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10.14 pm

The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis): I congratulate the hon. Member for Colchester (Bob Russell) on securing this Adjournment debate. The issue is important and it is one that the House will want to address.

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When I prepared for my response, I inevitably looked at a brief about the hon. Gentleman. As a Manchester City fan, I thought that I had difficulties, but when I discovered that he has been a supporter of Colchester United for the past 43 years, I felt that that was worthy of some sort of honour, medal—or even a cheap tie, similar to the one that he is brandishing.

The hon. Gentleman may be aware of the announcement today that Colchester zoo has the first artificially inseminated elephant to give birth in captivity. I do not know whether he is the father, but it is a remarkable, historic moment for the people of Colchester, so I am sure that he will find a way of attaching his name to that great achievement—as Liberal Democrats tend to do.

In my response to the debate, I shall address the general points of concern raised by the hon. Member for North Norfolk (Norman Lamb) and my hon. Friend the Member for Luton, North (Mr. Hopkins), as well as dealing with matters specific to Colchester. It is important that my response traces the history of sixth form funding and that it is put in the wider context of education funding. As the hon. Member for Colchester said, the approach of the previous Conservative Administration to further education over many years resulted in sixth form colleges being funded well below school sixth forms. As he is fully aware—and has stated—the Labour Government have long expressed the view that we want to address that historical inequality. Indeed, during the election campaign we reiterated our pledge to boost the share of national income spent on education generally.

In our manifesto, we promised that there would be more money for schools, universities and colleges. We also promised to guarantee the real-terms funding of pupils in school sixth forms, if student numbers were maintained in those sixth forms, and to increase the funding for sixth form colleges and further education colleges.

In our second term, we intend to build on the investment in further education of the past four years and to narrow the gap between funding for sixth form colleges and school sixth forms. We shall do that by levelling up the funding of further education colleges. We realise that that can happen only over time—it cannot happen overnight—and that it will inevitably be subject to the availability of resources. Ministers have to make that point from time to time, although of course it is not a point that Liberal Democrats tend to make.

Any policy change that involves additional resources has to be fully costed and subject to the prevailing economic circumstances. However, the hon. Gentleman will be pleased to hear that I am confident that our substantial investment in post-16 education will allow significant progress to be made during the course of this Parliament.

The hon. Gentleman will be aware that we have had to deal not only with inequitable funding levels between sixth form colleges and school sixth forms, but with the major disparities in funding between individual school sixth forms due to the discretion currently available to local education authorities. The best-funded sixth forms currently receive about one and a half times more funding per student than the worst. We also intend to tackle that inequality.

As stated previously, we will protect real-terms funding levels for all school sixth forms that maintain their student numbers, while increasing the level of funding for the

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lowest funded school sixth forms. As with colleges, that will take some time and the pace of change will depend on affordability. However, that guarantee means that convergence will be upward.

The new Learning and Skills Council to which the hon. Gentleman referred, with its overview of all post-16 provision outside higher education, will help us to achieve our vision of a coherent and collaborative post-16 sector. The council will take over the funding of school sixth forms in April next year. The further education sector will move from transitional funding arrangements to the Learning and Skills Council regime from the beginning of the 2002 academic year. That means that by August next year, school sixth forms and sixth form colleges will be funded by the same funding body and through the same funding system. The funding system has national rates for similar types of provision. Although most school sixth forms will continue to receive a higher level of funding to start with—due to the real-terms guarantee—I am sure that the hon. Gentleman agrees that the system will be a major step forward in achieving a level playing field between the sectors.

I shall address the hon. Gentleman's point about VAT. At the moment, education taught in all schools and colleges is free of VAT. Local authorities are funded through the VAT system for any VAT incurred on purchases for schools, but because sixth form colleges are directly funded by the Government as a result of the changes that were introduced in 1993 they are expected to include VAT in bids for funding. That explains the inequality regarding VAT.

In the meantime, we should not forget that the Labour Government have been responsible for a substantial injection of extra funds into further education and sixth form colleges. We have demonstrated our commitment to the biggest ever investment in post-16 education—almost £13 billion over the next three years. That includes substantial extra resources for the introduction of the new FE pay arrangements, which will help colleges to recruit, retain and reward excellent teachers.

We have introduced a step change in capital investment to develop centres of vocational excellence, and we are promoting higher standards of teaching and learning through the standards fund. This year alone, £527 million extra is being spent on further education—a 12 per cent.

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real-terms increase. The planned increase in student numbers over the same period is only 7 per cent. That means that funding per full-time equivalent student is increasing this year by 4 per cent. in real terms. We plan a further 3 per cent. real-terms increase next year, and we are confident that our planned investment will provide significant support to those offering 16 to 18 provision in the further education sector.

That is the general situation. I shall now discuss Colchester sixth form college, which was, I believe, opened in the year that the hon. Gentleman was the mayor of Colchester. I do not know whether his name is on a plaque at the college; he may be able to share that with me later. The college has seen its funds increase from £5.2 million in 1996–97 to almost £7.3 million for the coming academic year, and this year the college asked for, and received, more than £500,000 in additional funding for Curriculum 2000. The college has also been allocated its share of the £65 million extra that we are investing in the sector to help with further education teachers' pay. I did not hear him refer to any of those figures.

Of course I understand the calls for even greater investment to reverse the effects of the Conservative Administration's squeeze on colleges. However, we have made a start and, as I have shown, the increased funding levels for Colchester are clearly substantial. I would ask the hon. Gentleman to discuss that information with the governors of the college; I should be interested to hear their views.

As for the future, the new post-16 arrangements mark a step change in the funding and organisation of education and training in this country for young people. The arrangements are designed to drive up standards, to increase participation, to achieve parity between providers and to encourage collaboration. These arrangements will ensure that all young people have a broad range of high quality options from which to choose. From Colchester to Carlisle, the Government will ensure that every young person has access to educational opportunities that help them to pursue their dreams and fulfil their potential.

Question put and agreed to.

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