Further education - House of Commons - 18 May 2004

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Mr. David Rendel (Newbury) (LD): I, too, thank my hon. Friend the Member for North Norfolk (Norman Lamb). I congratulate him on raising the issue and on the excellent way in which he dealt with it. Everyone appreciated the excellence of his speech. The lack of response to the debate initiated by my hon. Friend the Member for Twickenham (Dr. Cable) last year may not have been due to my hon. Friend the Member for North Norfolk, but that could certainly be the case in future, given his excellent speech on the issue today.

It is nice to have a well-attended debate on this important subject, and other hon. Members would have liked to be here. My hon. Friend the Member for Hereford (Mr. Keetch) has had many representations from his constituency and would certainly have been with us had it not been for a prior engagement.

Of those who have spoken, only the hon. Member for Bury, North (Mr. Chaytor) is apparently fully satisfied with the level of further education funding. All is well in his world; it is the best of all possible worlds. However, some of us find that there are difficulties with the level of education funding-even under this Labour Government, of which the hon. Gentleman is so proud. I certainly look forward to seeing how representatives of the Association of Colleges respond to his remarks tomorrow.

Those taking part in the debate might well be forgiven their sense of déjà vu, because we have been here before; we had a similar debate in Westminster Hall almost exactly a year ago, on 14 May 2003, when we debated FE funding. That debate, too, was initiated by a Liberal Democrat, which indicates, as does the presence of many of my hon. Friends today, how seriously my party takes the issue.

I had the chance to speak during that debate and, among other things, I said: "For a very long time, FE colleges have been the Cinderella service of our education and skills system: under-recognised, undervalued, and underfunded."-[Official Report, Westminster Hall, 14 May 2003; Vol. 405, c. 114WH.]

Sadly, that did not have much effect, and my comments still hold true today. The failure to address that issue is perhaps all the more striking when we consider just how important it is. We are talking about a crucial gateway

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opportunity; it is crucial to achieving the Government's "Widening participation" agenda and to wider strategies aimed at tackling social exclusion and skills shortages-in short, to social justice and our country's economic future.

FE colleges are the golden thread that links provision for 14 to 16-year-olds, 16 to 19-year-olds, higher education-they account for 12 per cent.-and adult learning. The FE sector has twice as many students as higher education, and two thirds of them study part-time, but the Government's Higher Education Bill contained nothing for part-time students and failed to acknowledge the contribution of FE colleges. We must have a lobby to champion the sector, and it must be equal to that which has championed the cause of HE.

It is to the Government's credit that funding for HE has increased in recent years, but that must be set in context. We are playing catch-up after many years of underinvestment. Between 1993-94 and 1998-99, real-terms funding per student in FE fell year on year. Overall, it fell by 15 per cent., from £4,030 to £3,420, at 2002-03 prices. Despite increases in subsequent years, unit funding remains below 1993-94 levels.

Meanwhile, student numbers in the FE sector are expanding, and the large increase in overall funding masks the fact that funding per student is growing at a far less impressive rate. Numbers are expected to increase still further, which will increase the funding pressure. Even if existing participation rates are maintained, the rising population of 16 to 19-year-olds will increase the numbers of 16-year-olds in schools and colleges by 52,000, or 4.5 per cent., by 2008.

Like our schools, colleges have had to face extra costs, such as rising national insurance and pension contributions and rising pay for teaching staff. Overall, therefore, colleges continue to face severe funding shortfalls and uncertainty. According to the Association of Colleges, a significant number of colleges are now being forced to cut staff.

In the limited time available, I want to press the Minister on two key issues. The first, which has been mentioned, is the discrepancy in the funding of schools and colleges. Surely, we should apply the principle of activity funding. An activity that is carried out at a college or a school should be funded at the same level.

The Government expect colleges to shoulder the main burden of responsibility for the increased participation of 16 to 18-year-olds, but the college sector receives less funding than school sixth forms. According to the Association of Colleges' spending review submission, the total funding gap between the two sectors for the same work is 10 per cent. Yet in the age group that we are discussing, more than 700,000 are studying in colleges compared with 400,000 in schools. Moreover, college intakes include a larger proportion of young people from less well off, lower-attainment backgrounds, a point made forcefully by my hon. Friend the Member for North Norfolk.

According to the Government's youth cohort study, 65 per cent. of 16-year-olds who stay at school have eight or more GCSEs at grades A to C, compared to only 33 per cent. of those who enrol in the college sector. Nineteen per cent. of 16-year-olds in school come from unskilled manual backgrounds, compared to 38 per cent. in the college sector. Where is the sense of justice in maintaining such a funding discrepancy?

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During the passage of the Learning and Skills Act 2000, the Government promised to converge funding upwards; when does the Minister expect that convergence to take place? There is a strong case for a streamlined funding system, rather than a system of separate bureaucracies, with local education authorities, regional learning and skills councils, the regional development agencies and the HEFC all serving different parts of the system.

Another vital issue is the bureaucratic and regulatory burdens being shouldered by the college sector. New money has come with strings attached, as it so often seems to whenever it is provided by this Labour Government. The Prime Minister and the Secretary of State talked about trusting the front line as a key principle of public sector reform. Yet they also push what the Secretary of State described as

"a new system of targets and performance management" for colleges with resources linked to performance contracts. There is even a target to reduce bureaucracy; only new Labour could introduce a centrally imposed target with the aim of reducing bureaucracy.

A further concern is the huge number of separate funding streams through which colleges receive their finances. A typical college has about 30 different sources of funds; far too much money is stuck into specific pots, all of which require separate applications. Sometime soon, I suspect that somebody in one of the colleges will create a further education course in how to apply for money to run FE courses.

The work of the LSC's bureaucracy task force made it clear that there is significant scope to reduce the bureaucratic and regulatory burden on colleges, with the potential to release significant resources for the front line. Two quotes from the task force report in November 2002 illustrate the point; first: "The FE sector is full to overflowing with regulation and administration . . . Over-regulation and excessive administrative burden distract and pre-occupy colleges so that the learner and learning can at times seem like incidentals rather than the heart of further education."

Secondly: "The key message from colleges in the regional seminars held by the Task Force was their sense that bureaucracy derived from mistrust. A new relationship must be built around trust and transparency rather than monitoring, supervision and multiple review overlays."

I hope that the Minister will use the debate to explain what progress has been made in implementing the recommendations of the bureaucracy task force in this important report.

Six years after the groundbreaking report "Learning Works", the Government are still reluctant to recognise the importance of the FE sector, and there is a lack of clarity and of joined-up thinking. Why is there a discrepancy in funding between schools and FE colleges? Why are part-time students not given the same support as full-time students? Where is the joined-up thinking on the relationship between schools, colleges and the workplace in respect of the curriculum framework? Will there be sufficient resources to ensure that staff pay agreements are implemented? The list could go on.

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The persistence of the concerns shows that the Government still undervalue FE, which should be the learning powerhouse of society and the economy. Let us hope that in another year's time we are not lamenting the same failure to recognise how vital these issues are.

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