Education Funding for 18-year-olds

Rehman Chishti Excerpts

Tuesday 28th January 2014 Westminster Hall

[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.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I accept that the Government have done a lot of good work in the FE sector. The Minister says that further discussions will take place with specific colleges. For the record, MidKent college, which will lose £800,000 and have 1,000 students affected, is being told that it will get a cut of 3.4%, and yet there are high levels of deprivation in that area. Will the Minister have discussions with the college to see how things can be taken further?

[Matthew Hancock]

I will absolutely ensure that that happens. In fact, I will ensure that such discussions take place with all colleges. It is important, however, to set out why we took the decision we did.

We were faced with a cut across Government to make savings to reach our goals on reducing the budget deficit. I need not stress the wider argument about the necessity of reducing the deficit, but life would be easier for a Minister and throughout our country if we did not have a budget deficit of £100 billion, and if we had not had an even bigger deficit three years ago. We all know who is responsible for that. There is tension on the Opposition Benches between those who recognise and acknowledge the need to deal with the problems left by the Labour Government and the others. Not least, I recognise the reasonable approach taken, and the suggestion of alternatives, by the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Rochdale (Simon Danczuk); that is in contrast simply to complaining about things and saying, “Aren’t we in a terrible mess?” It is difficult being a Minister when there is no money left, but we all know whose fault that is. I will not stress that any more.

I care about the individual impact on colleges. For example, I would be delighted to visit Cambridge—I think I have a campaigning visit in the diary. According to our figures, which we are in the middle of confirming with colleges, as a result of the decision, Long Road sixth-form college will have a reduction in funding of 0.7% and Hills Road college of 0.2%. Those figures are to be confirmed with the institutions, but that is the scale in those instances. The impact assessment sets out the effect for types of colleges.

The reason for our decision is partly that it is in tune with other things that we are trying to do, not least raise the participation age. Many people have talked about NEETs, and I bow to no one in my support for FE colleges and their work in reducing the number of NEETs, but the biggest impact comes from the level of education at the age of 16, and from those who are in FE at 16 and 17 and whom we have to keep there. We are raising the participation age up to 18 years, with cross-party agreement, and are insisting that everyone stays in some form of education up to that age. We are focusing the funding on that.

The reasons underpinning the funding decision, therefore, are the decision to return funding for 18-year-olds to last year’s levels; our raising of the participation age; the need to do so much work to ensure that people stay in education at 16 and 17; and the fact that on average—this is not the case for everyone—18-year-olds spend less time on their education, even when it is full-time education. Furthermore, as the impact assessment says—this ought to be recognised in the debate—those who are 18 in education are no more likely to be disadvantaged than anyone else.