Further Education Loans

Esther McVey Excerpts

Tuesday 17th July 2012 Westminster Hall

[Mr Gordon Marsden (Blackpool South) (Lab)]

It is a pleasure to serve under your chairmanship, Dr McCrea, and I congratulate my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) not only on securing this debate, but on the detailed, cogent and strong case he made that gave both an overview of the issue and the specific details from his constituency. This debate is necessary because, as has been pointed out, the Government have used negative resolution procedure to lay regulations on these loans without any debate or oral statements. This is the biggest change for a generation; it will affect 375,000 learners, and because of the way the Government have introduced the regulations, it will come into effect on 1 September which is before the House returns from its summer recess. That is why it is so important to have more details from the Minister today.

Further education colleges now have to make decisions about retaining courses and staff as part of a Treasury cuts-driven loans system—let us make no bones about it—that even the Department’s officials say will cover only 80% of the current learner cohort. I appreciate the concession that the Government have made in response to widespread concerns across the sector, and the personal diligence shown by the Minister and the Secretary of State on this matter. Those concessions, however, and the written ministerial statement, have only provoked further concerns of substance from all FE stakeholders, and I want to raise one or two of those points with the Minister today.

My hon. Friend noted that only about £20 million of the bursary money is new money, and the 157 Group has also drawn attention to that. Will the Minister say how the funds will operate, what flexibility he is going to give to colleges, and what extra administrative burdens that will place on them? Will he pledge to lobby the Treasury if the £50 million proves inadequate?

The chief executive of the National Institute of Adult Continuing Education said that the loans system is new territory and creates uncertainty, and as we have heard, the Government have asked the Student Loans Company to administer FE loans as well. The SLC’s mixed record in such matters is well known. Will it have additional staff to administer the more complex FE structure, without the central processing mechanism used by UCAS in higher education? Will the Minister comment on the admission by his officials to stakeholders—I was present when it was made—that colleges may have to work with a paper-based system from the Student Loans Company for the first year because of the speed with which FE loans are being introduced?

The Government have promised to write off HE access course loans, but stakeholders such as Million+ are rightly concerned—as was my hon. Friend—that vulnerable individuals will shy away from taking up access courses in the first place. Will the Minister look at a potential broadening of the write-off, or at a grace period of perhaps three to five years for HE access students who, through no fault of their own but due to family circumstances or whatever, find themselves unable to get on an HE course immediately?

Loans are also to be enforced on adult advanced and higher apprentices to take out on an individual basis. However, the written ministerial statement made little reference to how that will work, or to the concerns voiced by the Government’s Commission for Employment and Skills about the potential reluctance of individuals and employers to participate. Why has the Minister so far not taken note of those concerns and those of Unionlearn? What consultation has he had with major employers involved in apprenticeship programmes, including the armed forces, about such reservations? Have his officials made an estimate of the number of adult apprentices who are at risk of dropping out if they are forced to take up loans on an individual basis? In a written reply, the Minister told me that he currently has no agreement with the Treasury to prevent it from clawing back unused loan funding if take-up is slower or poorer than anticipated. Will he undertake to obtain such an agreement before the loans are introduced next March?

As my hon. Friend and other colleagues have said, we need adult learners to continue to prosper and thrive, and not to be put off in places such as my hon. Friend’s constituency in Stoke, from improving their life chances and—this is important—from contributing to kick-starting growth in our local economies, something that we desperately need.

[Esther McVey (Wirral West) (Con)]

I, too, congratulate the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on initiating this important debate. He and the hon. Member for Blackpool South (Mr Marsden) have spoken about skills being critical to cities. Do they therefore concur that the FE freedoms outlined in the “New Challenges, New Chances” report will give more freedom to employers to meet the needs and demands of the future work force, and are a positive step in the right direction?