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Mr. Gordon Prentice (Pendle) (Lab): My friend talks about transforming the further education sector, and about the £1.5 billion that is going into it over the next five years. May I take it that that money will close the funding gap between FE colleges and schools? The principal of my local college, Dr. Alison Birkenshaw, tells me that that funding gap costs the college £500,000 a year, which is a huge sum.

Ruth Kelly: I think that my hon. Friend is referring to the funding gap in the unit funding costs for young people in FE colleges. That gap has narrowed for colleges that have delivered on their targets, from about 10 per cent. a few years ago to about 7 per cent. today. The £1.5 billion investment is part of an investment radically to transform the infrastructure of FE colleges and to build colleges for the future, so that they will have the first-rate, world-class equipment that they need to train young people and adults. The £350 million that was identified in the Budget represents the first step in a long-term process to renovate the entire sector.

Mr. Tim Boswell (Daventry) (Con): While I would welcome any long-term and lasting conversion to the cause of vocational skills, will the Secretary of State consider two matters in particular? First, will she consider the acquisition and accrediting of basic skills in the workplace, or at least in vocational settings, where those acquiring them are likely to see their relevance more clearly than in a classroom? Secondly, in relation to further education colleges, which will continue to be the major providers of adult skills, will she ensure that any increases—I fear that the genuine incremental increases announced today are modest ones—are not at the expense of other provision for adult learners in those colleges? The displacement effects from young persons' education have already put stress on the adult learners programme. We would all agree that the colleges are currently under severe financial pressures.

Ruth Kelly: I thank the hon. Gentleman for his comments. He is absolutely right that vocational training delivered in the workplace is far more likely to produce results than vocational training delivered outside the workplace. Where it is possible to deliver it in the workplace, that is what we shall seek to do, through the national employer training pilot. The returns to the individual from level 2 training delivered through the workplace are significantly higher than    those from training delivered outside the workplace.

The hon. Gentleman also asks about adult learners in further education. He is absolutely right that we should continue to protect adult learning provision, which is delivered through FE colleges. We have built into our skills policy a safeguard on the funding directed towards adult learners, which does not mean that that provision is not co-financed, and where appropriate, that fees are not charged. It does mean, however, that we recognise the importance of that agenda, and we will protect the funding that goes towards it.
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Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I welcome particularly the newly established employer-led skills academies. I have two construction academies in Four Dwellings high school, in which the school works very successfully with the construction industry. Similarly, the focus on regional skills partnerships is extremely helpful. Could the Secretary of State assure me, however, that when we consider the regional dimension we use a microcosm approach. I saw success in Birmingham city centre, where pockets of unemployment of young people were tackled by providing catering skills, which were exactly those that could be used by unemployed local people and that could provide local jobs. The regional dimension is important, but we should not take the region as too wide, and we should consider smaller areas, too.

Ruth Kelly: I completely agree with my hon. Friend. Regional skills partnerships will be working with the LSC and Jobcentre Plus to identify local skill needs, and in areas such as her constituency, employers can come together with FE colleges, schools and centres of vocational excellence to develop training that is appropriate to the local area. I would like to see a lot more of that in the future.

Mr. John Randall (Uxbridge) (Con): I, too, am interested in skills academies, and with my background, particularly the retailing ones. Will the Secretary of State ensure that fashion retailing does not get all the attention, as there is a whole other world of retailing out there? Can she go into a little more depth about how people access those skills academies and the sort of things that they aim to teach?

Ruth Kelly: Yes. We have worked closely with Arcadia Group, the retail industry and the Learning and Skills Council to develop qualifications and credits within the fashion retail academy. Young people can study those towards a level 2 qualification and can access them not just on the site, which will be based in London, but around the country, too. Online learning will be available, as well as accommodation for pupils who want to access the facility. An important part of the skills academy programme, however, is that it will link into centres of vocational excellence around the country and spread best practice into the further education sector, so that children up and down the country can access such skills.

Tony Lloyd (Manchester, Central) (Lab): I very much welcome today's statement. It is vital that we get the skills equation right, and I hope that my right hon. Friend will not listen to the blandishments of the Conservative party, which, when in government, betrayed this nation through its failure to develop a policy on skills. She rightly talks about a partnership between all the parties on skills training, and that is a good and healthy start. The best employers always trained well, and the good employers will train. We have a problem, however, with those employers who regard training as simply cost and not benefit or who are resistant to any training whatever. Will she always keep in mind that we need some power to coerce bad employers, as they fail not only their employees—and their businesses, interestingly—but the nation?

Ruth Kelly: My hon. Friend is absolutely right, which is why the development of sector skills councils is so
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important. Sectors, and industries, come together to define their own skill needs and the best way of delivering those for their sector. Certain sectors, such as in the film industry, have decided together that they want a training levy paid by all their members. We are examining how that has been working in practice, but I believe that about two thirds of all employers are paying the training levy. They have asked us to make it mandatory, and we are currently consulting on that. The key, however, is to consider the question sector by sector, and to ask sectors to identify the appropriate approach for them and what would make the most difference in terms of upgrading their skills.

Mr. David Rendel (Newbury) (LD): There seems to be one big hole in the statement—I hope that there is not a similar hole in the White Paper—in relation to education, training and skills for those in prison. Does the Secretary of State agree that such education and training is one of the best ways of reducing crime in our society, and that it is important that the cuts in education and skills training under the previous Conservative Government are rapidly reversed so that those who are in prison can avoid the risk of returning to a life of crime when they leave?

Ruth Kelly: I agree completely with the hon. Gentleman. If offenders can acquire skills, they will be less likely to re-offend in the future. We have already made significant progress on giving access to basic skills to offenders, but I would like to go further. Later this year, we will publish a Green Paper on offender education, which will take that a stage further.

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): Does my right hon. Friend share my anger about the situation inherited in 1997, with some 4 million adults unable to read and 10 million adults without number skills? Does she agree that union learning reps are in one of the best positions to reach out to people who lack not only skills but confidence? Will she congratulate the south-west TUC, which ran a conference just two weeks ago with which I was able to share experience, on its work to improve not only the lot of individuals, but the productivity of businesses in the city of Plymouth, the south-west and our country?

Ruth Kelly: I agree completely with my hon. Friend, which is why it is so important to increase the number of union learning reps, and why we have pledged to increase their number from 8,000 today to 22,000 in future. It is often the case that employees, particularly adults already in work, do not want to come forward and say that they have a problem with literacy and numeracy. However, it is often much easier for them to discuss their skill and learning requirements with a union learning rep with whom they feel comfortable and work alongside. Union learning reps have already increased demand for training significantly, and more than 100,000 people have accessed learning as a result. I hope that we can increase that significantly over the coming years.

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