Further Education Colleges: Recovery of VAT

Baroness Blackstone Excerpts

Tuesday 9th June 2026 Lords Chamber

[Lord Livermore (Lab)]

There is a great deal to be said in favour of what Alan Milburn sets out in his interim review. He has published his interim review, setting out the drivers of youth unemployment. Clearly, some of the issues that the noble Lord raises are important to that and a factor in the rise in economic inactivity among those with health conditions. Alan Milburn will set out his final report later in the year, at which point he will set out his policy recommendations. I look forward to him doing so.

[Baroness Blackstone (Lab)]

My Lords, picking up what the noble Lord, Lord Johnson, said, the FE college sector really is the poor man of the education system in this country. This follows years of neglect by previous Conservative Governments. My noble friend the Minister read out a number of different improvements in the resourcing of these colleges, but does he agree that there also needs to be greater parity of pay? Those who work in FE colleges are worse paid than those who teach sixth formers and much worse paid than those who teach in universities, despite neither of those groups being particularly highly paid. Will he look into this, with the Department for Education, to see whether there can be some improvement in pay and in the training of leaders in FE colleges, so that we can have better skills training in order to support the economy and a better deal for those young people who do not want to follow an academic route and go to university?

[Lord Livermore (Lab)]

I agree with my noble friend’s overall point that we want greater levels of parity between FE colleges and other educational establishments. The Government are delivering those measures through our post-16 skills White Paper on developing the skilled workforce that our economy needs and on reaching the target of two-thirds of young people participating in higher-level learning. FE colleges are a vital part of that. One thing that I have not read out is that, in recognising rising student numbers, the Government are providing £87 million of exceptional in-year growth payments to colleges this year and are increasing funding by nearly £800 million next year.