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6 May 2009 : Column 81WH—continued

the Department. The price for that insufficient clarity and understanding is being paid by learners and teachers across the country. That is why the outrage that we have heard this morning has found form in this debate and why this matter deserves to be debated on the Floor of the House. I hope that the Government will take the opportunity, as a result of this debate, to do just that.

Colleges and schools have progressed to an advanced stage of planning only to have their plans halted and their hopes shattered. Some 144 colleges have had their budgets frozen. Both situations are tied together by the inefficiency and sluggishness of the response—limousined Ministers arrive late and react slowly. When both crises broke, an explanation from the LSC was notably absent, and the ministerial response was little better, consisting of reactive statements and soundbites that went little way towards allaying the legitimate concerns of the sector.

Some £250 million has been committed to sixth forms and £300 million has been committed to colleges, but those pledges have been accompanied by a vast, confusing silence. No one seems to know where the money is going to or whom it will benefit. The £300 million for the Building Colleges for the Future programme is little more than a drop in the water. Colleges and schools are still confused and uneasy about the direction in which their institutions are heading, and, as the weeks pass, key decisions cannot be made. The severity of the situation seems to grow daily, but there is now an opportunity to remedy that. As the LSC has not managed
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to explain to schools how it plans to compensate for the mistake, perhaps the Minister will take this opportunity to guarantee that all schools and colleges will receive full funding allocations. I have asked one of his colleagues to confirm that all schools and colleges will be fully funded, regardless of which stage in the process they are at. Will the Minister give that guarantee today, which was suggested in the letter of 2 March? Will he also comment, in those terms, on exactly how that money will be allocated and on what basis it will be delivered to schools and colleges?

Will the Minister show that he understands the gravity of the situation and the outrage that people feel? To be helpful, I shall pose a number of questions that might assist him to give the assurances sought by the House and those affected. First, will he comment on the strategy that he intends to put in place to make such failures impossible in the future, in the way that my hon. Friend the Member for St. Albans (Anne Main) demanded? Secondly, will he explain the structures and mechanisms that will make that possible, as my hon. Friend the Member for Bournemouth, East (Mr. Ellwood) suggested? Will he outline when he first knew of the crisis, and how and when he made that information available to the House? Will he say what lines of communication broke down between the LSC and the Department? We know that the Department’s officials attend key LSC meetings, so it is inconceivable that there was not a channel of communication. How, then, was that channel broken?

Will the Minister comment on the possibility of carrying out an independent analysis of this matter, as my hon. Friend the Member for Aylesbury suggested? Perhaps that should be done by the Public Accounts Committee, or maybe Sir Andrew Foster should be revived to say a further word on this subject, as he has already reported on the debacle in colleges. Finally, will the Minister apologise unreservedly, up front and without passing the buck to officials? Will he say that Ministers owe the House and those who have participated in this debate—and, much more significantly, teachers and head teachers, governors and parents, and, most of all, students—an absolute apology, along with an assurance that this will never happen again?

Mr. Ellwood: On a point of order, Mr. Hancock. I seek your guidance. Would it be in order for the Palace of Westminster, which put such an effort into setting out the chairs for Labour Members—all 30 of them—to get a rebate considering that only two of them have been used in the debate?

Mr. Mike Hancock (in the Chair): That was a good try, Mr. Ellwood, but even your enterprise does not give me the right to say that is a legitimate point of order—it should be ignored by all.

10.47 am

The Minister for Schools and Learners (Jim Knight): Let me start by giving you, Mr. Hancock, as I have in writing, and the House, an apology for being two minutes late. I should have either walked or allowed more than seven minutes to get here from the Department, but I am seeing the Mayor of London today, on the anniversary of his election, and I will pass on my comments about the traffic situation around Westminster.

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I congratulate the hon. Member for Hemel Hempstead (Mike Penning) on securing the debate, which has given an important opportunity for the Members present to express their concerns and anger, which we have heard this morning, and for me to explain what has happened in respect of the problems with post-16 funding, particularly for sixth forms.

Obviously, the background to this issue is the importance of post-16 education. That is why the Government have raised the participation age and have introduced the September guarantee, which I shall talk more about later. As hon. Members have commented, the Learning and Skills Council has apologised, on 3 April, for the problems. I should like to say, at the outset, that I am very sorry for the disruption that has been caused to school and college leaders over the conflicting content of the letters that they received in March. Thanks to the Chancellor’s Budget statement, we can now confirm that there will be expanded funding—not just up to the levels that were promised, without the funding to back them, on 2 March, in the LSC letter, but beyond those levels—for post-16 education from September, when the money will be received by colleges.

Let me work through the sequence of events—

Mr. Hayes: Will the Minister give way?

Jim Knight: I want to work through the sequence of events before I give way to interventions, so that I manage to explain properly what went on.

As Members who follow these things will be aware, the funding process starts in November every year, as it did last year, with the annual statement of priorities. The funding agreement between the Government and the LSC sets out the allocation of funding for post-16 learning. During the December to January period, that is then followed by a dialogue between schools, colleges and the LSC over what capacity they have in the system to deliver post-16 learning. In January, as the problems in the economy caused by the global banking crisis became clear, we agreed with the Treasury that there should be an additional 17,000 apprenticeship places to cope with some of the increase in demand that was starting to emerge. That figure not only took account of the data on previous years’ out-turns, which is a normal part of the process, but looked at some of the projections of increased learner numbers for September.

The moderation of bids then proceeds during February and the notification is usually sent to schools and colleges in March. This year, that happened with the letter of 2 March, which was sent to school sixth forms. Unfortunately, that letter was not seen by Ministers and it did not have clearance. In the first paragraph, the letter included the phrase that it

As I have said, the money was not there and it had not been agreed to make final allocations on that basis. The letter went on to state

However, the apology that the LSC published on 3 April states:

I first saw the letter of 2 March on the same day that that apology was issued—on 3 April. That was the first time any Ministers saw that letter.

The LSC wrote again to school sixth forms in a letter that I had approved to say, among other things—[Interruption.]

Mike Penning: Will the Minister give way?

Mr. Mike Hancock (in the Chair): Order. I am trying to give the Minister the opportunity to be heard by everyone, not just those who want to harangue him.

Jim Knight: Thank you, Mr. Hancock. I know that the hon. Member for Hemel Hempstead wants to intervene. As I said to the hon. Member for South Holland and The Deepings (Mr. Hayes), I would like to conclude outlining the sequence of events so that they are clear and on the record.

The letter of 27 March that was sent to schools gave them their allocations. It has since caused anger and concern among leaders, which has been reflected by their representatives in the House. There are statutory reasons why a letter had to be sent out then: it was so that schools and colleges could rightly set their budgets. That letter said

That letter was signalling that, beyond the estimates of learner demand that were emerging during February and March, recessionary impacts meant that demand was continuing to emerge—particularly because of the numbers of people aged 16 to 19, who were in employment but not training, losing their jobs. Such people wanted to come into learning in college and we needed to respond to that. The matter was the subject of discussions across Government, which concluded in the announcement made in the Budget. I was able to negotiate an additional £655 million from the Treasury to fund post-16 learning over two years—£251 million for this financial year and £404 million for the following financial year. That will allow us to deliver our September guarantee and not only to fund the allocations that were made wrongly on 2 March, but to go beyond those allocations.

A letter was then sent to schools and colleges by the LSC on 27 April informing them about the news in the Budget and saying among other things:

So, the LSC was signalling for the first time that schools and colleges could, indeed, come forward for additional funding if they identified additional demand to that identified in February/March.

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Mr. Hayes rose—

Jim Knight: I have almost finished. At the end of last week, in relation to the detailed allocations, I agreed that the 2 March figure could go out to learners, with the exception of four institutions. The reason I have been unable to be absolutely clear on that until now is that there are four institutions that will not get up to the 2 March allocation. I will be talking to the MPs who represent those institutions today—the hon. Members for Braintree (Mr. Newmark) and for Mid-Norfolk (Mr. Simpson) and my hon. Friends the Members for Basildon (Angela E. Smith) and for Norwich, North (Dr. Gibson). Technical reasons relating to how the formula was worked out mean that those institutions will get less than they thought. In all but one case, significant numbers are not involved and, in every case, I think that the school and college know the situation in respect of those allocations.

Finally, before I take a couple of interventions if I have time, it is worth reemphasising that the allocation from the Budget means that we can fund more post-16 learners than ever before. The allocation is up from £1.5 million to £1.55 million. That is on top of the 17,500 additional apprenticeship places to which I referred earlier, and it includes funding 55,000 extra educational maintenance allowance places. A detailed process will now go on until 22 May to agree the very final allocations, including that extra amount for those colleges and schools that are able to stimulate additional demand in order to meet the needs of young people.

It is also important for me to say that—I know that the Opposition will not like this—we are committed to a September guarantee and, going forward, we are committed to funding places for every 16 to 19-year-old in school and college who wants one and wants to carry on learning. In terms of skills, it is important that we come out of this recession stronger than when we went into it. That is not a guarantee that I have heard repeated by the Opposition, who are so well represented in this Chamber.

Mr. Hayes: I will be very brief. The Minister said that he was not aware of the letter that was sent out on 2 March. Were his officials aware of it? In other words, did the Department know because, presumably, he has at least conducted some kind of internal investigation into these matters? Perhaps when answering that point, he will also tell us—he referred to this glibly earlier—whether all those colleges that were promised extra capital funding by the LSC will get the money that they were promised.

Jim Knight: Certainly all those schools and colleges that were promised money on 2 March will get that allocation, with the exception of the four institutions that I mentioned. The issue of capital is different and
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continues to be debated in the House with my colleagues from the Department for Innovation, Universities and Skills.

In conclusion, we set ourselves the bold ambition of having a world-class education system that brings out the best in every single learner. That means a system that can adapt to the changing world in which we now live—[Interruption.] Sorry, on the other question, one official was aware of the letter that went out on 2 March.

Mike Penning: On a point of order, Mr. Hancock, is it acceptable for a Minister of the Crown to make a commitment during a debate that he will give way to an hon. Member and then refuse to do so, knowing full well that the time scale means it is impossible for that hon. Member to get in before the debate is terminated?

Mr. Mike Hancock (in the Chair): A Minister should not only arrive on time, but, if he gives such a commitment in a debate, he should, according to the conventions of the House, find time to let that hon. Member come in.

Jim Knight: Thank you, Mr. Hancock.

Mike Penning: Give way.

Jim Knight: I will give way for a very brief intervention.

Mike Penning: It is absolutely fascinating that the Minister now gives way because the Chair has lambasted him on the basis that he will not answer the question. Will he answer a simple question and if he cannot do so, will he write to me? Why are some of my schools today telling me that they have not had written confirmation about the shortfall—in one school of £60,000 and in another of £90,000? They have had nothing at all. Some schools have received something and some have not. Why?

Mr. Mike Hancock (in the Chair): You have 20 seconds, Mr. Knight.

Jim Knight: Thank you, Mr. Hancock. There are 1,730 schools and colleges in receipt of the letter. If some have not received it, I shall pursue the matter when I leave this Chamber.

Our education system must change. We are responding to a global recession—

Mr. Mike Hancock (in the Chair): Order. I would like to thank all Members and the Minister for the courtesy that they have shown to the Chair, and Members for the courtesy that they have shown to each other to enable them to speak in the debate. I request those Members who are leaving to do so quietly, and we will move on to the next debate.

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Government Procurement

11 am

Mr. David Kidney (Stafford) (Lab): It is a pleasure to see you in the Chair for this debate, Mr. Hancock, and the Treasury Minister who is here to respond to it.

The premise of this debate about sustainable procurement is that the Government have fine policies for sustainable procurement promotion, but there is confusion over responsibility, and some practical guidance is missing. That means that there is not the leadership and direction necessary to make as big a success of sustainable procurement as we should.

For much of my speech, I shall focus on the power of public procurement, but sustainable procurement is the responsibility of every procurer. In fact, in some instances, the private sector is ahead of the public sector, particularly in respect of private finance initiative contracts. Whatever people think about the politics of such contracts, those who bid to construct and then run a building or a series of premises for 30 years are clearly focused on the cost over the whole life of the contract, not just the up-front building costs. In some senses, the private sector is already aware of whole-life costing, which I shall discuss, when the public sector is a bit slower.

The public sector has enormous purchasing power, and it would be interesting to hear whether the Minister has a figure for that. I estimate that £175 billion a year is spent by all public sector organisations on goods, services and utilities. I contend that that purchasing power could be used to lead by example to promote sustainable procurement, which is the procurement of goods, utilities and services in a manner that maximises the environmental, social and economic benefits for all of society over the whole life of the procured asset.

In 2005, the Government set themselves the ambitious goal of making the UK a leader in the European Union in sustainable procurement by 2009—this year. A little over a year ago, I chaired an inquiry into sustainable procurement which last summer resulted in the report, “Costing the Future: Securing Value for Money through Sustainable Procurement”, which was intended to be a contribution to the debate about how best to achieve the Government’s ambition.

Our inquiry took evidence from private sector companies, the public sector—central Government, local government, the National Audit Office, the Audit Commission, the Office of Government Commerce—and many others, and we published our report in the summer of 2008. The report states that many of the necessary policies are in place for sustainable procurement but they have not been consistently translated into practice. We found some instances of good practice but many missed opportunities. I shall try later to give some examples of where we felt opportunities had been missed. Since the report’s publication, I have been happy to see several further Government initiatives—for example, the creation of the Centre of Expertise in Sustainable Procurement, which will help to address the issues raised in the report.

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