Margaret Hodge
Further education
This speech was given as part of a debate in the House of Commons.
The Minister for Lifelong Learning and Higher Education (Margaret Hodge) : It is refreshing to come to a debate in which all hon. Members from all political parties welcome the Government's investment in a particular sector. It is also refreshing to come to a debate in which all those who have spoken recognise the importance of the further education sector.
In response to the rather sour contribution from the hon. Member for Newbury (Mr. Rendel), I should point out that if FE had been a low priority in Government thinking, we would not be increasing investment by 19 per cent. in real terms over the coming three-year period. We would not be issuing a whole series of policy documents and initiatives that bring FE in from the cold and ensure that it can make its proper contribution. FE is central to what the Government are about. It is central to our desire to raise skill levels and qualifications, to improve our skills base and enable us to have a prosperous economy. It is central to our social inclusion agenda that we enable every individual to develop their potential and to contribute fully.
I do not recognise the interpretation that the hon. Member for Newbury put on our policies. Indeed, it is because FE covers everything from basic skills through to higher education, and because it deals with everyone from the age of 14 through to our oldest learner, who was 107, that it plays such an important role in what we do. If the hon. Gentleman were properly informed he would know that, as promised by the Learning and Skills Council, all colleges—except five, where there is still a dispute—received their budgets by the end of April. Again, I do not recognise his figure of 5 per cent. He should look at our Departmental annual report, published today, in which we show that funding per student will rise by 7 per cent. in the next three years in real terms. By 2005–06, total funding for students will be 13 per cent. in real terms higher than it was in 1998–99.
The hon. Member for Twickenham (Dr. Cable), whom I congratulate on securing the debate, acknowledged that there is a 10 per cent. cash increase in the base funding rates for all colleges. He has two particularly good colleges in his constituency. I am in correspondence with the principal of Richmond adult community college, who has written to me about her funding. Funding for people in that area comes through the learning and skills councils. If the college gains funding elsewhere it is difficult for us to justify putting in additional funding to support activities that are funded elsewhere. I hope that he will recognise that.
A number of hon. Members mentioned that our funding over time will depend on performance. There will be a 2 per cent. real-terms increase this year. We recognise that there are additional pressures, but with that additional money all colleges are much better equipped to deal with them. Over the three-year funding period, which many hon. Members have welcomed, those that perform well next year will get a 2.5 per cent. premium. Excellent colleges that exceed their performance targets will get a 3.5 per cent. premium, which will go through into the following year. The outcome-focused funding mechanism is one of the most innovative structures that we have developed in Government. Colleges will be rewarded for meeting and exceeding the outcomes that we want. The outcomes involve participation, success rate, employer engagement and raising the skills of the workforce.
I will deal quickly with some of the issues that have been raised. The hon. Members for Twickenham and for Daventry (Mr. Boswell) expressed concern about how employer links are to be refined. We are aware of the importance of having sensitive mechanisms for measuring employer engagement; it would be different if someone were talking about a sixth form college, and very different in many general FE colleges. We will be sensitive to that, but we want to encourage employer engagement. We are also sensitive to the importance of bringing small and medium-sized enterprises into the loop more firmly, and of ensuring that colleges can respond to training needs in SMEs. We will have something to say about that in the skills strategy that we shall publish in the summer.
I had the great pleasure of visiting City college in the constituency of my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper), and seeing much of the excellent work that he has done there. I congratulate him on his active engagement with the FE sector, which is apparent in our correspondence on various issues. He talked about the foyer, as did the hon. Member for Twickenham, and he asked whether we could move towards some kind of support beyond the age of 19. All hon. Members recognise that that is important. We will introduce the education maintenance allowances nationally by 2004 and I hope that we will have something further to say about our proposals beyond that point in the skills strategy paper we will publish in June or July. We recognise, as other hon. Members do, that for many disadvantaged people in our community it is not beneficial for support for individuals to be cut off at age 19.
Linking with the Department for Work and Pension, which my hon. Friend the hon. Member for Plymouth, Sutton (Linda Gilroy) mentioned, is complicated and expensive. We are in constant discussion with our colleagues in the DWP, and my hon. Friend is correct to say that we should bang a little more consistently on the Treasury's door to try to get sensible working across Departments. There is, however, a real attempt to deal with that throughout the Government.
My hon. Friends the Members for Brighton, Pavilion and for Plymouth, Sutton spoke about our moves towards trying to get a level playing field between sixth form colleges and schools with sixth forms. I acknowledge and welcome their recognition of the work we are doing on that. We hope to go further, and the financial settlement has taken us a long way down that road. However, no one can account for things that are outside their control. For example, because of pension contributions, we have probably been able to make less progress than we would have liked. Nevertheless, I think that we will make serious progress.
The hon. Member for Orpington (Mr. Horam), among others, spoke about qualifications being flexible. The importance of having bespoke qualifications to meet employer needs was also mentioned. We hope to deal with that matter in the skills strategy. Indeed, those who have read the document that we issued in consulting on the skills strategy will have seen various suggestions as to how we can move forward on modular and bespoke qualifications to meet the needs of individuals better.
I do not take kindly to hon. Members saying that we are not tackling bureaucracy. We have a long way to go, but the hon. Member for Newbury ought to ensure that he is better informed. I shall simply say that we have reduced some 75 or 76 different funding streams to five. We are implementing all the recommendations of the Sweeney task force on bureaucracy, and I hope to make announcements in the not-too-distant future about how we can take that good work further forward.
I know that hon. Members are anxious to move on elsewhere now. This has been a good debate; I welcome it, and the support that has been given to the generous funding settlement. I also welcome the partnership that we have established with colleges, in which we will put the learner at the centre, to increase participation and raise standards.
