Equality of Funding: Post-16 Education

Lloyd Russell-Moyle Excerpts

Tuesday 25th February 2020 Westminster Hall

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I beg to move,

That this House has considered equality of funding for post-16 education.

I am delighted to have secured this debate on the funding of post-16 education. I will focus on the critical phase of 16-to-18 education, which has been described by the Institute for Fiscal Studies as

“the big loser in the changes to education funding over the last 25 years.”

The IFS calculates that funding for 16 to 18-year-olds is now 6% lower than funding for students in secondary schools, having been 50% higher at the start of the 1990s.

[Sir Desmond Swayne (New Forest West) (Con)]

When I did my A-levels, I had a full timetable. I reckon that we now fund two and half days’ tuition. Is that enough? If we consider it to be enough, should we not acknowledge that A-levels are part time and expect people to go out to work? I do not think that is realistic.

[Lloyd Russell-Moyle]

I agree that it is not realistic to expect A-level students to go out and work when they should be studying, although a part-time job during A-levels is always positive. I had one myself, and it does grow the person. I will come on to the fact that we are now effectively funding part-time study rather than full-time study.

In this debate, I will focus on the pathways that the vast majority of 16 to 18-year-olds follow: academic pathways through A-levels and the general applied pathways, mainly through BTECs. Technical education has dominated the debate over the past few years. It is a very important area of development and is now the subject of a lot of necessary focus and reforms. What has lacked focus, reforms and money are the A-level pathways and, as I said, the BTEC pathways.

Academic and applied general qualifications are delivered in the main by three institutions: sixth forms in schools, sixth-form colleges that are separate from schools, and general further education colleges. Along with specialist colleges and training centres, they make up the vast majority of the FE sector. I therefore hope that the Minister will focus on those pathways and not on T-levels, which we have debated previously in this place.

Since 2010, the pressure on 16-to-18 education has increased significantly. The coalition Government made the right decision to protect the education budget, but that applies only to students up to 16 years of age. That means that 16-to-18 education has shouldered the burden of the cuts that had to be made in the Department for Education. The three deep cuts to funding, combined with significant increases in running costs, mean that the purchasing power of 16-to-18 funding has declined sharply over the past decade.

I will come on to the impacts that the disproportionate funding arrangements have had on students and institutions, but first I want to highlight two key issues that must be addressed if we are to ensure that the education of the 1.1 million 16 to 18-year-olds in England is properly resourced.

[Steve Brine (Winchester) (Con)]

I think the hon. Member would acknowledge the very welcome recent funding announcement in this area. Peter Symonds College is in my constituency; it is one of the largest sixth-form colleges in England and has had a 30% increase in student numbers over the past decade.

Although the funding announcement is welcome, I am sure that the hon. Gentleman would agree that it is a long way short of what the Raise the Rate campaign asked for. More pertinently, the one-year stopgap funding settlement is the problem. The sector now needs—we are looking to the spending review for it—a much longer-term settlement, so that it can undertake strategic planning.

[Lloyd Russell-Moyle]

Quite right. I will come on to three things: sufficiency, equality and parity. Sixth forms are particularly disadvantaged in the current system, and we need to start fixing these things.

Fundamentally, the funding that sixth forms in schools, colleges, academies and sixth-form centres in general FE receive to educate 16 to 18-year-olds is not sufficient to provide the high-quality education that young people need, and that the economy needs to prosper. Cuts to courses, support staff and extra-curricular activities mean that sixth form, by which I mean academic education and general education in England, is now a part-time endeavour for many students. Although a calculation based on part-time education in technical training may have made some sense in the past—such students spend significant amounts of time in the workplace or another training location—academic and general vocational education has never had that component, and all learning time is spent in the institution. The institution therefore needs the resources for that to happen.

The only way to address the key issue of sufficiency is to increase the national funding rate, which is by far the biggest element of 16-to-18 funding. It is extraordinary that the rate for 16 to 18-year-olds has remained frozen at £4,000 per student since 2013, whereas the rate for 18-year-olds who enter their third year of study—often the young people who require the most help—has fallen to £3,300.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate the hon. Member on securing the debate and making a very important contribution in his opening remarks.

Does he agree that a significant issue faces many further education colleges: some of them are left to pick up the pieces when young people do not have the numeracy and literacy skills that we would hope for by the time they are 16? The current underfunding and lack of funding for further education in such colleges is particularly impacting on the life chances of that group.

[Lloyd Russell-Moyle]

Exactly. That is why the cut to the third year of funding is particularly pernicious. A young person who comes in might need some extra support for a year before they can move on to their final stage of BTECs or A-levels, and the college is actually punished for doing that remedial work.

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

I, too, congratulate my hon. Friend on securing the debate.

Does the perniciousness not work in two ways? Teachers in my constituency have pointed out that they are punished in terms of funding, and that the results they achieve for those students do not count towards their post-16 results.

[Lloyd Russell-Moyle]

Yes, it does. I hope the Minister will address that point.

I pay tribute to the work of the Sixth Form Colleges Association in co-ordinating the Raise the Rate campaign, which has been highly effective. As has been mentioned, the Government have responded by pledging an increase of £188 this coming September. That is still far below the £4,700 per student that Raise the Rate is asking for, and it is £822 below the £5,000 that schools receive for each pupil.

That brings me to the second key issue: equality. Young people are now required to participate in education and training until the age of 18, but education funding is reduced for students who have reached 16. This inequality is impossible to defend. It is worth noting that, in the independent sector, fees usually increase at the age of 16 to reflect the additional cost needed to train and educate 16 to 18-year-olds.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

The Yorkshire College of Beauty Therapy is in my constituency. It is suffering from the fact that the new T-levels in the relevant subjects are being introduced but are not yet ready. The whole area of vocational education is suffering from the same lack of sufficiency that my hon. Friend describes for academic subjects.

[Lloyd Russell-Moyle]

My hon. Friend is quite right. We have debated T-levels previously, and there is the difficulty of transition as we go forward. I hope that we will eventually get to a situation where we have A-levels; good general vocational training, with BTECs continuing as a strong component of that; and T-levels. They all offer something different and important.

Until 2011, the funding for a student at a sixth form in a school continued at the school rate, not at the college rate. Given the concerns about the inequality that that caused, there was quite rightly a campaign. Organisations such as the Institute for Public Policy Research said that we needed to equalise the funding. The Government did that but they equalised it down, meaning that we took away about £800 per pupil in today’s terms from the budget, rather than adding to the college budget. That hurts sixth-form colleges even more, as they generally pay teachers’ terms and conditions and do not get additional remuneration for it. For many years, general FE colleges have got away with underpaying their staff, or rather, the Government have got away without giving them additional resources.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will my hon. Friend comment on the impact on the availability of science, technology, engineering and maths subjects and modern language courses, as well as on our competitiveness? The 15 hours per week contact time compares very poorly with, for example, the 25 to 30 hours per week in Canada, Singapore and elsewhere.

--- Later in debate ---

[Lloyd Russell-Moyle]

My hon. Friend is quite right; that is very worrying. A headteacher in my area talks about the difficulty of recruitment into the sector when there are far better options for pay within the wider teaching sector, let alone the idea that teachers of STEM subjects can often get better pay elsewhere. That seems wrong.

With the Budget and a spending review looming, the Government’s short-term priority should be to raise the rate, but the long-term ambition must be to level up funding and undo the mistake of 2011 to ensure that 16 to 18-year-olds receive the same investment in their education as younger students. There is little point in investing heavily in pre-16 education and even more heavily in higher education at £9,000 per student—depending on current moves in the HE review—if the pivotal stage in the middle continues to be overlooked and underfunded.

Sixth-form colleges and general FE colleges also face a number of specific disadvantages that exacerbate the issue. For example, since incorporation, colleges cannot reclaim their VAT costs, but schools and academies can. The Sixth Form Colleges Association estimates that the average sixth-form college has to redirect around £350,000 per year—4% of their income—away from frontline education of students to pay the VAT “learning tax”. What sits behind that and many other funding inequalities is the inexplicable decision to classify colleges as private sector bodies. Even private schools and private sixth-form colleges are not classified in such a way because they are third sector charities

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

My hon. Friend is making a passionate speech. I would add to his list another disadvantage to colleges. Ealing, Hammersmith and West London College was in massive arrears. The current principal, Karen Redhead, has turned it around towards being back in the black again, but the insolvency regime promises to punish her even further, while other people are being bailed out for not managing things as well as she has. Will my hon. Friend comment on that?

[Lloyd Russell-Moyle]

We need to look at those issues, particularly the way that we manage debts linked to buildings, which has got a lot of colleges into trouble in the past.

For sixth-form colleges in particular, the vast majority of their income comes from the Government, and a private sector classification is simply impossible to justify. A few years ago, the Government allowed a pathway for sixth-form colleges to become academies, but it is not right that the Government require a change of governance in the organisation for it to be classified as part of a particular tax band, rather than working out the best governance for the institution to give the best education, which is what we should focus on.

All colleges suffer when the Government decide to exclude them from initiatives such as early career payments, or funding streams such as the teachers’ pay grant, which was afforded to schools. Their incorporation in 1983 by the then Secretary of State, Keith Joseph, removing them from local authority oversight—a historic mistake that has led to a widening of the gap since the 1990s. Only the equalisation of structures across the board will solve the problem.

Brighton, Hove & Sussex Sixth Form College—or BHASVIC—is one of the sixth-form colleges in my constituency. It has grown by 630 students since 2014, but its income has grown by £1.5 million only, meaning that the student body is up by 21.7% but the income is up by 13% only. The principal of BHASVIC wrote to me saying that

“Whilst the additional income for 2020-21 is welcome, it barely makes up for inflationary cost pressures over the last couple of years”.

BHASVIC will use the money simply to plug the gap, rather than actually investing in IT, teacher development and other things that are needed, particularly for student wellbeing—colleges also face the burden of rising rates of mental health problems.

BHASVIC is one of the lucky few. It has been able to bid and draw from a limited pool of funding for capital works on academies. Unlike school sixth forms, colleges do not hav a dedicated pot of money and must bid against academies for building and maintenance. For general FE colleges, it is even more complicated in that they have to bid with local economic partnerships for funding. The myriad capital funding streams to pay for buildings leads to a lack of joined-up thinking and a postcode lottery of facilities in our education system.

The views of education providers, teachers and principals are unanimous: the funding gap has a devastating impact and is felt widely. When I secured this debate, the House of Commons digital engagement team posted on Facebook asking for feedback from students and staff. Abi, one of the respondents, said that her sixth form cannot even afford basic items such as extension cables for computers, and teachers are having to pay out of their own pockets for printing. That is totally wrong. A Reddit user said that A-level politics was dropped midway through their course because the teacher left and the school could not afford a new specialist in the department. Another student reported that their college has had to shut its canteen, which it cannot afford to maintain, so students now eat at the fast-food joints across the road, blowing out of the water any aspirations for healthy living and eating.

One way colleges have tried to manage those difficulties is through a flurry of mergers into super colleges in an attempt to pool costs or recreate the services that the local education authority provided before 1993, but such mergers often mean a centralising of course provision in just one or two campuses across the network, and lead to teachers and management being further away from the students and communities they serve. I do not want to say anything bad about any individual colleges—many have staff who do fantastic work—but the mergers render the Ofsted regime not fit for purpose. Multi-academy trusts are inspected per campus, but for a multi-campus set of FE colleges, there is only one inspection, so we have no idea of the differences between two campuses offering the same courses and options. That lack of granularity renders the Ofsted inspections almost worthless.

[Alexander Stafford (Rother Valley) (Con)]

On the point about mergers, the Dinnington campus college recently merged with the RNN Group in Rotherham. Since then, it has had problem after problem. Currently, it is slated for closure, which would have a devastating effect on my constituents. Does the hon. Gentleman agree that some mergers do not take into account some important aspects of colleges, such as location, teaching and staff, and that we need to ensure that colleges such as Dinnington campus remain open?

[Lloyd Russell-Moyle]

I totally agree. I was on the board of the corporation at one college that merged into a sixth-form college. I was one of the few corporation members who voted against that merger. I am afraid that sixth-form college has not prospered since the merger. I have been involved in other colleges that have merged. In Haywards Heath, just north of my constituency, the sixth-form college did not prosper following a merger into general FE and ended up shutting. The initiative has led to a number of campuses suffering and shutting and, although it has been successful in other areas, its record is not good enough, with a number of failures.

To solve the problem, will the Minister commit to sufficiency, to ensure that schools and colleges can continue to deliver a high-quality, internationally competitive education? The Government need to raise the national funding. There is no justification for a funding cut at the age of 18. The rate should be at least £4,760 per student per year in 2020, and it needs to increase in line with inflation in the rest of the sector. Will the Government ensure that providers of sixth-form education can operate on an equal basis and a level playing field by removing the imposition of VAT learning tax and allowing them access to all the funds available to other education providers?

I will end by asking the Minister three questions sent to me by the head of the other sixth-form college next to my constituency. First, Phil Harland, the principal of Varndean, said that by 2025 the number of Brighton and Hove 16 to 18-year-olds wishing to continue post-16 education will have increased by 500. Similar increases are expected elsewhere across the country. Without any additional buildings, the city and the college sector more generally will not be able to accommodate those students. Will the Minister confirm that his Department is working with colleagues in the Treasury to secure a dedicated post-16 capital expansion fund for those colleges to draw on when their numbers increase?

Secondly, the three Brighton and Hove college principals met the city’s chief executive just before half-term to talk about the growing mental health crisis. The meeting was helpful in finding ways forward, but all parties recognise that without additional funding dedicated to support the mental health and wellbeing of students in that vital period, little progress will be made. Is the Minister aware of the problem, and does she recognise that dedicated resources for in-house counsellors are needed, so that nothing is taken from teaching budgets?

Thirdly, the sixth-form college sector was identified by a previous Minister as the jewel in the crown of the UK’s education system. That jewel might have dulled slightly in recent years, caused in part by the difficulty of recruiting teachers to the sector. The difference between school teachers and college staff is increasing. The School Teachers Review Body is an independent body that sets the level of school teachers’ annual pay awards. The Government usually accept the recommendations and fully fund them, but they do not fund pay in the college sector. Will the Government commit to fund the STRB increases for colleges as well, so that they can pay their staff properly?

This year, 2020, is the year to raise the rate to at least £4,760 per student and to level up funding between different stages of education. Within 16-to-18 education itself, I hope that the Minister will agree that we need to invest in our college sector.

[Several hon. Members rose—]

--- Later in debate ---

[Lloyd Russell-Moyle]

I thank the Minister, who has given a very good holding reply to most of the points. It was very skilfully done—to some extent. I will summarise by saying that there are lots of little pots around that colleges can probably bid for here and there, but there is not yet a strategic view of how we will increase the money going into this sector and how we will equalise the funding between the different providers.

There is no real vision on how we will sort out the VAT problem, apart from by wanting to fiddle about with governance issues. Surely it would be easier and more cost-effective to rule these institutions out of VAT, rather than requiring them to go through the cost of converting, which is not necessarily appropriate in all cases. We have not really been offered an answer to the questions there. I hope that in the spending review the Minister will go back to the Department and there will be some more movement on these things. We were not expecting a pronouncement today.

We heard from many hon. Members. We heard about the work that the hon. Member for Colne Valley (Jason McCartney) continues to do with the APPG. The hon. Member for Winchester (Steve Brine) mentioned the need for long-term funding. My hon. Friend the Member for Makerfield (Yvonne Fovargue) talked about the need to catch up because of the cuts that have happened. My hon. Friend the Member for Ealing, Southall (Mr Sharma) talked about needing to put students first and was worried about the larger class sizes. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) talked about the college in her constituency and the danger to STEM subjects. My hon. Friend the Member for Luton South (Rachel Hopkins), who serves on a board of governors and is a graduate of that sixth-form college herself, also talked about the need for long-term funding—over a number of years.

We heard from my hon. Friend the Member for Bristol South (Karin Smyth) about how young people are falling through the gaps because we do not have the resources to support young people, when they are moving on, between institutions. My hon. Friend the Member for West Ham (Ms Brown) talked about how the need to travel cuts people off from opportunities in which they might excel, but also about the mental health burden that has been put on our young people. There have not only been cuts to school counselling services; those have been exacerbated by the wider cuts that we have seen in youth services and elsewhere. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) of course pushed again on capital grants and on EMA for young people.

I come from a family of people who have worked in sixth-form colleges. My mother worked all her life as a sixth-form college teacher—first at Taunton’s in Southampton, then at Bexhill sixth-form college, then at Park sixth-form college and then at Lewes sixth-form centre—before retiring. My sister has just gone to start teaching A-levels in Essex and has worked at a number of sixth forms herself. I come from a family who care passionately about sixth forms, and I went to a sixth-form centre myself. I hope we can ensure that this vital pathway through education is properly resourced and funded, as it deserves to be.

Question put and agreed to.

Resolved,

That this House has considered equality of funding for post-16 education.