Select Committee on Education and Skills Minutes of Evidence


Examination of Witnesses (Questions 580--599)

BILL RAMMELL AND PHIL HOPE

24 APRIL 2006

  Q580  Mr Wilson: You do not agree with me that there is a mixed reaction but certainly some of the reactions we have seen have said it was mixed. There have been some good reactions but there have been some like the NIACE who have said it was a " . . . missed opportunity to address the balance of investment between full and part-time students as well as people preparing to enter the labour market, returners to it, those seeking mobility in it and those who have left paid employment". That is pretty mixed, is it not?

  Bill Rammell: I think there is an issue. We have very good relations with NIACE but there is a fundamental debate about where you spend money within the system. I make no apology for the fact that this Government has significantly increased funding to the further education sector by something like 48% in real terms over the last nine years. We are rightly focusing expenditure on the key priority which is 16-19-year-olds with adult basic skills and the roll out of the national employer training programme. That does mean that there are not, relatively, as many funds as were previously the case to fund other forms of adult education. Phil might want to comment upon this. That is one of the issues that we proactively debate.

  Phil Hope: One of the areas where there is a lot of agreement is around personal and community development where we have a ring-fenced fund of £210 million. We are rolling out now a series of new partnerships led by the LSC at a local level to energise not just the spend of that £210 million, which is not a ceiling but a floor for capturing more resource from local authorities—indeed the health expenditure is about raising people's awareness and education around health matters, voluntary organisations, community groups and many others at a local level—to take what is at the moment quite a patchy and incoherent programme of work at a local level into a much more coherent organised strategy and hopefully capture more resource into a coherent strategy at a local level. That is something that is large in the White Paper and which I know NIACE are very keen, in particular, to play an active role in helping us to deliver.

  Q581  Mr Wilson: I spoke to my local principal at the Thames Valley University, which is in my constituency, and he raised three specific areas in which he has concerns. The first of which is that this is going to be too heavy on failing colleges; secondly, he is worried about the proposed expansion of sixth forms and concern about the schools drifting into more and more vocational subjects and, finally, about cutting back on adult learning which Thames Valley University has done already and is being viewed generally as a much lower priority.

  Bill Rammell: Let us try and address each of those in turn. Too heavy on failing colleges, this is similar to the debate we had within the schools area, and the way I normally respond to that is by saying if you had your child or someone within your family going to an organisation that was consistently failing I think you would want something done about it. We are, in a very real sense, mirroring the reforms put forward within schools within this reform package and saying that there will be a 12-month period, a notice for either a college that is inadequate or one that is barely satisfactory or coasting and that we do in those 12-months expect improvements.

  Q582  Mr Wilson: To be fair to him I think he was concerned that there are only 4% in this category, whereas around 50% of school pupils leave school without a full Level 2 achievement. I think he was comparing the two and schools do not seem to be getting the same hard time that perhaps the FE colleges do.

  Bill Rammell: I think if you go and talk to teachers or head teachers within schools they might take a different view to that. To get the figures into context between the first inspection round and the second inspection round there has been an improvement in terms of the numbers of colleges that were deemed to be inadequate. It started at 19, that figure is now down to eight. However, there is a broader group of colleges that according to the inspection evidence are either barely satisfactory or coasting, which is defined as satisfactory but not improving. There are about 50 of those colleges, which is about 12-15% of the total. I think it is right and proper that we do not just focus on the ones at the very bottom but the group above it, we want to see improvements in that area as well and that is why we are saying in those circumstances there would be intervention. There would be very strong support, particularly through the newly established QIA, to help those colleges develop but I think that is the right focus. On the second criticism in terms of the expansion of school sixth forms, one of the things that we have done within the White Paper is very much to level the playing field because we made the policy announcement last year that there would be a sixth form presumption for a successful specialist school to be able to expand and take on a sixth form. We have now said within this White Paper that for a successful FE college, particularly to meet the demands of the 14-19 agenda, and the need for diplomas, there will be an equivalent ability to expand. Again my very strong sense, talking around the FE sector, is that levelling of the playing field has been very strongly welcomed. Thirdly, in terms of adult learning, there is a balance to be struck and when we talk about the dramatic and significant expansion of Train to Gain, the national employer training programme, focusing upon people who have been left behind, who are in the workplace and do not have the equivalent of their first full Level 2, I think it is absolutely right that we do focus attention and resources upon those people. That will mean that there is not as much money as historically has been available within other areas and that is where we do need a better balance of contributions between the state, the employer and the individual. Phil, do you want to comment?

  Phil Hope: Just on that point. Certainly courses that will be under pressure are the short courses that do not lead to qualifications. I would emphasise that in those areas where people value those courses, whether it is individual learners or employers, an increased contribution from fees, indeed full cost recovery courses where they are valued, can continue and we would want them to continue to be run. Certain colleges have taken that challenge on through communication, through the work they have been doing with their communities, I am thinking of City College Brighton and Hove, for example, that has managed to sustain increases in fees and increased numbers of learners. This is the challenge and the fee guidance that we put out suggests good practice for different colleges to respond in that way to those adult learning courses that may not be able to qualify because they do not fit the priorities the Bill has outlined. I just want to pick up the second point about expansion of sixth forms. You mentioned the development of vocational courses, and presumably you are referring there to the new diplomas. I do not want to get into the territory of the Bill which currently four of us, at least, sitting in this Committee will be taking when we get to clauses 61 and 62 of the legislation, Chairman, but we will be looking very long and hard at the importance of these new 14 specialised diplomas that have to be delivered through a partnership, the 14-19 strategy between schools and colleges to make sure that every young person has that choice of a specialised diploma which meets their needs to be delivered by colleges and schools working collaboratively together at a local level. I think that is, frankly, a fantastic opportunity. As I say, I do not want to rehearse the arguments that we will go through in Committee but I think that is a very important part of the new direction colleges will take at a local level in working with other partners.

  Q583  Mr Wilson: Just to tell you the effect that these policies have had on Thames Valley University. It has resulted in them closing all their community location venues, of which there were about 15 in Greater Reading, and withdrawing all their ICT outreach venues in the town and they have had to pull 250 full-time equivalent student places which is saving about a million pounds. That is the effect.

  Phil Hope: As I say, Chairman, the issue here is about the opportunity the colleges have got to take the courses that they were previously running and to market those courses with an increased contribution in fees from those taking part. As we focus on the priorities of 16-18s of Level 2 qualifications within the adult workforce planning things like skills for life, Chairman, and an expectation that there will be an increased contribution up to 50% by 2010 from individuals to pay for their courses that do not lead to these qualifications, we know that colleges which go out in the community, market in that way and sell those courses in that way, those courses that are valued by employers and individuals can continue to run. I think it is very important that the Committee appreciate the importance as we steer down these new priorities that colleges take these opportunities. We had evidence from a Mori opinion poll that showed that learners and the community out there do say they expect to pay a 50% contribution towards the cost of a new course, actually most people do not even know they are going on courses which are heavily subsidised to the tune of 75% or 72.5% already. When this is explained and talked about and comparisons given people say, "Well fair enough, we should be paying more as a contribution towards courses." They may be short courses for people's leisure learning or courses of that kind, the opinion poll definitely showed it is reasonable to expect a higher contribution. The challenge for the colleges is to carry on running those courses at higher fee levels or, indeed, full cost recovery levels by going out to the community to explain the value that the courses have and the funding requirements for them.

  Bill Rammell: Can I add one word to that. There is about £100 million at the moment nationally that colleges forego in terms of fees that they could raise. One would imagine, given that figure, that there would be a link between—for want of a better phrase—between the socio-economic level of prosperity within a local area and a lower level of fees contribution. In fact, if you look at the evidence across the country that is not the case. I think part of this is a real determination on the part of the college to proactively go out and sell and communicate its fee strategy. The Brighton College example is a very interesting one. They have doubled their fees at the same time as year-on-year increasing significantly their learner numbers. They have done it through going out into the community, actively consulting and actually making real comparisons with, for example, things like water charges and the amount of money that an individual pays to a further education course. I think if the college is determined you can make this work.

  Q584  Chairman: We will be coming back to those in a moment. It is interesting that none of your reactions in terms of the broader picture mention Leitch at all, either the intermediate report or what might be the point of having Leitch reporting after the White Paper came out or before legislation. How does Leitch fit into it all?

  Phil Hope: In a way, Chairman, it is the difference between supply side and demand side, if I can put it that way.

  Q585  Chairman: Yes.

  Phil Hope: The White Paper is primarily around the supply side of that. How we make FE ready to be able to respond positively to what I think Leitch is going to be talking about, has already talked about in his interim report, but when his final report comes out later this year about the skills challenge, frankly the skills mountain that we have, both in terms of skills gaps and shortages in this country, and the graphs that we all know about plus comparisons with what is happening in France, India, China, the United States, that would be the demand side measures that we expect to flow from what Sandy Leitch is going to talk to us about. The importance about the FE White Paper is can we put further education into a position where it is the engine room for delivering that skills agenda? Is it fit for purpose and what do we need to do to make it more fit for that purpose? As I said earlier, the importance of colleges being able to engage with employers and respond positively to what employers will demand through the new funding mechanisms for courses that are relevant, that are at a time and place when those employers need them and are delivering the kinds of skills and qualifications that their workforce require, having built a platform of employability through the focus we have on the 16-18s and on the Level 2 qualifications through the entitlement to Train to Gain, if we get that supply side right when Sandy Leitch's second report comes out, I think we will see how the supply and demand side meet together.

  Q586  Chairman: Will you have a White Paper Mark II?

  Phil Hope: Whether we have a White Paper in response to Sandy Leitch is not for me to be able to say at this moment in time.

  Q587  Chairman: There is a logical consistency that might have argued you have a report on the supply side and the demand side and then you write a White Paper.

  Phil Hope: All I would say to you is we know we have a skills mountain to climb, the interim report has told us that. We wanted to make sure we had the supply side in good order with these changes to raise quality, to put the focus of government spend where government spend needs to be, on skills for life, on Level 2 qualifications, on the employability of the workforce in a good position, so that when Sandy Leitch's report comes out the sector knows the direction of travel, the role it has to play in raising the skill levels of this country.

  Bill Rammell: I think as well, Chairman, it is one of these situations where you are damned if you do and damned if you do not. If we had said "Okay, we are going to hold back on the FE White Paper until the summer when Sandy Leitch brings forward his very important report" I think we would have then been open to criticism, "It has been since October last year that Andrew Foster had come forward with his report and the Department is silent". Sometimes you cannot get it right.

  Q588  Chairman: Does the Department have an historic memory?

  Phil Hope: In what respect?

  Q589  Chairman: A memory of the recent history. When the Dearing Report came out, which if you remember was about FE and HE, the principles were right, were they not, that the contribution should come—we argued this as much in terms of HE, top up fees and all that—from the individual who benefits from education, it should come from the employer and also from the state representing society. Some of the early pilots that are coming in Train to Gain are almost suggesting, on the one hand, you are charging people more money as individuals to do courses that do not lead to qualifications and, on the other, you are replacing the funding that the employers were paying for training in the first place. You are substituting state money, Government money for what employers were putting in in the first place.

  Phil Hope: No, that is absolutely right. So in the roll-out of the pilots into the full Train to Gain that started in those 20 areas from 1 April already and will roll-out nationally on 1 August, the lessons we have learnt from the pilots about ensuring we minimise that dead weight, which I think is what you are referring to, Chairman, are absolutely critical. The important point here is that we need to engage with two groups that we were not engaged with before. The first are employers who have not traditionally trained at all, the hard to reach employers, and the new brokerage system as a result of learning from the pilots is giving specific and clear guidance about how they go about doing their business to engage with those hard to reach employers. Moreover, for employers who are already engaged in training are we reaching the hard to reach employees, those employees that those employers currently training are not reaching either. Those are two major priorities that are out in the guidance to the brokers as we roll-out the Train to Gain programme to eliminate the problem that you have described. What is crucially important about the whole picture of that is just getting more employer investment into training. We think the brokerage system, the Train to Gain, the offer for the Level 2, it is right that where there is market failure at Level 2 that is where government subsidy should go but Train to Gain is not just going to be about Level 2, I have to say, it is a training service to employers to raise their whole game, whether it is apprenticeships, Level 3 indeed as well as Level 2, to really capture and gain employer investment in training their own staff and to realise the benefits to sell, market, understand the benefits that training your own workforce can deliver. Train to Gain is not just about Level 2, it is a complete service to employers to raise that total investment across the piece. I am hoping Sandy Leitch will see and reinforce the importance of those kinds of programmes and the importance, indeed, of public and private sector employers investing more in their workforce.

  Chairman: Thank you for that. Let us drill down a bit more on adult learning. Gordon.

  Q590  Mr Marsden: I want to keep the focus on adult learning not least because we have taken a very strong evidence base not just from NIACE, who were referred to earlier, but also from the Association of Colleges, the Association of Learning Providers and others who are really quite deeply concerned—and I stress it is the unintended consequences, there is no criticism of the intention of Government—about the unintended consequences of your funding priorities perhaps being too narrowly focused on young people. What I would like to explore with you is, you have already said today about the expectations about the changes in the funding elements between employee, employer and the individual. Those are very broad percentage figures. They are not going to be replicated in the same way in the same places on the same courses and yet the implications of getting that wrong in terms of courses laid off never to be recovered, significant groups of people on the edge of social exclusion, dropping out of the system equally, perhaps, never to be recovered are profound. What I would like to ask is what are you going to do if some of the forms of adult learning that concern has been expressed about do tail off and tail off very rapidly and adults are either unwilling or unable to make greater contributions? Do you have any form of contingency plan for dealing with it?

  Phil Hope: First of all, I would disagree that there is such a thing as a too narrow focus on young people. This is not about either/or, it is both/and. We both have to stem the flow into the workforce of under qualified young people, young people without basic skills, indeed young people without the equivalent of a Level 2, five good GCSEs going into the workforce. I think that is absolutely critical and we have to raise participation rates for 17-year-olds from the 75% we have at the moment, which I think is unacceptable, up to a target of 90% by 2015. It is a big challenge, and that is what we have to do. Indeed, we have to make sure that there is not that cliff when they leave at 18, and that is part of the Level 3 entitlement for 19-25-year-olds, so we get a 16-25 entitlement where young people can see real pathways of learning right the way through. I have to say expenditure on adult learning is something around £2.8/2.9 billion and has been rising and, therefore, a significant part, just under 50% of the budget goes on adults. The question is what is the focus of that budget. We have made very clear what we think the focus of the budget should be for adult learning, the priorities for that being a full Level 2 qualification. There is that Level 2 entitlement and there is the Train to Gain that will roll-out to deliver hundreds of thousands of Level 2 qualifications in the workforce to meet employers' needs. Your question is, okay, if that has that effect, what is the effect on other adult learning courses that are being delivered? We made the point earlier that we believe those courses, if they are valued by learners and by employers, can continue because they can be run by colleges and other providers at a higher fee level or it can be a full cost recovery level for those employers. There is, of course, full fee remission for those particular individuals in the community who are on income related benefits, and we know that is a very important part for the kinds of communities you are referring to, Gordon, around the individual communities and their needs. There is another group of course—I am sorry if I am answering at length, Chairman, but I think it is important we understand the importance of this.

  Q591  Chairman: We did have a bit of trouble with Ivan Lewis with long answers, you are following in a good tradition, Minister.

  Phil Hope: I apologise. A final point I want to make is about what I call stepping stone provision. For many of the communities that we are describing it is very important that if individuals start a course, a short course, a literacy or numeracy course, an ESOL course, that course leads somewhere. We are quite concerned, I think we say this in the White Paper, that a number of those courses do not add up to a point of progression. People do a course and it does not create for them added-value as an individual. It does not provide them with what they describe as a stepping stone, it is not a stepping stone on to progression on to Level 1 or, indeed, Level 2 qualifications. Now that is part of the change that we want to see happen, either through the way the PCDL might be developed but also through the development of the foundation learning tier that we talk about in the White Paper which provides—and that will be built into the framework for achievement of new qualifications—a coherent package so that when individuals begin the course they know that the course develops their basic skills, adapts their needs and also leads on to higher qualifications. There is a genuine vocational pathway on the way through. That is the challenge for all of us nationally and locally.

  Q592  Mr Marsden: I think many of those points are entirely reasonable and particularly the stepping stones point. It is, of course, however, the case at the moment that a number of courses which are effectively stepping stones courses are either not marketed effectively as such, or alternatively, in some cases, not recognised as such by the LSC. If you talk to parliamentary colleagues they will give you numerous examples from their own casework of those sorts of situations. Under the new dispensation that you are outlining, what are you going to do, first of all, to make that assistance and, if you like, to have a dialogue with the LSC to make sure that stepping stone courses do lead somewhere and, secondly, to make sure that the LSCs themselves are flexible enough in their recognition of what are enabling courses to get people who have been on the social margins or people who have been out there back into that progress? One of the things which concerns me is that we are talking time lag here. This funding mechanism is to some extent a super tanker, it is very difficult to turn it around. You have to get it right as early as possible because what you will get to start with is the perception that all these courses are going and there is nowhere to sign up for them and all the rest of it. Once those courses have gone it will be very difficult to get them back in the frame even if they are marketed effectively at that stage. There needs to be some early intervention, does there not, to make sure that courses which are genuinely stepping stone courses are not lost from the mix because of the increased fees?

  Phil Hope: I think I would agree with that, Chairman. I think the issue is quality, a judgment by the LSC of the quality of the courses that have been delivered to know that they are doing what we all would agree is required, that these courses are genuine, that they do add up to a coherent package that provides people with qualifications which when accumulated together arrive at and can help towards that magic key of the full Level 2 equivalent qualification. It is that job at a local level. Now I believe that is where we have to do a whole lot of work to ensure that at a local level we do challenge providers to demonstrate that is what those courses are delivering within local communities. I think that the way that courses are developed and marketed and link together is a challenge for the providers and the LSC to work at a local level. That is a matter of judgment, Chairman. I will not deny we cannot make that judgment necessarily from the centre but what we can do is create the foundation learning tier framework which provides the opportunity for people at a local level to see how in terms of the national framework they can develop the provision and the service particularly for those people, perhaps not those who qualify for fee remission—although it is a major marketing job to ensure those people do take up those courses—but those who are just above fee remission levels to ensure that they see the actual value for them and their progress both in their personal lives and also in the opportunities to get jobs that pay better because they have undertaken these courses.

  Bill Rammell: Can I just add a word to that. I do take your point about the danger of unintended consequences and politically over the last year, as this process has been going through, one of the things we have held very firmly to is the need to rationalise and sort out what happens below Level 2. I have consistently been making the argument that has been going up and down the country that if you properly map provision against the national framework then it gets funded. What one begins to recognise is that there is both good and bad both within the framework and outside of it and we do need a much better system to determine what really does lead to progression in terms of the stepping stone provision through to Level 2. What we set out for the first time in the White Paper is a commitment, overtime and resources allowing, that we would turn that into an entitlement. If we can achieve that I think that is a really radical step forward.

  Q593  Mr Marsden: The White Paper talks about the LSCs having negotiated income from fee targets with colleges to make sure that fee income is raised rather than learning opportunities cut or simply under-funded. Obviously that is a laudable intention. What are you going to expect the LSCs to take if providers do not manage to meet their agreed income from fee targets? Are you just going to allow those providers to cut those courses?

  Phil Hope: Frankly the market will work in that way. If the college does not raise the fees it will not have the income to run the courses. The pressure will be from the LSC to say, "Live up to your targets" but actually if they do not get their targets for raising the fees they will not have the money and that will be the key that will drive those colleges to either do better at marketing to raise their fee income and to make choices about which courses they offer. It will be the very fact that they are not getting their fee, it will not be the LSC, "you have not reached your target that is going to be the pressure", it is going to be if they have not raised the cash from fees that will be the pressure and change the performance and behaviour of the college.

  Q594  Mr Marsden: You have accepted the analysis of the City & Guilds and others about the impact of the demographic gap on skills certainly in the next 10 years, let alone the next 15 years. Are you confident again that the structure you outline in the White Paper and the priorities you outline in the White Paper will give you enough wiggle room over the next few years to be able to meet that skills gap from a larger and larger percentage of older, lesser skilled or, in some cases, unskilled people?

  Phil Hope: We have some very challenging PSA targets to achieve on exactly that point, particularly in terms of those achieving Level 2 qualifications. Now by 2010 we are expecting 500,000 individuals to be getting a Level 2 qualification, that is a very big target. We are on target for that at the moment but I think we will have to look very carefully, which is why we are focusing and ensuring that Government expenditure is increasingly delivering that Level 2 outcome. It is that employability that is absolutely critical because the more they get to achieve their Level 2 qualification, firstly people have got a Level 2 qualification, they are better employees, they are more productive, they are more profitable, if I can put it that way, and they are making more money themselves; secondly, they are into learning and the possibility of them wishing then to go on to Level 3 qualifications and to carry on developing their skills in the workforce is much more likely. Achieving that Level 2 target is an absolutely critical part of what we are trying to achieve. In terms of demography, in terms of young people, of course, even though the demography means there will be fewer young people coming through, we want to increase the participation rates.

  Q595  Mr Marsden: Of course.

  Phil Hope: And we think that will roughly balance off.

  Q596  Mr Marsden: Presumably an important part of that strategy for older learners over the next five to ten years is going to be encouraging them to take part in their own funding. Obviously the White Paper has talked about the trialling of the new learner accounts and we know the history of that but I think most Members of this Committee would welcome the fact that you have returned to that as an initiative. I think the initiative, and the principles behind it, speaking for myself, were extremely laudable and sound. Obviously the devil is in the detail and everyone is going to be looking at the detail. Are you in a position today to give us any indications as to what a learner account is going to look like and how will payments be made to individuals and how providers will draw down the money?

  Phil Hope: We cannot give a lot of detail at this moment, Chairman. Certainly we are going to take it very carefully so we do not repeat the mistakes of the past. A number of lessons have been learnt from how the old ILA system was operating to ensure that we do not fall into those traps, if I can put it that way. We are going to be piloting the Level 3 learner accounts in two regions—and we have not yet chosen the regions before that question gets asked, Chairman—to make sure that we do this in a way that engages learners. You are absolutely right to suggest that if we give individuals, in the way that we know from the past, an account and a feeling that this is theirs to spend on their development we know that raises demand. We have chosen Level 3 because that is where we know the information is coming to us that the next demand for skills in the economy is going to be required. We will choose two regions, we have not chosen them yet, to pilot this in so we can ensure that it comes through individual learning accounts. We have not designed all the detail yet but it is not going to be cash in a bank account that they spend in that way, it will be money that they know is theirs to spend on their learning. The critical thing is whether we can maximise all the opportunities so that not only is there that learner account money that is theirs, a proportion to spend on their Level 3, but other resources that are around as well can be added, things like adult learning grants and so on, so that an individual can really see what they have available to them that really will unlock the opportunity for them to engage in Level 3 learning.

  Q597  Mr Marsden: When do you expect to be able to say something more about the pilots and the details? It would obviously be helpful to the Committee in finalising its report to be able to say something further in that respect. I wondered if you could give, not a timetable that we would hold you to, but any broad indication?

  Phil Hope: We are looking at it actively now, Chair, as you can imagine, so this autumn is when we are hoping to be able to publish more details about how we expect the pilots to look and how we will go about delivering so we really capture both the full benefit that the learning accounts can bring, as well as safeguarding against the potential abuse we have experienced in the past.

  Q598  Mr Marsden: Have you made any decisions yet about how learner accounts are going to be operated? We know of course that the original ILAs were administered by Capita; can we take it that Capita will not be administering the new scheme?

  Phil Hope: I think we can say we have not made any choices yet, Chair, about how we are going to do it but we are not going to repeat the mistakes of the past.

  Bill Rammell: It will be the tried and tested payments system that we have at the moment, and not a new bespoke system, which was the mistake that was made under ILAs.

  Q599  Mr Marsden: Can I ask about groups of people that particularly need to be reached. There is the welcome initiative in the White Paper, and you referred to a pilot scheme of £5 million, which will be operated across eleven districts, particularly addressing the needs of women learners. If those pilots proved successful, will you want to roll that principle and that target group of women out at a fairly early date to a much broader group of people?

  Phil Hope: There is a total of £20 million that has been allocated to some of the recommendations that came out of the Women and Work Commission report, Chair. Obviously, if a pilot is successful, then we will want to see ways that we can learn the lessons from that and roll it out more widely. Obviously, questions of resource come into that, but it is vital that we get more women coming in to training, and, I have to say, into non-stereotype, non-gender specific forms of training, skills and employment. That is part of the real challenge that we want to make some real progress on.


 
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