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Mr. Pat McFadden (Wolverhampton, South-East) (Lab): I absolutely agree with the Secretary of State about the importance of the White Paper that was published today. One of its elements is the return of learning accounts. When the policy was in practice before, it was affected by the severe problem of fraud, which led to a loss of confidence in the accounts. Will she set out what difference there will be between the learning accounts to which the White Paper refers and those that existed in the past?

Ruth Kelly: My hon. Friend makes an important point. It is right that funds are in the hands of individuals so that they can access the courses that they think best meet their needs. The vision of a demand-led system—by both individuals and employers—is at the heart of our approach for the further education sector. Clearly, the individual learning account experience was subject to fraud, and we learned lessons from the Select Committee inquiry into that. In future, all courses will have to be quality assured. A register of quality-assured providers will ensure that it is not possible to defraud the system. At first, the new accounts will be available only for level 3 courses, rather than all courses, and we will pilot the approach carefully before extending it across the country. If, as I think we will, we develop a
 
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watertight system that puts power in the hands of the individual, we will move towards a further education system that is in general much more responsive to individual need and demand and that helps us to meet the skills challenges of the future.

We will not only put more power into the hands of the individual in the further education sector, but we will ask colleges to be more responsive to employers. I would like to see courses that are chosen by employers and delivered in the workplace so that companies can access all their training needs, from adult literacy to degree-level engineering, in a convenient and timely way. All colleges will be asked to specialise in their strong areas so that they all have a real centre of excellence. We will raise the bar on standards by taking tough measures to improve colleges that are underperforming. This is a radical package for the further education sector, and it is a Labour package. This is a Budget that secures fairness for every child and every learner by investing in every child and every learner. The Conservatives had the chance to invest in the further education sector when they were in government, but did they? No. In fact, funding was cut by 14 per cent. in real terms under the previous Government.

Mrs. Nadine Dorries (Mid-Bedfordshire) (Con): If the Secretary of State thinks that the reforms were so desperately needed and so important, why has it taken the Government nine years to introduce them?

Ruth Kelly: Why has it taken the Conservative party nine years to wake up to the fact that more investment might be needed in our schools and further education colleges? Over the past nine years, funding in education has risen by 48 per cent.—almost half—in real terms. At the same time, we have introduced a new level 2 entitlement for all young learners and an entitlement for adults who do not have the basic skills required, to gain them for free. We are also piloting a new approach to level 3 in the regions. The White Paper relates to colleges that are needed to deliver the skills needs of the nation.

Peter Luff: Does the right hon. Lady think that perhaps the time has come for a more radical assessment of the relative roles of higher education and further education? The overlap is now considerable. The message of a 50 per cent. target for HE seems to diminish the value that the Government attach to FE. Is the White Paper radical enough to address the skills needs of our country?

Ruth Kelly: I think that it is. When the hon. Gentleman has a chance to read the White Paper, he will see that we plan to use FE colleges as a major way of delivering HE for those learners who are already in employment and need skills delivered in the workplace, and for those areas where students and employees do not have ready access to HE institutions. That is right and it will help us to achieve our target. If anything, the target of 50 per cent. is too low an ambition rather than too high an ambition.

Mr. Sheerman : Before my right hon. Friend leaves the subject of FE, may I congratulate her on the White
 
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Paper? The reasonably broadminded coalition on both sides of the House would no doubt congratulate her on the quality of the recommendations. However, does she think that there is a problem with rebuilding and refurbishing the FE sector estate? She knows about the serious financial problems with borrowing the money in the FE sector. I have not been able to find anything in the document to put that matter to rest.

Ruth Kelly: I agree that the sector needs more capital investment, and capital spending in the FE sector will rise by £1 billion over the next five years, £350 million of which was announced as additional investment in last year's Budget. My hon. Friend is also right that the FE sector finds it difficult to compete on the same terms as schools for 14 to 19 education in particular. When he examines the White Paper closely, he will see that we are planning to level the playing field and make things fairer between schools and the FE sector, and sixth-form colleges in particular, in the approach to 14 to 19 capital, with local authorities in the lead, delivering their vision for capital spending across that age group. I hope that he accepts and recognises that that is a major step forward for capital investment in the FE sector.

John Bercow: On employer involvement, in the formulation of the content of the specialised diplomas, how will the right hon. Lady decide which employers to consult, by what means and over what period?

Ruth Kelly: Again, the hon. Gentleman makes the important point that employers in each sector should be intimately involved, not only in delivering part of the diploma, but in designing the curriculum content. That is why I have asked every sector skills council, which the Government have set up in every major area of the economy, to lead in bringing together a partnership of those interested employers to agree the content of each and every one of those specialised diplomas. By 2013, every young person in the country over the age of 14 will have the choice of learning on one of those 14 specialised diplomas, to which he so rightly referred—bold thinking, but the need for much higher quality and better vocational education is clear. If we are to compete against China and India, we need to invest in engineering and other major parts of the economy.

In proposing our reforms, we have always been clear that they need to be backed up with investment. We have done that against a backdrop of an Opposition whose policy on investment is in complete disarray. The Conservative party refuses to match the investment that we are putting into our education system. I ask the hon. Member for Havant (Mr. Willetts) to contradict me if what I am saying is not true. It is a party that yet again puts tax cuts before the investment that is needed in our nation's future.

Michael Connarty : My right hon. Friend may be coming to this, but it is worth making the comparisons in concrete terms for the House and the record. My understanding of education spending trends is that between 1992–93 and 1997, the percentage of gross domestic product spent on education fell from 5.4 to 4.7 per cent. under the Conservatives. In the period in which Labour has been in
 
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office, it went up to 5.6 per cent. by 2004–05. What is the percentage aim in this Budget, and where will education fit in in the GDP of this country?

Ruth Kelly: My hon. Friend makes a compelling point. It is true that when the Conservatives had the chance, they cut investment in education. Not only that, in their most recent manifesto of 2005, they did not mention skills. Those did not get a look-in.

My hon. Friend asks about our ambition for the future. As he knows, it is to match spending in the state sector with spending in the private sector. Over the course of this Parliament, we have said that we intend to continue to raise the proportion of GDP that is spent on education. We have also said that by 2010–11 we will have fulfilled the ambition on the capital side. We have gone much further than the Conservatives in outlining our plans for the future. We are putting no limits on the ambition that we have for our children or for ourselves as a nation.

We are making the hard choices now for stability and prosperity in the future. There is investment and reform for today and tomorrow, and aspiration and achievement for all. This is a bold and progressive Budget, and I commend it to the House.

6.17 pm

Mr. David Willetts (Havant) (Con): As we are debating the Budget, I draw the House's attention to my entry in the Register of Members' Interests.

I want to focus on education, and I ask the Secretary of State when the decision was taken to put it at the centre of the Budget. Of course we welcome the fact that it is centre stage, but one suspects that the Government thought that they would like to do health, but that was a bit too embarrassing, so they then thought they would like to do pensions, but that was too difficult. It seems that by a process of elimination they eventually decided that education had better be the theme.

We welcome the announcements on extra expenditure on education in so far as we understand them. I had hoped that we might know a bit more about the detail after the Secretary of State's speech, but, sadly, we do not. Although we welcome the extra spending, it has to be accompanied by reform. To secure the advantage of the extra expenditure, there has to be real reform of public services.

It was striking that in the Budget speech last week, the Chancellor spoke a lot about education and education spending, but he never once mentioned the Education and Inspections Bill, which was supposed to represent the pivotal moment when the Government committed themselves to serious reform of education. He offered spending without any commitment to the reforms on which the House had voted only a few days earlier. One might have expected him to show at least a little bit of gratitude to Opposition Members for having helped him to secure those reforms.


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