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Further Education Colleges

12.30 pm

Mr. David Chidgey (Eastleigh): The Minister will be aware that I take a close interest in the fortunes of further education colleges in and around Eastleigh, my constituency. I am sure that his assiduous advisers will have briefed him that I have been a governor of Eastleigh college for about eight years. I have seen the college go through the trials and tribulations of incorporation, and pass through difficult times to achieve a much improved performance.

The Minister will know that the Further Education Funding Council 1997 inspection found that three aspects of provision were less than satisfactory, but by 1999 all had been brought up to a satisfactory standard. In May 2002, the provider performance review by the Learning and Skills Council rated the college as good. In that regard, we are almost looking forward to the imminent Ofsted inspection.

However, I want to use the debate to highlight issues throughout the sector, rather than in the particular college with which I am involved. Too often, the FE college sector has been overlooked—it has been treated as the poor relation in education—but more under-19s attend FE colleges than the combined total at sixth-form colleges and universities. FECs have traditionally been the training and education resource of the community, for the community. Traditionally, as many as 60 per cent. of students at an FE college are from the local area and remain settled in that community, becoming skilled craftsmen and technicians, who are essential to driving the local economy.

FECs often provide a second chance for mature students to gain skills that keep them off benefits and take them into work. FECs also provide opportunities for students from poorer backgrounds to gain the skills that will take them out of poverty and into well-paid jobs. More than a quarter of FE college students come from the 15 per cent. of local authority wards that are the most deprived. FECs provide opportunities for workers to update their skills and to gain new skills in our increasingly technology-driven commerce and industry.

Such colleges are the vital conduit through which the expression "learning is for life" can move from mere soundbite to approaching reality, so why is the sector in such disarray and all too often adrift and despondent? Why is it that, only last week, the chairman of the General Teaching Council, Lord Puttnam, wrote in The Guardian that further education

I put to the Minister some issues that he might dwell on in his response: staff pay and conditions, the inadequacy and uncertainty of core and standards funding, the impact of curriculum changes, lack of direction between local and national learning and skills councils, and student funding. First, pay and conditions. To quote Lord Puttnam, FE salaries are an "embarrassing joke". The facts are plain: some 80 per cent. of FECs were unable to fund at least one of the pay awards granted since 1993. The average salary of full-time FE lecturers is some £2,600 less than it would be had the national recommendations been implemented since 1993.

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Since then, FE lecturers' pay has fallen by 7 per cent. compared with that of teachers, and by 20 per cent. compared with the equivalent private sector post. Teachers' starting salaries are some £1,600 higher than those of FE college lecturers. During that same period, more than 22,000 lecturers have been made redundant and today some 44 per cent. of lecturers are on temporary contracts. The college working year has increased by two weeks, and the working week by 20 per cent. No wonder staff turnover in FE colleges has risen to almost 20 per cent. per annum, and no wonder 60 per cent. of lecturers are over 45, compared with some 45 per cent. of secondary school teachers.

There is an urgent and desperate need for new initiatives to reverse the negative impact of insecurity and fragmentation that is putting the structure of further education at risk. Without new incentives to attract new recruits to replace an ageing staff, we shall face a growing deficit of skilled and committed FE lecturers in the very near future.

Turning to the inadequacy and uncertainty of FE funding, the Minister will be familiar with the Government's figures: FE funding increased by some 10 per cent. between 1996-67 and 2001-02, with further increases of some 2 per cent. per year planned to 2003-04. However, those figures are the total core funding and standards funding. Those are the funds that FE colleges must bid for at some expense, which is a bitter pill if the bid is unsuccessful. Core funding per student—the bread and butter for FE colleges—has fallen since 1997, and the add-on element, which is standards funding, will soon make up 12 per cent. of all FE college funding. However, as we all know, what the Government giveth, the Government taketh away.

I give just two examples for the Minister to contemplate. During this financial year, Amersham and Wycombe college in Buckinghamshire was awarded about £209,000 in standards fund allocation, but next year the LSC will award it just £32,000. During this financial year, Tower Hamlets college will receive some £500,000 in standards fund allocation, but next year that will fall to about £220,000.

That uncertainty and changes in funding will result in more staff redundancies, more short-term contracts and more uncertainty for colleges. No wonder there were some 6,000 unfilled staff vacancies in FE colleges last year. Added to the dilemma is the uncertainty and delay in core funding approval. The financial year for FE colleges starts on 1 August. Colleges are incorporated bodies and bound by law to operate responsible financial planning and budgeting procedures, which must be approved by their governors.

As late as the end of June 2002, the 2002-03 core funding allocation for Eastleigh FE college had not been confirmed and, today, it is still unclear precisely what standards fund allocation it can expect to receive. There has been dialogue between the college and the local LSC since March on the provisional allocation that the college can expect to receive next year. It needs to know that to prepare its budget. To be fair, it was never guaranteed that the figures would be finalised before June, but we understand that the provisional allocations that have been discussed and agreed for Eastleigh may not be met in full. Any significant deviation in allocation will invalidate the budgeting process and could even leave the college open to a charge of mismanagement. It

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cannot be right to expect FE colleges to fulfil their corporate responsibilities when financial planning data, which are essential to the process, are not available only five weeks before the start of their financial year.

Turning to curriculum changes, FE colleges have made a great success of the curriculum 2000 initiative and I am sure the Minister agrees that college staff have worked hard to deliver the model's broader curriculum. However, there are wide concerns that any backtracking from the model could be greatly detrimental to the 16 to 18-year-old students. Colleges are concerned that the new initiative might be abandoned or diluted, which will only further demoralise the hard-pressed staff who worked to make it a success.

There is a separate curriculum issue. Paragraph 23 on page 12 of the Government's discussion document "Success for All" is on meeting the skills need. It sets out the importance of recognising employers' needs, and I agree. Employers are stakeholders in the process, along with the taxpayer and the student, but the bodies charged with setting the national qualifications curriculum have been inflexible too often. They have failed to recognise changes in technology and skills, and changes in the marketplace involving employers' demands for new and different skills. That can be only to the detriment of student and employer alike. I would be grateful if the Minister were more specific, as "Success for All" refers to

I do not see where the Government are going, and I would like that clarified.

Next, the lack of a single direction for both local and national LSCs. Most FE colleges are developing positive and constructive relationships with their local councils and there is high regard between them, but it remains unclear how much authority is exercised locally. Funding decisions in particular seem to be taken nationally, sometimes overturning previous local agreements. The one-size-fits-all approach in further education is clearly not working and the Association of Colleges for Further and Higher Education would surely agree that we need more local decisions on local funding issues.

There is general concern that the advent of LSCs has increased the scrutiny burden without increasing effectiveness, or adding any value to the student. Many are concerned at the lack of representation of people with FE knowledge on some local LSCs. The satisfaction rating of local LSCs is highest among colleges that feel that local learning and skills council staff understand the nature of further education.

A recent Association of Colleges for Further and Higher Education survey found that two thirds of the colleges feel that there are clear tensions between local and national LSCs. As many as 90 per cent. feel that their LSCs have not reduced the burden of bureaucracy, and less than 3 per cent. think that they offer good value for money.

My final point is on student funding. There has been good news from the Chancellor, as education maintenance allowances are to be rolled out nationally. I welcome that, but why wait until 2004 and why set them at the reduced figure of £30 a week rather than the

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more attractive £40? We need to put in place initiatives to make young people stay in education now, rather than abandon a further two years' potential intakes while we wait for the scheme to be rolled out. We certainly must end the postcode lottery of allowances at the edges of the pilot areas, as is the case in the Southampton borders of my constituency.

Other funding issues for FE students are not addressed by the EMAs, and we must tackle them if we are to end FE's status as poor relation to HE. Funding for the over-19s in the system is discretionary—it is not guaranteed for the duration of the course, and two years is the maximum. When will that change? Real-terms expenditure on FE student support has hardly increased in more than a decade. In real terms, adult FE student support has almost halved during the past decade, and is little more than £82 million a year. No wonder the Library confirms that nearly a quarter of FE students are considering dropping out because of financial pressures and that three quarters of those who suffer financial hardships are single parents—the very group that we want to have more skills so that they are more employable and leave the benefits system.

If we compare the plight of FE students with the position of HE students, we see how unfair the situation is. However invidious comparisons may be, the £1.8 billion available in HE student loans, together with access funds of £91 million last year alone, show just how big the disparity is, although the HE student population is only slightly larger in full-time equivalent terms than that in FE. To underline the extent of the yawning funding gap, I might add that average funding per student taking three A-levels is £3,530 a year in a sixth-form school, but only £2,520 a year in an FE college—a difference of almost 40 per cent.

The increased education funding announced in the comprehensive spending review is welcome, but, depressingly, it serves only to reinforce the disparity between further education and education in general. Education spending is set to increase by 6 per cent., but FE is allocated a mere 1 per cent.—the same old sad and sorry story. I look forward to the Minister's response.

12.45 pm

The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis) : I begin by congratulating the hon. Member for Eastleigh (Mr. Chidgey) on securing a debate on this important issue. To a tremendous extent, we make common cause on the direction that further education should take.

I should confirm that the local community regards Eastleigh college as an excellent institution that does incredibly well, and I pay tribute to the hon. Gentleman, who serves as a governor. It is important for Members of Parliament to experience the real world from time to time, and close contact with our schools and colleges is an important way of doing that.

The Government are clear about the need to reassert the status and value of further education, which must be central to the lifelong learning opportunities that we seek to create. For many, further education is the bridge to higher education; for others, it is the bridge to skilled employment. For many adult learners, it is also a way back into learning, and it plays an important role in delivering access to basic skill opportunities. It is

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important, too, for work force development, and if we want our economy to be successful, competitive and productive, it is important that we ensure that colleges support employers and provide them with appropriately skilled and trained staff.

It is also important to put further education at the heart of the society that we seek to create—one that is fair and socially just as well as economically successful and prosperous. Further education has an impressive track record on encouraging and supporting access to learning among those who have been denied such opportunities. It gives them the chance to fulfil their potential, which may have been denied them because school was not a success or because they lived in communities with relatively low educational aspirations. Further education therefore plays an incredibly important role in the social justice agenda. It plays an equally important role in creating the strong and successful economy that we need by ensuring that employers have access to proper training that upskills their work forces.

Perhaps the only issue on which I differ from the hon. Gentleman is the Government's record on FE funding. It does not surprise me when Liberal Democrats ask for yet more money without referring to the taxation requirement or to the fact that all Governments have finite resources and must make difficult decisions about priorities. As politicians, we should not mislead any sector or the general public by suggesting that there is an infinite amount of money and that the Government do not need to make hard choices about their priorities.

Our investment record is quite good. By next year, total FE funding will have increased by 26 per cent. in real terms since 1997 and funding for full-time equivalent students will have increased by 16 per cent. The teaching pay initiative is providing £110 million this year to reward high-quality teaching, which is £45 million more than last year. I believe that Eastleigh college will receive a 25 per cent. increase on last year's TPI allocation. During the four years before the general election—1993 to 1997—the previous Government cut FE unit funding by 12 per cent. in real terms, so we started from a very low base.

We have the opportunity to bring together an exciting and dynamic reform agenda with, for the first time, sustainable long-term investment. The sector is crying out for some sense of security about its status, value and worth in the world of education, as well as a strong sense of stability, viability and a long-term vision for institutions and area planning. The 1 per cent. real-terms core funding increase from the spending review settlement is good news for the FE sector. Along with the TPI, it will have implications for pay. It is too early to say what the outcome will be, but we will be in a much better position in the autumn to be clear about terms and conditions and plans for pay for people in the FE sector over the next three or four years.

The hon. Gentleman made an important point about the difficulties experienced by people in institutions who are expected to make decisions year by year when they are not sure what budget they will have at any time. That is one reason for us making it clear, as part of the spending review announcement, that we intend to move

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towards three-year budgetary planning cycles. That will provide clarity for the local LSCs and for each college on what the three-year programme entails.

In referring to investment, it is worth dwelling on the role of education maintenance allowances. I understand that the hon. Gentleman wants them to start earlier and to be more generous. I would expect a Liberal Democrat to say that, but we must manage finite resources. The education maintenance allowance is universally popular, other than among Conservative Members, who, interestingly, have no FE representative present. For the first time, we will have a universal mechanism to support young people who stay in education post-16.

A major challenge facing the education system is that far too many young people drop out. Some drop out at 16 simply because they have a negative experience in the education system, but, traditionally, many have dropped out because of lack of financial support to enable them to continue. Therefore, the introduction of education maintenance allowances is an important step forward. Evidence from the pilots shows that it leads directly to improved participation. Equally important is the fact that the allowances are linked to individual student performance and attendance. There is no automatic payment. Students must be studying and co-operating to receive an allowance, so it is a good incentive for young people to stay in education. It is important, however, that they not only stay in education, but attain as a consequence of participating beyond 16 and progress to either a modern apprenticeship or higher education.

Alongside the new commitment to investment, within the past two or three weeks we have published the document "Success for All", which sets out our vision for the future of further education and the reform that must accompany the investment. We are consulting widely on the document. The consultation will conclude at the end of September, when we will be clear about our investment and reform agendas for FE in the medium and long terms. Having consulted people in the sector and others, we shall make clear statements in the autumn.

There are several elements to FE reform. I am sure that the hon. Gentleman agrees that, although the social inclusion role of FE colleges is vital, we should focus on achievement and attainment as well. It is okay to say that it is good to get into education people who have been denied such opportunities, but it is equally important that we support them and enable them to succeed, achieve and attain when we hook them back in. There are real issues on achievement and attainment rates as opposed to participation rates.

Part of the reform and investment deal is that improvement targets will be negotiated between local LSCs and FE colleges. That should result in not only a three-year clarity on funding, but clear expectations on the quality and level of provision and the improvements expected.

Mr. Chidgey : As part of that programme, will the Minister recognise the difficulties that colleges have in recruiting and retaining well-qualified and able lecturers, who are obviously essential to the process, given the salary disparity between lecturers and schoolteachers?

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Mr. Lewis : We recognise that. I referred to the extra money that will be granted through the comprehensive spending review. Later this year, we shall announce what that means for investment in FE, including the implications for pay and conditions. We accept that recruitment and retention is a real issue, and there is a commitment to levelling the investment in FE and schools. However, there is no commitment to a time scale, so we must see what we can realistically achieve with the settlement we have been given.

We intend to create a situation involving minimum performance, such as applies to schools and LEAs, and we shall have floor targets for FE colleges. We must develop excellence in the approach to teaching and learning in further education, which we may not have focused on as clearly as we have in schools in recent years. As well as pay and conditions, we must be clear about our commitment to training and development for FE staff and ensure that the infrastructure is there to support that.

We must also ensure that what happens in FE colleges responds to the needs of local employers and the local labour market. The criticism is sometimes made that a disparity exists between what is happening in the classroom and the rapidly changing economic profile of an area or the skills shortages identified by business and employers. There must be a much closer synergy between the world of work and the world of education, and FE colleges are vital in that regard. There is a direct relationship.

The hon. Gentleman raised the issue of qualifications. The Government have asked the Qualifications and Curriculum Authority and the LSC to work together to draw up plans to move towards a unitised qualification

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framework and to set out advice on a credits-based framework. We accept the need for change, but we believe that change must be managed carefully over time so that it does not simply reverse reforms that have been introduced only recently.

We also accept the need for well-designed vocational qualifications. Although vocational experiences must be as stretching for a student as other learning experiences and although vocational qualifications must have a similarly high status as other qualifications, the learning experience for vocational qualifications must not be the same as for the academic route. Otherwise, the object is defeated. We must ensure that the design, content and assessment of qualifications are right for the student.

We have introduced centres of vocational excellence in many colleges. That programme will accelerate, which feeds into the view that many more colleges should develop a specialist role in their communities. That again must be closely tied to the needs of the local economy and the labour market. However, there must also be far more institutional collaboration area by area. There has been a culture of competition in education over the years, but we are asking providers to come together and take a far more collaborative approach so that the learner has access to the full range of opportunities, recognising that individual institutions are not in a position to provide everything.

The relationship with the LSC is very important, and we are committed to a significant reduction in bureaucracy. The Sweeney taskforce is due to report soon. The LSC is committed to a 25 per cent. reduction in bureaucracy and we shall deliver on that in the months ahead. I accept that there needs to be an emphasis on the skills mix in local LSCs.

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