HC Deb 22 November 1991 vol 199 cc603-10

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]

2.31 pm
Ms. Joyce Quin (Gateshead, East)

I am grateful for the opportunity to speak on the motion for the Adjournment of the House in order to raise a matter that is causing me great concern—the number of cases in my constituency of considerable financial hardship being experienced by full-time and part-time students.

I believe that these instances of hardship arise as a direct consequence of a range of Government policies such as the introduction of the student loan scheme, the decision to exclude students from various social security benefits—for example, housing and unemployment benefits—the Government's attitude towards local authority financing with particular reference to local authority discretionary educational awards, the level of access funds that educational establishments have at their disposal and the problems relating to schemes such at the Government's career development loan scheme.

Many of the constituency cases with which I have dealt in recent months have especially worried me because they seem to show that the financial hardship now experienced by many students is especially severe for those who come from low-income families. That has led me to conclude that higher and further education no longer provide a pathway out of poverty towards educational achievement and self-fulfilment, because students from poor backgrounds may be forced to give up studying and never achieve the educational qualifications that they seek. Furthermore, there is great danger that people from such backgrounds will be deterred from applying for educational courses in the future. Having spoken to many of my parliamentary colleagues and having listened to debates and questions in the House, I believe that my experience in Gateshead is part of a national pattern.

I remind the Minister that Gateshead is far from being one of Britain's most prosperous towns. It has high unemployment and considerable long-term unemployment. In many ways families have never recovered from the earlier recession of the 1980s, let alone the current recession. Many young people in Gateshead have grown up in families in which it is very rare for someone to have a full-time, decent and well-paid job.

Gateshead has a large number of low-income families and has traditionally had a poor participation rate in further and higher education. That has improved in recent years and I congratulate the local authority and the local schools and colleges on that. Nevertheless, many people who might otherwise have gone on to Government employment schemes have been deterred from doing so because of the difficulty in finding jobs as a result of going on those schemes. They have then concluded that going on to further education or staying at school are better options.

To illustrate my point about student financial hardship in Gateshead, I shall refer to some specific cases, but in such a way as to protect the identity of my constituents. I shall refer to the first case as Mr. A. He wrote to me in March saying: I am writing in the hope that you may be able to give me some positive information regarding the money I am supposed to live on. I am a male of 49 years living on my own in rented accommodation, I spent a year on E.T. at the Gateshead National Garden Festival from 1989 to 1990 … that was alright, then last September 1990 and with the end of the festival in site … I had a dread of going back on the dole as I already spent seven years on the dole previously … through no-fault of my own. Any-way in September 1990 I decided to further my career in Horticulture and started a college course full time at Houghall College, County Durham, which meant having to live on a Educational-grant … My expenses weekly are £29 rent, bus fares to college £25, HP £10, electric £5 total £69 weekly this is without food. My grant allows me £60 weekly a difference of £9, I am now getting deeply in debt with my rent. I cannot get any help from Social Security or Rent Rebate. How am I supposed to live on this grant". I sent the letter to the Department of Employment, among others, and received a reply from the Parliamentary Under-Secretary of State, suggesting that my constituent should take out a career development loan. My constituent was reluctant to do that because he thought he would get further into debt. At that point he was already in dept. However, he made inquiries and was told by his bank that he was not eligible for such a loan because in the past he had received a Government grant. I forwarded that letter to the Department of Employment and got the unsatisfactory answer that it fully understood my constituent's position and his reluctance to consider a bank loan at this time, but was sorry in this instance not to be able to offer an alternative suggestion. The conclusion of the story is even sadder. This week I spoke to my constituent. Having completed his course, he found that there were few vacancies for horticulturists and he is once again on the dole.

The next constituent case concerns Ms. B. She sent me a letter in September which she described as a heartfelt plea for fair dealing. She commenced a two-year nursery nurse examination board course at Tyneside college in Wallsend. She was 27 at the time and not residing with her parents. She applied to Newcastle council for a grant as she was living in the Newcastle area. She was awarded £670 a year. That had to cover everything—all living and personal expenses, all college equipment and all travel expenses. She is living with a friendly family that she knows. Otherwise, her position would be impossible. Although the local authority was sympathetic to her problem, the sum of money available to it for discretionary grants had been severely cut in recent years, so it could not see its way to helping her further.

The next case concerns Mrs. C. She wrote to me about her student son and was greatly concerned about the plight of all students this summer due to the Government's changes in social security rules. She rightly notes that students are not entitled to any income support from the Department of Social Security during the summer vacation and she points to the real problems that exist in areas of high unemployment, such as Gateshead and on Tyneside in general, where students, whom the Government urge to take on part-time or full-time jobs during their vacation, simply do not find those jobs available. According to my constituent, simply applying for extra amounts in loans, either under the Government's student loans scheme or from the bank, defeats the object, because the students then get themselves further into debt.

My constituent concludes: The present government wants education standards to be improved but in the case of students, it will only result again in the 'rich' families being able to afford to send their children on to further education. There will certainly be a choice but that choice will be `money'—an elitist society. It will certainly not be a classless one. The next case concerns a constituent whom I will call Mrs. D, who wrote to me about her two daughters, both of whom were studying in London—not entirely out of choice. One had come to London university to do a postgraduate music diploma because it was the most appropriate place for her to study. As we know, students in London have particular problems because of the high cost of accommodation. Students in London have suffered particularly badly because of the Government's decision to make students ineligible for housing benefit. My constituent felt strongly that neither the amount on offer from the student loans scheme nor the money available from the postgraduate access fund would be enough to compensate for the loss of housing benefit to her undergraduate daughter or to her elder daughter, who was on the postgraduate music course. I have since asked my constituent for an update of the position and she has confirmed that the family has had to put in a good deal more extra money to finance both daughters than it had previously expected. Fortunately, that family was able to put in extra money—although it meant some sacrifices, such as doing without holidays and so on—but I contend that if those two girls had come from a less fortunate background, they simply would not have been able to continue their courses in current circumstances.

My final case relates to two girls who live in a hostel that manages beds for single homeless girls, many of whom come there because of family breakdown or abuse. During the summer, both girls decided that they wanted to go to college to get some qualifications. One intended to go to Gateshead college full time for a year to do five GCSEs, but was unable to get a grant or income support because she did not qualify under the 22-hour rule and so reluctantly decided to attend part time instead. The other was doing a BTEC first diploma at Newcastle college. She could not get a grant or income support and had no option of going part time. Consequently, she had to exist on an average income of £26 per week from an evening waitressing job. According to the letter that I received, both girls have to find money for books, stationery and examination fees out of their meagre income. The letter concludes: it seems very unjust that young people who are determined to improve things for themselves after a bad start in life should be faced with such an uphill struggle. Those are the only examples that I have time to cite today, but I could give several more from my constituency files. I believe that those cases represent the local tip of a large national iceberg. The Minister may be tempted to respond, as the Secretary of State did during education questions a week ago, by dismissing such allegations of hardship. I have received earlier dismissive replies from his Department and from the Departments of Employment and of Social Security. I hope, however, that I am wrong, and that the Minister's response to these specific cases will represent a considerable change of heart.

The Minister will no doubt refer to the availability of loans, and may well repeat the claim made in a letter by his predecessor: there is no evidence … that a … loan scheme has in practice had the effect of reducing participation by lower socio-economic groups. Such evidence is now beginning to appear and I believe that my hon. Friends and I will be proved to have been right all along in our predictions of the effect of the student loan scheme.

The Minister may also refer to the discretionary grants from local education authorities. When I approached the Newcastle local education authority about one of the constituents to whom I have referred, I was told that the city council's budget for discretionary awards had been severely cut in recent years. I believe what the Newcastle local authority tells me, because I know only too well how Gateshead has been affected by Government cuts which the local authority has been forced to implement.

The Minister will probably also refer to availability to colleges and educational establishments of access funds to alleviate instances of hardship. This week I contacted Gateshead college and was told that the pressure on the access fund was such that the college could have spent its yearly entitlement by the end of the first week of the academic year. The college has had the heart-rending task of choosing between applications from equally deserving cases. I am worried that many students may convert to being part time rather than full time, simply because they cannot afford to be full-time students. Like many other colleges and educational establishments, Gateshead college is worried about that trend and thinks that it will increase in the future, particularly if nothing is done.

I hope that the Minister will accept that the case studies to which I referred highlight a serious problem. I hope that he will not take refuge in bland, average, countrywide statistics but will appreciate the painful reality behind those statistics.

The National Association of Citizens Advice Bureaux has asked the Government to undertake an urgent review of the situation. It is in an excellent position to understand the hardship experienced by many students and the gravity of the problem. Although the Minister's Department has refused to countenance such a review in the past, I beg him to think again and announce today that the Government will undertake the urgent review called for by the NACAB and many hon. Members. Unless action is taken to give colleges and local education authorities more funds and to channel Government money to hard-pressed students, the prospect for many students, not only in Gateshead but nationally, will be very bleak. Moreover, the Government will end their period of office with many blighted futures on their conscience.

2.47 pm
The parliamentary Under-Secretary of State for Education and Science (Mr. Alan Howarth)

I am grateful to the hon. Member for Gateshead, East (Ms. Quin) for providing the House with the opportunity to debate student support. She recently wrote to me and I am glad to be able to respond more fully now than was possible in correspondence. Many of her remarks today were about her constituents in Gateshead, but she also referred to the national picture.

There is an important distinction to be drawn at the outset in the support arrangements for students in further and higher education. In general, students who embark on full-time and sandwich courses at degree level are entitled to a mandatory award from their local education authority and can apply to the Student Loans Company for loans. All other students—those in further education, most of those on part-time courses in higher education and most postgraduate students—do not have that entitlement. They can, however, apply for a discretionary award from their local education authority.

Let me deal first with students in full-time higher education. I believe that the Government have a good story to tell. We have made substantially more money available in maintenance support for students in higher education. The full-year loan and grant are now over 30 per cent. higher than the grant alone was two years ago. That is a generous increase by any standards. The increase for the current year has been 6 per cent. That compares very well with the current rate of inflation, which is now below 4 per cent. We have just announced that we will increase student support by 4½ per cent. for the 1992–93 academic year, thereby at least maintaining its value in real terms. Additional help is available from the access funds for those facing particular difficulties. Higher education students have the lion's share of the access funds, which are worth in total nearly £26 million this year.

Our restructuring of the support arrangements also means that students' maintenance costs are now shared more fairly between the students themselves, their parents and the taxpayer. Parents are paying less—their assessed contribution is frozen in cash terms if their income rises in line with average earnings. The same freezing of their assessed contribution benefits students' spouses, too.

Student loans are available to all eligible students who apply for them. The student loans scheme has proved a success. In its first year, more than 180,000 students took out loans worth some £70 million. The take-up is likely to be even higher this year; more than 83,000 students have already applied. The claim that loans would deter students from enrolling in higher education—also made by the hon. Lady—have proved misplaced. Quite the reverse is true—participation is increasing rapidly. Ten years ago, only one young person in eight entered higher education. It is now one in five. We expect it to be one in three by the year 2000.

Students have always looked for vacation work. While I accept that there may have been a little less temporary employment available during this summer than in previous years, there is no doubt that many students still found temporary jobs in the long vacation. There may also have been opportunities for paid work experience.

Ms. Quin

Has the Minister undertaken a regional survey of the number of students who managed to obtain temporary work during the summer? I am sure that there must be great variations not only from one part of the country to another, but from one town to another, because of the high levels of unemployment in certain places.

Mr. Howarth

I accept what the hon. Lady suggests, because clearly there have been regional differences in economic conditions. I hope that, in time, we shall be able to monitor what has actually been happening. We shall certainly try to monitor it with the best precision that we can but, at this stage, we do not have firm figures.

As we have heard, it has been claimed that there has been widespread hardship among students this summer. No one wants to see students forced to abandon their studies for financial reasons and no one wants to see students in hardship, but I do not believe that students are abandoning their studies for financial reasons. Preliminary reports from local education authorities do not suggest that students have abandoned their courses as a result of the changes that we have made. Last year the majority of students did not take up their loan facility. It was their decision to forgo that extra, publicly provided support.

There have been reports from the National Association for the Care and Resettlement of Offenders and from the National Association of Citizens Advice Bureaux—the hon. Lady referred to the latter—but neither was convincing. The NACAB report involved only a small number of students who approached only one of about 60 bureaux. It was not clear from the report whether they had even applied for the available student loan or help from their college's access fund.

The access funds supplement the main package of student support and allow universities, polytechnics and colleges to give discretionary support where access to higher education might be inhibited by financial considerations or where they consider that students face real financial difficulties. The sum available for further and higher education students—nearly £26 million this year—is a substantial extra amount and, if allocations are properly targeted by institutions, should be adequate for its purpose. In general, they should not go to students who have not explored all other reasonable sources of finance.

Institutions administer the access funds under general guidelines provided by the Department. In the summer, we issued further guidance designed to improve the targeting of the funds. I hope that institutions have found the guidance useful this year. Earlier we dropped the requirement that up to 85 per cent. of the funds should be disbursed before the end of the financial year. For the long vacation we told institutions that they could anticipate up to 10 per cent. of this year's allocation if they wished to do so. We have made it as easy as possible for institutions to help students in genuine financial need within the resources available to them. Most institutions are also able to draw on hardship funds of their own, of course.

It is important to understand—this is too often misunderstood— that access funds are not intended to be a replacement for the social security benefits to which most students are no longer entitled.

Some play has been made of the fact that the Government withdrew the right to claim social security benefits from most full-time students. The House discussed that in an Adjournment debate last week. Our reforms have ended most students' need to rely on benefits, and it is better that that should be so.

The extra resources available from the uprated grant and loan more than compensate for what the majority of students could have claimed. In fact, many students claimed no benefits and, as I have already mentioned, the access funds enable institutions to provide discretionary support for those in need. I should emphasise that vulnerable groups of students, such as the disabled and lone parents, remain eligible for benefits. Students aged under 19 in further education have retained their entitlement to housing benefit in term-time if they are living away from their parents.

Ms. Quin

Does the Minister doubt the cases of hardship that I have quoted? What, if anything, can he do about them?

Mr. Howarth

I want to continue to develop my argument. I remind the hon. Lady that we are making more public support available to many more students than ever before. As I explained, we have increased publicly provided support for students in higher education by 30 per cent. compared to the period before the loans scheme was introduced. The fact that growing numbers of students are making the personal decision to go into higher education each year suggests strongly that our system of student support, far from providing a deterrent, is encouraging more people to go into higher education, who perhaps would not have had the confidence to do so or the belief that it is appropriate for them.

I have been most concerned by reports that some students may have been in temporary difficulty at the start of the current term because their grant cheques have not arrived from certain authorities. My Department has vigorously pursued reported delays with the authorities concerned. We have pressed them to make provisional payments where necessary, to ensure that students do not suffer hardship. I hope that local education authorities will have learnt some valuable lessons from this year's experience and that they will take great care to consider what contingency plans are needed to avoid being caught napping again by a late rush of applicants.

Without wishing to understate what was surely a trying time for some students, I shall make two further points. First, reports reaching me indicate that many of those LEAs that were not coping have now cleared their backlogs. Secondly, most LEAs, including Gateshead, coped well with the record number of applications they received. That fact should not go unremarked.

I have dealt at some length with the arrangements for mandatory support because they have been in the limelight recently and because they are the direct responsibility of my right hon. and learned Friend the Secretary of State. As to the arrangements for discretionary support, they are essentially for the 116 local education authorities in England and Wales to decide. They have discretionary power to support students in further or higher education, including those who study part time.

The Education Act 1962 currently limits mandatory grant support to full-time first degree and comparable courses. We could put primary legislation before Parliament to change that, of course, but we would need to consider the substantial cost to the taxpayer. We could extend student loans to part timers in higher education without primary legislation and have not ruled out doing so, but again, cost is a factor. The available figures do not suggest that either part-time students in higher education or full-time ones in further education are deterred by lack of mandatory funding; on the contrary, demand is buoyant.

It is also worth bearing it in mind that, under the so-called 21-hour rule, young people can study part time for up to 21 hours a week without affecting their entitlement to social security benefits. The rule is designed to help the genuinely unemployed to use their time constructively. It is not intended as a source of support for the committed student. In order to qualify, therefore, the young person must be prepared to give up his course if a suitable job opportunity is offered.

Press reports that local education authorities have cut back drastically on, or have even stopped making, discretionary awards have rather exaggerated the position. Certain LEAs do indeed seem to have reduced their overall awards budgets this year, but most are continuing to grant awards at about the same levels as in previous years.

Hon. Members must recall that these are, after all, discretionary awards. Ministers do not seek to influence LEAs' decisions or policies on them: they would cease to be discretionary if we did.

Within the national funding framework, it is for each local education authority to set its own education budget, and to decide how to allocate it between the various elements of the service, including discretionary awards. If particular LEAs see fit to alter their priorities and redeploy funds from one area to another, that is their decision. There is undoubtedly room to make savings and improve efficiency within education spending, and we are anxious that LEAs should do so. But in considering where economies may best be made, they must, of course, take account of the likely effect on pupils and students. A policy of "no awards come what may" is not a reasonable policy—it is something which no reasonable LEA would do. Nor should there be any need for such a policy in any properly managed authority.

It has been suggested that, in some way, Government funding—or the lack of it—has forced LEAs to cut back drastically. I cannot accept that. The 1991–92 local authority finance settlement allowed for authorities in England to spend almost 17.5 billion on education, which is a 16 per cent. increase over the 1990–91 settlement. This is a very considerable increase, well in excess of the rate of inflation.

The motion having been made after half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at one minute past Three o'clock.