Further Education Loans

Debate between John Healey and John Hayes

Tuesday 17th July 2012 Westminster Hall

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It is a pleasure to speak in this debate, and I congratulate the hon. Member for Stoke-on-Trent Central (Tristram Hunt) on securing it. He is right to say that it is timely and, to pick up on his first point, that we should have an opportunity to debate the issue at greater length. I have already made, and I will continue to make, overtures to create some space for such a debate when we return, not least because I am always happy to debate skills and further education. I do not say that those things are the Government’s only shining example of success—far from it—but they are certainly shining brightly. That is because we are determined to give FE colleges the freedoms and flexibilities that they need to become increasingly responsive to employer need and learner choice—my hon. Friend the Member for Wirral West (Esther McVey) referred to that.

Disraeli said that it is easier to be critical than to be correct. The hon. Member for Stoke-on-Trent Central was not terribly critical and was correct to welcome the measures that have been put in place, which I shall mention in a moment. First, however, let me set the scene. With the new freedoms that I have given the sector, it is essential that further education is able to offer as many people as possible the opportunity to gain learning as a means of improving their prospects through progressive learning or access to employment.

When we debated the comprehensive spending review, I and my colleagues in Department for Business, Innovation and Skills—in particular the Secretary of State—were determined that our priority should be those who are most disadvantaged, either by an absence of prior learning or by their circumstances, and those to whom we could make the most difference in terms of further education. That is not to underestimate the significance of lifelong learning or second and third chance education. Indeed, in the same CSR negotiations we cemented and safeguarded the adult and community learning budget that had been threatened and—I am reluctant to say this—sometimes disparaged by the Labour party when in government. That safeguarding surprised some who had not anticipated that we would be so protective, but I believe in adult and community learning not only as a means of re-engaging people but because it adds to the individual and collective well-being of our nation. As you know, Dr McCrea, I believe in the promotion of the common good and would not do anything to inhibit the interests of the people.

To that end, we made it clear that priority would continue to be placed on basic skills, younger learners and people below level 3. When introducing loans, we limited them to people over the age of 24 and those studying for a qualification at level 3 or above. That was a deliberate attempt—more than an attempt; a deliberate policy decision—to prioritise the least advantaged, because in my judgment, it is the duty of the fortunate to promote the interests of the less fortunate, no less in government than in our personal affairs.

In net terms, around 10% of FE learners will be affected by the new loans, and as I have said, they will be older learners and people studying at level 3 and above. Notwithstanding, however, that that is a small minority of the FE cohort, I received representations over time, we conducted an impact assessment, we surveyed the sector, and we engaged in discussions with the 157 Group, NIACE, the AOC and others—the hon. Member for Blackpool South (Mr Marsden) referred to them all. Those representations made it clear to us, and that analysis showed, that some kinds of learner might be, in the words of the right hon. Member for Wentworth and Dearne (John Healey), disproportionately affected by the prospect of loans. One has to be a little cautious, because similar evidence before the introduction of HE loans suggested a lower take-up than subsequently occurred. One therefore needs to qualify one’s doubts in those terms, but I do share the view that we needed to do more. Indeed, that was set out in the very good letter sent to me at the end of June by the hon. Member for Blackpool South, who has contributed for the Opposition. He identified four areas in which he believed that there was a particular issue and he put his case, as ever, very reasonably and fairly. Those four areas were essentially access to—

[John Healey]

Will the Minister give way?

[Mr Hayes]

Yes, I will happily give way.

[John Healey]

When I came into the Chamber, the Minister said, “Are you here to pay tribute to my work?” I have been known to do that and I suspect that his hand has been forced somewhat on this question of student loans. Before he moves off the impact assessment and the research, is he not worried that that research showed that only one in 10 current students would definitely do their course if they were faced with having student loans as he is proposing?

[Mr Hayes]

Actually, if one looks at the impact assessment closely, it suggests that after clear communication of the offer, we will expect full take-up of the funding for loans. A very significant majority of people, when the circumstances of the loans were explained to them, said that they would participate. Initially, some were very likely to do so and some were less certain, but the number saying that they would participate grew as these things were explained to them. By the way, full take-up of the loans would be 90% of 24-plus learners studying at level 3 and above. We are therefore talking about a very significant majority of 10% of the cohort. That is where we are in terms of the overall FE numbers.

It should be borne in mind that the impact assessment was carried out before I announced the mitigation package, to which the hon. Member for Blackpool South has referred. I was coming on to why we put that in place. A case was made about access to HE. It seems to me perfectly fair to argue that it would be unacceptable for someone to borrow to study an access course and then borrow again to study an HE course. The hon. Member for Blackpool South asked whether we could look at the issue of timing. I think that we should and I will do so. I think that there is an argument for people who do not immediately progress to HE, but do so perhaps a year or two years later. We need to consider how we manage that, but the hon. Gentleman makes a fair point and I will certainly look at it.