Further Education Colleges (North-east)

Edward Leigh Excerpts

Tuesday 26th January 2016 Westminster Hall

[Mr Jones]

I agree, but that is where the problem lies. I sympathise with the Minister. Having been a Minister myself, I accept that civil servants sometimes look at things through a London—not even a south-east—prism and think that if something is not happening in London or the south-east, it cannot be happening elsewhere. The idea that my hon. Friend has an outstanding college in Northumberland is perhaps something that they cannot comprehend. Any changes need to be right. One size will not fit all. We have a dynamic group of colleges. The issue is not about competition. That would be a retrograde step back to the bad old days when people were literally competing. That is not a good use of resources and not good for the learners themselves.

Another aspect that is important for the further education sector is to raise aspirations. If we are going to get people into engineering or hospitality and tourism, one thing that the north-east needs more than anything—the further education sector has a key part to play—is to raise aspirations. Sadly, in my own constituency, and in other constituencies as well, we have the problem of—it is a horrible word—NEET: not in education, employment or training. It is difficult to find out the numbers. There are individuals now who are not included in any statistics anywhere. They are not in the education statistics; they are not claiming benefits; and they do menial, part-time, casual work. That is okay while they are young, but they are missing out on the opportunities to get the qualifications that they need for the future, and in many cases they put themselves at great risk working on building sites or in conditions with no health and safety provision or any care for those individuals. Those are the people we need to reach. Sometimes, when the school system has failed them, the further education sector is a good way to access them.

I want to address two other points and how other Departments’ policies impact on the further education sector. Just outside my constituency, in the City of Durham constituency, is Finchale Training College. It was set up in 1943 for the rehabilitation and retraining of ex-servicemen. It does fantastic work with veterans who have mental health problems and physical disabilities. It has a long tradition of retraining them and getting them ready for work. It has also done other training work in the wider further education sector. It was a residential college until 2015 when the Government changed the rules in a move away from residential colleges, and we can argue the pros and cons of that.

In September 2015, the Department for Work and Pensions introduced the specialist employment service to help individuals who need extra help because of disabilities or other training needs. They would have gone into the residential system, but are now—I think positively—in the community. The system set up to deal with this is not only bureaucratic, but it has a detrimental effect on colleges such as Finchale. Contracts were issued nationally and large organisations such as the Shaw Trust, Remploy and others got the contracts. They have sub-partners and Finchale is a sub-partner for the Shaw Trust. The pathway for the people who need extra help into the system is via the disability employment advisers in local jobcentres. There are only two full-time disability employment advisers in the entire north-east; the rest are part time, and there is a problem. Access is gained through a computer-based system. On the first working day of each month, a number of places and contracts are put out. The employment advisers then have to match people to those.

In theory, there is a regional cap, so there should be 18 for the region, but that does not work in practice. So Finchale, which would have expected 70 students over the last period, has only got two, because as soon as a jobcentre in Croydon or south Wales logs on and gets in early, it can upload all its applicants to fill the places. So the idea that Finchale will access learners from south Wales or Croydon is not the case. There are an estimated 200 people in the north-east who need help.

[Sir Edward Leigh (in the Chair)]

Order. The hon. Gentleman is giving an excellent speech, but he has gone on now for 15 minutes. Several people want to speak, and I want to get everybody in, so can he now bring his remarks to a close?

[Mr Jones]

Will the Minister ask his Department for Work and Pensions colleagues to change the system? The system needs to have a regional cap and to allow for people at least to access it, because at the moment it is having a detrimental effect on colleges such as Finchale.

Finally, I would like to hear the Minister’s thoughts on regional devolution. We are told that post-16 further education will be devolved to the new regional body, whatever that will be. Will he guarantee that, if that happens, any cash will be ring-fenced or immune from cuts? When the public health budgets were devolved to local government, the first thing to happen was that they were top-sliced. One of my fears, I think rightly, is that the devolution agenda being pushed by the Government is more about devolving responsibility—without the cash to go with it—and then the blame when the new local authorities have to make the cuts. I am interested to know the Minister’s thinking.

We have world-leading colleges and further education institutions in the north-east. The Minister needs to work with them and not to try and implant in the north-east some blueprint that might look nice on his civil servants’ spreadsheets. If something is not broken, why try and fix it?

[Sir Edward Leigh (in the Chair)]

We have a number of people wishing to speak. Please keep your speeches down to less than six minutes.

--- Later in debate ---

[Mr Wright]

My hon. Friend makes a fair point, but I would go further, because I worry about the area-based review in the Tees valley. May I ask the Minister why the review includes FE and sixth-form colleges, but not school sixth forms, 16-to-19 free schools or university technical colleges? If a comprehensive review of post-16 provision in an area is being undertaken, why include only certain providers? The 10 FE colleges in the Tees valley subject to the review account for only about 60% of provision, so how can a proper evaluation take place? The process seems opaque, and no one has been able to demonstrate to me clear and transparent criteria for how the area-based review is being conducted. Will he use this opportunity to do so this afternoon?

Furthermore, given that colleges are autonomous organisations, it is difficult to see how any conclusions of the review can be implemented unless the Government starve colleges of funding until they agree to the conclusions. Will the Minister respond to that point and confirm that colleges in the north-east that refuse to accept the findings will not experience disproportionately harsh cuts to their funding?

The Government’s key objective in skills policy is the target of 3 million apprenticeships by 2020. The apprenticeship levy has been proposed as a means to ensure that firms pay for training. I appreciate that core funding for 16 to 19-year-olds and adult skills will be maintained in cash, if not real, terms as a result of the spending review. However, the Minister knows that there remains acute pressure on college budgets. The Skills Funding Agency has suggested that about 70 colleges throughout the country could be deemed financially inadequate by the end of 2015-16.

A devastating impact on FE colleges in the north-east is possible. Will the Minister reassure the House, without referring to specific institutions—doing so might undermine confidence—that colleges in the region will have suitable resources? Will he explain how he anticipates that the combination of his main priority, apprenticeship expansion, with other FE college activities will complement one another, rather than the former being seen as a substitute or alternative for the latter?

I mentioned that FE colleges in the north-east are drivers of social mobility. For people in the north-east in their 20, 30s or 40s who have been made redundant—sorrowfully, we have had far too much of that in the north-east recently—or who may not have worked hard at school but now want to put their lives back on track, and yet are not in a position to take on an apprenticeship place, how does the Minister anticipate that FE colleges will be able to provide them with the necessary basic skills to make something of their lives?

I turn to the apprenticeship levy and, in particular, something that the Minister said when giving evidence to the Sub-Committee on Education, Skills and the Economy yesterday. About 2% of firms in England will be liable for the levy, and the Tees valley figure is broadly comparable to the national proportion—2.2% of our employers are large firms. In Committee I asked the Minister whether the Government position was that the levy will be a ring-fenced fund to be drawn on only by levy payers to fund apprentice training. The Minister said that large firms would have “first dibs” on the money raised from the levy.

That response prompts a number of questions. If that is the case, how will the 98% of smaller firms receive funding for apprenticeship training through the levy if they are waiting for scraps from the table? Will firms be able to carry the levy forward to subsequent financial years, so that if a large firm does not want to draw on it in year one, it will have that possibility in year two? Again, how will that help smaller firms? How will the system help FE colleges provide suitable financial planning? Will the “first dibs” approach be allocated on a national, regional or sub-regional basis—will it be large firms only in the Tees valley, or only in Hartlepool? How will the levy work?

As the Minister understands, the considerable uncertainty is undermining the ability of colleges in the north-east to plan and to provide their existing excellent further education provision. I hope that further detail will be provided this afternoon, so that colleges can get on with the job of ensuring that we can transform our regional economy and that people’s lives in the north-east are made better.

[Sir Edward Leigh (in the Chair)]

Congratulations—on the nail at six minutes. I call Anne-Marie Trevelyan.

--- Later in debate ---

[Nick Boles]

No, I am not going to give way. I am going to move on—[Interruption.]

[Sir Edward Leigh (in the Chair)]

Order. The Minister has intimated that he is not giving way, and I am afraid we have to listen to him quietly. It may be difficult, but Members must calm down.

[Nick Boles]

Hon. Members have asked a great many questions, and I want to try to answer as many as I can.

First, as well as seeming to think that my own educational background was a subject of interest for the debate, the hon. Member for Bishop Auckland suggested that I have no understanding of rural areas and the issues they face. I point out to her and the hon. Member for Blackpool South (Mr Marsden) that the constituency of South Holland and The Deepings neighbours—indeed, borders—my own. Your constituency, Sir Edward, also does. I, too, have a very rural constituency. I, too, have a constituency in which there are three towns that are more than 20 miles apart, so I entirely understand the issues. I am afraid that in Lincolnshire, fine and wonderful county though it is, we probably do not have much better public transport between towns than in the north-east, so to suggest that I have somehow brought an urban or south-east view to area reviews is ludicrous.

Secondly, the whole point about area reviews is that they are locally based. They are run locally, with local colleges taking these decisions. We of course accept that for the lower level of training in particular—level 1, 2 and 3 training—it is simply impossible to expect people to travel significant distances if we want them to continue in education. We do want them to continue in education, so we will absolutely not be looking to do that.

Opposition Members might want to ask themselves why the great and much admired Newcastle College is able to do so well. One reason is that it is big. In a single year, it secures £38 million of grant funding from the Skills Funding Agency alone, whereas many other colleges in the north-east receive £2 million, £3 million, £4 million or £5 million. “Merger” does not necessarily mean the closure of sites. In fact, what makes the closure of a site much more likely is a small, financially challenged institution that simply cannot cope with the overhead costs of running a college for very low volumes of training—

--- Later in debate ---

[Nick Boles]

I will not give way. I am answering all Opposition Members’ questions—[Interruption.]

[Sir Edward Leigh (in the Chair)]

Order.

[Nick Boles]

I will now move on to funding. With many of the Opposition Members here today having participated in that Opposition day debate in which they frightened their constituents and mine with the prospect of a 25% to 40% cut, I hoped that I might hear one word of welcome for the fact that the Chancellor was able to guarantee that the adult and community learning budget will be protected in flat cash terms throughout the spending review period—that is, until 2019-20—and that the 16-to-19 funding rate will also remain flat at £4,000 until 2019-20. Opposition Members predicted a 25% to 40% cut. We, through managing the economy responsibly, have secured funding stability, which I know their colleges welcome.

The hon. Member for Hartlepool (Mr Wright), as always, asked some important and serious follow-up questions, with the slight advantage of having quizzed me yesterday for an hour and a half. I will try to answer them, though they are not directly on the theme of area reviews. The change in the nature of apprenticeship funding is, of course, a critical element in looking at the future of any college’s finances. I hope that he will welcome, endorse and help to go out and spread this message. Currently, across the country, colleges secure only 30% of all the funding for apprenticeship training. The rest—two thirds—goes to private training providers. We all believe that private training providers have an important role to play, and none of us wants to fix the market for colleges, but I hope that he and other hon. Members will join me in urging colleges to set themselves the ambition of winning two thirds of that funding.

Colleges are incredibly well placed to provide training for apprenticeships, as many colleges in the north-east already do. It will be a significantly expanding budget. The apprenticeship levy, about which the hon. Gentleman has some understandable concerns, will increase apprenticeship funding in England to £2.6 billion by the end of this Parliament. Between 2010 and 2020, apprenticeship funding in this country will have doubled. What other education budget will have doubled in that period? That is a dramatic shift. Colleges are fantastically well placed to take advantage of that funding, and I hope that we can work together to ensure that more of them secure it.

The hon. Member for Bishop Auckland asked an important question about the interaction between the new apprenticeship levy and the Construction Industry Training Board levy. She is right to say that the CITB has the support of the industry, but she is perhaps a little over-generous to say that the scheme is not broke. The reality is that our construction industry yet again has gone straight from feast to famine and suddenly finds that it does not have the skills it needs, so something is not quite working in the provision of skilled labour. I am sure that that is as true in her constituency as it is elsewhere in the country.

We have made very clear to the industry and, indeed, to the CITB that it will be for the industry to decide how it wants to combine the two levies. It may well be possible to devise a solution whereby one levy is effectively netted off against the other, so that no individual levy payer pays twice but we continue to provide support. The CITB levy, as the hon. Lady will be well aware, will cover more employers than the apprenticeship levy. She has my commitment that we will work with the industry to ensure the two levies work well alongside each other.

A question was asked about the devolution settlements and whether the funding that might be devolved will be ring-fenced. Hon. Members will be aware that we have already devolved capital funding to local enterprise partnerships in relation to skills. That funding is not ring-fenced; it goes into the single capital pot that the partnerships have. I hope that Members will be reassured to know that even as adult skills funding starts to be devolved to areas that have secured devolution deals, local authorities in those areas will still be subject to the same statutory requirements to provide certain skills for free to certain members of the population. Local authorities might not have a ring-fenced budget, but they absolutely will have a statutory duty to meet that provision, as they do in relation to social services and all sorts of other services. I am sure that hon. Members will know from their own experience that local authorities take such statutory duties very seriously indeed.

The hon. Member for Darlington raised an interesting point and was the only person really to get into what she called the jungle of qualifications. I agree with her; it is often a baffling sea to any 16-year-old who comes in, seeking a set of courses to take them to a career. I hope that she will welcome and contribute to the review being conducted by a former Labour Minister, Lord Sainsbury. He is looking into constructing slightly clearer and more directive routes for technical and professional education, so that from the age of 16, young people are given a clear sense of what will actually take them into a job.

Finally, I come back to area reviews, which are the real subject of the debate. It is very important to understand and underline that colleges are independent institutions. We simply do not have the power, nor do we want to have the power, to tell them to merge, close or do any such thing. That is why—

--- Later in debate ---

[Mr Marsden]

On a point of order, Sir Edward. You will observe that we have a considerable amount of time for the Minister to answer interventions, but he has refused to take any. Is it in order for him to do so, or is it just simply impolite not to?

[Sir Edward Leigh (in the Chair)]

It is certainly in order for him to decide whether to take interventions. Whether it is polite or impolite is for others to judge.

--- Later in debate ---

[Mr Kevan Jones]

On a point of order, Sir Edward. I have never seen a Minister fail to accept any interventions. When time is not on a Minister’s side, it is fair not to, but we have eight minutes left and he has refused to have any Opposition Members challenge him on anything he has said, which is absolutely outrageous.

[Sir Edward Leigh (in the Chair)]

Well, that is not a point of order, but there we are.

[Nick Boles]

I hoped that Opposition Members would understand that, when I said that I wanted to conclude my argument, that was slightly different from saying that I wanted to conclude my speech. I will be happy to take some interventions when I have concluded the argument that area reviews are not going to be centrally imposed solutions. They are locally generated solutions that will provide a prospect for every college—about which Opposition Members have spoken in such glowing terms—to do an even better job in the future of providing vital technical skills to their young people.

I will start, if I may, by taking an intervention from the hon. Member for Bishop Auckland, given that she secured the debate, and I am happy to use the rest of the time to take further interventions.

[Sir Edward Leigh (in the Chair)]

I was going to call the hon. Lady to wind up at the end if she wants to, so does she want to let others come in first?

[Helen Goodman]

Okay, I will wind up afterwards.

--- Later in debate ---

[Mr Jones]

What the Minister is highlighting is that it seems as though he has made up his mind what he wants: he thinks big is beautiful. He rightly argues, as I said in my contribution, that Newcastle College is a good, forward-looking institution, but he clearly wants large colleges with satellites. That is not what local colleges in the region want; they want to co-operate with one another, so I am sorry, but he is being disingenuous if he is suggesting that he has somehow not made his mind up even before he started this review.

[Sir Edward Leigh (in the Chair)]

Order. Will the Minister give Helen Goodman a couple of minutes to wind up, please?

[Nick Boles]

Of course I will. I just want to give any other hon. Member the opportunity to intervene, Sir Edward. They seem to be very keen to intervene—but perhaps less keen now.