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Ann Coffey (Stockport) (Lab) rose—

Mr. MacShane: Will my right hon. Friend give way?

Mr. Denham: Let me get a little further, if I may, in setting out the position.

As part of the boost to the economy, which the Conservative party has opposed, we have brought forward £220 million over the spending review period to this year and the next. Let us be clear: it is my intention to ensure that every pound that we have promised to spend will be spent. The capital programme has not been suspended.

Ann Coffey: Does my right hon. Friend agree that part of the problem has been that the Learning and Skills Council announced the deferral of a small number of projects for three months, alarming every college principal with a capital project? Aquinas and Stockport colleges in my constituency have capital projects worth over £60 million, which is a big investment in Stockport and in further education. Those two colleges have planning permission. Can he assure me that their plans will go ahead?

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Mr. Denham: As I understand it, the two projects to which my hon. Friend refers have received full approval in detail. None of the colleges that have received such approval is affected by the current delay in LSC consideration.

Mr. MacShane: My constituency, Rotherham, has been hard hit, with job cuts at Corus and with Burberry shutting down. Three weeks ago, the Rotherham Advertiser filled two pages with the new plans for the new development at Rotherham college of arts and technology, which had been signed off. I was concerned about that being displayed, given the misleading guidance to which my hon. Friend the Member for Stockport (Ann Coffey) has just referred. I am meeting George Trow, the college principal, on Friday. Could the Secretary of State’s private office write to me before then with the assurance that he has now given at the Dispatch Box, with reference to Rotherham college of arts and technology? I would be most grateful.

Mr. Denham: The remarks that I made apply to colleges that have received full approval in detail to proceed. I am happy to write to my right hon. Friend ahead of his meeting.

Having set out the success of the programme and made it clear that it is my intention to ensure that every pound that we have promised to spend will be spent and that the capital programme has not been suspended, let me turn to an issue that is of genuine concern to Members on both sides of the House. There are schemes in the pipeline that have not yet been fully approved, and the LSC has put further approvals on hold until it has assessed the whole programme. The LSC has not yet provided a full analysis of all those schemes, but I need to be frank: many more schemes are currently in preparation than can be funded in this spending round. Some colleges that have anticipated early approval will be disappointed. Priorities will have to be set and hard decisions will have to be taken.

It is clear that in some cases, unrealistic expectations have been allowed to develop or have been encouraged, which is unacceptable. The LSC is, by statute, responsible for the management of the capital programme, but as Secretary of State, I will apologise to any colleges that find themselves in the position we have discussed, and as Secretary of State I need to find out how that situation arose and what lessons must be learned for the future. That is why I have agreed with the Learning and Skills Council that Sir Andrew Foster should carry out an independent review of the LSC’s handling of the programme. I hope that I have outlined the current position to the House as much as I can, and I undertake to bring forward more detailed information when it becomes available and when I am able to do so.

Mr. Willetts: I appreciate that the Secretary of State has recognised the problem faced by FE colleges. Could he add a bit more information about the number of colleges whose plans are “in the pipeline”, and on the value of those projects, so that we can have a rough idea of the scale of the disappointment that he is talking about?

Mr. Denham: I am not able to do that reliably. The problem is that if I were to give the number of schemes that have formally been through every process and which are, as it were, sitting in the LSC’s in-tray for approval either in detail or in principle, I would be
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understating the problem—and I do not want to do that. We have just discussed a college in north London that would not fit into that category, but where I accept that some work has been done in drawing up plans for the future. The procedure has a regional and a national element, and I would prefer to make information available to the House when I have a full picture of the number of projects in the pipeline, and the stage that they are at. I hope that the hon. Gentleman accepts that as an honest answer. It would not help for me to present what might be seen as a narrow definition of the colleges that have expectations of approval in the next year.

Mr. Willetts: I am grateful to the Secretary of State for giving way a second time. I understand what he is saying, and I appreciate the suggestion that he will make information available, but will he undertake to come to the House with such a statement? Can he tell the House when he might be able to give us the information? The uncertainty is itself part of the problem for the FE sector.

Mr. Denham: The LSC told me that it is working towards being able to take the complete picture, with some clarification on the decisions it can take, to its council meeting, which is due to take place on 2 March. I hope that in the days or weeks before 2 March it will be possible, by written statement or in whichever way is appropriate, to make information available. I make that undertaking to the House because we are very proud of the programme. It was praised by the NAO and it has achieved a great deal of good. Colleges are being built, the programme will be delivered over the next two years, and it is unacceptable that some colleges that hope to be part of that process in the near future may face disappointment. We will make available any information that we can as it becomes available.

Alistair Burt (North-East Bedfordshire) (Con): Before the Secretary of State leaves that point, he will note that the management and administration of the LSC has been one of the most messed-about aspects of education in recent years. Will the inquiry have a look at whether the continual chopping and changing in the way in which the LSC did its job contributed in any way to the freeze that he is dealing with at the moment?

Mr. Denham: I have asked Sir Andrew Foster to look specifically at the handling of the capital programme. Moreover, we are going to establish an agency focused on young people and on skills, which the House will be debating in a few days’ time, to advise us and the LSC on what lessons should be drawn from what has happened in the past few months for the future handling of the programme by those two agencies. I hope that that addresses the hon. Gentleman’s point, at least in part.

Mr. Chaytor: I look forward to the Secretary of State’s visit to my constituency in a few weeks’ time, where he will be able to see for himself the remarkable rebuild of the two outstanding colleges in my constituency. But, as far as future capital spend is concerned, would he remind us about what the Opposition have said about the extent to which they are prepared to match the Government’s spending programme?

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Mr. Denham: It would have been seriously remiss of me to forget to draw attention to that point, so I am grateful to my hon. Friend. The Opposition spokesman told the Association of Colleges that he could not even guarantee to deliver the capital spend promised by this Government in 2010. I hope that any Opposition Members who are rushing to put out press releases saying how terrible the whole thing is will say that their own party wishes to cut spending in 2010.

A global economic slowdown is the time to increase, not to reduce, investment in skills and training. Companies that invest in training are two and a half times more likely to come through the downturn successfully than those that do not. Today it is even more important that business knows that it can get real help from the Government. Those who lose their jobs need support, including help with skills to get back into work, and young people need more opportunities to learn and train for the jobs of the future. That is what we are providing, and what the Opposition oppose. They say that my Department should cut £610 million a year, starting from 1 April. They oppose the Government’s fiscal stimulus and the borrowing needed in a downturn, so they could not match the new investment that we are making or the new support provided by Jobcentre Plus. Now is the very worst time to make cuts, just when people need training to help them keep their jobs, when businesses need to train their staff to boost productivity, and when people need extra support to help them train or retrain to get a job.

The hon. Member for Havant talks of young people without work, education or training. He knows that the figures that he throws about represent a smaller proportion of a much larger generation of young people. Not content with ignoring the extra 1 million young people in work or education since 1997, he throws into the figure young people who are at home bringing up children—the Tories used to be in favour of that. He throws in part-time students—they used to be in favour of them, too—and students on gap years, just to pad out his press release.

Of course there is a real, if much smaller, problem of young people apart from the system. But what does the hon. Gentleman do? He opposes the very things that would help, such as raising the participation age so that more young people get work with training, and the new deal, which is giving young people extra support. His concern turns out to be empty rhetoric.

Mr. Lancaster: I hope that the Secretary of State will treat this as a genuine request for information. Given his commitment to getting people back to work, what assessment has he made of the potential cost of adding students currently on benefit to those who are exempt from his reversal of funding for equivalent or lower qualifications?

Mr. Denham: That is a slightly complicated question, which I may need to reflect on when I have a look at Hansard. As the hon. Gentleman knows, the change that we have made to ELQ funding, to create new opportunities for those who have never been able to go to university, was the right decision. Further measures have been taken to ensure that there are higher education courses to enable people with higher-level skills to reskill—I can say that word, as the hon. Member for South Staffordshire is no longer in his place—and gain new
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skills. That is the right approach to meeting the labour market’s need for people to retrain for a new career or a new direction.

The hon. Member for Havant mentioned apprenticeships. This Government have rescued apprenticeships from their collapse under the Conservatives and built them up so that they are well on their way to taking their rightful place as a mainstream option for young people. He could not match the extra £140 million that we are investing to provide 35,000 extra places this year. We want more than 250,000 apprenticeships next year, just when young people, and business, need that boost. The new national apprenticeship service will enable us to meet our ambition that one in five young people will take up an apprenticeship in the next decade, and to extend group training associations and support the extension of existing schemes. We expect the public sector to shoulder its share of responsibility.

Mr. Paul Truswell (Pudsey) (Lab): Labour Members all know that when the Opposition were in power, apprenticeships were going the way of the dodo. None the less, does my right hon. Friend accept the concern about the position of some apprentices, given the difficult economic circumstances in which their employers find themselves? What action might be taken to ensure that the investment in current apprenticeships is not lost?

Mr. Denham: We have established a clearing house in the construction sector to try to match apprentices who may lose their jobs with other placements. We have also changed some of the rules in the system to make it easier for apprentices to continue their college-based training to get the necessary technical qualifications. We acknowledge the problem that my hon. Friend mentions and we are tackling it.

Simon Hughes (North Southwark and Bermondsey) (LD): Will the Secretary of State give way?

Mr. Denham: I have taken many interventions and I need to make some progress. I shall take more interventions if I can.

Even if the Conservative party stopped all apprenticeships for those over 19 next year, they would have to make further cuts of £400 million in education and training. We continue to expand higher education; Conservative Members could not.

More than 330,000 people learned new skills through Train to Gain last year, and more than 100,000 employers have engaged with the programme. By 2010-11, the programme will train 1 million a year. Train to Gain means training when and where employers want it, and it works for businesses and individuals. Forty-three per cent. of Train to Gain learners reported that they earned better pay, and 30 per cent. gained a promotion as a result of their training. Fifty-one per cent. of businesses reported an increase in staff productivity and 64 per cent. said that it improved their long-term competitiveness. The deputy director of the CBI recently said that Train to Gain is exactly the product we need at this time.

Yet the hon. Member for Havant and the Conservative party have repeatedly called for the abolition of Train to Gain. That means denying 1 million people and thousands of firms the chance to get on or use training to come
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through difficult times. Train to Gain lets us offer small businesses flexible training—short courses, which have an immediate impact on productivity. It has enabled us to work with companies such as Nissan, JCB and others to train workers who face short-time working. The Conservatives would stop that.

In the past two years, more than 1 million adults have gained their first literacy or numeracy qualification. Last year, almost 300,000 people got a level 2 qualification and 130,000 got a level 3 qualification—huge increases compared with five years ago. Those record improvements transform people’s lives and make a genuine difference. What would the hon. Member for Havant do? He believes that we should turn back the clock, end the courses and revert to subsidising Spanish courses for holidays.

Training will help companies through the downturn, but it cannot prevent every job loss. In the last recession, people who lost their jobs were abandoned without help or hope. Many drifted or were dumped on to incapacity benefit. Some never worked again. We will not turn our backs on those who lose their jobs. We have provided £158 million in new support to colleges, third sector organisations and Jobcentre Plus to help people get the skills they need to keep their job or find a new one quickly. We are challenging the whole education and training system to change the way in which it works, and to respond better to individuals and businesses. An extra 75,000 college places will be there for those who are out of work for more than six months. People will not have to choose between learning and earning; as they get into work, their training will continue.

At every level of education and training, people may want to reskill or retrain. We have supported and encouraged the Higher Education Funding Council, with £50 million match funding to help universities and support individuals and businesses now. A few moments ago, the hon. Member for Havant complained that he had read about that in The Daily Telegraph . Now the scheme is a reality, but he has not even congratulated us on it. That funding is possible because of the VAT cut, which the Conservative party also opposes.

We are trebling professional and career development loans, allowing for 45,000 new chances to gain skills and qualifications. We are planning for the future. We are establishing the skills funding agency to ensure that we can develop the skills that we need in the strategic parts of the economy, which will enable us to prosper when the upturn comes.

I welcome the fact that we are having this debate—a debate that the Government themselves intended to hold. I hope that I have explained why we wanted it. The Conservative party has a bad history, a wrong analysis of the problems, the wrong policies—and does not even have the courage to come to the House and explain how the cuts that its party leader has promised would affect this area of activity. Everybody will learn lessons from that.

4.44 pm

Stephen Williams (Bristol, West) (LD): The Secretary of State mentioned previous recessions. I have bitter memories of two recessions—one when I was in school and the other when I had just started work.

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In the early 1980s, when I was in secondary school, my community in south Wales was devastated. Hundreds of people in one village could be thrown out of work in one day, sometimes as a result of the deliberate policy of the Government of that time. Shops were boarded up and people were in despair. Indeed, some people of my father’s era faced unemployment and insecurity for an entire generation.

I also remember being a young graduate trainee in 1990 in what is now PricewaterhouseCoopers, when the three people who sat near me—my manager and two supervisors—got a telephone call, reported to the fourth floor and were made redundant. They were then marched on to the pavement and I was told to clear their desks.

I have bitter memories of previous recessions, but many young people today simply have no idea what a recession is, because for the past 15 or 20 years they have grown up in an environment of increasing prosperity, rising house prices and a credit bubble—that is, in an age of consumerism. Now they suddenly find that that certainty—indeed, that bubble—has been pricked.

In a few months’ time, one third of a million undergraduates will be leaving university and, for perhaps the first time in a generation, they will not really know what the future holds for them. When I graduated 20 years ago, the pattern was the same as it is at present. Traditionally, the largest employers of graduates were in financial services, banking, the City and the professional services that support those occupations. However, the sector is facing its worst recession in a generation, so young people leaving university will be uncertain and worried about their future.

Those who are yet to decide what to do beyond school—to go into further or higher education—must be wondering whether it is worth making that investment, which now comes with increased personal debt, or whether they would be better off taking their chances in the workplace. Those already in the workplace knew that the dynamic 21st-century economy meant that they would probably have to train and retrain throughout their working lives. However, in a downturn or recession, they will have to rethink and to retrain all over again.

It must be something of a record in a debate on skills—I have had to do several in the three and a half years that I have been a Member of Parliament—that neither the Conservative spokesman nor the Secretary of State mentioned the Leitch report, which was meant to be the foundation of the Government’s skills strategy, taking us up to the 2020 economy. Perhaps that is because, two years on from Leitch, the Secretary of State and the Government realise that many of the recommendations and conclusions of that report are already effectively redundant, because the economy has changed. Many of the criticisms made of the report from the Liberal Democrat Benches in 2006 and 2007 are perhaps more apt now. In particular, employer-led demand does not seem so relevant when many people no longer have an employer.

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