Education Funding for 18-year-olds

Eric Ollerenshaw Excerpts

Tuesday 28th January 2014 Westminster Hall

[Dr Huppert]

I agree. It is perverse to say that a free school or academy is more public than a sixth-form college or a regional college; it simply does not make sense and must be changed.

Long Road sixth-form college has its own problems. It has one of the lowest levels of funding of any sixth-form college; it has £480 per pupil per year less than the average. If it got average funding it would have an extra £940,000 and there would not be such a problem. It does not get protection, because it was not one of the high-funded sixth-form colleges, and it gets hit by another £70,000 or so, and pupils will miss out as a result. It was also hit years ago, because the Learning and Skills Council told it to put together a bid for new buildings that it desperately needed, but the calculations were done wrong and there was no money available, and it is stuck with poor buildings. Yet despite that it is in the top 10% of value added in the entire sector.

All three institutions do well and they would be delighted if the Minister visited—it is not a long distance—to look at what they are doing and at the problems they face. They do a great job, but this is the straw that can break the camel’s back, because it is not something that they can do much about.

Long Road sixth-form college does not have a way of changing its curriculum offer to students who are already enrolled in level 2 courses at the moment; it will not have the opportunity to take on a new system. It would be completely wrong to say, at the end of somebody’s level 2 year, “Sorry, you can’t do the course you signed up for. You can only do a 12-unit applied qualification: two A-levels rather than three.” That simply cannot be done; that would not be reasonable.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

On that point, will my hon. Friend give way?

--- Later in debate ---

[Matthew Hancock]

I am well versed in the VAT issue and recognise the argument. Removing the VAT anomaly would cost £150 million, which is the same amount that we have had to save through the measure we are debating, so I am afraid that I simply have to plead having no money to deal with it. All I will say is that I fully acknowledge the argument.

A sixth-form or FE college has a private sector designation from the Office for National Statistics that leads to the VAT charge, but it also gives the college much more power over borrowing. On the one hand, a sixth-form or FE college has much more power to manage its finances, but on the other hand, it has to pay VAT. I note that in the past couple of years, there have been two new sixth-form colleges. Yes, there have been new 16-to-19 free schools, but there have also been new sixth-form colleges, so some people have taken the decision, even though they know that they will have to pay VAT, to go down the sixth-form college route, because they get extra flexibility in managing their finances. I completely acknowledge the VAT issue, but there is a flip side to the argument, which is why some people go for paying the VAT, even though they might not need to do so.

[Eric Ollerenshaw]

The Minister is explaining himself extremely well, but there is a bit I do not get. Why did he make the commitment to colleges that they could have 540 hours, which they then budgeted for, only to take it away, leaving them with a problem?

[Matthew Hancock]

My life would certainly have been easier had the decisions been taken together, and had that not happened. I am simply putting that forward as an explanation of the context we need to think about when considering the size and scale of the cuts.

We are looking at the individual implications. I am happy to ensure that the EFA and my team talk to any college that is concerned. We need to recognise, however, that the reason for the decision was that savings had to be made across Government. There is also a policy explanation: there is the fit with other things on which there is consensus across the House. I am not looking for adulation over this policy decision; I am looking to explain myself as well as I can. I am happy to talk to colleagues and colleges further, because my goal is to support colleges and education to the best of my ability.