HC Deb 03 July 2001 vol 371 cc236-42

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

10.1 pm

Bob Russell (Colchester)

For a Government who claim that their priorities are "Education, education, education", Labour has been a huge disappointment for sixth form colleges. Although my debate this evening centres on the Colchester sixth form college, which is one of the top such colleges, the financial discrimination to which it is subject is experienced by every sixth form college in the country, of which there are just over 100.

Indeed, the situation confronting our sixth form colleges is worse now than it was even under the Conservative Government. The gap between the funding given to sixth forms in schools and that provided to our sixth form colleges has widened over the past four years. The variation has grown to 30 per cent. or more, and the projection for the next few years is that the gap will widen still further. Sixth form colleges have been told that they must make further so-called efficiency gains, whereas school sixth forms have been promised increased funding. Where is the fairness? The playing field is not level, and now the Government are planning to make it more uneven. Life will become more of an uphill struggle for sixth form colleges.

Labour's promises to give equality to our young people have been broken. Pledges from Ministers have not been honoured. There is no need for me to rehearse the arguments over the funding of our sixth form colleges. The Department for Education and Skills is well aware of them, yet Ministers have failed to tackle the unfairness.

In April this year, the chair of governors of Colchester sixth form college, Mr. Syd Kent—a former Labour county councillor and former chair of Colchester constituency Labour party—wrote to the Secretary of State for Education and Employment to express concerns about funding. In a detailed letter, Mr. Kent said: We have had eight years of funding cuts expressed as 'efficiency gains' which has led to a dramatic decline in levels of real funding. I invite the Minister to visit Colchester sixth form college to discuss with the principal and others the consequences of the Government's unfair funding policy towards sixth form colleges. No Minister has ever visited the college, which has 2,150 students.

In the first year of the last Parliament, the Select Committee on Education and Employment looked into further education, including funding for sixth form colleges. At the outset, the chairman was the hon. Member for Barking (Margaret Hodge), who was followed by the hon. Member for Croydon, North (Malcolm Wicks), both of whom were subsequently promoted to ministerial office in the Department for Education and Employment.

Sadly, hopes that fairer funding for sixth form colleges would be forthcoming as a result of a new Government promising more investment in education proved to be unfounded, even given the Select Committee's recommendations and the ministerial influence of two people with personal knowledge of the unfairness.

Will the Under-Secretary of State for Education and Skills, the hon. Member for Bury, South (Mr. Lewis), deliver where others have failed? He is newly installed, and thus free to distance himself from those who have gone before. This is his chance to bring justice and fairness to the nation's sixth form colleges. Will he announce to the House that the Government will at long last put right the wrongs of the funding formula, which currently cheats students and staff of the Colchester sixth form college, or will he merely provide warm words, like others before him, and leave the sixth form colleges with a funding formula that results in considerably less funding per student in real terms than that provided for a student at a school sixth form?

According to the Association of Colleges, a student undertaking a three A-level package at a school sixth form is funded on average to the tune of £3,530 per annum. A student at a sixth form college, however, is funded to the tune of £2,520. The difference of £1,010, according to the association, represents underfunding of 29 per cent. for a student at a sixth form college. Others believe that the real difference is more than 30 per cent.

If students at Colchester sixth form college were funded at the same level as sixth form students attending the town's selective Colchester Royal grammar school and Colchester County high school for girls, and Philip Morant school, it would receive a minimum of an extra £1.25 million a year. Why is there a different funding formula? What logical reason can there be for students in the same town and the same age group, taking broadly the same range of subjects, to be funded at different levels? Yet sixth form students at those three schools are funded at a higher level than those attending Colchester sixth form college. There can be no justification for that two-tier disparity.

Given the same level of funding, the college could enrol more students, in line with the Prime Minister's target that more young people should enter further and higher education—currently, it has to turn many applicants away—and recruit more staff to provide a better student-staff ratio to match those enjoyed by sixth forms in three of the town's schools. Pupils from all the 11-to-16 comprehensive schools in Colchester, and from further afield, go on to the sixth form college. Teaching staff at the sixth form college are on lower pay scales than their school-teaching counterparts. That unfairness, which stems from the unfairness of the funding levels, also needs to be corrected.

The root cause of the two-tier sixth form funding provision lies with a Conservative Government who, in 1992—in an act of typical Tory stupidity, rather than one of common sense—removed sixth form colleges from the democratic framework of local education authorities, and established them as quango institutions.

Norman Lamb (North Norfolk)

I agree with what my hon. Friend says about the discrimination suffered by Colchester sixth form college. Does he accept, however, that the same discrimination is suffered by sixth form colleges across the country, including Paston sixth form college in North Walsham? Many small sixth form colleges suffer the additional burden imposed by extra financial auditing requirements, which constitute further discrimination in comparison with the arrangements for sixth formers in schools.

Bob Russell

I agree. This is a nationwide problem affecting all sixth form colleges.

One of the less widely known side effects of this education apartheid is that sixth form colleges have to pay value added tax, while school sixth forms do not. Perhaps the Minister can explain the logic of that. If he cannot, will he pledge this evening to arrange with Government colleagues for the status of such colleges to be amended so that, as with school sixth forms, VAT is not levied?

As I have said, this is not the first time that the unfair funding of sixth form colleges has been brought to parliamentary attention. The last time was 15 months ago, on 15 March last year, when the hon. Member for Luton, North (Mr. Hopkins) secured an Adjournment debate in Westminster Hall. The Minister who replied was the present Under-Secretary of State for Work and Pensions, the hon. Member for Croydon, North then Under-Secretary of State for Education and Employment. I also spoke briefly.

Mr. Kelvin Hopkins (Luton, North)

As the hon. Gentleman says, I spoke about this 15 months ago. I am very concerned about Luton sixth form college, where I am vice-chair of the governors, and particularly concerned about the continuing pressure on sixth form colleges to increase so-called efficiency by 1 per cent. per year. The requirement is not imposed on schools, and I consider it an additional burden on sixth form colleges. I hope that he will address that problem as well.

Bob Russell

I am grateful for that intervention. The hon. Gentleman kindly allowed me to speak in his Adjournment debate and I thought that I should repay the compliment.

In his contribution to the debate, the Minister said: I recognise that the previous Administration's disastrous approach to further education funding means that sixth form colleges are now funded well below school sixth forms. He went on to admit that the disparity in funding between sixth form colleges and school sixth forms was 20 per cent., a figure somewhat lower than in reality exists, but nevertheless an admission by the Government that there is serious unfairness.

In response to my intervention, the Minister said: The Government agree that upward convergence for further education colleges, including sixth form colleges, is the way forward. I have to ask this evening why then, 15 months later, have the Government done nothing to move the funding of sixth form colleges upwards so that they converge with the funding given to school sixth forms?

As for upward convergence for further education colleges, that never happened, with the result that a range of academic courses at the Colchester Institute—on which I had an Adjournment debate on 9 April—will not be provided from this September, with the loss of around 50 academic and support staff. Had the Government acted in the way that they said that they would, the courses and jobs could have been saved. Local people have been deprived of educational opportunity and choice. Who do we blame? The Labour Government or the new learning and skills councils—another tier of quango?

Back to sixth form colleges, however, and, in March last year, the Minister told the hon. Member for Luton, North: Clearly we need to move towards a position in which every young person doing A-level or vocational courses at that level—regardless of whether they are in a sixth form, sixth form college or an FE institution—is being treated properly and fairly. That is our objective, but it will take some time to achieve. It may have been an objective in March 2000, but nothing has been done to make it a reality. Indeed, as I have pointed out, the situation has deteriorated and it is set to get worse.

The Minister also stated: We want to bridge the gap positively, with sixth form colleges moving upwards." —[Official Report, Westminster Hall, 15 March 2000; Vol. 346, c. 94–95WH.] So why have the Government failed to deliver what was promised?

Recommendation 13 of the report of the Education and Employment Committee, published on 4 June 1998, under the heading "A level playing field for post-16 funding", stated: The one area in which genuine harmonisation of funding would appear to be both possible and desirable is in full-time 16–19 provision. Select Committee recommendation 14 stated: We agree with the Minister of State that this kind of harmonisation should be achieved by additional funding for the FE sector rather than a process of 'levelling down'. It should be possible to establish a 'common entitlement' for 16 to 19-year-old students on similar courses in schools and colleges and to fund it accordingly. We believe that such a 'common entitlement' should include the kind of enrichment activities which have long been regarded as a key part of traditional school sixth form education. This would ensure all institutions—whether colleges or schools—serving 16 to 19-year-olds would receive comparable funding for providing the same qualifications. Almost three years later, the Government's response in 1998 makes interesting reading: We are attracted to the idea of an 'entitlement curriculum' common to all 16 to 19-year-olds. The section concluded with a promise of action in deciding how it might be achieved in practice. Nothing has been done to deliver what it was believed was the Government's promise of action based on recommendations made by the Select Committee in a report published on 4 June 1998. The Government have badly let down Colchester sixth form college and the 100 or so other sixth form colleges throughout the country. All that they ask is that the Government keep their promises and fund sixth form colleges at the same level as they fund sixth forms in schools. For a Government who said that their priorities were, "Education, education, education", it should not be too difficult to deliver.

10.14 pm
The Parliamentary Under-Secretary of State for Education and Skills (Mr. Ivan Lewis)

I congratulate the hon. Member for Colchester (Bob Russell) on securing this Adjournment debate. The issue is important and it is one that the House will want to address.

When I prepared for my response, I inevitably looked at a brief about the hon. Gentleman. As a Manchester City fan, I thought that I had difficulties, but when I discovered that he has been a supporter of Colchester United for the past 43 years, I felt that that was worthy of some sort of honour, medal—or even a cheap tie, similar to the one that he is brandishing.

The hon. Gentleman may be aware of the announcement today that Colchester zoo has the first artificially inseminated elephant to give birth in captivity. I do not know whether he is the father, but it is a remarkable, historic moment for the people of Colchester, so I am sure that he will find a way of attaching his name to that great achievement—as Liberal Democrats tend to do.

In my response to the debate, I shall address the general points of concern raised by the hon. Member for North Norfolk (Norman Lamb) and my hon. Friend the Member for Luton, North (Mr. Hopkins), as well as dealing with matters specific to Colchester. It is important that my response traces the history of sixth form funding and that it is put in the wider context of education funding. As the hon. Member for Colchester said, the approach of the previous Conservative Administration to further education over many years resulted in sixth form colleges being funded well below school sixth forms. As he is fully aware—and has stated—the Labour Government have long expressed the view that we want to address that historical inequality. Indeed, during the election campaign we reiterated our pledge to boost the share of national income spent on education generally.

In our manifesto, we promised that there would be more money for schools, universities and colleges. We also promised to guarantee the real-terms funding of pupils in school sixth forms, if student numbers were maintained in those sixth forms, and to increase the funding for sixth form colleges and further education colleges.

In our second term, we intend to build on the investment in further education of the past four years and to narrow the gap between funding for sixth form colleges and school sixth forms. We shall do that by levelling up the funding of further education colleges. We realise that that can happen only over time—it cannot happen overnight—and that it will inevitably be subject to the availability of resources. Ministers have to make that point from time to time, although of course it is not a point that Liberal Democrats tend to make.

Any policy change that involves additional resources has to be fully costed and subject to the prevailing economic circumstances. However, the hon. Gentleman will be pleased to hear that I am confident that our substantial investment in post-16 education will allow significant progress to be made during the course of this Parliament.

The hon. Gentleman will be aware that we have had to deal not only with inequitable funding levels between sixth form colleges and school sixth forms, but with the major disparities in funding between individual school sixth forms due to the discretion currently available to local education authorities. The best-funded sixth forms currently receive about one and a half times more funding per student than the worst. We also intend to tackle that inequality.

As stated previously, we will protect real-terms funding levels for all school sixth forms that maintain their student numbers, while increasing the level of funding for the lowest funded school sixth forms. As with colleges, that will take some time and the pace of change will depend on affordability. However, that guarantee means that convergence will be upward.

The new Learning and Skills Council to which the hon. Gentleman referred, with its overview of all post-16 provision outside higher education, will help us to achieve our vision of a coherent and collaborative post-16 sector. The council will take over the funding of school sixth forms in April next year. The further education sector will move from transitional funding arrangements to the Learning and Skills Council regime from the beginning of the 2002 academic year. That means that by August next year, school sixth forms and sixth form colleges will be funded by the same funding body and through the same funding system. The funding system has national rates for similar types of provision. Although most school sixth forms will continue to receive a higher level of funding to start with—due to the real-terms guarantee—I am sure that the hon. Gentleman agrees that the system will be a major step forward in achieving a level playing field between the sectors.

I shall address the hon. Gentleman's point about VAT. At the moment, education taught in all schools and colleges is free of VAT. Local authorities are funded through the VAT system for any VAT incurred on purchases for schools, but because sixth form colleges are directly funded by the Government as a result of the changes that were introduced in 1993 they are expected to include VAT in bids for funding. That explains the inequality regarding VAT.

In the meantime, we should not forget that the Labour Government have been responsible for a substantial injection of extra funds into further education and sixth form colleges. We have demonstrated our commitment to the biggest ever investment in post-16 education—almost £13 billion over the next three years. That includes substantial extra resources for the introduction of the new FE pay arrangements, which will help colleges to recruit, retain and reward excellent teachers.

We have introduced a step change in capital investment to develop centres of vocational excellence, and we are promoting higher standards of teaching and learning through the standards fund. This year alone, £527 million extra is being spent on further education—a 12 per cent. real-terms increase. The planned increase in student numbers over the same period is only 7 per cent. That means that funding per full-time equivalent student is increasing this year by 4 per cent. in real terms. We plan a further 3 per cent. real-terms increase next year, and we are confident that our planned investment will provide significant support to those offering 16 to 18 provision in the further education sector.

That is the general situation. I shall now discuss Colchester sixth form college, which was, I believe, opened in the year that the hon. Gentleman was the mayor of Colchester. I do not know whether his name is on a plaque at the college; he may be able to share that with me later. The college has seen its funds increase from £5.2 million in 1996–97 to almost £7.3 million for the coming academic year, and this year the college asked for, and received, more than £500,000 in additional funding for Curriculum 2000. The college has also been allocated its share of the £65 million extra that we are investing in the sector to help with further education teachers' pay. I did not hear him refer to any of those figures.

Of course I understand the calls for even greater investment to reverse the effects of the Conservative Administration's squeeze on colleges. However, we have made a start and, as I have shown, the increased funding levels for Colchester are clearly substantial. I would ask the hon. Gentleman to discuss that information with the governors of the college; I should be interested to hear their views.

As for the future, the new post-16 arrangements mark a step change in the funding and organisation of education and training in this country for young people. The arrangements are designed to drive up standards, to increase participation, to achieve parity between providers and to encourage collaboration. These arrangements will ensure that all young people have a broad range of high quality options from which to choose. From Colchester to Carlisle, the Government will ensure that every young person has access to educational opportunities that help them to pursue their dreams and fulfil their potential.

Question put and agreed to.

Adjourned accordingly at twenty-three minutes past Ten o'clock.