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Baroness Symons of Vernham Dean: My Lords, I am sorry that it falls to me to say that we are now past the time allocated to the PNQ and that we must proceed to further business.

Business of the House: Debates this Day

Baroness Symons of Vernham Dean: My Lords, I beg to move the Motion on the Order Paper standing in the name of my noble and learned friend the Leader of the House.

Moved, That the debate on the Motion in the name of the Lord Dearing set down for today shall be limited to three-and-a-half hours and that in the name of the Lord Eames to two hours.—(Baroness Symons of Vernham Dean.)

On Question, Motion agreed to.

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Tax Credits Bill

Baroness Symons of Vernham Dean: My Lords, I beg to move the Motion on the Order Paper standing in the name of my noble friend Lady Hollis of Heigham.

Moved, That the order of commitment of 23rd April be discharged and that the Bill be committed to a Grand Committee.—(Baroness Symons of Vernham Dean.)

On Question, Motion agreed to.

Education and Skills

3.20 p.m.

Lord Dearing rose to call attention to the resources needed to give effect to the Government's policies for education and skills; and to move for Papers.

The noble Lord said: My Lords, my concern in introducing this debate is with the outcome of the forthcoming triennial spending review. In that context, I warmly welcome the words of the Chancellor of the Exchequer in his Budget speech in another place, when he said that,

    "education will receive the priority [it requires] to deliver further substantial improvements, not just in our schools but also in our universities and colleges".—[Official Report, Commons, 17/4/02; col. 588.]

I want to spell out what I see as being needed.

Unless bold decisions are taken, I fear that we shall end this decade facing the near certainty of declining economic activity not only in relative but in absolute terms. We shall face declining national income, the prospect of more poverty, more unemployment and a goodbye to the aspirations for health set out in the Wanless report. History warns me that, in spite of high intent, we shall lack the resolve in the face of other spending priorities to commit to education and skills on the scale necessary for our economic well-being.

I fear that the English in particular, in a way that is not true of the Scots, have never really committed to education and skills. Historically, action by governments has been a belated response to necessity rather than being taken because of a conviction that investment in people is the basis for creating decisive economic advantage.

Perhaps I may go back in history to Trevelyan's History of England. Referring to the case for providing national primary and secondary education during the time of,

    "the fat years of Victorian prosperity",

around the 1850s so as to make provision against the return of lean years, he says of thinking at that time:

    "As to education, Prince Albert, it was remembered, was a German, and popular education was a fad, fit perhaps for industrious foreigners in central Europe who had not our advantages of character and world position".

It was not until 1870 that we had the Education Act as a belated response to the economic challenge that was then apparent from France and Germany. I could go on but I shall simply mention the scathing

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indictment, expressed in 1953, of post-war governments for their parsimoniousness on education and for failing to match developments abroad. It was out of a similar need to match the progress that our competitors had been making that the noble Lord, Lord Baker, as the then Secretary of State, introduced belatedly a catch-up in the provision of higher education in this country.

I turn to those,

    "industrious foreigners...[without] our advantages of character and world position".

In a debate on 10th April, the noble Baroness, Lady Sharp, told us that, compared with the 4.9 per cent of gross domestic product that we invested in this country in 1998, in Germany the figure was 5.5 per cent, in France, 6.2 per cent, and in the USA, 6.4 per cent. Those figures did not surprise me. But what did surprise me were figures given in the other place which indicated that the proportion of our gross domestic product spent on education last year was no more than it was 10 years ago.

I was even more surprised—I cannot believe it—that, in the early days of a government committed to education, that percentage was falling. It is rising only now, with the aim to achieve 5.2 per cent by 2003-04. That is still way below where the French, Germans and Americans were in 1998, and I guess that they have not been standing still.

I turn to the results of that in terms of the educational skills capital of our people. If I remember the figures correctly, in this country when these comparisons were being made in 1998, 55 per cent were at NVQ Level II—that is, GCSE; in France, the figure was 72 per cent; and in Germany, 83 per cent. At the crucial Level III, whereas the Germans were at 74 per cent, we were at half that level.

The National Institute of Economic and Social Research, in making productivity comparisons across nations, looked at France, Germany, the USA and the UK. Where did we come? Of course, we came bottom. What did the institute attribute it to? Lack of investment in skills, education and, of course, capital.

I have referred to the comparisons with our traditional competitors—those, perhaps, whom the Victorians would have had in mind. But, looking ahead and examining the figures, I believe that increasingly we must consider the 40 per cent of the world's population that lives in India and China. The growth rates of those countries over the past decade were, in one case, 6 per cent a year and, in the other, 8 per cent a year. When the other young Asian tigers trembled in 1998, they hardly blinked; their economies marched on.

China is emerging increasingly as a world economic power. According to the figures, it is now seventh in the world league. Let us just think where it could be by the end of this decade. We see references to India as the "back office of the world", with investment in information technology increasing at 50 per cent a year over the past decade. These are clever, industrious people who, the World Bank warns, at the end of this decade will still be paid only a reasonable fraction of

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our wage rates. Therefore, how shall we compete? There is only one way and that is by moving up-market.

The English language, in becoming the international language, exposes us more than other nations. Not only is the manufacturing sector at risk but the service sector is also. Therefore, we are doubly vulnerable.

Over the weekend I read the annual report of a company that I know well. The report commented, in a small sentence with no great emphasis, that the company would be outsourcing to other countries, transferring 30 per cent of its production to two new factories in Mexico and to China and eastern Europe. That is only one example. We read of the insurance industry and call centres. I believe that one of them employs 60,000 people and is talking of transferring to India. I could continue with such examples.

If we are to address this situation in a meaningful way, I believe that we must look again at the proportion of our national income—our gross domestic product—that we invest in education and skills. The main point that I want to make in this debate is that, whereas we have been thinking of increasing that investment by 0.1 per cent as a share of GDP, in the next triennial review we must move to an increase of 0.2 per cent a year—that is, double the present rate.

An increase from 0.1 to 0.2 per cent does not sound very much, but it is big money. Assuming that GDP grows at 2.5 per cent a year, with that change there would be an increased contribution of £3 billion in the first year, £5 billion in the second year and £8 billion in the third year, making, if my arithmetic is correct, a total of £16 billion. But I emphasise that that is a minimum amount.

I have looked at the proposals made to the Government in the context of the triennial review from the Association of Colleges, which is bidding for an extra £5 billion, and the Local Government Association, which is bidding for an extra £8 billion for schools. The universities are bidding for an extra £10 billion. That is much more than my £16 billion. They are not the only people in the game. I repeat that that is the minimum figure which we need to consider in the triennial review.

In arguing for increased resources, those institutions owe it to the nation to use such resources effectively. In general, I believe they do. For example, who has done better than British higher education in reducing the unit of resource for teaching by 40 per cent over the past 25 years? That is impressive for a labour-intensive industry if we consider the hours which our teachers work and the low cost of further education. There are faults, which I could identify, but basically those institutions are using funds well. My point is that a consistent, sustained policy of which people know in advance can be rationally and carefully planned. We do not need adventurous initiatives but a sustained, well-directed investment programme in our field.

I am grateful to the number of noble Lords who have decided to engage in this debate. Others will speak more authoritatively than me on particular

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dimensions of the need for greater investment in our people. However, I should like to illustrate some. I begin, because too often we put skills at the back of the queue, by stating the need to back the Cassels committee recommendations on skills and apprenticeships.

We need to lift the numbers staying on after 16 and avoid drop-outs at 17. We must bear in mind that the proportion of those in education and skills at 17 has not increased in a decade. We must pursue vocational education, in particular through our FE colleges in partnership with schools, increasingly from the age of 14.

We must address the plight of the 20 per cent of our children whom society fails at school: the truants, the drop-outs, and the disaffected from whom society reaps a bitter harvest. We must recognise the need to see our FE colleges as the powerhouse of the skills economy. We treat them as the Cinderella at our peril. We cannot expect to remedy our longstanding skills deficit on the cheap. We must act on the advice of the national skills council that 80 per cent of the new jobs emerging over the decade will require a higher level of educational attainment, whether in FE colleges or higher education. We must respond to the needs of our teachers and schools at all levels; the pay issue will not go away.

We must not "do a railways" on education by denying it the capital resource that it needs. I have summarised the figures. We must stay with the policy of aiming for a participation rate of 50 per cent in higher education by the end of the decade and recognise that much of that can be achieved by partnerships between higher and further education. In doing that we must recognise that by engaging more young people who do not come from the traditional backgrounds for such education, there will be a cost.

At this point I declare an interest as patron of the University for Industry. The Government should keep faith with their vision for the University of Industry—which is now beginning to motor—as a flagship for a nation committed to life-long learning. I hope that the Government will want to make life-long learning a defining achievement of their term of office.

I conclude by coming back to Trevelyan. He lamented that the Victorians did not use the fat years to invest against the lean years he saw to come by investing in our people. We must accept that competitive advantage lies in investing in our people. The philosopher Santayana said—I do not know his work well, but I recall one sentence of his writing—that those who do not remember the past are condemned to revisit the past. We must remember our past, which I briefly summarised. We must in our time heed Trevelyan's admonition and use the years ahead of economic growth to navigate our way in a world in which the economic hegemony of the West is no longer a law of nature.

Accordingly, I urge the Government to ensure that the resources needed for education and skills are provided. They must recognise that that means increasing the share of GDP they receive by at least

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0.2 per cent per year; 0.1 per cent simply will not do. Investment in people must be grasped as the decisive basis of economic advantage, not as a belated response beaten out of us by the competition. We are behind the game. We must now, for the first time in our history, play to win. My Lords, I beg to move for Papers.

3.35 p.m.

Lord Puttnam: My Lords, I should begin by declaring a number of interests—among them chancellor of the University of Sunderland and chairman of the General Teaching Council—but today I shall speak unequivocally in a personal capacity.

I am extremely grateful to the noble Lord, Lord Dearing, for initiating this debate. It is especially timely and as such doubly valuable. His opening remarks about the need to remain competitive in the face of challenges from not just the "established tigers" but other nations such as China and India are ones that I particularly echo. I shall also attempt to enlarge on the noble Lord's observations and, indeed, his statistics regarding the need to sustain a commitment to increased expenditure.

In preparing for today's debate—courtesy of our rather wonderful Library and its staff—I discovered something which I found astonishing. Prior to 1960 the UK was spending a higher proportion of its GDP on education than almost any comparable nation. But, a generation later, a 24-nation study by the OECD showed the UK spending less of its GDP on education than any other comparable country. That is extraordinary. No such similar reduction in any sector's share of this nation's resources has ever occurred. Nor, indeed, has it been experienced in any other developed nation in the world. To echo the noble Lord, Lord Dearing: what on earth did we think we were doing?

Prior to the First World War, it was felt sufficient to spend some 1 per cent of GDP on education. Lord knows, even that 1 per cent was hard fought for. The inter-war years saw an increase to about 3 per cent. That, in turn accelerated in the fifties and sixties to a point at which in 1975 it had reached 6.3 per cent. It then collapsed before settling at less than 5 per cent for a decade or so.

I accept that GDP fluctuated during those years but, as with our health service, the overall damage has proved inescapable: massive under-investment during the very years when the rest of the developed world was pouring sometimes scarce resources and energy into creating education and health systems equal to the extremely tough challenges of the modern world.

Will any Member of your Lordships' House who believes it possible to slash investment in education and yet develop as a coherent and competitive nation please raise a hand? Is there anyone in the House today who seriously believes it possible to reduce public spending on education and maintain any credible ambition for productivity and growth, let alone promote those more generous civic ambitions, which most of us share?

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The noble Lord, Lord Dearing, implores us not to "do a railways on education". I fear that in some sense we did a railways on education in the late seventies and eighties and we are only just seeking to recover. The real analogy here should be with investment in health. I am not suggesting any diminution in last week's brave and timely funding commitment. But it was only in the early 1990s that expenditure on health as a percentage of GDP began to rise faster than that on education. One of the principal reasons for that—probably the major reason—was the necessity to invest in new, highly sophisticated and expensive technologies. There was a recognition that technology had the capacity to transform medicine in many respects. That in turn required massive injections of capital.

Education is now facing a precisely similar challenge. If we are to have any chance whatever of being competitive with those new economic tigers, never mind the established nations, we have to invest in the people—that is to say the professionals—and the technology that will help to deliver the education system we badly need. We must invest and, as the noble Lord, Lord Dearing, said, we must invest unstintingly.

The argument in favour of investment in education is ultimately, in my judgment, even more compelling than that for health. Whereas the state of an individual's health is, above all, a matter of personal and family concern, the quality of a nation's education has consequences not just for the individual and those whose lives revolve around them, but, more broadly, for the whole of society. As the noble Lord, Lord Moser, once memorably observed, unlike all other areas of public expenditure, education alone is both the "cause and the consequence of national success".

However, we have a choice. We can go on indulging the fantasy that, as a result of those "efficiency savings" that opposition parties are always so fond of promising, we can have a world-class education service at present levels of investment—or maybe even less. In the past four years I have visited 320 schools. I am sure that there are some savings, but they are really at the candle's end.

The other alternative is that we can grow up, dig deep and remind ourselves of our determination to give our children brighter, fairer and genuinely more fulfilling lives. I know of no other way of guaranteeing ourselves a successful and sustainable future as a nation.

3.41 p.m.

Lord Trefgarne: My Lords, I too am most grateful to the noble Lord, Lord Dearing, for securing this debate and for giving us the opportunity to look at an issue of such importance to the future prosperity of the United Kingdom. In discussing education and skills policy, we must be careful because policies in England are sometimes different from those in Scotland or Wales, as many employers sometimes discover to their confusion.

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I should like to concentrate my short remarks on the future role of vocational education and training, which is an issue in which I believe passionately. It is also a key concern of the Engineering and Marine Training Authority of which I have the honour to be chairman.

The Government's most recent statement on education and skills is the Green Paper relating to 14 to 19 year-olds. It is a significant document in setting the agenda for the future of education and skills. There is much to be welcomed in it. At long last, the language that we are hearing is moving away from the notion that the academic route is for the bright ones and the remainder should consider a vocational option. We shall only encourage the brightest of young people to consider seeking vocational qualifications if we are able to persuade them—and especially their parents—that they will not be disadvantaged by so doing.

Industry needs to attract people with a diversity of skills; both those who enter after completing a higher education course and the potential technician. The evidence from the introduction of the GNVQ shows that young people following such programmes from the age of 14 develop a significantly more positive attitude towards engineering, which is my special interest.

That is demonstrated not only by an increased interest in entering engineering work-based learning at the age of 16 and above, but also for those following the A-level pathway there is a greater likelihood of choosing an engineering degree course or engineering career at a later stage.

So-called vocational GCSEs will become a reality in September when GCSE engineering becomes available to schools. It is a course that has been designed with the support of the engineering employers. I am pleased that the EMTA has been able to work very closely with both the Department for Education and Skills and the Qualifications and Curriculum Authority (QCA) in its design.

For this qualification to be a success, appropriate financial resourcing is essential. Teachers will need help, support and additional training in order to be able to deliver a wider range of specialisms and cross-curricular activities in which they may have had little previous experience.

In addition to the financial resources, we also need to persuade those advising young people of its benefits. I have already mentioned the influence of parents, but the quality and effectiveness of careers advice is another factor. Teachers are very influential in advising young people on careers. Yet many have not had the opportunity of working in industry and therefore do not appreciate the opportunities available. Perhaps I may suggest to the Minister that it would be helpful for some teachers to use their five statutory "Inset" days to increase their awareness and understanding of industry and commerce. In the case of engineering, it will be necessary for schools to work in partnership with work-based training providers, colleges of further education and employers.

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For the GCSE engineering qualification to have any significant impact, the target required is that 350 schools should be offering this GCSE by the year 2005—indeed, every one of those schools visited by the noble Lord, Lord Puttnam, in the past few years.

Since its introduction by my noble friend Lord Hunt of Wirral—I am not sure whether he is in his place—in 1994, the modern apprenticeship route has had a significant impact on the number of people entering the engineering industry. The recruitment needs of that industry require about 33,000 modern apprenticeships to be in training at any one time. In 1994, the number of apprentices in training was about 8,000. Today it is 22,000, of whom 18,000 are in England, 1,500 in Wales and around 2,000 in Scotland. While we have not reached the required number, we are surely moving in the right direction.

Engineering work-based learning was almost universally seriously under-funded under the training and enterprise council system, although payments varied from TEC to TEC, and a small minority of TECs operated a system of differential funding between sectors which resulted in a reasonably realistic and equitable payment for engineering. But the majority did not, resulting in serious under-funding and great disparity between different TECs.

The majority of TECs paid an average of £6,000 to £7,000 over the three to four-year period for an advanced modern apprenticeship in engineering, although some paid a good deal less. The direct costs of education and training for an engineering modern apprenticeship, excluding any direct employer costs, such as trainee wages and work-based supervisor, trainer or mentor costs, are between £13,000 and £16,000, depending on the level and complexity of the training.

Given that background, one might expect the engineering community to be pleased with the national rate for an engineering modern apprenticeship set by the Learning and Skills Council of £12,130. The reality is that, for the moment anyway, few, if any, employers or training providers receive anything like that amount because of cushioning and damping arrangements introduced for 2001 and 2002.

There is now a new set of arrangements for funding modern apprenticeships, with the funding being made available by the LSCs, recognising the expense to employers of providing places and the higher value-added outcomes. However, in England the funding is only available for the training of 16 to 18 year-olds. For those employers who train people over the age of 19 years of age, the funding available is only 56 per cent of the national rate. The industry is particularly keen to attract people aged 19 and above. This funding is not available at all for those over the age of 25, except in Wales.

So the engineering industry continues to take its concerns about these arrangements directly to the LSC. But, in closing, perhaps I may urge the Minister to reinforce the concerns of the industry.

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3.48 p.m.

Baroness Walmsley: My Lords, I thank the noble Lord, Lord Dearing, for initiating this debate and for giving us the opportunity to question the Government's track record and future intentions in relation to the resources needed to provide this country with a world-class education system.

The Government claimed in 1997 that the priorities for their first term of office would be "Education, education, education". However, as the noble Lords, Lord Dearing and Lord Puttnam, have mentioned, the resources devoted to education as a percentage of GDP have fallen during their term of office. That says a good deal about the Government's actual priority as distinct from their election rhetoric.

In its first term Labour squeezed education spending to its lowest share of national income for 40 years. The Labour spin machine has done its best to mask that. The notorious £19 billion additional investment announced in the 1998 Comprehensive Spending Review was derived through double and treble counting. When inflation was taken into account the £19 billion figure fell to just £6.1 billion. Less than half of the £17 billion for school repairs announced since September 2000 will materialise.

Reform in the primary sector was supposed to be the success story of Labour's first term. It pledged to reduce the maximum class size to 30. In April last year, more than 1,000 five to seven year-olds were still in classes of 30 or more. The squeeze, where successful, has been at the expense of other age groups. Parents whose children were five in 1997 now see their nine year-olds suffering the consequences. Secondary school class sizes are now larger than they have been for 20 years.

As with many things, good education is built on good foundations. That should be found in the early years setting. Although the Government have put additional resources into nursery education, there is still a long way to go and there are questions about the quality of much provision. There can be few better investments for the Government in the education sector than raising skill levels in early years. Money is coming in now, but the so-called prudent policies of the Government's first term left many children with either no place or a place where the staff had low levels of qualification.

In addition, many of the problems found in other parts of the education system are seeping down to early years. Classroom disruption is an increasing problem and the age at which it becomes an issue of concern is falling. Early intervention is essential. That requires continuing professional development for teachers, with consequent resource implications and extra cash for on and off-site intervention units.

Many discipline problems are the result of issues outside the school that affect children's ability to cope with the stresses of school life. I have just returned from a visit to Japan during which I visited a school and was amazed to learn that every school has a professional adult school counsellor available on the

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staff to advise and support children and teachers. How wonderful it would be if we could have the same provision here.

Instead, we have charities such as the National Society for the Prevention of Cruelty to Children, with which I have a non-pecuniary association, running counselling services to fill the gap. Although there is a good case for those services to be outside the perceived authority of the school, there is also a case for government financial support to help such initiatives flourish. Such services do not come cheap but they are cost-effective because they often save greater cost later.

Effective early intervention also requires joined-up thinking and action between professionals across education, health, social services, youth services, housing and law enforcement. One aspect of last week's Budget that most concerns me is the danger that children's services budgets will be attacked as local authorities struggle to pay their increased national insurance bills and at the same time achieve the Government's targets on bed blocking to avoid the financial penalties of failing. The extra money to address bed blocking is cancelled out by the extra bill for national insurance, so where is the money to address bed blocking to come from if not from children's services or other hard pressed budgets? Perhaps the Minister would like to explain.

Schools and colleges are also facing another major resource problem. Last year the Special Educational Needs and Disability Act 2001 came onto the statute book. However, despite their good intentions, the Government have not provided adequate resources for our educational institutions to implement it. The result is that many schools and colleges face bills for capital and current provision that they simply cannot meet.

The combination of those two problems could cause chaos in our schools. It is all very well setting the agenda and laying down targets, but the Government have a habit of failing to provide the resources to meet their aspirations and then blaming someone else when they are not met. Passing the buck to schools, local authorities, social services, and so on, has become a nasty habit that I wish that the Government would kick.

Of course, resources are not just monetary. In a service such as education, it is human resources that matter most—that is, the teachers and support staff in our schools. In some areas, we have a real crisis of resource shortage. The Minister will undoubtedly be as tired of hearing me highlight the shortages of mathematics and science teachers as I am of highlighting them. I wish that that were not necessary. Sadly, we seem to be in a downward spiral that it will take a major effort to halt. Lack of specialist maths teachers means children uninspired to study maths and a consequent shortage of the mathematicians and maths teachers that the country needs.

Creative initiatives backed by adequate resources are needed to inspire our young people to choose maths and to choose teaching. Perhaps I missed

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something, but I did not hear the Chancellor promise more money to help schools address those problems last week.

Many schools are slipping through the net. In last week's Times Educational Supplement, there was an interesting case of a primary school in one of the lowest-funded counties—Staffordshire. It was not in an Excellence in Cities area or an education action zone; it was not a secondary that could apply to be a specialist school; not a small school; not a this, that or the other that attracts extra cash. And it found itself £18,000 in the red. If ever there was a case for levelling up, not levelling down, that is it.

To summarise the common thread running through my remarks, it is dishonest of the Government constantly to set targets and promote policies but not provide the necessary resources to the agencies that must carry them out. To then beat those agencies with the stick of league tables and financial penalties for failing to meet the targets is the final insult.

3.56 p.m

Lord Moser: My Lords I, too, express my gratitude to my noble friend Lord Dearing not only for introducing this important debate but for a series of a remarkable educational reports that bear his name.

The broad background is clear enough, although it may help if the Minister clarifies the overall figures. We are spending about five per cent of our gross domestic product on education—that has gradually crept up during the past few years after considerable decline. That is still a little below the Organisation for Economic Co-operation and Development average, especially in our spending on higher education. Several major countries spend a good deal more. Perhaps the Minister could give us a summary statistical picture. In any case, there is certainly no cause for complacency.

I wondered whether to speak about basic skills, with which I am involved, secondary schools or the teaching profession, but decided to devote my few minutes to universities. That is because, in a strange way, the universities have lost their place in the Government's thinking and priorities. Although I do not want for a moment to lessen the priority given to schools or basic skills, I shall speak about universities.

I must declare an interest. I am Chancellor of Keele University and am closely involved with Oxford University and the London School of Economics.

My mind goes back to the historic Robbins committee, on which the noble Lord, Lord Layard, and I both served 40 years ago. Among other things, we recommended a substantial expansion, which was implemented. But no one could conceivably have predicted that 40 years on a third of the age group would be going into higher education—still less that the Government would be aiming at 50 per cent.

The route to today's mass higher education system has been dramatic. There are now far more universities, which have coped remarkably well with a vast increase in numbers. They have widened their offerings of academic courses and research and—this is not always appreciated—have greatly increased

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their links with industry and communities. Those are fine achievements, the reward for which, as the noble Lord, Lord Dearing, said, has been considerable cuts over the years. In spite of that, the main government emphasis is on further expansion to 50 per cent of the age group. I suggest most strongly that that should await a tidying up of funding—not just student finance, which we often discuss, but overall funding—so that universities can offer those students the decent quality teaching and research backing that is their prime function.

I shall confine myself to two points that illustrate why government funding arrangements will force the university world into a period of decline. First, academic salaries are at a truly ludicrous level, well below all comparable occupations, not to mention the City. Twenty years ago, the average professor was paid the same as a Treasury under-secretary; today, the under-secretary—perhaps not deservedly—gets twice as much. No wonder that it is hard for universities to recruit and retain high quality academics. Moreover, it is an ageing profession. By 2010, nearly 50 per cent will be eligible for retirement. Add to that the expansion presumably required to cope with the targeted 50 per cent student intake, and one sees the scale of what can truly be described as a crisis into which years of underfunding have lead the universities. The quality of the academic staff—not their fault—is at issue.

The latest research developments make things worse. The recent research exercise showed remarkable research advances throughout the universities, which was good news. The financial response from the Government was bad news. We were told that the outcome was that there was no more government money to finance those admirable research activities. The actual outcome is that 50 per cent of research funding will go to five leading universities. I am all in favour of a flow of money going to our leading universities. We need our Harvards, Yales and Princetons, and we have them. They need every bit of support. However, it is worrying that the other 50 per cent of funding is spread between around 90 universities. That means that even well graded research departments, including those graded 4, must—remarkably—cope with a considerable decline in research money. They have been graded highly but will get less money because of the limitation of research funding. That is another discouragement to the profession.

Those two critical problems—salaries and research funding—bear on the quality of what universities, through no fault of their own, can offer the vast number of students. Both stem directly from the decline in funding over the decades. I refer your Lordships to recent reports from HEFCE and Universities UK, which show the serious implications of those trends. If noble Lords want lighter reading, they might turn to the recent brilliant lectures by Simon Jenkins at University College and the Master of Peterhouse, Cambridge. Those lectures show what has been happening to our universities.

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My main point is that the spending review, which we look forward to seeing in the summer, is crucial for all of the education sector, as the noble Lord, Lord Puttnam, said, and not least for higher education. Every day that goes by, I care more about education, just as I care about health. The Prime Minister's priorities—education, education, education—are crucial, and I hope that the Government will allocate one of those "e"s to higher education.

4.4 p.m.

Lord Haskel: My Lords, the noble Lord, Lord Dearing, has consistently put the case for more resources for education and training for more years than, probably, he would like to think. I congratulate him on doing so yet again.

We all agree that a well educated, highly skilled and well trained workforce is essential to success in the modern economy. What stands in our way? Perhaps it is history. In the past, many in education regarded vocational and technical subjects as second-class. Some academics still hold that attitude, but, thankfully, it is being overcome. Since May 1997, the Government have started to tackle the discrimination against vocational training. As the noble Lord, Lord Trefgarne, told us, there will be GCSEs in subjects such as management and engineering. However, we are still at a disadvantage because we start from a lower base than our competitors.

Where is the barrier to the call from the noble Lord, Lord Dearing, for more education and skills in the economy? Could it be within the business community itself? However successfully the Government and the education sector provide the policies and resources for an educated and skilled workforce, their action alone cannot bring about the changes necessary to make a real impact on the problem of low and absent skills.

There must be a partnership with business, and business must play its part. Fortunately, many companies and businesses do so. Some of our companies, such as Ford, BAE Systems and the company with which the noble Lord, Lord Browne of Madingley, is associated do a wonderful, remarkable job. However, many do not consider training to be a top priority. Their view is that the manager's duty is, above all, to pursue increased share value by any means possible.

There are all kinds of ways of improving share value that are faster and less risky than investing in training and skills. A company can move into the currently fashionable sector of business, engage seriously in financial engineering or come to an informal arrangement with competitors. The Office of Fair Trading announced this week that it uncovered one cartel every month. We now know that, if someone does business with the right bank or brokerage house, their analysts will talk up the share price. Companies can outsource their work and avoid the cost of training altogether. As the noble Lord, Lord Dearing, reminded us, they can even move their business to a country where costs of labour and standards of employment are lower.

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Skills training must have a bigger impact on share value than some of those activities. For that to be achieved, there must be a real commitment to productivity and a longer timescale. Fortunately, we have a growing number of companies whose leadership is guided by such thinking. Certainly, they are focused on results, but they are also concerned about clients, about adding value, about making a difference and continuously improving what they do. Such companies are concerned about improving relationships with employees, customers, suppliers, investors and the community.

Such leadership provides a sense of purpose; the employees know what the company is trying to achieve and what role they can play. It removes the insecurity created by the feeling that, as a result of improved productivity and efficiency achieved through training and skills, employees will cut their own throats because the company will be downsized. That kind of leadership encourages people to become more literate and more numerate and to acquire the IT skills that enable them to work more effectively and earn more. It offers every encouragement and facility for employees to move up from one level to the next because year-on-year skill requirements are rising. It recognises that, today, technical experts are increasingly expected to incorporate management into their daily work and encourages them to acquire the relevant skills.

Those are the partners that my noble friend the Minister should seek out. That is the means whereby our investment in education will be converted into the improved industrial performance we all seek. My point is simple: if our economy is to benefit from the work of the education sector and the Government's efforts to raise the performance of our workforce through education and training, those efforts must be matched by a leadership culture in business and industry that looks beyond the narrow confines of the financial markets.

4.10 p.m.

The Lord Bishop of Portsmouth: My Lords, I am grateful to the noble Lord, Lord Dearing, for initiating this timely debate. I want to begin by welcoming the Chancellor's promise in his Budget speech to,

    "increase significantly the share of national income devoted to education over the course of this Parliament".—[Official Report, Commons, 17/4/02; col. 588.]

The additional £270 million package announced last week was good news, though I imagine that some will say, "About time too!". In particular, I want to welcome the £87 million targeted at addressing issues of behaviour in the classroom. However, I hope that the increased highlighting of special needs in schools is matched by resourcing of both staff and accommodation.

On a visit to the Isle of Wight yesterday, I had the opportunity to see the excellent work done at the Bishop Lovett school at Ryde where 30 per cent of the pupils have special needs. Such schools are working

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extremely hard and they need more resourcing. I think of other schools such as St Luke's in the centre of Portsmouth.

I would also urge that further money be released to go beyond the 33 hot-spot areas which have been identified. While it is heart-warming to hear of the Chancellor's generosity towards the world of education, I want to make a couple of points which I would not want the House to lose sight of in the longer term.

First, the Department for Education and Skills announced on 19th March a consultation process to make the National Professional Qualification for Headship a mandatory requirement for first-time head teachers. That points up the fact that schools are reliant to a great extent on the quality of the leadership team, both in terms of direction and strategy on the one hand and vision and affirmation on the other. But while no one would doubt that raising the overall standards of schools is affected in a significant way by the quality of leadership, the standards in the classroom lie very much with thousands of teachers who day by day share in the lives of our children, young people and increasingly those in adult education.

I believe that we under-estimate the value of our teachers and that is reflected in their resourcing. None of us would argue with providing teachers with better classrooms, more facilities and enhanced working conditions. But we still have not yet moved to a position where ordinary classroom teachers are remunerated in proportion not only to their professional skills but also to the impact they have on the lives of children and young people. Here I recall with great warmth a lecture given by the noble Lord, Lord Moser, in Portsmouth University some years ago where I happen to be a governor.

I am happy to talk about the notion of vocation and I believe that to be critical in sustaining people through the sometimes thankless periods of their lives. However, I fear that in the case of teachers the notion of vocation has often been used as a cloak, to put it bluntly, for avoiding paying them properly for the key role that they play in our society. Who has the most fundamental impact on a child's life outside the family? Members of the medical profession will do so at particular stages and, unfortunately, other public servants in the emergency services will also be called upon from time to time. But none comes anywhere near to the shaping and formation which takes place in school above and beyond the academic achievements which we rightly celebrate.

The second point I want to make concerns building effective partnerships. The Secretary of State, Estelle Morris, speaks of a "shared vision". I concur with the view expressed in the strategy document that,

    "successful delivery will depend on strong and effective relationships with many partners".

The words "partner" or "partnership"—we all have computers which can call up the number of times words are used if our memories are of no help in that regard—are mentioned 14 times in the document.

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Fortunately, I do not use those words as often in my sermons, but there we are! It is a deeply spiritual concept, joking apart.

I believe it to be a key practice in education. However, the recently announced Budget package makes little mention of this. I urge the Government to consider thoroughly how such partnerships can best be funded. In the SRB world, partnerships between business and education and Government are often difficult to sustain beyond the given period after which the whole thing has to be argued for again. Good as SRB developments are, I hope that lessons will be learnt from that.

Where voluntary organisations are working in partnership with local education authorities, it would seem that those with a stake in education are being hit by a kind of "doubly whammy". Not only do they pay for education through taxes, they are also often making voluntary contributions to other organisations.

I want to conclude by saying that the notion of "life-long learning" has not only been a significant development within educational philosophy over the past 20 years, but also in practical terms a fundamental feature of the way in which the worlds of education and employment have become explicitly connected. This is undoubtedly part of the back-drop to the creation, following last year's general election, of the Department for Education and Skills. It has led to a broader perspective—one which I wholly support—of seeing education as a continuous process in which there are any number of particular stages, rather than the somewhat curtailed versions experienced by another generation.

Fundamentally, education has to be available and attainable for children, young people, as well as adults—that is, if we are to take seriously the constantly changing needs in the workplace and home.

4.16 p.m.

Lord Sutherland of Houndwood: My Lords, I, too, am grateful to the noble Lord, Lord Dearing, for many things, including his many vigorous and rigorous contributions to the furtherance of education of which today's speech was another example.

I was particularly taken with the statistics of the noble Lord, Lord Puttnam, who pointed out that in the 1950s and since we seem to have had as a national policy disinvestment in education rather than increasing investment. Indeed, I was taken back to my boyhood in the 1950s, to the "Goon Show" and the remarkable song which began, "I'm walking backwards for Christmas". As a merry youth, I did not realise that that was a statement of government education and investment policy. The difficulty is that Christmas has not come.

Perhaps I may declare an interest. I am employed by the University of Edinburgh. Inevitably, therefore, my remarks will be from the academic coal face. Although I would wish to speak on many aspects of education, I shall restrict myself to higher education.

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A point I want to make immediately is that a fixed epithet is often attached to the word "vice-chancellor"; it is the word "whinging". Perhaps I may try to deconstruct that notion immediately by first congratulating the Government, the Office of Science and Technology, the DTI, and through it the Treasury and the Wellcome Trust on the major investment in research infrastructure which has taken place over the past two or three years. The investment of £1 billion is significant and is recognition of the quality of research in our universities. It is capped—I make the point explicitly—by the institutions with the help of their friends in industry and business and other funding sources. They are alive to funding sources outside the state system of at least a further £250 million. That was the condition of receiving funds from the Budget. I congratulate the Government and the OST on that.

But—and there is bound to be a but—that investment was the recognition of the reality of which we have been speaking today. It is the reality of years of under-investment. I simply plead with the OST and through it the Treasury that in the coming spending review they find ways of entrenching at least that level of investment in the system over the years to come. A one-off bonanza is marvellous—if you hit the target and have good bids you do well, as did my own institution—but it is not a recipe for long-term growth and ensuring steady research, training and skills at the highest level in ways that are necessary for our economic future.

We have been under-investing in our universities. But, somehow, despite views to the contrary, the universities have continued to deliver more and more for much less. It is thought that universities cannot manage themselves. There has been reference to that. We do not manage ourselves; in most of the universities that I know and certainly in those in which I have worked, there are excellent governing bodies aided by superb help from captains of industry, from those in business and the local community. They have all helped us to manage what I consider has been a spectacular success.

But that success has been bought at two prices—first, a very significant cost to the infrastructure. Report after report has indicated the difficulties. I have referred to research infrastructure; I should stress that teaching infrastructure is as much in need of support and investment. If we are to broaden the base of students coming into university, we must have the facilities that allow us to do that. We want to produce graduates, not people who drop out or fail at the end of the first or second year.

The second cost, to which reference has already been made, is that borne by our staff. I shall not repeat the points made by my noble friend Lord Moser, but university staff salaries have significantly fallen behind all relevant comparators. One might ask whether that matters. We still have university teachers, so perhaps the market is settling itself at a lower level.

I shall give the House three reasons why it does matter. The first is international comparisons. If one calculates the adjustment to the relevant OECD

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figures for comparative academic salaries, we fall somewhat below Spain and just above Greece. Spain and Greece are marvellous nations, but they are not the natural benchmarks if we wish to succeed in developing a highly geared, technology-based economy with the kind of skills developed at the highest levels that the universities can produce. Our benchmarks have to be countries like Canada, the US, Germany and so forth. Those are not the benchmarks against which we are performing as a nation. Again, I hear some ask whether that matters. It matters because the employment world for academics is an international one; the best academics can work anywhere in the world. Unless we can recruit and retain the best people over here, again our contribution to the education and skills necessary for our economic and cultural development will fail.

The second reason is the comparison with other professions, a further point made by my noble friend Lord Moser. I shall therefore move on to the third reason and cite only one example to illustrate the fact that there are shortages in many key areas of teaching. A recent survey of computing science departments in British universities indicated that more than 90 departments are currently carrying vacancies, while almost 13 per cent of those departments have vacancies running at over 20 per cent. That has happened because we cannot afford to recruit and retain staff in a very competitive area of our economy.

Until last week, those points would have formed the substance of my speech, but in conclusion I should like to make one further point. This matter was discussed earlier at Question Time: national insurance contributions. Perhaps I may cite my own institution to illustrate what the new proposals will mean. The employer's contributions for my institution will amount initially to £1 million a year, so I shall have to tell my staff that, yes, they will have to pay 1 per cent more in tax. That is a matter between them and the ballot box, although personally I do not mind because I would rather be honest and pay the extra money in the form of tax. But not only will my staff pay 1 per cent more in tax; there will be roughly 40 fewer junior lecturers in the institution to help my staff next year. They should not count on there being many weekends free of marking even more essays and looking through even more lab reports.

4.24 p.m.

Baroness Massey of Darwen: My Lords, it is a great pleasure to speak in a debate initiated by the noble Lord, Lord Dearing. On the last occasion he spoke in this House, he had just rushed in from Barnsley, but was nevertheless as impressive as ever in his eloquence, wit and knowledge. He is no less so today and I thank him for initiating this important debate.

The noble Lord spoke of investment in people, which I agree is vital. He spoke also of the need to cultivate a diversity of skills; again I agree that that is vital. Resources of any kind for any service need to be targeted, appropriate, cost-effective and monitored in order to test their effectiveness. Today I want to discuss two initiatives in education which comply with

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those criteria. They invest in people and develop skills. I refer to the Sure Start programme and the National Healthy Schools Standard.

As a governor of an inner city London primary school, I am well aware of the importance to education of that vital resource, teachers—and how to recruit and retain them in the inner cities. I know that it also concerns my noble friend on the Front Bench. No doubt she will wish to comment on this issue when she comes to respond to the debate.

I shall focus on Sure Start and the National Healthy Schools Standard because I think that both initiatives illustrate what resources for education and skills should be about; namely, raising pupil achievement, promoting social inclusion and addressing health inequalities. Both programmes have also used processes of implementation which I believe the systems in education and health could learn from. Both are being evaluated; both include partnerships—a point mentioned by the right reverend Prelate the Bishop of Portsmouth—and both are moving forwards.

In addressing the basics of how young people are encouraged to achieve, not only academically but also socially, we have to address how their needs are met and how their confidence can be built up in the early years—a point mentioned by the noble Baroness, Lady Walmsley—and then by the ethos of a school.

The Sure Start programme was initiated by the Government in October 1999 with an initial budget of £452 million to cover three years. Its aims are to work with parents-to-be, parents and children to promote the physical, intellectual and social development of babies and young children, in particular those who are disadvantaged, so that they are stimulated at home to perform better when they get to school. Its principles involve using culturally sensitive programmes to encourage families to participate. By now, some 259 such programmes are in operation. The next 177 programmes have been announced and should be in place by next summer.

The Sure Start programme works across government departments and local networks, including parents, local education authorities, social services departments, local NHS structures, voluntary and community organisations. It provides an excellent example of partnership building.

A large-scale, long-term national evaluation of the Sure Start programme began in January 2001. I have selected only a few indices here, but early findings indicate that local links to other services are good, that parental involvement is high—including management of the local programmes—and that support to parents and families is marked, including links with local education institutions to encourage parents to take up training or education. Programmes support new mothers by providing ante-natal and post-natal care, including smoking cessation programmes and breastfeeding advice.

The reason I consider this programme to be a vital resource is because it begins in the early years, offering support to and involving parents and communities,

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thus empowering people to make the programme sustainable. It is at this stage that young people learn fundamentally how to operate in society and how to develop and use opportunities. We all know of the difficulties faced in adolescence. However, by then it is too late to expect resources of whatever kind to compensate for a lack of security and motivation.

I shall turn briefly to the National Healthy Schools Standard, an award for schools established in 1998, funded jointly by the Department of Health and the Department for Education and Skills. The budget for 2002-03 is £7.5 million. The programme promotes physical and emotional health by equipping children and young people with the attitudes and skills to make informed decisions about health, which can then be transferred to other areas of life. Investing in health, of course, assists in raising levels of pupil achievement.

The National Healthy Schools Standard encourages schools to provide a physical and social environment which is conducive to learning. Every LEA is now working in partnership with health to develop local healthy schools programmes. Almost 14,000 schools out of a possible 25,000 are accessing quality assured training services provided by those programmes. A review undertaken in 2000 by Ofsted stated that the National Healthy Schools Standard award has helped to improve working between LEAs and health service structures, and has helped to develop school policies such as drug education and citizenship. Programmes have been instrumental in making improvements at both primary and secondary levels in the behaviour of pupils, standards of work in the classroom and the quality of personal and social education programmes.

When we are examining the resources needed to develop education and skills, we do not always need expensive technology, although IT is a great bonus. I return to my original premise, that raising achievement, promoting social inclusion and addressing health inequalities are fundamental to education and skills. The two programmes that I have mentioned cost less than they might through good-will and joint working. Their depth, consistency and impact are worth noting. They cost less than picking up the pieces or trying to compensate by putting extra resources into dysfunctional children or families at a later stage.

Children deserve resources which are carefully designed and implemented. The programmes that I have discussed provide examples of what engages and inspires people to be involved in decisions about their lives. Again as the noble Lord, Lord Dearing, said, investment in people is crucial. Does the Minister agree that resources such as the two I have mentioned are invaluable?

4.31 p.m.

Lord Chan: My Lords, I congratulate the noble Lord, Lord Dearing, on securing the debate. I thank him for asking me to speak on a subject that is the cornerstone for the success of the Government's policies, particularly in health and social care. I must

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apologise to noble Lords. I am unable to stay to hear the Minister's reply as I have to be in Liverpool to chair a meeting this evening.

I want to focus on the future needs of the National Health Service for skilled professional people with compassion and sensitivity to deliver a service of the highest quality that everyone expects.

The Secretary of State for Health said in his address last Thursday on Delivering the NHS Plan that by 2008 he would expect a,

    "net increase of at least 15,000 more GPs and consultants, 30,000 more therapists and scientists, and 35,000 more nurses, midwives and health visitors".

The achievement of these large increases in highly skilled professional people in so short a time will require at least three key conditions: first, increased sustained recruitment of students and graduates; secondly, more funds for training institutions and support to enable students to afford the fees and costs of training; and, thirdly, new innovative training courses that prepare new graduates to provide the health and social care services that people need.

In order to motivate and attract the kind of people needed by the NHS, more attention should be given to inviting prospective candidates to visit primary healthcare centres, hospitals and laboratories that support the health service. There should be opportunities for them to go on structured visits, to shadow health professionals and to accompany them on visits to homes. This exposure to real patients and the actual workplace would help to select future NHS staff with the appropriate attitudes to patient care.

Education and training courses in medicine, nursing and health-related sciences cost more than other academic courses because they involve contact with patients and take longer. The current estimate is that a university student will accumulate about £10,000 in debts from student loans over three years. For a medical student the debt will be £16,000 after five years. Clearly the Government need to consider supporting students, particularly those from families with modest incomes, in order to enable them to pursue training in healthcare professions. Failure to do this will perpetuate medicine, for example, as the preserve of the children of professional families.

Although the undergraduate medical and nursing curricula have undergone changes in the past three decades, the pace of change has not kept up with the reality of a health service increasingly used by people, inadequately funded and inadequately staffed. The expectations of the public and patients have risen rapidly with advances in information technology. Demand for acute medical and health services has also risen steeply because of drug and alcohol abuse, particularly among young people. About one-third of all cases in our accident and emergency departments in hospitals result from alcohol abuse.

What then will constitute an appropriate curriculum for our medical and health professionals of the 21st century? It will have to be an integrated curriculum for doctors, dentists, nurses and other

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health professionals. Causes of premature death and disability must be addressed—in particular, lifestyle-induced diseases of the heart, lungs and blood vessels, sexually transmitted diseases, obesity and diabetes, to mention a few. Health inequalities associated with poverty, deprivation and ethnicity should be included in the curriculum. Public health, with its emphasis on prevention of disease and the maintenance of health, will need as much prominence as treatment of diseases.

I therefore look forward to the outcome of the development in the next two years of the new "common learning" programmes for undergraduate health professionals announced by the Health Minister, John Hutton, on 14th February this year.

The Government need to focus their attention and funding on all these issues in regard to the training of health professionals if the NHS Plan for a better health service is to be achieved in the next five years.

4.36 p.m.

Baroness Carnegy of Lour: My Lords, the noble Lord has made a very important contribution to the debate. As other speakers have pointed out, large sums of money will be needed if the education service is to do its job.

I should like to comment on an aspect of what the noble Lord, Lord Dearing, said in regard to one area where the nation need not wait until the next spending review. Some of your Lordships—the professional educators and councillors among you—may think I am over-simplifying, but I am entirely unrepentant about that.

This week the secondary school league tables were published in Scotland. They contain only pass numbers and percentages at standard and higher grade levels, but it is interesting to make comparisons, on that level alone, between schools and locations with which one is familiar— for example, between two schools in country towns a few miles apart with similar catchment areas. Those schools show roughly the same percentage of passes at Highers level—the equivalent of A-levels—but at standard grade one school achieved very much more than the other.

Looking elsewhere on the list, at comparative city schools as well as those in local towns, the same evidence appears. The unevenness that is unexplained by catchment area is in the standard grade achievement; the unevenness is in what schools have done for their least able pupils; the unevenness is in the number of young people leaving school with little or nothing to show for the 18,000 hours they have spent in classrooms.

Your Lordships will accept that that unevenness is not peculiar to my part of the country or to Scotland. Surely a top priority at this time must be the young people whom school is failing, the ones who form the gap in the league tables because they achieve so little. We must surely concentrate on them above all, not only for their own sakes—although that is the most important reason of all—but because to improve their lot will be the key to so many other of our national problems—the youth crime on our streets, the drugs

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and drink and bad diet, teenage pregnancies and single motherhood, employers' recruitment problems, the universities' difficulty in widening access, the apparently unchanging large number of adults lacking basic reading and calculating skills.

Of course, the problems are not new, but the need to tackle them is increasingly urgent. Surely, this Government, with their stated commitment and enthusiasm for social justice and their big House of Commons' majority, should have the strength to stand up to the excuses which continue to be made within the system and insist.

Is the difficulty due to funding? The difference between the schools I have mentioned is not financial—they have similar funding regimes—nor is it the formal curriculum, which is broadly shared. The difference is what interests and motivates the young people most; what the schools are like to be in; how they feel and how they feel to the parents. It is also in the informal curriculum such as sports, clubs, societies, expeditions, drama, and the relationship with staff which those informal activities offer. It is in the hidden curriculum, the atmosphere, the attitude to individuals within the school, to visitors, the attitude to uniform and the whole ethos of the school.

Some schools can do it. Some are motivating those most difficult to motivate. Others in similar circumstances are far less successful. Should not the Government now start a big campaign, not by producing yet more targets to be met and bureaucracy in measuring those targets, but asking schools, each in their own way, to pool experience and challenging them to do better for the less advantaged? We all know that the need is there and we all need to meet it. Should schools themselves not make a huge effort to do better in this way when they are not succeeding?

I believe that it is a matter of will; of political will; of will in education and among our people. I believe that the Government could do a lot to give a lead on this.

4.42 p.m.

Lord Quirk: My Lords, in gladly joining the debate of the noble Lord, Lord Dearing, I start with a word on the problem of attracting, recruiting and retaining good teachers, surely the most important and vital resource in education. In addition to inspiring our own teenage young with the prospects of a rewarding career, there are other possibilities. One is to look abroad, as we have done with teachers and nurses. As it happens, I am against overseas recruitment if it means filching teachers from countries like South Africa where the need is even greater than ours. But nearer to home there are countries such as Germany and Poland producing a buoyant supply of graduates well able—thanks to a good education system—to teach maths and other shortage subjects in English. We should be looking at that rather more carefully than I suspect we are.

I also wonder about the possibility of second-career attractions being offered to men and women in their 40s. Are Ministers studying the model presented by the Alternative Certification route in the United States? It

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has a 20-year track record and according to the Economist last month, it is now the means whereby about one-third of all teachers in the United States enter the profession. It is a quick way of tapping into the academic knowledge and also the life skills and experience of people who have a real contribution to make in the classroom. Moreover, it seems to be a recruitment stream especially favoured by men and ethnic minorities. They are just the people, one may say, that we need in our inner city schools. Do not let us forget that we have vacancies for 2,000 in London alone, and needs too in the prison education service to which I now turn.

Successive governments have acknowledged the crucial role of education if those emerging from young offender institutions and from adult prisons alike are to have any chance of getting regular employment and going straight. Yet we all know how little has actually been achieved to improve matters over the years. I drew attention just a year ago to the fact that in HMP Birmingham only 60 out of 1,000 inmates were on proper education or vocational courses. Last month I noted that in HMP Wandsworth only 90 of 1,400 inmates could be in classes at any one time and that the education facilities were in use for only 20 hours a week.

I happily acknowledge that there has been notable progress over the past year with responsibility for education and training being transferred with ring-fenced budgets to the Department for Education. I welcome, too, the establishment within the DfES of a prisoners' learning and skills unit, just as I welcome innovative schemes like "Learndirect" now being piloted in several prisons. I have high praise for the splendid volunteer work done by bodies such as the Prisoners Education Trust, which is doing remarkable work on an annual budget of less than £200,000 a year.

But how much remains to be done. Provision is still inexplicably uneven across the Prison Service and woefully inadequate overall. Even with the planned increase to £62 million in the financial year 2002-3, this works out at only about £600 per head for education per annum as against the total cost of incarceration, which is well over £25,000 per head per annum.

We get some idea of the continuing problem from the report on the young offender institution, Deerbolt, by Ms Anne Owers, published last month. Deerbolt, she says, is "one of the better" young offender institutions, yet it,

    "suffers from insufficient investment in regimes and activities",


    "education places for only 30% of the prison population at a time",

the rest being locked up in their cells for "up to 23 hours" at a stretch: and that is one of the better young offender institutions.

Nor is that all. There is the little matter of priorities. The otherwise praiseworthy drive to raise basic skills seriously misses the point. Ms Owers reports that the education targets do not meet the needs of most young people there. Sixty per cent of them are functionally illiterate; that is to say, below Level 1 in basic skills.

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But the Prison Service targets focus on Level 2. Praiseworthily, Deerbolt is exceeding those targets, but at the expense, she says, of cutting by one-third the lower level courses that nearly two-thirds of the population of Deerbolt needs. That was Ms Owers only last month. But her message is exactly what her predecessor, Sir David Ramsbotham, told me in a letter two years ago.

There is one final point. The 60 per cent who are below Level 1 deprived themselves of education through exclusion or bunking off as 10-year olds. But now many see the light and are keen to make up for their deficit in education and skills. Those who are not might well respond to the kind of deal suggested by several of us, most recently by the noble Lord, Lord Dearing, himself, of remission time being negotiated in return for courses passed. That would be a double gain for us because, first, it would be a reduction in the enormous costs of our Prison Service and, secondly, an increase in the number of those released who would have some chance of entering an honest career thereafter.

4.50 p.m.

Baroness Warnock: My Lords, this is an extremely timely debate. I join in the expressions of gratitude to my noble friend Lord Dearing not only for initiating the debate but also for introducing it with such vision and for putting our present predicament into its historical context.

I have nothing to say that has not been said or will not be said more eloquently by others. But for those of us who have spent our entire lives in education it is our absolute duty to state the facts even if that means restating the obvious.

The fact is that it will be impossible for the Government to meet their manifesto undertaking—the target of 50 per cent of school leavers having some experience of higher education—without investing an enormous amount of money in education, not at some future date but now, immediately, this summer. I agree strongly with my noble friend Lord Moser that that target cannot be met without money first being invested in schools. The target should be removed until the performance of secondary schools has improved greatly, as I believe has the performance of primary schools as a result of government initiatives. I disagree with the somewhat gloomy remarks on primary schools of the noble Baroness, Lady Walmsley. The Government have made a clear commitment to primary education and there is a great deal of evidence that it is beginning to work. But the same cannot be said for the secondary schools.

Again I make an obvious point. I refer to the difficulty of obtaining and retaining good teachers. No one can pretend that it is not a matter of money. Teachers have themselves to be educated. They have to be trained. But, above all, they must be paid a proper salary which does not place them at the bottom of the professional pile but reflects their worth.

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That has further consequences. As we all know, the cost of housing now makes it impossible for teachers in a large number of areas throughout the country to live anywhere near their place of work. Therefore, teachers are bound to leave London, Birmingham and other areas where they are urgently needed because they simply cannot afford to live there.

The other obvious fact is that the universities will be unable to provide higher education for new students without millions of pounds being provided to them through the funding council. If higher education is not only to retain some elements of its old-fashioned use of academic education but also to expand to cover all the kinds of education about which we have heard today—and it must do so; otherwise there is no point in these vast numbers of people having the experience of higher education—then teachers of higher education must be found. They will not be found if they are not given, first, a proper salary; and, secondly, an opportunity for research. In many cases, people go into higher education to combine teaching with research. I maintain that the best university teachers combine teaching with research. We cannot find those people—and certainly not among young people. There is still a body of university teachers, as I well know, but they are all knocking on a bit. They are not likely to find replacements for themselves without a serious rise in the standard of living for university teachers.

I have to declare an interest. The university that I know best is Oxford. It is quite astonishing to reflect on the comparative wealth that we enjoyed when I was in my 20s, 30s and 40s: the houses we lived in; the schools to which we could expect to send our children; and the status now of university teachers. I take one example. The Dragon School is an independent preparatory school which all my five children attended. University members of Oxford's community are barely represented among the parents of those at Dragon School. They cannot afford that kind of education. Neither do they live in the kind of houses that we were able to live in. The real drop in the standard of living of university teachers is extraordinary.

I conclude with an important point. One of the most remarkable aspects about teaching in Oxford was that we attracted undergraduates from overseas. Many of them having already gained a degree from their home country took another undergraduate degree in Oxford. I cannot help thinking of the wonderful Rhodes Scholars we taught at Oxford. Those people are beginning no longer to want to come to this country. Why should they want to do so? Last week Sir Howard Newby said that the top priority of the funding distribution was accessibility of universities to people from deprived backgrounds and the outreach of universities into the community. If you are an undergraduate from Harvard or Princeton, or from wherever it is in Germany, why would you want to come to a university which, because of those priorities, is degenerating, being allowed to crumble, not having the academic aspirations that it used to have? I believe that the loss of overseas undergraduates will be very serious not only to the universities but also the country

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as a whole. The status of this country has always depended, and I hope in future will be able to depend, on the quality of its universities. I do not talk just about the ancient universities but the many other universities—they are no more than 40 years old—which are and have been at the peak of academic success. We must not let that go through a failure to take the issue seriously.

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