Education Funding for 18-year-olds

Kate Green Excerpts

Tuesday 28th January 2014 Westminster Hall

[Kate Green (Stretford and Urmston) (Lab)]

It is a pleasure to serve under your chairmanship this morning, Mr Williams. I am very glad to have secured this debate on a subject that affects not only the excellent Trafford college, which serves my constituency, but further education and sixth-form colleges right across the country, as is demonstrated by the presence of so many colleagues.

On 10 December last year, without any prior notice or consultation and before any impact assessment had been published, the national director for young people at the Education Funding Agency announced a 17.5% cut in funding per full-time student aged 18 at the start of the academic year 2014-15, as part of a strategy to achieve the savings required in the 2015-16 spending review period. The cut, which it is estimated will affect 100,000 students and save £150 million, means that the funding per student would be reduced from £4,000 to £3,300, at an average cost to FE colleges of £600,000 per college, although some will suffer much greater cuts—in some cases, in excess of £1 million. Sixth-form colleges will also be hit, many of which have already suffered substantial funding cuts; some face the loss of as much as a third of their funding over the lifetime of this Parliament.

[Mr Jim Cunningham (Coventry South) (Lab)]

I hope that my hon. Friend realises that the student opportunity fund will also be cut. That will badly affect Coventry university, which will receive a cut of £790,000. The figure for Warwickshire college is £361,000, and for North Warwickshire and Hinckley college it is £162,000. Effectively, Coventry and those Warwickshire colleges will have a cut—so much for helping young people to find jobs and acquire skills. What does she think about that?

[Kate Green]

My hon. Friend is right to draw attention to the wider context of the cuts faced, both by the FE sector and by this particular age group.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Lady on securing the debate. While we are focusing on the impacts on sixth-form colleges, does she agree that this is not a double but a triple whammy, because sixth-form colleges are facing the VAT problem, in that they have to pay VAT whereas other schools do not? In a sense, it is a really unlevel playing field. Colleges such as Brighton, Hove and Sussex sixth-form college and Varndean college in my constituency simply cannot understand why there are double standards, particularly when we add in the fact that academies are being set up and getting funded for sixth-form, and sixth-form colleges are not.

--- Later in debate ---

[Kate Green]

The hon. Lady is right. The issue of the uneven playing field in relation to VAT charging was raised in this Chamber shortly before Christmas by my hon. Friend the Member for Wigan (Lisa Nandy), and many other hon. Members have repeatedly brought the matter to the Government’s attention.

Ministers have argued that the cut announced just before Christmas is justifiable because they want to focus spending on 16 and 17-year-olds, and because 18-year-old students would already have received two years of post-16 full-time study. Perhaps Ministers believe that the affected students are undertaking a repeat year of study in order to resit their A-levels and upgrade their results, but that is not the case at all. As has been pointed out by the Association of Colleges, the 157 Group and others, the students most affected are most likely to be those on vocational courses.

Those students may have achieved good GCSE results at school but may have had no opportunity to undertake vocational study at key stage 4. If they wish to pursue a technical route, they cannot begin level 2 vocational studies until they enter college post-16. Colleges report a reluctance among, and lack of incentive for, schools to co-operate with them to provide early vocational training to students aged 14 and 15, and it seems particularly unfair that such students should be penalised.

However, it is perhaps even more concerning that many of the students who will be affected are likely to be those whose school experience was the least successful. For such students, full-time study undertaken at college offers a vital second chance. These are the students who may have found the school environment difficult, but who flourish in a college setting. They may have had their education disrupted by health problems or difficult family circumstances. Some will have started out their studies in a school sixth form but will have left after the first year, having failed to attain good AS grades —often as a result of the poor information, advice and career guidance offered in the school.

[Dr Julian Huppert (Cambridge) (LD)]

I thank the hon. Lady for giving way and for securing this very important debate. Does she agree that there is also an issue with the number of schools not providing information about the existence of FE colleges and sixth-form colleges? There needs to be a much better link, with schools encouraging people to look at apprenticeships and other opportunities.

[Kate Green]

I very much support what the hon. Gentleman says. This is a matter of the incentives and funding arrangements, and it is about having a level playing field for all educational institutions, something that I know other hon. Members will wish to allude to in the debate.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I congratulate my hon. Friend on securing the debate, and apologise for the fact that I will not stay until the very end. A lot of emphasis has been put on the impact assessment. Sheffield college and Sheffield’s Longley Park sixth-form college, in my constituency, are somewhat bewildered as to who could possibly have undertaken an impact assessment that so grievously missed the point about what the cut will do to young people from the most disadvantaged backgrounds. Does she agree that it would be possible to avoid the cut if new institutions and small sixth-form developments that have not recruited to the level for which they were funded had that money properly clawed back in a timely fashion? That would be better than hitting the most disadvantaged students.

[Kate Green]

I very much agree, both with the concerns that my right hon. Friend raises about the impact assessment, and with his comment about potential alternative sources of funding that would allow us to avoid the need to introduce this cut. On his comments about which students will be most affected, an analysis of the situation at Trafford college, which serves my constituents, bears out his concerns. Ministers know that level 3 is the standard that employers increasingly look for, and it is the standard that we should expect students to achieve as a minimum. It is worrying that the majority of students at Trafford who will be affected are studying vocational courses at level 3. The majority had low attainment at age 16 and, contrary to the suggestion in the Government’s impact assessment, the majority come from the borough’s most disadvantaged wards.

I have looked carefully at the breakdown of the courses that students at Trafford college are taking. They include English, maths, biology, chemistry, and vocational courses in plumbing, training as an electrician, vehicle maintenance and cabin crew training—a testament to the important relationship that the college has forged with nearby Manchester airport. Those courses could not be more pertinent or relevant to the career prospects of young people, so it comes as no surprise that college principals have expressed concern that a cut in funding, which will have the effect of reducing access to such courses, increases the risk of these young people becoming NEETs—not in education, employment or training.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate the hon. Lady on securing this important debate. Her experience in Trafford is exactly the experience that is being fed back to me by the principals of Cornwall college, which has campuses in Newquay and St Austell, and Truro and Penwith college. They say that very vulnerable people, whom we should be helping the most to get that second chance in education, are likely to be affected. Does she not find it surprising, as I do, that although the Government’s impact assessment suggests that disadvantaged people will be affected by the cut, we are moving ahead with it anyway?

[Kate Green]

I very much agree with the hon. Gentleman that the impact assessment, which paints a rather puzzling picture, does not appear to support the decision that the Government have taken. It certainly attempts to paint a rosier view than the one that college principals and sixth-form college heads have painted. The Government’s somewhat thin assessment pays no attention to wider issues, such as the implications for bursary funding, and it pre-empts the outcome of the Cabinet Office review of provision for 16 to 25-year-olds.

[Stephen Timms (East Ham) (Lab)]

I am grateful to my hon. Friend for securing a debate on this very important issue. She has talked about what college principals are saying. Let me quote what the principal of Newham sixth-form college has said, describing those affected:

“These are ambitious and aspirational students who have stuck with their commitment to education. They are doing the right thing…How were they to know that the system would decide that they don’t deserve to be funded for 3 years of further education at the same rate as those students who only need 2 years?”

Is not it a very arbitrary and damaging cut that has been introduced?

[Kate Green]

It is indeed a damaging and arbitrary cut. Little attention seems to have been paid to the educational life chances of these students and why they need this additional year of full-time education at age 18.

There are also, it is fair to say, a number of flaws in the methodology used in the Government’s impact assessment. It compares 18-year-old students with all 16 to 18-year-olds, not with 16 and 17-year-olds, which means that the distinct circumstances and backgrounds of 18-year-old students and their particular needs and characteristics are obscured. It fails to do a comparison with students in school sixth forms, and so underplays the disproportionately diverse backgrounds of FE and sixth-form college students. It ignores 18-year-olds studying for between 450 and 539 hours, and it makes no mention of the disparity between the funding for five to 15-year-olds, and the funding for 16 to 18-year-olds, which the Association of Colleges has pointed out already stands at 22%.

Even so, as the hon. Member for Cornwall—I forget the exact constituency—[Interruption.] It is not all of Cornwall. As the hon. Member for St Austell and Newquay (Stephen Gilbert) pointed out, the impact assessment does acknowledge that there is a disproportionate impact on disadvantaged students. A disproportionate number of black and ethnic minority students are affected. It also recognises that the majority of students affected are undertaking vocational courses of study.

The impact assessment recognises that five out of six students affected are in FE colleges. That means in practice that the effect of the policy overall is a 5% funding cut for FE colleges, compared with a 1% cut for schools. It is likely that, in colleges, the effect will be felt not just by 18-year-old students, but by all 16 to 18-year-old students, because they are often taught together as a single group.

The impact on colleges is compounded by the lagging in their funding, which was highlighted when the Secretary of State appeared before the Select Committee on Education on 18 December 2013. That lag means that the effect of the introduction of a cut in August 2014 is that the funding received for students who have already started two-year courses will be at a rate lower than had been anticipated and budgeted for in their second year. That means that colleges are having to rethink fundamentally their budgets and business plans for next year, and their future admissions policies. I was encouraged by the fact that the Secretary of State recognised that point when it was raised with him at the meeting of the Select Committee and agreed to give it further consideration, including the possibility of delaying the cut until September 2015. I very much hope that this Minister will be able to update us today on what further thought has been given to that.

In conclusion, there are real concerns about the impact of the cut both on institutions, especially further education colleges and sixth-form colleges, and on the students they teach. The policy appears to run counter to all the Government’s ambitions to increase social mobility, to invest in vocational education, to increase the employability of young people at risk of becoming NEET, and to level the funding playing field for colleges and schools.

Of course everyone understands the scale of the challenge, given the financial settlement in the spending review 2015-16, but as has been pointed out, other spending choices could have been made. As the Chair of the Select Committee, the hon. Member for Beverley and Holderness (Mr Stuart), pointed out on 18 December, colleges are losing out, while free schools and academies are being funded for what he graphically described as “phantom students”, often in areas where there is already plenty of provision.

The Sixth Form Colleges Association points out that nine free schools for 16 to 19-year-olds established since 2011 will educate just 1,557 students when they have recruited fully in line with their plans—if they manage to do so—compared with an average of 1,687 students per single sixth-form college, so the investment in free schools certainly does not look like an efficient use of funds at a time when spending for this age group is under such pressure.

Against that background, the choice to cut funding for vocational training, and to cut funding that is more likely to reach students from less advantaged backgrounds—the very group that the system has repeatedly failed—seems at best ill informed and at worst simply perverse. That approach is likely to have a far-reaching impact on the life chances and prospects of the very group of young people for whom we should want to do most. I very much hope that Ministers will take a step back for further reflection and rethink their approach, given the widespread concerns, and I very much look forward to the Minister’s response to those concerns.

[Several hon. Members]

rose—