Education Funding for 18-year-olds

Nic Dakin Excerpts

Tuesday 28th January 2014 Westminster Hall

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on securing this debate. The attendance demonstrates how important this debate is inside this building and—more importantly—outside.

The fact is that students at colleges are 22% less funded per student than in the 5 to 16 sector, so this sector is already under serious pressure, financially. Frankly, the Government are cutting this sector because they have chosen to protect 5 to 16-year-old funding and they have nowhere else to go to cut the funding further. However, at the same time there are political choices, because the Government have created nine new 16 to 19 free schools at a cost of £62 million. The answer to my written question shows that students in those schools are funded at £5,500 per student, compared with £4,000 per student in other colleges.

[Mr Marcus Jones]

Will the hon. Gentleman give way?

[Nic Dakin]

No. I have to allow other hon. Members to get in.

Political choices are being made, which is why these colleges, and these youngsters, are being hit again.

Essentially, post-16 there are two types of institution: widening participation institutions, which include further education colleges and about half of sixth-form colleges, and selective institutions, including most schools and some sixth-form colleges. Essentially, the measure will hit widening participation colleges, which take a gamble, or work to invest, in students who are highest-risk in respect of Ofsted outcomes and in terms of needing the most work in them while they are there; and now they are the highest-risk in terms of cash. Hon. Members are right to say that the result will be perverse outcomes, in terms of behaviours of people in various areas.

Three types of students are affected: first, those who have not achieved their five A* to C grades at the end of compulsory education, coming to 16, and need an extra year to do their intermediate level, before going on; secondly, those who change course during their level 3 provision, often for good reasons, and take three years to do their level 3; and thirdly, students who have to take a year out to care for somebody or to have a baby, or for other crises that happen. These are the hardest students to support and they are the biggest risk, and now they bring in the least money. So the measure is damaging in that regard. It also contradicts the Government’s framework. To raise the participation age, for example, there should be rewards, not penalties, for taking these students forward. There is a desire to close the achievement gap and these are the very students to whom that applies. There is a desire to invest in vocational education and the Government’s own impact assessment demonstrates that this is hitting vocational education worst of all. Everybody recognises that the forgotten 50% need further investment and these students are the forgotten 50% who need it, to be able to deliver.

There is a danger. Let me quote Paul Wilson, principal at Regent college, who said that, in the area of Leicester in which his inclusive college operates, his is the institution in the partnership that is delivering for these students. If there are disincentives for him to do that, he might start to say, “Thank you, goodbye” to these students, and then where do they go? We will have a rising issue with people not in education, employment and training at 17 and 18, as well as beforehand.

It is really dreadful. I know, from my experience as a college principal, that schools would at the end of the first year send students with Ds at AS-levels to us, up the road, because they no longer wanted to deal with them, because they were too high-risk. This means that other students will be too high-risk. There is a danger that we will let down a generation—this forgotten 50%—yet again. There will be an impact on colleges, such as John Leggott college and North Lindsey college, which do an excellent job for students in my constituency.

--- Later in debate ---

[The Minister for Skills and Enterprise (Matthew Hancock)]

It is a great pleasure, Mr Williams, to respond, under your chairmanship, to a forthright debate. I am grateful for the opportunity to set out the context and some of the issues surrounding our decision, which was not an easy one to take. Many of the points raised were not quite accurate, so I hope to provide some reassurance on them, and on how we will deal with the impact on individual colleges, not least because several hon. Members raised the concerns of colleges that are particularly hard hit; I am looking at the hon. Member for Croydon North (Mr Reed). At the moment, we are confirming with colleges the individual allocations.

Before we get to the meat of the debate, let me say that the process for making the decision was completely in line with the process for making such funding decisions under this Government and the previous Government. Say that following the overall allocation in a spending round, it becomes clear that savings have to be made in the Department for Education, outside the ring fence for education for 5 to 16-year-olds; the overall funding policy for the following academic year should be set out before Christmas, in December, in a letter from the Education Funding Agency. That is the normal way of doing things. Someone implied a criticism of the EFA, but there should be absolutely no criticism of the EFA over this, because such decisions rightly rest with Ministers. In February, normally, we come up with the allocations for individual colleges. That is the process we are going through: we are looking at the impact on colleges. We have estimates of those impacts, but we need confirmation from each college. That is the normal process, followed by the previous Government as well as this one. There has not been a problem in the process, but we can go into the individual decisions.

[Nic Dakin]

First, earlier information about a cut would have been helpful and welcomed by colleges. Secondly, although the process described by the Minister is accurate, for the first time that I can remember, a decision will affect people already enrolled on courses. If they are on a two-year course, the cut will impact on them and, because of the lagged funding, that is particularly difficult.

[Matthew Hancock]

I will certainly respond to that point. The irony for those already in education who are affected by this decision is that the funding is being returned to the 2012-13 level that it was at when they enrolled. An important piece of context has not yet been mentioned: the decision, which regrettably had to be made because of pressures on the public finances, changes funding for 18-year-olds back to the 2012-13 level. I understand and appreciate the pressures on the budgets of FE colleges, but in 2012-13, pupils were funded for 450 hours, and we raised that to 540 hours—an increase of 16 and two thirds per cent.—and we are now debating a cut of 17.5%, which is of almost exactly the same order of magnitude. The discussion about the impact on colleges and the conversations with college principals need to happen in the context of the fact that this changes the funding rate per pupil for 18-year-olds back to 2012-13 levels, which was only last year.