TECs: Funding (Hansard, 28 February 1995)

§ Lord Inglewood
My Lords, yes. The Government provide sufficient resources to training and enterprise councils annually to enable them to undertake the tasks they have contracted to deliver. In 1994–95 the Employment Department is providing £1.7 billion for training and vocational education programmes managed by TECs.

§ Lord Rochester
My Lords, is the noble Lord aware of the statement reported to have been made last month to the Employment Select Committee in another place by the director of the TECs national council that funding levels for the training for work programme, which is the main measure for the long-term adult unemployed, were inadequate to allow TECs to provide significant amounts of necessary higher level skills? Would not the country benefit much more from substantially increased investment in TECs than from what appears to be a 20 per cent. cut in their funding announced in last November's Budget?

§ Lord Inglewood
My Lords, it is important to be clear about exactly what is happening. It is the case that there will be a reduction in the number of places on the training for work programme, which is targeted at those who have been out of work for more than six months. Over the past 12 months there has been a drop of more than 400,000 in the number of unemployed, of whom just over 250,000 were long-term unemployed. We believe that against that background alone there is a case for looking at the matter. At the same time my right honourable friend the Secretary of State has set a tight target to increase the effectiveness of the training for work programme in getting people back to work.
We must also be aware that this is not the only programme which is managed by TECs. We are bringing in a variety of new measures, many of them associated with the competitiveness White Paper. If one compares the amount of money which TECs will be able to spend next year with what they are likely to spend this year, TECs will spend £19 million more next year. In other words, the level of expenditure they will be able to incur is the same.

§ Lord Gisborough
My Lords, is it not true that in future there will be an outcome payment system whereby trainers will be paid in relation to the success of their trainees in gaining qualifications? If that is so, will it not mean that trainers will adopt a selection process in order that people will pass and they will be paid, and therefore the people most in need of training and most unlikely to have qualifications will miss out?

§ Lord Inglewood
My Lords, the change in the funding of the training for work programme described by my noble friend is correct. That change was asked for by the TECs themselves. It has led to a considerable increase in the effectiveness of those TECs where there have been pilot studies. We believe that it will assist in creating jobs.

§ Baroness Seear
My Lords, does the noble Lord not realise that that system is bound to be extremely harmful to people with special needs? In the early days of the YTS there were special needs premiums. It is now 1408 increasingly difficult to obtain money for the training of people who need it desperately if they are ever to earn a living at all. Does the noble Lord agree that they will be a great charge on the community if they do not receive training?

§ Lord Inglewood
My Lords, the noble Baroness is absolutely right about the problems of those with special needs. It is for that reason that my right honourable friend the Secretary of State has agreed with the TECs that there should be extra money for people in that position.

§ Baroness Turner of Camden
My Lords, does the Minister recollect that on 6th February last I asked him a Question about South Thames TEC? Is he yet in a position to reassure the House about the position of the small training organisations awaiting payment and in which staff could well face redundancy unless funding is provided? Can he yet assure the House that the appropriate funds are being provided and that everything is in order?
Secondly, would it not be a good idea for local authorities to be directly represented on TECs, not merely as local authorities but as major employers in their own areas?

§ Lord Inglewood
My Lords, concerning the South Thames TEC I have nothing to add to what I explained to the House on the previous occasion to which the noble Baroness referred. So far as I know, no provider has gone bust by virtue of what has happened in the South Thames TEC.
Turning to the noble Baroness's question about the membership of the boards of TECs, currently they include about 700 directors from the private sector and 300 community leaders. In relation to the wider community interest, we believe that the presence of community leaders fulfils the function which the noble Baroness, Lady Turner, sees for local authorities.