learning providers are sustainable, and that this provision is available to our constituents. It is therefore important for the Minister to confirm at this stage, given the recent Budget, whether any provision has put in place to recognise the additional costs for FE colleges or independent learning providers in delivering a more modular form of learning.

As we heard in evidence—I will expand on that in a moment—additional administrative and cost burdens will be placed on colleges. Will money be put aside to ensure that they are able to run these courses sustainably? If it is not the Department for Education or the Minister that will be ensuring additional funds, will it fall on local mayors to provide financial reassurance? Might the need for this kind of provision appear in local skills improvement plan? There would then be an expectation that a Metro Mayor would provide additional financial reassurance.

If not, I fear that this scheme will end up being something that largely happens in the private sector, where there is maybe a bit more risk appetite, and only with employers who can provide certainty about the economies of scale by placing several learners on courses. If a particular employer says, “Well, I want seven of my staff to do a specific course,” then someone might run one on that basis. But we are looking for colleges or independent providers to pre-emptively offer a course and see who signs up for it, so all these financial implications will only add to the potential nervousness around that. We heard several witnesses say that this measure has the potential to be a game changer for colleges, but only if they can afford to take the risk. This amendment, proposed by my hon. Friend the Member for Warwick and Leamington, offers some potential for the Government to illustrate that that risk has been seriously considered.

It will be useful for the Committee if I specify some of the additional costs that learning providers will face. We know that one of the Bill’s objectives is that someone who studies in this kind of modular way should not pay any more than they would have done had they studied in what you might call the usual way on a short-term, full-time course. Providers are saying that delivering in this new way will be more expensive, so there is a gap. Someone has to fill that gap, and it will either be some form of Government or the provider themselves. If it is going to be the providers, they will have to think carefully about whether that will be affordable.

If we think, for example, about the recruitment costs for any college that takes on lecturers—advertising a position, going through the interviews, all the administrative costs with collating CVs and going through and meeting to discuss those CVs—and all those things that might normally happen in advance of a three-year university degree, with all the revenues that will come in from that, all those costs still apply. However, it might be that those costs apply to someone who will actually be working for a short length of time and with far less revenue coming into the learning provider, and the barriers to recruitment will arguably grow.

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Division 7

Ayes: 5

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Labour: 5

Noes: 8

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Conservative: 8

[Andy McDonald]

I beg to move amendment 1, in clause 1, page 5, line 23, at end insert—

“(1IA) The fee limit as determined under paragraphs 1D, 1E and 1I is to be indexed to any future increase in tuition fees”.

This amendment is to ensure that should the Secretary of State or Parliament decide on any increase in the value of tuition fees, the fee limit is adjusted accordingly to ‘future-proof’ the value of the lifelong learning entitlement.

It is a delight to see you in the Chair this afternoon, Mrs Cummins. I thank the Minister for his commitment to lifelong learning and for his acknowledgement of the position regarding FE lecturers and teachers. All of us who value our superb FE sector are aware of the pressures it is under, but I ask him to take up with me outside this discussion the unintended consequences of bringing other providers into a field where they can detract and take people away.

I welcome the commitment to lifelong learning but, as my amendment speaks to the issue of fees and therefore indebtedness, I also feel obliged to place on the record my thanks to Governments past for making the commitment to provide me and my generation with an entirely free education. Given that I started as an undergraduate in the 1970s, I recognise the wisdom of Harold Wilson in establishing the Open University. His good sense, and that of Jim Callaghan, ensured that working-class youngsters could fulfil their potential without the burden of long-term debt.

It is a different world now, and I very much regret the commodification and commercialisation of education in this neoliberal world. I hope that future Governments will abolish tuition fees for those embarking on their higher education journey. I am of the view that some of the changes we have seen since the 1970s have not been to the betterment of those wishing to further their training and education, or to the betterment of our economy and society. But we are where we are, and the Government’s intended commitment to lifelong learning warrants support—albeit, as ever, subject to the rigours of examination in the Bill Committee process.

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The hon. Member for Warwick and Leamington asked for clarification on HE funding. We believe that a continued fee freeze achieves the best balance between ensuring that the system remains financially sustainable, offering good value for the taxpayer and reducing debt levels for students in real terms. To be clear, we are investing an extra £750 million over three years, from 2022 to 2024-25, to support high-quality teaching and facilities for subjects that support the NHS and degree apprenticeships.

[Andy McDonald]

I thank the Minister for his response. On the ancillary issue of universal credit, I have an uncanny feeling that the protections are not as universal as the Opposition hope. Nevertheless, we have been given some reassurances. On the substantive matter of my amendment, I am pleased that the system works, that the Minister has been persuaded of the veracity of our arguments and that it is already built into his thinking. With that, I will not press the amendment to a Division, and I thank the Minister for his clarifications.

[Robert Halfon]

I forgot to mention this but I think the hon. Gentleman asked to see me. I would, of course, be happy to meet him at any time.

Amendment negatived.

Question proposed, That the clause stand part of the Bill.