Examination of Witnesses (Questions 620--639)
BILL RAMMELL
AND PHIL
HOPE
24 APRIL 2006
Q620 Mr Chaytor: Is this not a mechanism
likely to increase the number of students taking Level 3—
Phil Hope: It might well do so,
and that will be—
Q621 Mr Chaytor: —and it is
a means of softening the blow for the existing cohort as a result
of the increase in the proportion of the fee to be paid by the
student.
Phil Hope: What we did not want
to do is to expect students who had got their Level 2 by the age
of 19 but hadn't moved on to a Level 3 qualification, but then
had realised the value of a Level 3 qualification, to be disadvantaged,
to be dissuaded from going back into learning at Level 3; and
this entitlement which starts from September 2007 will do that.
Bill Rammell: I think you may
get some expansion as a result of this policy change, and we will
have to deal with that; but this is a real issue in disadvantaged
communities where arguably people progress at a slower rate, go
out of the system and come back. I think that through this change,
which is significant, we have made it that much easier for people
in those circumstances to do that.
Chairman: We will move on to "Quality,
Competition, Responsiveness"; and Stephen and Nadine are
going to lead on this.
Q622 Stephen Williams: Minister,
the White Paper states that the Learning and Skills Council will
get a new remit to promote diversity, choice and specialisation
and provide competition in the FE market. Foster also said that
failing departments and failing colleges should face a contestability
review to see whether a new provider could provide a better service.
It seems to me that there may be two scenarios where there might
be a new entrant into the FE market, either to take over an existing
provision where it is deemed that the existing college is failing
or to provide that choice that a new entrant absolutely would
be coming to the market. What is the mechanism by which you are
going to attract in these new providers; will it be a competition
or a tendering process?
Bill Rammell: Certainly in certain
circumstances there will be a competition, but let me set out
the three ways in which new providers can—and when we talk
about new providers it does not necessarily mean people who are
currently outside of the system; it may be another FE provider
from elsewhere in the country—but certainly it may be in
the case of failure, where we are having a more robust intervention
regime with colleges that are failing. Secondly, there will be
a responsibility on the Learning and Skills Council every five
years to conduct a review. That is not competition for its own
sake. If things are working well, then there is not a necessity
to have a competition; but if the LSC does identify that there
is a need for improved quality, a need to promote innovation or
to expand provision, then it will run a competition, and that
will be advertised, and providers will be able to come forward
and make a proposition. Thirdly, under the core and commissioned
element of the LSC's agenda for change, 10% of the budget
is going to be kept back each year for open competition between
providers, and that is something that is now built in to the system.
All of that, I think, if we get it right, can lead to an environment
in which we drive up quality and responsiveness through that process.
Q623 Stephen Williams: Where do you
think these new providers are going to come from? I heard you
say to the Chair that some of it may be from the existing sector;
now you are effectively saying that if Blackpool College were
in trouble that the City of Bristol College could bail them out.
That does not seem very logical to me—or are you anticipating
there will be new providers from the private sector mainly?
Bill Rammell: I think it will
be a combination. The CBI is very keen to see that opportunity
for new private sector providers to come in to the market. I also
think—and this is where it is important that we get the
language right in describing this—there are real opportunities
for highly-performing existing further education colleges as well,
either to go into a competition directly to put forward a proposition
that that FE college will make that provision, or we might be
talking about individual departments through the process of saying
that there is a 12-month intervention process. That is not necessarily
a judgment just on the whole institution; it might be a particular
department, and you then might be looking for a neighbouring FE
college to take on that responsibility. There might as well be
a greater use of federations between successful FE colleges and
ones that are struggling, so there will be a variety of ways of
taking this forward.
Q624 Stephen Williams: I was not
aware of what the CBI had said. Clearly, in A-level tuition there
is an established private market in private schools and colleges,
but in skills provision is there really slack out there in the
market? Are there people that want to come into the market to
train people in place of existing FE provision? I know that in
some parts of the private sector that works, and I was trained
in the private sector to get my professional qualification. People
learn English as a foreign language in the private sector rather
than in the state sector; but in the sort of services provided
by FE colleges, do you think there are people out there who are
willing to enter the market, which might be quite a risky market
in terms of attracting students into it?
Bill Rammell: Certainly the indications,
talking to people like the Association of Learning Providers and
others, is that there is a willingness and an interest in expansion.
In terms of the risks associated with this, they are not coming
into a stagnant market; over the next few years we are going to
be expanding the number of places by about 50,000. On top of that—and
I do not want to overstate it because by and large colleges are
doing well—through the focus of that small number of failures
you may well get opportunities from that point of view as well.
There certainly are providers who are willing to come in and take
on this proposition; those will not exclusively be from the private
sector; there will be real opportunities for public sector providers
as well.
Q625 Stephen Williams: Will the Government
be providing assistance for some people to enter the market, for
example capital assistance?
Bill Rammell: The capital regime
for existing providers—I referred earlier to the Levelling
of the playing-field; that if you are a successful existing provider
you will have a means to get access to additional capital. We
are not going to be going out to external providers and saying
"come in and we will pay for you to set up your institution".
Q626 Stephen Williams: Moving to
powers of intervention, there are a couple of places in the White
Paper, at paragraph 5.7 and 7.26, where you are proposing to give
the Learning and Skills Council new powers to direct a governing
body to dismiss a principal or to "eradicate poor provision",
which was the phrase in the White Paper. Presumably, going back
to the ping pong that the Minister had with Rob Wilson earlier,
that will require legislation at some point: is that the case?
Bill Rammell: It will, yes.
Q627 Stephen Williams: So you cannot
do any of that until you have got your bill, and you do not know
when that will be.
Bill Rammell: No. We can clearly
set out the direction. I think within this White Paper we have
made a very sound case, notwithstanding the processes that have
to go on inter-departmentally. I think we have a very strong case
for legislation, and I would hope to see that come forward as
quickly as possible.
Q628 Stephen Williams: The White
Paper is in danger of giving the Learning and Skills Council the
twin approach of being a friend and mentor of colleges, but also
this organisation is going to recommend they do some pretty awful
things. Is there a danger that there is going to be a good cop/bad
cop relationship here? An article I perused earlier, written by
our colleague Gordon Marsden in the Manchester Guardian
says that there is a danger of having a hybrid funding organisation
and Ofsted together. Would you like to comment on that?
Bill Rammell: I think we are trying
to get a combination of both self-regulating, developing institutions
that are performing well; and in those circumstances, frankly,
the LSC will be intervening far less, both from its own point
of view and from the inspection regime as well. We are expecting
over time that if you are doing well, the average number of days
in the second inspection cycle will be about a 50% reduction compared
to the current picture. I think that that message is very warmly
welcomed within the sector; that if you are doing well and achieving
your targets, if you are delivering through the inspection regime,
then, frankly, people get off your back and you get on with it.
We are setting out some propositions that in those circumstances,
where providers are doing very well, we might move to three-year
financial budgets; we might move to a single data return each
year, with much less intervention from the LSC. There is a real
goal there for good providers. You may characterise this as good
cop/bad cop, but I do not think that is quite accurate; but at
the same time as that, where there are real instances of failure,
where it is not working and not serving the needs of the community,
you need a tough approach where you do say, "this is a serious
situation; here is an improvement notice; on average you have
12 months to turn that round". There are then a variety of
ways with external support, through an improvement advisor, through
the QIA, to help the college deal with that situation. It is only
in extremis, when they have gone through that process and
it has failed that you might see the closure of the college and
someone else taking over. I think it is possible for the LSC to
manage both those approaches through its relationship with colleges.
What will help is the much more localised focus that the LSC will
deliver through the development of the 148 local teams across
the country under strand 7 of the agenda for change.
Q629 Stephen Williams: One of the
keys to high standards will be the quality of the workforce. Sir
Anthony Foster recommended there should be a workforce review,
and he recommended that it should be done by the Department. In
the White Paper you have recommended various things to do with
continuing professional development, and that is fine, but you
also appointed Lifelong Learning UK to undertake the detail of
this review, rather than doing it within the Department. Why is
that?
Bill Rammell: If you look at the
Department's five-year strategy, we took the view that as a general
rule we wanted to set the overall policy framework and strategic
goals, but the detailed implementation was much better done by
others, by intermediary bodies. It was in that context that we
took the view that that focus on workforce quality should be undertaken
by LLUK. That does not mean that we will just say, "there
it is; get on with it" and have no dialogue with them. I
think this is a really important initiative. You have highlighted
the commitment to continuing professional development. That 30
hours per year, which will be a responsibility for the individual,
their line manager, and will be built in to the inspection framework
for the college, is a very important way, alongside professionalising
the workforce, as we have made the commitment to do by 2010, to
continue the progress that has been made and drive up quality
across the board.
Q630 Stephen Williams: One of the
factors that affects the quality of anybody's workforce is the
pay they are offered. Paragraph 4.33 of the White Paper states
that you were aware of the concern about pay as one of the reasons
why colleges are not able to offer such attractive salaries for
people teaching the same subjects as some schools, because of
this funding gap that other people want to come in on. You have
made a commitment to start narrowing that funding down: when will
it be eliminated?
Bill Rammell: This issue has been
around for some significant time, and the criticism I have heard
from the sector is that there have been warm words from Government,
but there has never been a timetable to deal with it. My sense
within the sector is that the announcement that Ruth Kelly made
at the Association of Colleges Conference last October has been
very positively received. That gap was identified as being 13%.
We have made a commitment and we will deliver by 2006-07 a reduction
to 8%; the following year it will reduce to 5%. You can only give
commitments within the framework of the CSR, but we are committed
over time to eradicating that. In terms of the pay that is available
for staff, we are working within a context in which there has
been a significant increase in funding to FE colleges—48%
in real terms. Compare that with the 14% real-term cut that took
place in five years running up to 1997! The overall financial
framework is better, but I acknowledge—and I have regular
dialogues with NATFE—that there are continuing concerns.
We recently conducted some consultancy research through York Consulting
that analysed the views of FE lecturers across the board, and
pay was not—there were questions, but it was not the paramount
concern that it is sometimes depicted as being. That does not
mean that I would not hope that over time we cannot do more on
pay, but it has to be within the financial resources that are
available.
Q631 Stephen Williams: Acknowledging
that extra funding has gone into FE, why are local sixth-form
colleges, as have lobbied you recently—they acknowledge
they are getting extra funding from one budgetary year to another,
but they have also been successful in attracting more and more
students, and the increase in their budget has not caught up in
the increase in the number of students, so the funding per head
has been diluted. Do you think that is a common experience around
the country?
Bill Rammell: We moved a year
or so ago to plan-led funding, which at the time was welcomed
by FE colleges because it brought stability. Previously you could
lose funding in year if you either under-performed or over-performed.
The system we now have is that you agree the plan in terms of
the learner rates and volumes with the LSC, and it is not adjusted
in year. That sometimes means that you pick up additional numbers
that are then open, through negotiation, to be built into the
following year's financial plan; but there are more people who
work on the stability year on year that has been brought by the
existing system, as compared to those who say, "we have over-performed
and in year we need an adjustment". I know that when he gave
evidence to you, Mark Haysom was very insistent upon this issue
that we need to get that planning mechanism more effectively correct
so that we are not having that in-year turbulence.
Chairman: Here is a lot of interesting
stuff coming out of this session, so we are enjoying it. It is
a pity we are not on television today. Perhaps the BBC cannot
afford, with Terry Wogan's salary, to cover parliamentary business
any more! Never mind, we will carry on. I did say when meeting
some of you last week that as soon as we talk about skills we
are not reported in this Committee, so we should flag that up.
Q632 Mrs Dorries: Can you tell me
why you described Essex Local Authority as "the Taliban"?
Bill Rammell: I think we are on
a different subject.
Q633 Mrs Dorries: We are not, actually,
no; it will lead on.
Bill Rammell: As a constituency
MP, within the framework of special needs education—and
I think we have got the right approach at a national level—I
have historically taken a view through my own constituency experience
that the kind of choice that exists within the national framework
has not always been delivered by Essex LA, and those were the
concerns that I was representing.
Q634 Mrs Dorries: Are you happy then
that Essex LA provides government advisors to the Government and
has appointed two recently to the Government in the past few months,
to work as advisors at the DfES?
Bill Rammell: Essex LA covers
a whole range of functions, and I am very pleased that they have
a relationship with the Government. Just as you are a constituency
MP, I am a constituency MP, and I do robustly make representations
to my local authority on behalf of my constituents, and I am not
going to apologise for that.
Q635 Mrs Dorries: I probably agree
with you in terms of your analysis of Essex LA—there are
LAs across the country that one may not describe in such terms,
but there are a lot of good LAs. Do you think therefore the reason
why the LSC exists is because you do not trust the local authorities?
Is the purpose of funding going to the LSCs to fund FE colleges
because you can control it and you can trust the LSCs, and that
is why they were established, rather than the local authorities?
Bill Rammell: No, I do not think
that is the case at all. Within the White Paper we have made clear
that there is a significant role for local authorities in terms
of delivery for the 14-19 agenda, taking the strategic lead, pulling
the partners together. However, I started this evidence session
by talking about the importance and role of the LSC and comparing
it to what went previously, prior to 2001, where there were different
funding bodies, whether it was the Further Education Funding Council,
the TECs, or local authorities. I think that by pulling that together—I
have very robust exchanges with the LSC, I can assure you, about
their performance; but in terms of what has been achieved we have
brought coherence to that overall environment through the LSC.
The focus that the LSC has enabled—the spotlight on the
skills agenda, and bringing the employer voice within the system
has been very significant, and that would not have happened if
there had been local authorities managing in that way.
Q636 Mrs Dorries: Why not? Do you
not think that if funding went to local authorities—not
that I want it to happen—but if you, as the Government,
put the funding through the local authority do you not think we
would see a greater parity and equality of funding between those
aged 16 and 19 attending comprehensive schools and those who go
into colleges and further education?
Bill Rammell: No.
Q637 Mrs Dorries: They are the poor
relatives of education, are they not?
Bill Rammell: I have just set
out in some detail the way in which we are rectifying that problem.
When we talk about poor relatives, the issue of the funding disparity
has been driven by the significant increase in investment that
this Government has brought to education across the board, where
there has been a significant increase in FE funding and certainly
a significant increase in schools funding as well. The reason
that I made the point that I did—you said should we simply
not hand it over to local authorities—the key difference
is through the LSC mechanism, particularly through the Council
structure. We have brought the employer voice directly into the
shaping of provision up and down the country; and that has brought
a significant benefit that would not have been there, arguably,
if this had just been done through local authorities. However,
one of the issues that we are grappling with across government
at the moment is the need to ensure that local authorities are
very coherently involved in this. In the ODPM initiatives of the
city regions there are consultations. There are eight major cities
at the moment, each of them in their different ways, that are
looking to see how external partners can be involved in the skills
debate and the skills agenda; and local authorities will be key
within that.
Q638 Mrs Dorries: In relation to
the measures you have spoken about today, some of us have been
asking questions about the disparity of funding for that particular
age group since we arrived last May. We do hear lots of words
of encouragement, but a year on since we first came to the House,
certainly a year since I first asked my questions, still we are
hearing words and there has been very little action. What is the
timetable? When will 16-19-year-olds in FE colleges, who are usually
children from lower socio-economic groups and socially deprived
areas, be receiving the same funding as children in community
schools do?
Bill Rammell: I wholly refute
the accusation that all that has been happening is warm words.
Since you came into the House there has been a very concrete timetable
to reduce that gap. The financial year we are in at the moment—the
gap as estimated by the Learning and Skills Development Agency
is 13%; next year that will reduce to 8% and the following year
it will reduce to 5%. Those are not warm words; that is a big
change and a big difference in the funding gap between schools
and FE. My sense, going around colleges up and down the country,
is that whereas in the past we might have been accused of warm
words, there is recognition that we are moving on it.
Q639 Mrs Dorries: Will there be parity
of funding after 2008? Will 16-year-olds be receiving the same
Level of funding as in community schools, and will teachers teaching
within FE colleges be receiving the same as those within community
schools?
Bill Rammell: Our commitment,
as resources allow—and the reason for that formulation—is
that we only can commit in the three-year spending review period;
but we would hope to move beyond that position of a 5% reduction
by 2008 to eventually eradicate that gap. The gap is important,
but I would make a broad point that the funding base in further
education colleges is substantially better today than it has been
in the past because of the significant boost in investment we
have delivered over the last nine years.
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