Session 2010-11
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Evidence heard in Public

Questions 1 - 96



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Oral Evidence

Taken before the Education Committee

on Wednesday 16 March 2011

Members present:

Mr Graham Stuart (Chair)

Neil Carmichael

Nic Dakin

Pat Glass

Damian Hinds

Charlotte Leslie

Ian Mearns

Tessa Munt

Lisa Nandy

Craig Whittaker

Examination of Witnesses

Witnesses: Haroon Chowdry, Institute for Fiscal Studies, Mark Corney, Independent Research Consultant, and Mick Fletcher, Independent Research Consultant, gave evidence.

Q1 Chair: Good morning. Thank you very much, gentlemen, for joining us this morning for the first oral evidence session in our inquiry into participation by 16 to 19-year-olds in education and training.

As this is the very first session and you-all three of you-are eminent researchers in this area, the best way to start is to ask what we should be looking for in this inquiry. What are the most important things for a Select Committee that advises Government to be inquiring into, if we are to ensure that we maximise the participation of 16 to 19-year-olds in education?

Mark Corney: I am happy to start, Chair. Good morning, I am delighted to be with you.

We should certainly be trying to maximise participation in education and training by 16 and 17-year-olds, and we should be looking at whether the curriculum offer is right to maximise participation. We need to look at whether financial hardship is a barrier to maximising participation. We need to look at whether the potential lack of adequate transport is a barrier against participation, or whether we simply have too few apprenticeships provided by employers, because we know that there is a massive demand by young people for apprenticeships but not too much of a supply by employers.

I also say one specific thing that you might want to test out during your inquiry, especially with Ministers and officials from the Department: why do we have that 10 percentage point drop in participation in full-time education from 16 to 17? That is still there, despite the deepest recession since the ’30s having a large impact on the youth labour market. We should continue trying to find out why full-time education at 17 still does not attract more young people. Haroon, you might want to add some points.

Haroon Chowdry: I am an economist, so I can add some such points, although the main ones will somewhat reiterate Mark Corney’s remarks. Economists are often concerned with areas where people are prevented from doing things that might otherwise be beneficial for them and for society as a whole, because they are hindered in some way. They might face financial barriers, which are known in the jargon as credit constraints, and to that extent young people are prevented from achieving things that they have the capacity to achieve. That is a concern, and it should be minimised.

The other concern that I think should be focused on is NEETs. Why is there a stubborn percentage of young people who do not seem to be engaged in any productive activity? Why has that percentage not gone down? How can policy minimise that, because a cursory glance would suggest that reducing that percentage might be a win-win for all parties involved?

Q2 Chair: Doubtless we will have time to explore that more, but are there any obvious suggestions for Government as a result of your economic analysis of this area?

Haroon Chowdry: No obvious suggestions-I would probably be sitting on the other side of this desk if I had some.

Previous research which myself and colleagues at IFS have been involved in has found, perhaps surprisingly, that a major predictor of NEET status post-16 is academic performance within school, so one way to improve the situation at the 16-to-19 phase might be to target young people in secondary and primary schools who are at the lower end of the scale of achievement, and who we might think are at risk of being NEETs at 16. We could focus interventions on those children to get them up to standard at 16.

Q3 Chair: Which is the approach of successive Governments, I suppose-early intervention, in the hope of achieving that. Little sign of success so far, but that is the effort.

Haroon Chowdry: There are varying degrees of success. Economists believe passionately in the idea of early intervention, so if it has not had the desired effect, we should probably be looking at better early intervention rather than giving up on early intervention.

Mick Fletcher: I will not repeat what my colleagues have said, but simply say that I agree with them. The key issue is not whether to increase participation but how. The answers, I believe, lie in the curriculum and in aspects of financial support.

The other thing that I would advise the Committee to focus on is where the issue is located. Large swathes of the 16-to-19 population and the institutions that serve them will not be affected in the slightest by raising the participation age. A selective sixth form or sixth-form college is not going to notice it happening. The issue is concentrated in general further education colleges and among those specialist, independent and voluntary sector providers which work with young people who are not engaged in education. There is an issue for schools-as Haroon rightly said, the issue is not in the school sixth form so much as in the lower school-in terms of preparing people, so that they can accelerate progression through further education when they get there.

Q4 Ian Mearns: Coming out of that introductory session is the big question for our guests. Would you have gone ahead with plans to introduce compulsory education at 16 to 19 if you have been in power after the 2010 general election? Let’s talk to Haroon, as he was talking about not being on this side of the desk-what if you were on this side?

Haroon Chowdry: I am not sure what the IFS view is on that-we generally steer clear of uttering or even possessing such views. Again, it would depend on the rationale, and how well it had been articulated. A neo-classical approach might be to argue that if you are forcing people to do something against their best interests, it can’t be right and can only make them worse off. There might well be more subtlety to it than that. As an economist who is stronger on the number crunching and less strong on the policy aspects, I will defer to the other people sitting with me.

Mark Corney: The answer is yes. The reason is because raising the participation age-some colleagues will have the opportunity to discuss this in the Education Bill Committee, when you get to clause 69-is an issue that focuses the minds of Ministers, parliamentarians and Select Committees on why 16 and 17-year-olds do not participate. I think that there will be a very important discussion because, as I understand it, looking at the explanatory notes for the Education Bill, the coalition Government are suggesting that, yes, raising the participation age-RPA-should increase to 17 in 2013 and to the 18th birthday in 2015, but leaving the Secretary of State with room for manoeuvre about when to commence the sanctions on young people and the obligations on employers. However, I am probably of the view that I don’t understand why the legislation would come into force if the sanctions are not there-it becomes almost a symbol, and you get into questions why a 16 or 17-year-old doesn’t attend. No one will come knocking on the door to say that people should attend. That will be an important debating point in the Education Bill Committee, and I am sure that it will be fundamental point that you will come back to and might wish to look at.

Finally, I also suggest to the Committee that you might wish to look at raising the participation age under the previous Administration and the criteria, as against the evolving policy of how raising the participation age will emerge under the coalition Government, because in that way you can seek clarifications of how it will happen in practice. But the answer to your question, Mr Mearns, is yes.

Mick Fletcher: I say yes for slightly different reasons. The coalition has got the decision right, although the decision is to raise the participation age but to be distinctly ambiguous about compulsion. Intellectually, that is quite tricky, but in practice it is the right thing to do. The benefit of raising the participation age, in the way proposed, is that it is symbolic-we must not underestimate the symbolic importance of it-and it puts the money in the right place. If anybody thinks that there is virtue to be had in chasing every last truant at the age of 17 or 18, or dragging somebody out of employment because they are not getting sufficient hours of instruction, that might in practice be a rather foolish road to go down.

Q5 Ian Mearns: Do you think, as a result of that, that we might have to redefine what participation means?

Mick Fletcher: Yes, I think you are right.

Q6 Ian Mearns: And do you think that there is anything significant that would lead towards our delaying introduction? Are we just going to sit around waiting for conditions to get better, or is there anything in particular that you think we should be doing in order to make the conditions better and to make sure that this works in the future?

Mick Fletcher: For 16-year-olds, we are almost there in terms of participation, so for 2030 it will be a fairly painless transition. The big issue, as Mark has already said, is around 17-year-olds-what happens at 17? We have got to do quite a lot of work there. Financial incentives and support can play a part, but curriculum reform is needed as well.

If I may expand on that, I think one of the issues that faces young people who leave school without the requisite qualifications to get on to a level 3 programme is that they may get a level 2 qualification after a year-they seem to be implacably opposed to taking two years over it-and then, at the age of 17, they are faced with the prospect of a further two years to get a level 3 qualification. If you can think back to 17-I find it very difficult to go back that far-two years at the age of 17 is a life sentence, isn’t it? We need to do something that helps young people get themselves qualified, so that at 16 they can have the prospect of a level 3 qualification in two years, which is not a lifetime.

Q7 Ian Mearns: Is there any evidence that asking youngsters to continue to pursue, say, English and maths until they are 19 will provide them with significant motivation to engage positively in the process?

Mick Fletcher: There are many good things in Professor Wolf’s recent report, a lot of which I agree with. But she ignores or understates the importance of motivation. It really is important to motivate young people, and it is very clear that for some pursuing their learning in a vocational occupational context is what attracts them. The suggestion that we limit the capacity of schools and colleges to offer vocational elements of a programme to 20% is misplaced; 40% might be a better figure to pick, for that motivational reason.

Q8 Chair: Which is exactly the percentage that the UTCs-proposed by Ken Baker-suggest.

Mark Corney: I want to add a point about whether conditions will ever be right to introduce the RPA-if you need sanctions or, certainly, the obligation on employers to offer day release, which are very important and should be considered. What we must not do is create such a loose definition of participation to come up with 100%. Many of you, as parliamentarians under the previous Administration, will be thinking about the target-driven culture, and I am sure that you have lots of different views on that. Let’s not do it with the RPA.

If you look at raising the participation age under the previous Government, my understanding is that full-time education would be counted-I think the definition was 16 hours or more-and work-based learning, including apprenticeships. We know that the NEET category and those in jobs without training would not count, but we still have two other really important categories. One is called "other education and training" in the statistics, which mainly covers part-time. Will part-time education count? I can see that if politicians are desperate to say, "We have full participation,", it would count.

Another group is the young people in jobs with employer-funded training. There has always been an issue about the quality of that training-some may be equivalent to day release, but a lot might not be. Are we going to include low quality employer training just to get to 100%? I should say that the categories that I’ve mentioned-part-time education and jobs with employer-funded training-increase at 17, the very year at which it is really hard to get close to 95%, 96% or 97% participation under the RPA. So be very careful not to have such a loose definition, because it will become meaningless for raising the participation age.

What my colleague, Mick, has said about Professor Wolf’s report is right. There is a very important point, which is that participation at present levels may well be because disaffected learners are not having to compulsorily resit GCSE maths and English, and there is a very wide vocational offer. If educators change the curriculum offer and make it almost compulsory to do maths and English and narrow the vocational offer, you must not assume as a social scientist that participation will remain the same. Young people might just tell educators what they think and not turn up. Haroon is the economist and can talk about how there are variable changes and other variables, which is a very important issue to look at.

Q9 Pat Glass: Haroon, your study looked at the increase in the participation rate and compared that in a cost-benefit analysis with the costs of the EMA. Do you consider that an increase in the participation rate of, say, 2% to 3%-I know yours was higher; you said 4% to 7%-is sufficient to warrant the cost of the EMA?

Haroon Chowdry: On that basis, it is hard to tell. The way the calculation that my colleague mentioned was structured was such that, given the impact that was observed, which was about twice that magnitude, they were relatively confident that the expected future benefits in terms of higher earnings would outweigh the cost of providing the EMA to those who receive it. If you incrementally reduce the estimated impact of the EMA on participation, that calculation gets more and more marginal. I don’t know at which point it flips and becomes no longer worthwhile. There is a risk. It could be at 2% or 3%; it could be at 4%; or it could be at 1%. We haven’t done the maths on that, so I can’t give you a specific answer.

Q10 Pat Glass: But looking at the NFER study-I am trying not to use the word "dead-weight", because I think that it is awful-we were talking about an increase in participation as a result of the change to EMA of around 12%. I know that some local authorities in my part of the country are looking at an increase of 20% over two years. Clearly, your cost-benefit analysis suggests that the EMA was a good investment.

Haroon Chowdry: If that were the true impact of the EMA, and given what we know about the earnings benefits of an additional year of education, you would expect the cost-benefit calculation to look quite favourable. I am not sure how those impact estimates were calculated and how robust they are. If you were just asking people whether they would have participated in the absence of an EMA, and taken that as the impact, that is one way of measuring it, but that is perceived impact. There are all sorts of biases that might come into play. Self-reported information can be affected by how the person is feeling that day, or the mood that they are in. All our research is based on what actually happened. If you are looking in an area and comparing one year with the previous year, you might be conflating the true impact with an underlying trend. We know that participation has generally gone up over time, and you might be picking up some of that as well. It is important to separate the true impact of EMA from other things that may be taking place at the same time, which is what we try to do, but it is very difficult to do that well.

Mick Fletcher: You need to beware of setting too severe a test for this policy. This policy has an impact on participation, but it also had an impact on attendance, retention and achievement. Some of those effects were quite large. Some of my colleagues in the colleges in the 157 Group have been feeding through information on that. At Lambeth college, the retention rate for those receiving the EMA is 92%. The rate for those without the EMA is 75%. That is a dramatic difference for an inner-city college, dealing with the sort of people that we need to attract if we are going to get 100% participation. The achievement rate is 90% for those with an EMA, and 83% for those without. There is a big effect on achievement as well as on participation. There is also a demonstration effect on the students of the college-seeing the effect on attendance and performance.

There is also a simple welfare argument. Of those who said, "Yes, we would have turned up without it," they range from those who are very rich but have a good accountant to those who are hanging on with their fingertips. Simply looking at the participation figures is an inadequate approach to the policy.

Haroon Chowdry: I concede that the cost-benefit calculation that has been mentioned was based on the earlier study, which only looked at the impact on participation. Because it was a survey, and there were problems with response rates in the second year of the survey, it was not possible to collect comprehensive information on attainment. It did not look at a possible impact on attainment; it only took into account the impact on participation and combined that with estimates from elsewhere in the research literature on the earnings benefits of higher participation. If you took into account any potential impact on attainment, it would increase the benefits you might expect to derive from the policy.

Q11 Pat Glass: Trying to dig down into these difficult equations, if you look at the take-up of EMA in certain groups, it was very high in certain groups, such as ethnic minorities and children on free schools meals. How much can we attribute to low income-that students participated and stayed on because it increased their income or that of the household? How much was a shift in attitudes, in that FE suddenly became possible for these children? How much was a simple economic argument, and how much was a simple educational decision, or does it not matter in the long run?

Chair: Does anyone have an answer to that? Feel free to say that you haven’t researched it or that you don’t know.

Mick Fletcher: It is hard to distinguish, that’s all.

Mark Corney: Personally, I find it difficult to work out why the political finger has been pointed at the educational maintenance allowance, when the maximum household earnings are £30,800. The overall maximum spend on EMA is £560 million. There are two other budgets for 16 to 19-year-olds that are far larger. They are child benefit paid to parents with 16 to 19-year-olds and child tax credit for 16 to 19-year-olds. There is a fundamental difference with child benefit once a child reaches 16. At 16, child benefit is paid to parents if the 16 to 19-year-old is in full-time education or unwaged training. Some 15% of 16 to 18-year-olds do not receive child benefit. Why? Well, some are in jobs, with training, without training or with an apprenticeship. The financial support there takes the form of a wage. There is also, of course, the NEET group. So, at 16 child benefit changes-there is a new conditionality. We spend about £1.5 billion on 16 to 19 child benefit and £2.3 billion on 16 to 19 child tax credit.

Ms Glass, you don’t like to use the word "dead-weight," but I am happy to use it as long as it’s used consistently, and one of the questions is: dead-weight for EMAs, but what about dead-weight for child benefit? If there are parents with 16 to 19-year-olds in full-time education with household earnings of more than £35,000 a year, those students will stay on anyway, and at a time of fiscal austerity, the Committee should be looking at all funding for financial support for 16 to 19-year-olds, to look at the issue of household income, and not just education maintenance allowances. One of the reasons why that hasn’t happened is simply because of a silo. Education maintenance allowances score as public spending for the DFE-it’s called the departmental expenditure limit-and 16 to 19 child benefit and 16 to 19 child tax credit is annually managed expenditure, and it’s more or less up to the Chancellor. I invite the Committee to say, "How could we better shape the entire 16-19 child benefit, child tax credit and EMA budget to maximise participation and in the name of fairness to ensure that the money goes to the right young people and the right families?"

Q12 Pat Glass: Finally, moving on to the NFER study on which much of the Government’s policy has been based-it is not a study without controversy-how should we calculate the cost of the EMA? Who would attend without it? What percentage of participation does it raise? Does the NFER’s research tell us anything helpful?

Mick Fletcher: I don’t think that there’s a big contradiction between what the NFER’s research is saying and what Haroon and his colleagues found earlier. I think that the IFS study is more precise. It is based on a sample and a control group, whereas the NFER study is based on a relatively small sample with no control. But they are both showing the same thing, and it’s fairly straightforward. If you think of 100 people, roughly 43 of them will get EMA and the rest won’t. Of those 43, perhaps 36 or 37 would have stayed in education if they hadn’t got the EMA. I cite that 36% figure in my report, but you could say, "Well, 36 out of 43 is about 85% or 84%, which is much the same as the NFER figure of 88%." It’s not in dispute that a clear majority of young people who get the EMA would have stayed in education without it, but the fact is that they wouldn’t have achieved so well.

Q13 Pat Glass: One of the criticisms of the NFER study is that it focused to some extent on students in schools who didn’t qualify for the EMA anyway, and the vast majority of students who are affected by the removal of the EMA are in FE. Is that not something that would cause us concern?

Mick Fletcher: You are absolutely right. This is an FE issue. It isn’t an issue primarily about A-levels in selective sixth forms; it’s about people going to college to become hairdressers, cooks, motor vehicle mechanics and so on. You need to position this right.

Q14 Nic Dakin: You were making a point earlier, Mick, about the EMA being about more than participation. You mentioned that it was about being welfare support as well. Interestingly, picking up Pat’s point and Mark’s earlier point, students in colleges don’t get free school meals but students in schools do. Are there any comments on that?

Mark Corney: That’s a scandal. Either you level down or you level up.

Chair: I think that’s very clear, Mark. Haroon or Mick, do you want to comment on that?

Haroon Chowdry: I’ll leave that.

Q15 Damian Hinds: May I ask a couple of clarification questions, first to Haroon? The cost-benefit study that you’ve been citing talks about the lifetime earnings impact on these young people versus the cost, and in our notes here we say that we’re looking at the impact on the Exchequer by implication. Does the study actually look at total social return? In other words, is it the earnings to the individual over their lifetime versus the cost to the Exchequer in the short term, or the cost to the Exchequer versus the return to the Exchequer?

Haroon Chowdry: The former. It is not a net Exchequer benefit calculation.

Q16 Damian Hinds: That has massive implications overall when we talk about the ratio of benefits to cost from a public policy perspective.

Secondly, may I ask Mick a question? We were talking about attainment and retention, and you cited a study at one single college. I think Haroon would agree that one college is not particularly suitable as an analytical set, and there can be all sorts of conflated factors that are difficult to isolate, such as causality. Do you know of any other studies that take a much bigger data set to establish what you have said about attainment and retention?

Mick Fletcher: I have got a number of other colleges that I could quote, which show similar figures.

Q17 Damian Hinds: We have got those individual colleges, too, but have you got something more general that talks about the student population as a whole?

Mick Fletcher: I am sure that there is, but it escapes me at the moment.

Q18 Damian Hinds: Finally, it is worth reiterating the point, although it did come out in that conversation, that there are, as far as I know, no studies suggesting something else about the dead-weight cost of the EMA in the pure economist sense-take away the pejorative aspect-as money that you are spending that is not achieving its objective. Everybody seems to say that that is more than about 80%; is that correct?

Haroon Chowdry: The estimates of that which are implied by our analysis are in that ball park, which is why we have not disputed the estimates coming out of the NFER study. The dead-weight calculation assumes that participation is the be-all and end-all-that that is the only measure you are interested in. We might need to think a bit more carefully about that, especially with something such as the EMA which, in our study, did not affect only participation, because we found estimates on impact, and you can hypothesise why you might find an estimate on impact, either with or without an impact on participation. There are some groups for which we found an impact on attainment, even without an impact on participation. The benefits of an extra qualification might outweigh the benefits of participation. Also, putting aside the economic rational justification for policy, you might value the redistribution that the EMA provides by targeting people who are in school and on low incomes.

We would add another caveat to the discussion on dead-weight. Dead-weight, at least to me, seems more or less ubiquitous in most policies through which money is supplied to provide for people or firms to do something. In a note that we published this week, we did a quick back-of-the-envelope calculation that suggested that the temporary NI exemption for new businesses that are setting up outside the south-east would, on the Government’s own calculations, involve a dead-weight of something like 96%. Does that make it a terrible policy? No, it means that dead-weight is inevitable to some extent, because you cannot always perfectly identify people or firms who will not do what you want them to in the absence of the policy.

Q19 Damian Hinds: I am sorry to interrupt. To be clear, if we look at participation-and today’s session is about raising the participation age-as being the key measure, do we know of any studies that show that the dead-weight is less than 80%?

Haroon Chowdry: I don’t.

Mick Fletcher: No.

Q20 Neil Carmichael: And now life beyond the EMA, because of course by 2013 there will be compulsory education for everybody up to 18. We should bear that in mind, and it clearly somewhat diminishes the participation argument.

Have you been thinking about how EMA money might be better allocated? Mark touched on it earlier by linking it to child benefit and everything else, which is obviously a wise thought that the Committee must take into account. I would like to hear a bit more detail on that and on how one would completely reshape the EMA to achieve the objective that we really need to be thinking about, which is directing people to the appropriate courses, apprenticeship schemes and so forth that will lead them into a career. Have you any thoughts on that, Haroon?

Haroon Chowdry: The two thoughts I can add to that are that, in terms of targeting the EMA, we found that among females the impact of EMA was strongest among those who were eligible for free school meals. The income eligibility threshold for free school meals is, I believe, in the region of £16,000 to £17,000-in other words, you have to be on means-tested benefits. Those might be people who are in more severe poverty.

Q21 Chair: Is there a costing on it if it was limited to people who were previously eligible for free school meals, rather than £560 million or whatever?

Haroon Chowdry: We have not looked at that.

Mick Fletcher: That would be about 16% of the FE population.

Haroon Chowdry: Yes, about one in six of the whole population, but of course it is a bit more complex than that, because children who are on free school meals generally also have lower levels of attainment, so might not be in a position to participate at the age of 16. We found that while the impact was stronger for females who were eligible for free school meals, we couldn’t detect such an impact for males on free school meals, and that group would generally have very low attainment. If they haven’t achieved the necessary qualifications by 16 to enable them to take a post-16 course, a financial incentive on top might have relatively little traction, so you have to think carefully about how you would target that.

I come back to a related point that I made earlier: if you want to think about the bottlenecks that are preventing people from staying on at 16, you have to think about why certain numbers of children are not achieving qualifications at the end of secondary school and how that can be rectified. You might get a substantial boost in participation at subsequent ages if you could reduce the proportion of children who are leaving secondary school with no qualifications whatsoever.

Q22 Chair: Is it rational, from a policy point of view, to take most of the savings from EMA and spend it on, say, free nursery education for disadvantaged two-year-olds in order to intervene early and make a difference for the long term?

Haroon Chowdry: That is the $64 million question.

Chair: That is what we do every day, and it is what you are here to advise us on.

Haroon Chowdry: We have very little evidence on this from the UK. In America, which is where a lot of the policy impetus and academic impetus on early intervention stems from, they are very big fans of early intervention precisely because they think that it is more effective than intervening when children are teenagers-it is, to some extent, too late to do it then. The shape of that trade-off is very hard to say.

Q23 Chair: Is it economically reasonable?

Haroon Chowdry: I could not possibly tell you.

Q24 Neil Carmichael: The trouble with this line of discussion is that we are still assuming that we need to encourage people to stay in education post-16, whereas, in fact, we are going to make it compulsory anyway. I want to start teasing out how we will help to direct our people to the right places and encourage them to play a constructive part in the 16 to 17-year-old period. That seems to me to be the issue. Building on Mark’s point about the holistic question, and I am thinking aloud now-

Chair: Please don’t. Just ask a question and let these guys think aloud.

Neil Carmichael: I am about to.

You mentioned free school meals, which is a very good point because it is obviously a useful measure. Why don’t we have something like a skills premium-not dissimilar to a pupil premium-to direct people into appropriate courses post-16?

Mick Fletcher: I’m not enthusiastic about directing people into appropriate courses; I think labour market planning has a very bad reputation in this country and elsewhere. But the spirit that underlies the question is important. We have a choice in student support. We can have either a universal system, such as the EMA, or a discretionary system, and the coalition has indicated its intention to move towards a more discretionary system. I think that there are advantages and disadvantages, which I will summarise briefly for the Committee.

The advantage of something like the EMA is that people know in advance what they are going to get, and therefore it can be set to have an impact on participation. In a discretionary system, however, if you don’t know what you are going to get, it is not going to affect your participation. There is equal treatment with the EMA, whereas if you have a discretionary system, you will be accused of having a postcode lottery.

On the other hand, the EMA gives people the same amount of money irrespective of their needs. In some parts of the country, people have the need to spend quite a lot of money on transport to get to an institution and to support their choices. With some courses, students have to pay a lot of money for hairdressing equipment or catering equipment-knives or whatever-and a discretionary system gives you the opportunity to reflect those differences in cost. Rather answering your question the other way round, that overcomes the disincentive to follow a technical programme as opposed to going your local sixth form and doing history because it’s cheap. Having said all that, it’s going to cost more to administer a distributed system, and you have a problem of how you distribute the right amount of money to institutions, which you don’t have with EMA.

Putting all that in the balance, I think you could have a workable system based on institutional discretion as long as there is enough money. The worst of all worlds would be to put a small amount of money into a discretionary scheme and then have a mountain of bureaucracy giving guidance upon guidance to colleges on how to distribute it so that you don’t appear that you are running what someone will inevitably call a postcode lottery. You have to be brave enough to stand up and take that flak.

Q25 Neil Carmichael: I agree with that. Mark, do you have any thoughts?

Mark Corney: I have some thoughts about age. I mentioned earlier the fall in full-time education from 16 to 17. Perhaps we need to be offering, if we just talk about EMAs for the moment, a premium at 17 relative to 16. After all, there is quite a high participation at 16. We might be able to do something novel around there.

Of course, regarding the history-Mick will correct me-if we go back to the wonderful youth training scheme, the payment at 16 was I think £27.50, and the payment at 17 was £35. That actually puts in real terms how much young people are getting if they are eligible for education maintenance allowances, and I am sure that the IFS can do the discounted value-it’s not that high. You need to put it into context.

Anything that tries not so much to ensure a premium for a specific course, but to encourage participation at 17, would be welcome. Any ideas on the table would be welcome. Increasing payment at 17 is one. We might have to look at a different curriculum offer. The RPA might fall at 17.

Q26 Nic Dakin: Two quick follow-ups. First, there are youngsters who have EMA at the moment. When they go into second year, they are not going to have EMA. Will that exacerbate the problems for 16 and 17? Secondly, the Government have committed themselves to enhance the discretion in learner support awards. Thinking of Mick’s point, given that there is £560 million at the moment, how large does that have to be as a quantum to be effective to impact on well-being, participation and achievement in retention?

Mick Fletcher: Let me give you one piece of evidence. At the moment, the discretionary funds handed out by schools and colleges total about £22 million. About 200,000 young people get them, most of whom get them on top of EMAs. Institutions are constrained to target the poorest, and they judge that in many cases EMA on its own is not enough. I would be arguing for a fairly high figure even if you had a fairly low income cut-off. Looking at the lowest 25% of the population, you are talking about maybe 300,000 young people. If you provide them with £1,000 each, that is £300 million. If you give them £750, which is £25 a week for 30 weeks, that gives you £225 million. That is an indication of the sorts of sum involved. I think the £100 million quoted in the press the other day is in danger of being too low and of falling between two stools.

Q27 Tessa Munt: Can I ask one quick question to check something? If one didn’t pay the first year of extra participation and paid the second year, is that sort of what you were suggesting-it would kick in in year 2?

Mark Corney: My suggestion is that I would have a higher payment at 17, compared to 16, because I wouldn’t remove a penny from education maintenance allowances. I wouldn’t do that, but if there’s a sensible-

Q28 Chair: So it’s unimprovable? Do you think the last Government were wrong to say that they were going to review it when compulsory education came in-it’s perfect?

Mark Corney: Well, I think they were absolutely right to review it, but in the context of all 16-to-19 financial support. Given the economic tsunami we’ve just had, we should try to maximise value added from the 16-to-19 child benefit, the 16-to-19 child tax credit and EMA in the round. You’ve then got a lot of money to play with, but even if you look at that in the round, you might want to say that we should be paying a higher rate to 17-year-olds compared to 16-year-olds, because the evidence from the statistics says that’s when we lose 10 percentage points of 16-year-olds, who no longer study in full-time education. That’s when: probably at 17.

Again, I am trying to think, like Mick, of when I was 17. That’s when other things happen in your life. Education’s important, but other activities-leisure activities-crop up, and people may just drop out because they’ve had enough of education. We need to try to give an extra payment as they get older. That might have an impact. I’d like to consider that. I think that’s what I’m trying to say.

Mick Fletcher: You’ve got to remember that you’re trying to do three or four things. You’re trying to attract people into education; you’re trying to keep them there and help them succeed; and you’re trying to get them on the right courses, so there’s no disincentive. In terms of keeping people there, there’s no doubt that keeping people after the first post-compulsory year is the key thing. That’s when people drop out.

Chair: Damian, did you want to come in quickly?

Q29 Damian Hinds: Mark, can you explain to me about taking into account the whole social security and benefits system? I understand intellectually that of course that’s the right thing to do-look at it in the round, don’t look at one thing; one thing is done by one Department, not the other; we must be holistic and so on-but what do you actually think you would achieve? We are raising the participation age to 18 anyway. What will be physically different at the end of the day if we retain EMA but cut the exact same amount of money out of something else?

Mark Corney: To ask the other question, if you cut EMA back to £100 million, are you assuming participation will remain at current levels?

Q30 Damian Hinds: With respect, that is another question. Can we do the first one first?

Mark Corney: Agreed. That’s what we would try to prevent. If you have a fear, as I do, that if you cut EMA you might reduce participation among the lowest household income groups, maybe you can take money and redistribute from children from families from higher income groups, because they will stay on anyway. It is the classic link between household income and educational attainment and staying on. The area to look at, again, would be 16-to-19 child benefit that goes to wealthy families who might stay on anyway. Whether they received the £20.30 for the first child-or is it £13.20 for the second child?-they would stay on anyway. At 16, of course, the condition is that those payments are made only if you are in full-time further education or unwaged training. It’s not paid for every child. I think that is territory to look at.

Chair: Mark, that’s an interesting way of looking at it. I don’t think I’ve seen other evidence suggesting we should look at it that way. I find that stimulating, and I’m sure we could spend all day talking about it. Thank you, all three of you, for coming and giving evidence to us. Please stay in contact with the Committee. If you have any further thoughts on that or want to follow up with any proposals, we’d be interested to hear them, because our job is to write recommendations to Government. If you’ve got any thoughts on that, let us know.

Examination of Witnesses

Witnesses: David Lawrence, Principal, Easton College, Jane Machell, Principal, Alton College, Ian MacNaughton, Principal, The Sixth Form College, Colchester, Dr Elaine McMahon CBE, Chief Executive and Principal, Hull College Group, and David Wood, Principal and Chief Executive, Lancaster and Morecambe College, gave evidence.

Q31 Chair: Welcome. It’s good to see such a full panel. We’ll all have to be extremely disciplined-I know that’s harder for members of my Committee than it is for witnesses like yourselves, distinguished figures that you all are-but thank you very much for coming and giving evidence to us today in this first session on participation for 16 to 19-year-olds in education and training.

Ian, can I start with you, because you’re at the end? Can you lay out for us what you think the most important aspects are of increasing participation in 16-to-19 education and training?

Ian MacNaughton: Okay. Just picking up on the previous comments, clearly, in the first instance, there is a target in place. I would like to comment on the fact that where we are at the moment, the likelihood is that participation is going to drop. In fact, it is already dropping. We are into a perfect storm. Within that context, we’ve got pressures on the demand side, which will force the demand for 16-to-18 education downwards. We’ve got a loss of connectivity between demand and supply, because of the collapse of Connexions and the information and advisory service, and we’ve got savage cuts on the supply side, which are clearly going to make participation fall as well. I’m quite happy to talk about each of those briefly if you’d like me to do so.

Q32 Chair: I’m sure we’ll have time to come back to that. I’ll swiftly move along the panel. Elaine?

Dr McMahon: For me, it is a package, and it needs to be looked at in terms of what happens to the learner now, in the round, and the infrastructure that supports the learner. For me, it starts with what information, advice and guidance they’re getting and what’s happening to that. The Connexions services are being depleted up and down the country, so how is the localism agenda kicking in to address that? In terms of the financials, the monitoring of the financial situation-not just what we heard earlier about where it’s coming from and what’s not going to be there, but how we are going to be monitoring the system-who’s going to be involved going forward and how we advise young people about that.

For me, it’s about social mobility. It’s about diversity, and how we reach people and still have that agenda very firmly on the table. Colleges are working hard with their local communities on that agenda. It’s also about the infrastructure, in terms of simple things like transport. When you unpick it, if a learner can’t get to their choice, that would be absolutely a blocker. For me, it’s about looking at it from the learner’s perspective.

Q33 Chair: Thank you. Again, a reminder: what we do is conduct these inquiries, take written and oral evidence and write a report with a set of recommendations to Government, which Government is then obliged to respond to. Bear in mind always that we are looking for concrete, specific recommendations as to what Government needs to do differently or change in the framework in order to improve the situation. David?

David Lawrence: For me, it’s not just about participation; it’s about gaining appropriate skills that will allow people to make a positive economic impact. Most of the discussion that we’ve had is purely about participation. We need to enable them to have that choice.

Coming from a college that’s in a rural area, there are a whole series of hurdles to them making appropriate choices that we need to be extremely concerned about. The withdrawal of EMA just puts additional weight to that. The reduction in core funds for colleges to enable them to subsidise, for example, transport schemes is affecting it; the reductions of county council support for transport schemes is affecting it; clearly, Connexions is affecting the advice and guidance. Certainly in rural areas, higher fuel costs are a very substantial disincentive to participate.

So I agree with Ian. I think we can see participation being a real challenge in any event, but it’s not just about that; it’s about ensuring that students complete their learning. In most cases, there’s a significant drop-out at 17. It will be about retaining them for the full length of those programmes and ensuring that they are doing things that are going to give them an ability to make a positive economic contribution.

Jane Machell: I think we’re all wanting to reverse the rise in youth unemployment rates. That’s for sure. We want our country to have really competitive skills. We want to make sure that our children and young people are really highly trained and educated, so we can compete in a way that we can’t at the moment, certainly in some industries. What I would like to say is that colleges can be a really big part of this solution. We can do an awful lot. In three years’ time, I really don’t want to be sitting here and having the same debate about the discretionary learner support fund that we’ve just had about the EMAs. We will have some suggestions, I think, today about how we might be able to use that fund.

I agree with my colleagues that we have to see this as a whole. We have local authorities that, even though they have a statutory duty to provide a policy on transport for 16 to 19-year-olds, do not have a statutory duty to provide transport. My local authority is currently consulting on two things related to this issue: the removal or reduction of assistance from home-to-college transport for students in low-income families, and the introduction of a charge-it is suggesting £500-for post-16 students with learning difficulties and disabilities. So we cannot rely on the local authorities at all to provide that transport network, and EMAs have been a huge help, particularly in a rural area such as mine.

My college, for example, has for a number of years been subsidising transport for students from our revenue budgets of about £150 per year per student, but they still have to pay about £500 to £600 each. The discretionary leaner support fund has to be flexible enough to use that, and we need a direct statement about how we can do that, particularly in rural areas.

There are other cuts happening in colleges. The county council is pulling things out at the moment because of the fiscal situation, and our entitlement funding is being reduced by 75%. So we have to join together in terms of what the quantum is. We can’t rely on local authorities. Colleges can be part of the solution here, in terms of information and guidance, but also in terms of pulling together and helping people like you to decide what the criteria, and perhaps the quantum, should be for the discretionary learner support fund.

Chair: Thank you. David.

David Wood: I’m probably in the worst position, at the end, as everyone’s stated their case.

Chair: Don’t feel obliged.

David Wood: I’m never short of a word, Chair. I’d like to echo my colleagues’ thoughts, and I’d like to raise the issue of fairness in a number of ways, because it’s an important one. We are moving funding in the right direction probably, in the sense that we aren’t getting any more funding as colleges, but equally no one else is getting any more funding than us. So there is an equality emerging there, but I want to point out that there are still inequalities-big ones-in the system with the way colleges are funded. I’d argue that colleges are fundamental to tackling the NEET issue and fundamental to raising participation, but we need to be adequately funded. This is not a moan at all, it’s just the fact that if you look at equivalences, we still have to pay VAT and take huge mortgages out, costing hundreds of thousands of pounds, and the schools sector doesn’t. Those inequalities still sit there, and a number of colleges are feeling that pain right now because they took out mortgages on their premises when times were more buoyant and when we didn’t have an economy in reverse.

The NEET issue is really important, and I echo my colleagues’ concerns about participation. I wonder sometimes where we’re going to increase participation, because in my area we’ve got falling rolls. So, in some areas we might get a rise in the number of young people coming into education, but equally we’re getting a natural drop, so there is a balancing effect. But in my own area, 52% of young people at 16 who are NEET have no qualifications at all. I think that that is a really important issue. Young people leaving schools have to have the right qualifications to progress.

The second point that I would like to emphasise is about the fairness agenda. The people we are talking about most here are the most vulnerable and, by definition, the most vulnerable are the most expensive to educate. So we need to reach all those young people in NEET groups, in their communities, which means huge volumes of staff time to reach a few people, to get them back in. We are not really being funded to tackle those most vulnerable groups of people in our communities.

With that in mind, I want to make a final point. The area that I work in and represent is Lancashire-I chair Lancashire Colleges Principals Group. We have a very successful system-it is tertiary-and more than 80% of young people aged 16 to 18 are in our colleges, which is significant. We have got more than 15,500 NEET young people. In my own area, I have six school sixth forms within three miles of me, and two more 11-to-16 schools redesignating to be sixth forms in a falling roll situation. My concern is that, as you open opportunities for new sixth forms, you will dilute the income available to existing providers, displacing provision and duplicating resources, in a time of economic austerity. It doesn’t make sense to do that. By increasing competition in the area, you can actually weaken provision. Colleges, wishing to do their very best for learners, need to be funded to provide those wrap-around services that are not available in schools.

Q34 Nic Dakin: Welcome everyone. It is nice to see former colleagues here. Given the challenges that you are facing, the challenges that I am facing are probably less.

May I pick up the point made in the earlier session about 17-year-olds and stopping NEETs? David was picking up on this just then. What can be done to tackle stubborn NEETs and the problem of dropping out at 17? What things would you want us to recommend to support what you are trying to do?

David Lawrence: In my own college, I know when we lose the most significant number of 17-year-olds-it is always January time. In particular in a rural area, it is related to the length of time that people have to travel. We have just spent the past three or four years reducing that length of time.

We talk about structure programmes and everything else, but it isn’t just about the EMA; it is a complex series of things. Unfortunately, the impact of the current reductions in funding for transport makes it harder and harder just to provide the main infrastructure, rather than looking at shortening travel times for learners. The more specialist or the more geographically dispersed the population is, the harder that particular issue becomes.

I haven’t got the research evidence-although it would be particularly interesting-but I know from my own college that the more significant the travel time, the more likely people are to drop out at 17. We have made significant improvements in that retention issue by cutting travel times to no more than an hour and quarter-it is something like that-each way, but clearly that will be extremely challenging, not only because of transport support, although in my case Norfolk county council is just reducing support and will retain an element of it, but because of the effect of transport subsidies more generally, which are reducing opportunity for student access. It is a fundamental problem not only for access to education and employment, because it definitely has a big impact at 17.

Chair: Ian. At most, two answers for each question.

Ian MacNaughton: Mr Fletcher earlier indicated how important it is to have good numbers of 16-year-olds participating to create 17-year-olds who are participating. That is the first thing. Also, clearly, the number of 16-year-olds participating is now on the downward trend. Obviously, you don’t have the latest YPLA information, but I understand, with our analysts earlier, that in the 2010-11 year the number of 16-year-olds participating in education was down on the previous year. It is the start of this perfect storm that I mentioned. So I think in the first instance, yes, the drop between 16 and 17 is an issue, but clearly if the number of 16-year-olds is dropping, the number of 17-year-olds is going to drop further. I think there are some overall issues.

Q35 Nic Dakin: Is this the right time to raise the participation age? Is it something that we should be doing?

Dr McMahon: Is it Nic or Mr Dakin?

Nic Dakin: Nic.

Dr McMahon: I think it’s the right time, if we’ve got the right offer and the right quality of provision for young people. For me, they drop out when they are not motivated or cannot see an end goal for themselves that makes it worth staying in. So you start earlier, particularly at 14. There are a lot of studies on how colleges up and down the country are capturing young people at 14 and doing a good job for them. It is about the UTCs and other opportunities that are coming along, where you can say, "It starts before 17 and 16." Young people at 13 start to play truant, and at 14, schools are struggling to keep them. Why is that happening? Are they given the right guidance and options to move at 14? If you move at 14, you’re not just a year in; you’re captured. It is about whether you want to do it. In my college, you can go on to an academic A-level or international baccalaureate, which we offer, or if you want you can go on the vocational route to BTEC National or an apprenticeship. You should have those opportunities, which should start at 14. Then we wouldn’t be talking about 17.

Jane Machell: Yes and no is my answer to that question. Is it the right time? In one way, it has to be. We cannot have rising youth unemployment in this country, and colleges have a big part to play in that. But we need to have the right resources to support the more vulnerable, whom we have talked about, and motivate them. More importantly, we have to have the right curriculum. Professor Wolf raised this in her report. Some areas of the country-thankfully not mine-were quoted in that report, saying that all sorts of strange vocational qualifications were being taught in schools that hadn’t led to positive progression routes or links with employers. We in rural areas particularly welcome the suggestion for group training associations for small and medium-sized enterprises, with financial incentives for employers. I welcome the idea of colleges working in schools with more relevant skilled qualifications, not some qualifications that lead to nothing, so we can start motivating.

On early intervention, as colleges get involved with schools at lower age ranges, we can motivate students more as part of the curriculum, so that they can see some light at the end of the day and education and training doesn’t become this terrible thing that they have to stay in, if it leads to something. If that is the case, great. I totally welcome that.

Q36 Nic Dakin: You mentioned local authorities and Connexions earlier. What is the state of preparations on the ground for supporting the new arrangements, and what needs to be done to get them, if they are not already there, where you want them to be?

Jane Machell: I had a conversation with my local authority this week about just that, knowing that I was coming here. At the moment, if you count those in education, employment and training in Hampshire, there is a 89% staying-on rate. Some 6% are unknown and 5% are NEET. It thinks that it has capacity, because there are some post-16 spaces, but it does not feel that it has any flexibility in funding. We now have a funding system where it is of light student numbers, which you may not know about. What it means is that you are paid for next year on the basis of what you had last year. There is no flexibility to do any January or mid-year starts. There is no flexibility for any additional specific things that you might want to put on youngsters in the following year.

Q37 Chair: What would you like to change? What would a recommendation look like?

Jane Machell: There needs to be some sort of discretionary funding, not a slush fund, but something specific that we can use together, whether it is in consortiums or with local authorities, mid-year to target youngsters who drop out at 17 or who need specific training.

David Lawrence: In Norfolk, we have had a very good debate, I have to say, between the county council and the colleges about what is necessary. I have some sympathy for the county council, because it needs to make some very strategic decisions about where provision is located, and it has virtually no control over what most of the schools are doing. That is a fundamental problem. So, you have very small sixth forms that are not performing very effectively, and that are costing a great deal of money. You have all sorts of transport arrangements that have been driven by school collaborations which do not necessarily make strategic sense. When you say to them, "What can you do about it?" they say, "Well, the school can decide. Its governing body decides." They have not got those levers. The discussion that we regularly have is that they have had more influence over what colleges do than they have over what schools have done. That is a fundamental hurdle if we are going to deal with this in a joined-up way.

Q38 Nic Dakin: This is the final question from me: the Government say that they have secured sufficient funds to facilitate full participation in education and training by 2013 to 2015-is that what it feels like on the ground?

Jane Machell: No.

Ian MacNaughton: On the demand side, significant resources are being pulled, in terms of the EMA and student support-large amounts of money. There are obviously declining levels of household income. Part-time jobs are harder for students. There are higher transport costs in rail and bus fares. There is a reduction in services in many areas as well. Obviously, there are declining resources.

On the connectivity side, we have seen the collapse from 2010 onwards of the Connexions service. Nothing, in terms of young people’s careers guidance, is going to be in place much until 2012-13. There is a two-year vacuum there.

On the supply side, 16 to 18-year-olds in college, who are significantly less well funded than those in school sixth forms, are facing a more than 20% real terms reduction between 2011 and 2015. In essence, the funding per student on both the demand and the supply side, and the pooling of resources in terms of the connection between demand and supply, mean that we will not maintain the participation rates we currently have into the future.

Q39 Damian Hinds: Before we come on to my question, may I ask Ian for a clarification? You were talking about the decline in participation at 16. Is that because of the number of births 16 years ago, or is it the percentage you are talking about?

Ian MacNaughton: No, it is the percentage. It’s not just numbers or demographics; it’s the percentage.

Q40 Damian Hinds: Is there any reason to believe that that is any more than a one-year trend, because the medium-term trend is inexorably upwards?

Ian MacNaughton: I believe that it will go on for four or five years, if there aren’t policy changes.

Jane Machell: It depends on where you are. Certainly, in East Hampshire it is fairly flat; it is not declining. We know that from going back to year 7 data in schools. It is an overall picture-nationally, it will depend on the area.

Ian MacNaughton: I am talking about national YPLA data. Obviously, there will be local differences, but at national level the YPLA for 2010-11 says there is lower percentage participation at 16.

Q41 Chair: Do you happen to know what those numbers are?

Damian Hinds: We haven’t been able to see those numbers-we’re only Parliament.

Ian MacNaughton: The YPLA, the Government’s agency, should be able to supply them.

Q42 Damian Hinds: I want to address the difference between overall funding and per pupil or per student funding. We have also had these discussions with people in the schools sector. It is obviously very important, and it goes to the heart of the numbers. The YPLA numbers suggest that, if you get the sort of full increase that raising the compulsory age would suggest-of course, you may not, because of the non-sanctions people talk about-on average, you would have an increase in student numbers, given the blend of declining numbers in the age cohort but an increased percentage. Overall, it comes out as an increase in student numbers of about 3.7%. I know that you can’t do a straight read-across, because there will be different sorts of course, but bear with me on the ifs for a minute. If you have an average class size of anything less than 27, that is less than one person extra in each class. If you could absorb that-it may not be ideal; I accept all that-which other costs in the college are the key variable costs that are driven by the number of students?

Jane Machell: We are doing a lot of work in colleges, which we have done for some time, and we are being terribly efficient. We have been squeezed for many years in colleges, so we are quite used to this. We are pretty entrepreneurial, and we are doing even more of that now. We are doing more work on shared services, in terms of back-office work, which means things like our information systems, financial systems, HR systems and estates, which are procuring insurance, legal arrangements and those sorts of things. So we are still able to make some more savings there. Clearly, the big issue is around our staffing costs and high-quality teachers-recruiting them, ensuring that we are competitive with schools, so that young teachers coming out of education training with their certificates of education want to come into colleges. We need to maintain that high quality teaching base and recruit them and retain them. Teaching costs are the big costs.

If you go into the average classroom-we are one of the lucky ones who have a big mortgage, because we have invested a lot in our estate-they are big, but 27 children is not possible. In some of our classrooms, you just cannot fit them in. If it is specialist accommodation, it’s even fewer.

Q43 Damian Hinds: Chair, am I allowed to bring in both David and Elaine on that?

Chair: It is greedy of you, but go on.

Dr McMahon: We are working extensively on shared services. A colleague here from Lancashire colleges knows that because Hull college, where I work, which is a college in East Riding and North Yorkshire, as well as in Hull, works with all the Lancashire colleges on pooling to get better prices. On procurement we do a lot better, because we work on a pooled resource. We are working with the academy, which is sponsoring Hull on sharing our services, including staffing, so we pool our resources. Hopefully, post-Wolf report being accepted, we can pool our resources for staffing at 14 as well. We currently jointly run the sixth form there with them. We are looking at lots of things with the local authority, including the reductions in the Connexions service. We are looking at whether there are organisations, including colleges, who do a good job in many respects on IAG already and have matrix awards for it, where we can pool resources and get an entity that can be set up to allow connections to IAG to continue in a different form. We are doing an awful lot already. It isn’t enough, but it is starting to make an impact.

On your point about 27 in a class and x, y and z, that is fine on a straightforward academic curriculum, which we do.

Q44 Damian Hinds: I understand that.

Dr McMahon: It is not all right with special learning disabled students, and it is not all right with specific areas of the curriculum such as engineering, where you can only have so many people to a specific, technical machine. There are other reasons why you end up with a lower class size. That is not to say that we are not working on that and trying to maximise the modularisation opportunities and maximise the curriculum generally. This agenda needs a complete overhaul of the curriculum.

Q45 Damian Hinds: Sure. To be clear, when I was talking about 27, all I was making was the mathematical point that if class sizes now are less than 27, including one or any number in between, the increase of 3.7% is less than one student per class. I was not advocating class sizes of 27. Can I push you, Elaine? Theoretically, if you can absorb that increase in class size, what are the other key variable costs which are driven by student numbers?

Dr McMahon: The variable costs are the advisory support costs. We put in a lot of extra effort. The types of students that we get are very variable in their backgrounds. Some students have a need for more support. If the entitlement money goes from support areas, we struggle to make those students able to be motivated sufficiently and to meet their needs. The costs for us-the one that will really hit us-is that. If we do not have enough funds to support learner needs, we will struggle.

Q46 Damian Hinds: David, can I ask you to really focus in on the key variable costs? Can you absorb the class size-the key variable cost-which is driven by changes in student numbers?

David Lawrence: The first issue is that the increase in learner numbers is being offset by a reduction in funding per learner. That is a significant issue. Most of us have driven out those efficiency savings in the past. While you might, if you could get growth, ameliorate that to some extent, it will not totally take that out. The key variable cost is exam fees and learner support costs. The learners we’re attracting through this drive into that very, very last bit of NEET are those who require significant levels of additional support. The learners we’re attracting through this drive into that very, very last bit of NEET are those who require significant levels of additional support. Those costs are disproportionate for those learners; individual financial support for those learners is at a completely different level.

The overriding series of ifs that you gave us were all to do with that volume of learners being spread equally over the whole picture. What concerns me and those of us in rural areas greatly is that that is not what will happen. If you remove all the infrastructure that allowed people to make fairly even and equal choices about where they end up, that won’t happen if the infrastructure isn’t there. If you remove transport infrastructure or make it impossible for them to feel they can afford to access it, what will happen is that institutions reliant on those rural catchments will lose learners at the expense of the only option that they can see available to them, which may not necessarily be the one that gives them the most long-term positive economic impact to us as a society. The further impact for us, then, is that we think we’ll see numbers drop. It very quickly has the opposite effect when the numbers drop from that 26 or 27 average group size.

Q47 Damian Hinds: I accept that my ifs were all ifs-they were scenarios. Thank you. Your latter point leads us on to a key question. Can you describe the profile of the extra people that you’re expecting to come through the door and how they are different in terms of their needs? How will that, in turn, knock on to the types of course, level and support that you provide?

David Wood: The first thing I want to say is that it’s likely to be the difficult-to-reach people who are going to come into colleges. A little bit of caution: our colleges are full of the most able and brightest people in the country. Don’t associate FE purely with low-ability young people. Do not make that mistake. We are full of the most intelligent. They go to Oxford. Whatever level you wish to judge it by, do so.

On your question about the young people we’re reaching now, of the young people who come to me, 60% of them haven’t maths and English. It’s huge. Of course, they can often cope with a vocational subject per se, but they can’t cope with literacy and numeracy needs. Frequently, they come in and are devastated when they get GCSEs at level 2 and can’t go on to level 3, because they’re just not capable. It is all that disproportionate emphasis on easier subjects in schools that doesn’t fit them to come into college well.

The other thing about this group of students is that many of them are ill advised. That is important. There was a conversation about information, advice and guidance and drop-outs at 17. I think one issue is that they get poor advice on what course to go on. They have a sample and a dose of a school-

Q48 Chair: I hate to interrupt you, David, but we are going to come to course choice, advice and so on a little later.

David Wood: Okay. They have been poorly advised. Sometimes you say to these young people, "Sorry, you can’t do that." It might be an engineering course. They say, "Okay, I’ll do tourism." Where did that come from? What Wolf illustrates to us-it’s important in Wolf-is that 1% stay in NEET from 16 to 18, but 32% of young people 16 to 18 are in and out of NEET. So we’re not seeing a group of people-we must understand this; we’ve actually said it. You don’t get the rational choice of coming into an occupation, training for it, going into a particular job and earning a living. That isn’t the norm. What we have is this fantastic churn of experiment and interest. We get young people uncommitted to education and not sure what they want to do, but in my college, one thing is absolutely certain-they hate school.

Q49 Chair: Anyone else want to pick up on the quality and, when the participation age goes up, the likely picture of those people coming in? You could perhaps tease out, as Damian suggested, the curriculum implications and any cost implications, because that’s obviously a key message if the Government want FE in particular to pick up this group. Who would like to go with that?

David Lawrence: For me, this is all about motivation. That’s why the 14 to 16 part of this job is equally important. One can’t disagree with Wolf about English and maths. They’re fundamental skills, but most of them have been switched off from studying them, and when we get them back into college we try and switch them back on. I think the challenge is-in nearly all the answers I can think of, I very much subscribe to what David said. Their ability levels are there; they have just not been motivated. Our task is to find ways to motivate them using vocational subjects. I believe that we have been very successful in doing that. I have a massive problem where it then links to the labour market, and for my institution, it is very easy to see, because we are a specialist college.

The chief scientist’s Foresight report on the future of food and agriculture is filled with major challenges facing this industry. We have a massive skills shortage and we can’t recruit enough labour for it. It is about getting youngsters to see those occupations at 14 to 16. I have more than 600 of them in my college; a good 50% will progress to vocational programmes in that area and I can assure you that they wouldn’t have done so otherwise. We have to join this whole job up; it is not just about participation, it is about making sure we have made a link to where they are going to progress to, in terms of economic activity, and that is all about motivation as much as just achieving the academic qualification.

Q50 Chair: Elaine suggested earlier that it is all about getting in early; that if you get to them when they are 13, the chance of their dropping out at 17 is massively diminished. Do you all agree with that?

David Lawrence: Yes.

Q51 Tessa Munt: I want to ask you all this question, and particularly David and Ian. Equipment costs are normally borne by students; you have an arrangement over accommodation as well?

David Lawrence: The more specialist you are, the greater geographical area you end up covering. It is just a fact of life and, clearly, in some specialist areas we are now working almost on a regional and, in some cases, national basis. Without residential accommodation, you cannot achieve it and we are extremely concerned that, as part of the whole review of learning support funding, some of that support will be lost and that that will have the most significant impact on those with low incomes. In our case, we have tried to hold residential costs at a very low level; it is £100 a week for full board for our learners. You won’t find that in the university sector. It enables access and it is all about getting individuals into employment in these industries. Without it, we couldn’t achieve it. The most support we provide is a 55% subsidy, and that is for individuals from families with a total family income of less than £15,200.

In terms of equipment, it varies. We are not dissimilar in many respects to other colleges. Safety equipment is significant for us-it averages about £300 per learner and we support some learners with that. In order to be able to study certain subjects-arboriculture is one-they have to find between £800 and £1,000-worth of equipment. We have been applying a similar approach to support-we would not fund more than 50% of that and we have been using a means-tested system to deal with it.

Ian MacNaughton: David’s is a particular type of college; I am from a sixth-form college providing general education that is dominated by A-levels. The real problem is that in 2011, looking at the current policy landscape for the next few years, Government funding for 16 to 18-year-olds doing A-level courses that require equipment-the sciences, technology subjects and so on-is inadequate, it is not enough to pay. Within that context, current funding is barely enough and then we have to pay capital and interest on the mortgages from our capital developments from the past, which was not an option but a requirement of the LSC’s capital framework. We had an Ofsted science good practice visit last week. We have something close to 1,000 students doing science-related A and AS-level courses-a very big scale. Group sizes are very large now because of the declining funding; we have no spare resources to help the kids pay for incidentals in and around the course. Studying a science or technology subject, a creative subject or a performing arts subject at A-level now costs the students money-as much as £400 or £500 over a couple of years.

Q52 Tessa Munt: I represent a rural area with very few bus services and decreasing numbers. I phoned my county council and asked about the cost of a bus pass for next year. They were not able to answer that question this week for September. Do you feel that young people will move towards their nearest provision as opposed to the best provision? I have four schools with sixth forms and two schools without, and it is some distance-between nine and 20 miles-to the colleges. What will happen? Will students move?

David Wood: You’ve got an interesting one. Students cannot be held responsible for where their parents live, so it shouldn’t deny them access to the course most appropriate for them. I think that what you’re seeing is that this is impacting more heavily on those students who live furthest away by some distance. If you talk to anybody about EMAs, they say that the biggest concern they have is transport. In my area, a short distance of a couple of miles costs £12.50 a week, and if you go five miles, it is £24 a week. They simply cannot afford it.

I think I would support your view. If you are in a school, there are routes to school and you can still get on the school bus to get there cheaply. When we interviewed people this year for September, they went through a range of issues and said, "By the way, will your buses still run?" We know that that’s the deal-breaker. It is a very important point, and it’s about entitlement too. Some young people are being literally disentitled to education and training by this action.

Jane Machell: Youngsters, and indeed their parents, have been voting with their feet on quality of provision and what courses are available nearer to or further from them that might be more appropriate, as David just mentioned. It certainly happens where I am. There is a lot of cross-border movement. Some 20% of my students come from Surrey because it is only 10 minutes by train. It doesn’t matter that they don’t live in Hampshire. They vote with their feet and come to us because we’re a beacon, grade 1 college, and they want that high-quality experience. I still think you’ll find a lot of that, but those families who can afford it will continue to do it. For those families who can’t afford it, the transport costs become a barrier, so you might see less of that movement-I haven’t seen it yet, but we might.

Q53 Tessa Munt: I want to ask about the proportion of your budgets used in 2010-11 to support travel costs for students.

Ian MacNaughton: In my college, it is zero, because the approach we’ve always taken to resources is that there is no statutory requirement for us to provide transport support. That duty historically lies with the local authority, the Learning and Skills Council and other agencies. We always believe that our budget is there for teaching and learning, so we don’t subsidise student transport.

Q54 Tessa Munt: I’ve been trying to get to the bottom of this business of what the statutory duty is on local authorities to provide transport. There doesn’t seem to be one.

Ian MacNaughton: To add a caveat, that is in general. Of course, through our discretionary learner access fund, we occasionally contribute to some students, but not across the board. The responsibility at 16 to 18 has been the local authority’s.

David Lawrence: In our case, we put about 1% of our budget into subsidising travel costs, but that is for the very specific reason of dealing with drop-out at 17, and has been about speeding up and creating more effective bus routes. At the moment, Norfolk county council subsidises it. The learners contribute £358 a year, which is halved if they are on low incomes-£15,000 is the cut-off point. Learners with special needs for several years have paid the same rate as any other learner, because, why wouldn’t they? It is an equality issue. Everyone should pay the same. We are in discussions, and Norfolk county council has agreed to retain some contribution to learner support, and it should be congratulated on doing so, but it must still save £1 million on the cost in the next two years. We are looking at different ways of operating.

There is a statutory duty to plan but there is not necessarily a statutory duty to fund. There is a massive picture across the country. This certainly affects my colleagues in specialist colleges, such as mine, dramatically. If you’re in an area where the county withdraws all financial support for transport, students vote with their feet and go for cheaper provision. In labour market terms, that will have a fairly dramatic impact on the sustainability of some specialist provision as a result.

Q55 Tessa Munt: At the moment, students in Somerset pay £600, and that is going up. It will be a huge problem for a family with many children of college age.

Dr McMahon: Hull city council has been subsidising. It might not be able to do it at all next year. Currently, it is subsidised by that council but, on average, about £5 out of the £30 that a student gets for an EMA goes towards travelling, too. There is a double whammy. The subsidy is going as well as the money that we are using, which comes out of the EMA. Let us think of the volumes. Of the 4,200 full-time 16 to 19-year-olds in the college, more than 2,600-about 70%-are actually on the full £30, and that will go.

We have worked out that, if the learning support fund is treble what it is planned to be at the moment-even if that were to go through-some of our students would only get 70p if their families earn £20,000 a year. The bulk of those students are in families earning between £5,000 and £15,000 so the maximum a student in a family on £5,000 could get is £7 a week. That is to cover everything. It will not go anywhere. We are struggling with that at the moment, even with what might come in as a maximum on the learning support fund.

Jane Machell: Going back to raising the participation age, an 11 to 16-year-old or a four to 16-year-old is entitled to transport from the local authority because it is compulsory education. If, in 2013, 17-year-olds will have to be in some sort of education or training and, in 2015, the same will apply to 18-year-olds, why do 16 to 18-year-olds not have the entitlement that four to 16-year-olds might have?

Tessa Munt: I must say that I have asked such questions quite a lot-even if we were to stagger it from 2013 to 2015.

Q56 Chair: Are you all in agreement on that? Let us go back to the point I made at the beginning about recommendations. Obviously, the funding has to be found-it is not an obligation to be put on local authorities without funding-but as a recommendation that there should be an obligation on local authorities to provide transport for 16 to 18-year-olds.

Tessa Munt: But that has to be placed into legislation.

David Wood: One of the issues we all face is negotiating with individual bus companies. I can’t. I only have one in my town, so it will not give me any concessionary rates at all. The university has 6,000 students. If it is a large unitary local authority, it will have the ability to drive a better deal. You will get economies of scale by that joined-up thinking. I would worry trying to do it myself locally, because it would not make a difference. I do not have any bus companies to compete with.

Q57 Chair: That brings me to the next question, which is whether you would rather have it come to you, so that you could tailor it to meet the needs of your students, or would you rather it was a statutory duty imposed on local authorities and suitably funded?

David Lawrence: From my discussions with Norfolk, I believe that it is an integral part of providing rural transport. If we get it right, it has a much greater economic benefit by being strategically planned than being done on a piecemeal basis. Given some of the points that David made, I am very lucky in Norfolk. It still undertakes that work on our collective behalf, and we contribute to it. I feel very strongly that that is an important principle. If that were part of how it is dealt with under legislation, that would be extremely helpful. The county council’s problem is that it is not funded for it, as it keeps reminding us.

Q58 Tessa Munt: What you are saying is that it has to be taken out of the realms of political will, and become an absolute.

David Lawrence: It does.

Jane Machell: Let us not forget the impact if that becomes a right with the raising of the participation age for 16 to 18-year-olds. It would benefit the whole of the local community. The transport services will be there for the elderly in our community. They will be there for our families who are trying to get to the market on whatever morning it might be. It is not just about something for young people. It is about transport in the wider network and certainly in rural areas. That is the big issue.

Ian MacNaughton: We are fully in agreement with that recommendation. One little caveat was mentioned about local authorities. It seems that there should be an entitlement. Whether local authorities ought to be involved in it or not, I do not know. As it stands at the moment, things are very patchy. We are heading towards the educational funding agency being created to fund all four to 18 education, from April 2012. It seems that that entitlement is probably better delivered through an agency of that nature because, fundamentally, local authorities have almost no role in four to 18 education hereafter. They have an undefined planning role for the future, but funding does not go through the local authorities.

Q59 Tessa Munt: It also strikes me that you are not transport providers, you are educators.

Dr McMahon: We are talking about the rising participation age and about transport when the participation age is raised in a couple of years’ time. This is hitting us from September. Before policy, we need something now, in the interim period.

Q60 Pat Glass: May I move on to the discretionary learner support fund? Most of you were here when we spoke to the previous witnesses, so you heard what they said. We have heard and seen a lot of evidence that the EMA’s role as an educational incentive has been substantial. Others have played down that educational incentive to some extent. Devon county council has referred to EMA as more of a maintenance than a motivating factor. Do you see EMA as a financial carrot or an educational incentive? Do you think that it started out, in some cases, as an educational incentive and became a financial carrot? In terms of outcomes, does it really matter?

David Wood: That is huge. I think in some ways it is everything you said. It is an educational incentive, but without the financial support they wouldn’t be able to realise their educational ambitions. I think that is it. Without it you are not allowing a young person to participate. I think it is that important. As they move forward in the future, the point about the EMA, which probably hasn’t been made forcefully enough, is that, if we can get them in, by regularising their attendance pattern, they achieve. You are going to see a dip in quality, because many of these young people live chaotic lives, particularly the ones who are vulnerable.

With that in mind, the additional factor is that the ones who are very keen will want to earn money to displace the loss of EMA. Right now we are seeing a lot of our young people working. They all work-three days in college and a couple of days working-and that is going to increase. So you are going to have more young people looking for more part-time work, which will have a detrimental impact on their work at college. Of course, there is also less part-time work around, but the part-time work is to support their family as much as themselves.

So I think you will see them looking for more part-time work to pay for the expensive kit and the meals at lunchtime. We provide free breakfasts at my college. Our young people come to college inadequately fed, so they would otherwise pick up cans of Coke and crisps. You have to do a lot with these young people to change their attitudes and their motivation.

In a sense the EMA is a contract, and it is probably better to see it like that. They have a contract to use their money themselves; I think that is an important point to young people. These young people are very disempowered, and enabling them to have cash and to use it makes them more responsible.

Dr McMahon: It is both a motivator and a financial incentive. They have to have a bank account. They understand what happens with this money: it is theirs and it represents independence. Most important, though, is the way its use has evolved. You only get the EMA in a college if you actually attend and if you are actually successful. So there are two main incentives: you have to be succeeding on your course-meeting the tutor’s requirements-and you have to attend. If you don’t do those two things, you don’t get your money.

All the statistics collected by the AOC and 157 Group demonstrate, as we heard earlier with Lambeth college, that the EMA has tremendously improved success rates, and it has improved retention and attendance as a result. In my own college, we know that, compared with those who don’t get the EMA, there is in some quarters, at levels 1, 2 and 3, a 10% difference with the students who get the EMA. Obviously, because of the nature of the EMA, those students are from the most disadvantaged backgrounds. They are competing extremely well, which they did not used to do. Year on year, since 2004 when it came in as a pilot, there has been success. It has been a tremendous success.

Q61 Craig Whittaker: We heard that EMA is a contract. Elaine just talked about success rates and how attendance is up. We also know that schools will enable economic impact, which is actually the outcome we’re looking for. We have 1 million NEETs. Who is breaking the contract? Is it the guys getting the EMA or is it the colleges and schools?

Dr McMahon: We would not have NEETs if they came to college. They have dropped out before we get them.

Q62 Craig Whittaker: So it’s not working, then?

Dr McMahon: They are not reaching us. If we could get there, mostly they would be encouraged to stay, especially if we get them on the right programmes. The other big success that has happened in recent years, which I am pleased the Government are promoting, is apprenticeships, and 16 to 18-year-olds on apprenticeships is a big success. My college has just had a significant increase in its contract from the Skills Funding Agency, just because it is such a successful approach. Breaking contracts is about getting them on the contract in the first place, and getting them on the right course is about where the contract starts for the learner.

Q63 Craig Whittaker: So therefore it’s not the EMA that is particularly the issue. The issues are further down the line.

Jane Machell: There are two separate issues. Once they have enrolled and they are on EMAs, I echo exactly what has been said. They have to attend. We have to return their attendance rates on a weekly basis.

Q64 Craig Whittaker: But are they outcomes or ticking boxes?

Jane Machell: No. They have to be physically in the classroom, learning with a tutor.

Q65 Craig Whittaker: But surely the outcome has to be that these young people are going in schools to enable an economic impact for our country. That is not happening. We know that, because we have 1 million NEETs, so something is not working.

Jane Machell: That group of NEETs are not in our colleges yet, so we need to look at strategies across the country and how we identify who those young people are.

Q66 Pat Glass: Looking at the ones who are on EMAs and in colleges rather than those who aren’t, I am interested in what you said, David. Your view is that the abolition of EMAs will not only result in a possible reduction of participation, but that those who do participate will achieve less well.

Ian MacNaughton: I think that that is what Mick Fletcher was saying earlier when he was talking about EMAs. He was talking not only about participation but about attendance, achievement and progression, so it was the whole package.

Q67 Lisa Nandy: For the record, does everyone agree with that sentiment? I saw some nods in response to David’s point.

Jane Machell: We are very worried, to pick up David’s point-David Wood on my left. We have concerns about the fact that students will now stay in colleges, but they will not be able to afford to stay in education and training unless they do more part-time paid work. There are a number of studies being done. The university of Durham has done one. It started in the USA at the National Center for Education Statistics. As the hours of part-time paid work increase, attainment rates decrease, and we are seriously concerned that those students who really want to-they are motivated but cannot afford it-will do it by working 20 or 25 hours a week in Sainsbury’s, Tesco or wherever, and they will not be able to have the attention span and the time to do their work and succeed.

Q68 Pat Glass: Craig asked about the evidence behind those who continue to participate and how the outcomes may not be as good. Is that because of the well recognised link between attendance and attainment? Is that what you are basing that on?

Jane Machell: Yes.

Q69 Pat Glass: Moving on to EMAs, currently, in 2010-11, the cost is £564 million. The anticipated figure for DLSF for 2011-12 is £26 million, although that will increase threefold for three years. How do you think that the DLSF should be allocated? How will it be allocated in your college, and how important do you think external criteria will be to stop postcode lotteries?

David Wood: That is a tough question. If it’s at that level, there is barely enough to go round. One of my issues is that I do not want my student services area turned into a benefits office.

Q70 Pat Glass: That is my next question.

David Wood: How will we determine which young people will get a very small amount? And will that be for a very small number? We are at risk of not having much to give out, and it will not make a difference if we do. The level of support is not enough to be effective, so if it stays at those figures, we may be able to allocate it in a means-tested way, but it would not be enough to make a difference.

Jane Machell: It goes back to the issue of transport. If transport becomes an entitlement of some description, which would be a major cost, the DSLF can be used for equipment costs or special things. The transport issue is absolutely crucial.

Q71 Pat Glass: May I pursue that? My local authority-I am sure that the Government are quite capable of speaking for themselves-keeps saying to us, "If you are going to provide this, where is the money coming from?" My local authority is losing £40 million. It is not wealthy; it is lucky, because it is consulting at the moment on abolishing its support for 16-plus transport in future. If we make this compulsory, where will the money come from?

David Wood: I think Mark Corney’s presentation was excellent. He said that you have to look at the whole issue around 16-to-19 child benefit. There is plenty of money in the system-

Q72 Pat Glass: So is the recommendation that it becomes compulsory, but we should look at wider student funding?

Ian MacNaughton: That is absolutely right. I think we all agree that something must be done to support 16-to-18 student finance for travel and wider issues-probably on a means-tested basis, which we are keen on. Where does the money come from? Local authorities do not have it, and I have already made the point that we are heading towards national formula funding for 16 to 18s, which is just around the corner. Fundamentally, we cannot just say, "We need more here, we need more there." Somehow, we have to find the resources.

Within that context, one of the biggest 16-to-18 issues is the inefficiency and wastefulness of successive Governments in supporting small-scale 16-to-18 provision in and near urban areas. Huge amounts of extra resources for students have been put in, which are often lower quality-

Q73 Pat Glass: Are you referring to half-empty sixth forms?

Ian MacNaughton: I am talking about any form of provision where there are only, perhaps, 70 to 250 learners. That is much more costly for the Government to support, yet we are seeing a proliferation of that type of momentum. There is potential there for saving resources and using them for some of the things that we have been talking about.

Dr McMahon: It has to be targeted at the most disadvantaged, which goes without saying. But there must be an incentive for all organisations, local authorities and educational training providers in an area to pool their resources, because there is not a huge pot anywhere. We have got to learn to pool the resources and look at the opportunities. Whether that strand is transport, or whatever, there must be some way of incentivising us to pool the money and work out the best for the learner, instead of having individual organisations competing or trying to do things singly, which, ultimately, will not work.

Q74 Pat Glass: Finally, on individual colleges, of the £26 million distributed across the FE sector, which will include school sixth forms, how much will be spent on allocating the DLSF?

David Wood: There is a nominal amount of 5% of the budget-you can quadruple that, it is fair to say. My point is that I do not think we will be satisfied with what we do with it anyway, once we have attempted that task. The needs of our disadvantaged young people are so great that the amounts of money on the table will not go anywhere near satisfying those.

Q75 Pat Glass: So you think about £4 million of that £26 million, working on the basis of 15%.

David Wood: In terms of what?

Q76 Pat Glass: Didn’t you say that 5% is the current percentage and you could quadruple that?

David Wood: Yes.

Dr McMahon: We worked out that we needed four more staff to administer it. The information that we get at the moment on the means-testing element is quite detailed, whereas we need to access-

Q77 Chair: What do you need information-wise-sorry to cut across you, Elaine-because I know that there are issues around the transfer of information from local authorities. You are independent institutions, so there are data protection issues. What do you need to be provided with so that you can do the best job and reach the most people?

David Wood: Understanding the level of income of the family and the family circumstances is really important. The second thing for me is understanding the previous education of the young person. When they come to us, I need to know what their needs are based on their performance, what their issues are and whether they have any specific needs which I need to cater for in my own institution. Very little of that information follows the learner currently. I would want to see far better information passed from schools to FE, so that I can make better representation for my young people.

Q78 Chair: Are there any legal barriers to that happening at the moment?

David Wood: It just doesn’t happen, particularly when you are in a competitive situation. When a young person comes to me from a competing 11-to-18 school, we can’t call for information early, because that school talks to the young person and persuades them to stay, which is not right. But we don’t get that information. We are all in the same position. Although we have an idea who is coming in September, all these kids appear, which means you have to put in your provision very quickly. There is no doubt that if we got earlier information we would be able to put the support in earlier to make sure those vulnerable people were picked up much earlier, before we come to September, and guide them into our system. So for me, it is on two levels-the family circumstances but also the attainment of that individual and the issues surrounding them.

Jane Machell: I would echo that and also add to it.

Chair: Can you tell us what it looks like? You say it would be a nice thing to have. I don’t know what a recommendation would look like, what a rule change would look like and what a requirement would look like.

Q79 Pat Glass: You mentioned earlier that you get the money this year for what came in last year. Would it be helpful to have some kind of recommendation that there should be equalisation of funding across schools and colleges? In schools there is a mid-year redistribution and allocation to take this into account.

Jane Machell: They are obviously changing what is happening in school sixth forms now to bring it down.

Q80 Pat Glass: No, I am not talking about the amount. I am talking about the fact that in schools there is a mid-year adjustment.

Jane Machell: That would be helpful. But when you have a youngster who appears at the door and the school hasn’t given you the information, you discover that they are dyslexic, or dyspraxic, or they have some other learning difficulty and disability. There may be other social issues. There could be a range of mental health issues. You only find out about it on 5 September.

Q81 Chair: Do we need a young person’s passport and an obligation on any institution? I think it was done with gas companies and a certain time limit was imposed. People did not want to lose their customers and they had to respond to provide this information, so that the customer was not inconvenienced. Do we need something similar, so that when you register these people you can demand and receive the information you need within a reasonable period of time?

David Wood: Chair, there is a problem in the system generically. I would absolutely agree with that. The problem in the system is that information does not travel between education institutions comfortably. Often schools will cite the Freedom of Information Act-that is used continually. It is a very difficult area to pronounce on. The second bit is that when you talk to the YPS Connexions service, they won’t give you the information either because of confidentiality. At every stage, we have to do our best for this young person who materialises out of the blue in September. It is a very big challenge.

Q82 Pat Glass: May I ask one technical question? Do you get access to RAs? Is that not something that would help enormously. It gives all the student’s history of achievement.

David Wood: No.

Q83 Tessa Munt: I was going to ask you specifically about the issue of trust, as well, because from the experiences I have had, my sense is twofold. One is that colleges cannot trust the information that schools provide to them, anyway, where it does come forward. The second thing is that you are saying, Jane, for example, that you find students who are dyspraxic and dyslexic. I find parents who discover that children have those problems when they go to college and not before. Something is very wrong, then.
Jane Machell: I have a word of caution here, because I certainly have some fantastic relationships with many of our local secondary schools, and that information flow does happen. But quite frankly, it is down to the leadership of that school.

Q84 Tessa Munt: But do you test the ability of your students when they come in?

Jane Machell: Yes, we do.

Q85 Tessa Munt: Why are you doing that-because they have got GCSEs, or because they have got school reports, or whatever?

Jane Machell: Because we want to see whether they need additional support for dyslexia or dyspraxia.

Q86 Tessa Munt: I would then have to question the relationship with the schools.

David Lawrence: Even when they may have achieved maths A to C, they cannot actually do it in a different context. You have got to test that to understand it. There are some significant issues there.

Tessa Munt: I understand.

Q87 Charlotte Leslie: I am interested in the idea of enforcement. There seem to be two parts to this. There is leading the horse to water, which is the legal framework, and then the making it drink, which is the engagement with what actually goes on. To concentrate for a second on the first part-what is your view of the enforcement of participation, the concept and the reality of it? Do you welcome the fact that the actual obligation to enforce participation is being postponed?

David Wood: Criminalising learners, or their families, is not good. I think we’d all share the view that we would rather people wanted to be in our institutions than were press-ganged in. The difficulty I have is that the young people in that position who are unlikely to attend are very difficult to get at. What I would like to see is more flexibility and funding, which will enable me to go into those communities with sufficient staff resource to spend a large amount of time with the youth service and all those agencies to bring them in. Without that additional funding, I don’t think I can get to them in the way that you would want.

Dr McMahon: I completely agree with what David has said. I would add that it is also about the move towards working with employers in a different way. It is about moving on apprenticeships to a greater extent wherever possible. It is also that, if a young person at 16 is working with an employer, that employer has to commit to training and knowledge that is going to be transferable, not just for that company and not just for that organisation’s needs. So I think that, for the 16 to 18-year old, if raising the participation age is allowed to broaden what it starts out as, I think we have a good chance of enabling it to be successful.

Jane Machell: It is around flexibility. How are we defining participation? That was raised in the earlier session. Is it volunteering? Is it one day a week, doing some training or being with an employer? Not enough work has been done on how we are going to define participation. But I don’t think we should be criminalising students and their families. Anyway, if we did, the local authorities don’t have the resources to do what they do with a 14 or 15-year-old and put them in a pupil referral unit.

Chair: Do you have to do 280 hours of face-to-face tuition in the year? Is that the rule-I think it is something like that. It strikes me that some of our finest universities doing arts courses don’t provide that-they are only open 28 weeks a year and they provide far less than 10 hours a week of tuition. So it seems to me that Oxford and Cambridge are going to fail on participation. Sorry, that wasn’t a question.

Ian MacNaughton: It was a good point. They need £9,000 to do it, as well.

Q88 Charlotte Leslie: What extra burden do you think will be put on you if you’re going to have to start monitoring attendance as schools do, communicating with local authorities? Another issue is that a lot of the time kids fall off the school roll before they get anywhere near your level of education. I wonder how you see all that joining up with you, in terms of the added burden and whether you see it as a realistic thing that local authorities and colleges will be able to do.

David Wood: I think that colleges have superb systems for tracking students. We have magnificent systems of pastoral support-there are myths about that. We have outstanding systems of counselling and careers advice, with professional mentors working alongside them. I know that any student who is not in my college on any day is telephoned or texted. It is 100% done, and everyone here would echo that. We have got it down to a fine art. We know where every one of our students is; we know what they are doing and where they are. The attendance position isn’t a problem, and tracking students isn’t a problem. We’re good at it. We’ve got extremely good at it, and our data are outstanding at that level.

What we really need to do is work very closely with local authorities and other agencies, because we don’t know what we don’t know. I don’t know where those young people necessarily are, and we’ve had this issue about finding it quite difficult to find out their names and addresses from agencies, so that we can do something about it. It’s a little bit about trust. We need to have agreed rules of engagement about the exchange of information and data to enable us to track these young people. Part of it is that I know my own institution and our success rate. Our progression rate when they leave me is a 91% positive outcome, but as soon as they have left me, it erodes. It is very difficult to track a person in that process, and we need to get better at it. It can’t be just a college doing it on its own; it needs to be a truly engaged local position, and the localism agenda, which I think Elaine mentioned, is really important. If we can get local leaders buying into that, we’ve got a chance; but at the moment, it is down a little to whom you’re talking to.

Dr McMahon: It’s about the tracking systems, but it’s also about our approach with young people, which is successful. In a lot of areas up and down the country, you’ll find that successful colleges have got the same if not better attendance than the schools. That’s post-legal of course, because there is no need to be in a college. I would also say that a number of colleges such as my own provide a PRU service, so we take those who have truanted. We take them full time as well as part time from 14, and we know how to sustain them. So it is about the numbers game and systems, but it’s more importantly about the connectivity with the local organisations to enable us to provide that service, and we could do more of that. We should share our improved systems more than we’re doing at the moment, as well.

David Lawrence: May I just add one more point to that? Going back to your point, Jane, for me it’s about working with the other agencies, and that’s another area that’s being squeezed mercilessly at the moment. We know who these individuals are through our systems; they are quite often young carers. They have enormous challenges, and the level of support they require to overcome the challenges and get to college is very substantial, and they are the ones who invariably end up back in the NEET group because we can’t provide enough support. So the emphasis shouldn’t be so much on policing it as we might do pre-16; it’s more about focusing attention on key groups and having a joined-up approach with enough resource to provide the support for those individual learners, because they’re the ones who invariably fall out, quite often with very good reason.

Q89 Charlotte Leslie: I have just one final, more general question on the whole concept of raised participation age. We talked earlier about getting people to you so that they could start to fulfil that contract that we talked about with the EMA. To what extent and to what balance do you think that policing enforcement and legislation to make a legal requirement is the way to ensure that all our young people are engaged in quality training? To what extent do you think the fact that they’re not is a symptom of something that we need to tackle far further down the school curriculum at an early intervention level? What’s the balance, do you think, of sorting it out?

Jane Machell: I do think that we need legislation on it. We’re out of sync compared with other European countries, the US or Finland-you name it, we’re out of sync. The other bit of your question is about whether they are motivated enough, and are we actually offering them courses that will be motivating, that they will get support for, that will lead to something productive. At what point in their education do they get turned off? We have to keep working lower down the system with schools and our colleagues in schools to make sure that that doesn’t happen. I think it needs both.

Chair: I’m going to have to cut you off there, and not let anyone else come in on the answer. I’m sorry.

Q90 Ian Mearns: Something that I am particularly concerned about, because in a previous life I was chair of a careers company before Connexions was invented, and that you referred previously, Ian, is the collapse of the Connexions service. The Government’s stated intention, as outlined in the Bill, is to secure careers advice. From your perspective, is that intention backed by anything tangible to secure good-quality, independent careers information, advice and guidance for students? Is there any prospect that what is available will lead to more informed choices, better retention rates, and better educational and economic outcomes for students?

Ian MacNaughton: In my career, I cannot count the number of times the local careers guidance service has been built, rebuilt and changed. It is often true that the same people seem to resurface under a reorganisation, but they have often been made redundant or had TUPE-right transfers. I have honestly lost count. It must be nine or 10 changes. Every time a change happens, there is a waste of resources, and disruption to service. That is what is happening at the moment.

Our college is in Essex, but on the Suffolk border. Connexions gave a very limited service in 2009-10 and 2010-11, and looking ahead to 2011-12, we believe there will be very little guidance, particularly at the key stage of 14 to 16. Our students at 16 to 18 are getting very little guidance, but the 14 to 16-year-olds in schools receive almost no guidance at all.

I think the new all-age service is to be rolled out in 2012, but it will be a slow roll-out, and I don’t think it will be until 2013 that we fundamentally see a reasonable service in place. I do not know about its resourcing, but I suspect that it may have fewer resources than Connexions. For a three or four-year period, such guidance for 14 to 18-year-olds has become minimal.

David Wood: In Lancashire, we have virtually a tertiary system, with very good systems in place between schools and colleges. That is evident, and I need to put that down. Young people are well placed, because it is in no one’s interest to keep them. That is important. As soon as you introduce the notion of competition, it makes matters formidably different. I’m in an area where there is strong competition, and some schools will not let me in; they will not let us there.

My view about independent advisers going in is that that is fine, but it is no substitute for someone who works in the college and knows the subject going into the school. In some ways, a careers service would not be needed if you let me have access, because you could have any of my staff at any time to talk to young people from the age of six up. I would do that, and I think my colleagues would, but we are simply not able to. We don’t want to say, "This is the right thing for you; don’t listen to them." All we want to do is to have an opportunity to say, "Come and look at this college; come and see what we do; we are different."

Q91 Chair: What would that look like? On the aspiration, we’re interested in the mechanism that might deliver it. Tell me what it looks like, and what would be changed?

David Wood: To enable colleges to access young people in schools as a right.

Q92 Ian Mearns: The problem with that is that any institution that accesses another institution’s pupils will always be seen by that other institution as having a vested interest. The bottom line, as we have discussed before, is that the number of youngsters you get through the door generates your income. Malcolm Wicks, when he was an Education Minister, described what was happening in terms of advice and guidance in some parts of the country as akin to pensions mis-selling. That was some time ago, but we have long enough memories. I remember when the careers service was part of the education authority and became Connexions. We’ve been there, but now there’s a vacuum. How are we going to get round that vacuum?

David Lawrence: Can I just add a little to our proposal? If we were all accredited providers of IARC, which most colleges are, we would all be obliged-we would be tested on this-to give fair, open and transparent advice, irrespective of where the learner ends up. What I find really distasteful is to be told by a number of schools, "You can come in and talk about this subject, but you’re not talking about this, this and this." We do it. This is about learner choice, isn’t it? We are public servants. My view is that colleges are a means to an end, not an end in themselves, and our job is getting people into economic activity that will benefit wider society.

Q93 Chair: What does that look like, David? How do we enshrine, legislate or provide guidance on delivering the right that David Wood talked about?

David Lawrence: I definitely think we should require anyone who’s giving careers advice and guidance as an institution to have to work to those matrix standards, because that would be a formal approach, which would be very robust. Secondly, mainstream education providers should be given a right to have access to those learners, either in ways that we used back in time when there were more formal careers services and there were careers events for a wider population, rather than relying on individual schools, or through an access arrangement to school careers events. What you can’t do at the moment is have it separated out, so that a school head can decide they need to fill that particular course, so they’ll stop the colleges talking about it.

Q94 Tessa Munt: If you took 13-year-olds and make sure that part of their PHSE was that they should travel to their local college and have a day there, would that break that open?

Dr McMahon: Yes, we do that. We work with the schools on what we call discovery days. They come for a day, and they come from different schools on the same days. They go through a range of different taster activities.

Q95 Chair: Are schools obliged to do that?

Dr McMahon: They aren’t obliged to at the moment, but most of them participate.

Q96 Tessa Munt: It’s the ones who don’t.

Jane Machell: It’s certainly something that we could welcome outside this Committee meeting.

Chair: We’d love to hear from you after today’s meeting any recommendations on how we can improve not only participation, but the quality of education providers. Thank you all very much for being such good witnesses today.