HC Deb 26 November 1996 vol 286 cc174-9W
Mr. Jacques Arnold

To ask the Secretary of State for Education and Employment what plans she has for her Department's expenditure in 1997–098; and if she will make a statement. [6536]

Mrs Gillian Shephard

As my right hon. and learned Friend the Chancellor of the Exchequer announced today, the Government intend to provide £13,950 million for the Department's voted expenditure in 1997–98. This will be in addition to expenditure on schools provided through the local authority finance settlement, which my right hon. Friend the Secretary of State for the Environment will announce tomorrow.


Provision for schools is to increase by £830 million. The bulk of this will be provided through the local authority finance settlement. Detailed allocations for individual local authorities will be announced by the Secretary of State for the Environment on 27 November. The local authority settlement will allow for an increase of 3.6 per cent. for schools. It is for local authorities to decide how to allocate the available funding, but the Government expect that priority will be given to schools, the total package of funding for schools of all types (including provision for the under 5s) represents an increase over 1996–97 of 4.4 per cent.

Schools capital

In 1997–98, the amount available for school building will be £610 million. In addition local authorities will be able to benefit from the local authority capital challenge fund of £600 million over the plan period, to which my Department is contributing £25 million in 1997–98. Alongside these resources lie the opportunities available from the private finance initiative; the recently acquired right of grant maintained schools to borrow commercially; the full use of proceeds from asset disposals by grant-maintained schools; and the relaxations on the capital controls which apply to disposals of local authority school property. This combination of measures will help to maintain the school building programme at a high level. The results of the local authority capital challenge fund for 1997–98 will be announced in December.

Grant-maintained schools

The Government will continue to ensure that GM schools receive the necessary funding to meet their extra responsibilities and particular circumstances.

The plans provide for special purposes grants to schools to be maintained at broadly current levels. They also allow for the continuing development of existing GM schools, enabling the sector to play a leading role in extending choice and diversity, and in implementing the proposals contained in the June White Paper, "Self-Government for Schools" and in the Education Bill currently before Parliament. The Funding Agency for Schools is considering the balance of provision between the various grants.

Specialist schools

The settlement includes £33 million for 1997–98, £35 million for 1998–99 and £32 million in 1999–00 for our specialist schools programme. Already over 180 schools are operating as technology colleges or language colleges. The settlement, which adds £20 million to provision over the three years, will enable us to expand the network to over 300 schools, achieving increased diversity and opportunity.

Teacher Training Agency

The total grant for the Teacher Training Agency for recurrent and capital expenditure is planned at £210 million, £206 million and £197 million in 1997–98, 1998–99 and 1999–00 respectively. The grant takes account of changes in forecast student numbers which reflect, among other things, reduced targets for intakes into initial teacher training courses, consistent with a reduction in premature retirements from the teaching force. The grant also covers the costs of developing and introducing the new national teacher training curriculum and the graduate teacher programme, as well as funding for continuing work on the Headlamp scheme, and the development and piloting of the national professional qualification for headteachers.

Further Education and Training

16 to 19-year-olds and FE student numbers

Planned provision will enable the Government to meet their commitments to 16 to 19-year-olds for education and training in schools, colleges and work-based programmes. It will allow for continuing growth in the number of students both in the 16 to 19 age group and adults. Overall numbers of full-time equivalent further education students are set to increase by a further 8 per cent. over the plan period.

Grant to the Further Education Funding Council

The total grant to the FEFC is planned at £3,072 million in 1997–98, £3,053 million in 1998–99 and £3,011 million in 1999–2000. The sector is receiving extra resources totalling £80 million in 1997–98 and 1998–99 to underpin the continuing growth of the sector, including funding for the costs of greater use of the private finance initiative.

Modern apprenticeships and youth training

Government funding for modern apprenticeships, youth training and the development of these initiative flowing from Sir Ron Dearing's review of qualifications for 16 to 19-year-olds is planned to increase by £22 million next year against anticipated expenditure in 1996–97. Plans allow for at least 62,000 entrants to modern apprenticeships next year, rising to 67,000 by the turn of the century.

Employment and training Employment Service programmes

Unemployment has fallen by 10 per cent. in the last year and has been on a consistently downward path for almost four years. The unemployment rate in the UK is more than two and a half percentage points below the EU average. Against that background the Government's priority is to help unemployed people, and particularly the most disadvantaged, to compete effectively for available jobs and to get back into work as quickly as possible. It is therefore increasing very substantially the resources devoted to employment programmes designed to deliver the more intensive help needed by the longer term unemployed.

In addition to the already announced expansion of project work pilots, which will help up to 100,000 people, the Government will be introducing contract for work pilots to harness the private sector's talent for innovation to help longer-term unemployed people back to work. In addition, from April next year, a new mandatory programme of intensive interviews will be introduced designed to provide those reaching two or more years unemployment with concentrated back to work help from the Employment Service. This approach is expected to help about 250,000 people next year.

For those young people aged under 25 who have been out of work for two years or more, the Government will be making available throughout Britain the successful jobmatch programme. Jobmatch helps longer-term unemployed people to use part time work as a route out of unemployment. It pays a weekly allowance for six months to those who take a part time job, and provides training vouchers which individuals can use to improve their skills and enhance their employability. Some 40,000 people aged under 25 have been unemployed for two years or more. Jobmatch will help to ensure that next year more of them get back into jobs.

Training for work

With the welcome reductions in unemployment, including long-term unemployment, over the past year, the Government have been able to reduce provision for training for work by £21 million against anticipated expenditure in 1996–97. The planned number of opportunities in training for work will reduce by 9 per cent. to 180,000—less than the 11 per cent. fall over the last year in the number of long-term unemployed people.

As unemployment falls, training for work resources will be focused on the most disadvantaged and harder to help. Building on the experience of the pilots, the Government intend to integrate pre-vocational training into training for work and to triple the numbers helped. In 1997–98, 30,000 people with motivational, attitudinal and basic skill needs will be helped—with more in later years if the demand exists.

Careers Service

The Careers Service budget will rise to £209 million for each year of the period 1997–98 to 1999–2000. This level of funding will secure the entitlement of 3 million young people aged 13 to 18 to careers information and careers guidance. In particular it will allow and increase in the careers guidance available to 16 to 18-year-olds.

Lifetime learning

Following a Government review of services to business, the Department's main employer support budgets—employer investment in people, and skills for small businesses—are being combined to form the local competitiveness budget. This will simplify arrangements and delegate more responsibility to local level for the design and delivery of provision. Two new challenge funds—local and sectoral—will operate alongside the new budget. A small contribution to the new challenge funds from previously planned provision has been transferred to DTI, which will be managing the challenges on behalf of the Government Departments involved.

In their response to the issues raised in the replies to the "Lifetime Learning" consultation document earlier this year, the Government said that they would look into the scope for introducing a national helpline and developing local partnerships to overcome the barriers faced by many people in getting objective information and advice about learning opportunities. The Government intend to introduce such a helpline and £4.4 million has been provided for it in 1997–98.

Jobseeker's allowance

The jobseeker's allowance has been introduced successfully, and is significantly increasing the amount of help and advice the Employment Service is able to provide to individuals. The Government regard JSA as a key step in their wide-ranging programme of labour market reforms.

Disability programmes

The plans announced today provide for disability programmes, including access to work, to be maintained at their current level.

Training and enterprise councils

The Government have re-affirmed their substantial commitment to TECS, and plan to continue to invest over £1.4 billion each year over the next three years on programmes delivered through TECs. In addition, measures both to ease the administrative burden on TECs and to increase their flexibility to tailor programmes to meet local needs will reinforce their role as key players in local economic development.

Higher education

Student numbers

The Government's plans for student numbers in higher education allow for the participation rate for young people to be maintained at over 30 per cent. The Government have asked the Higher Education Funding Council for England to allocate funds to higher education institutions in such a way as to promote the expansion of the numbers of part-time undergraduate students.

Student support

The plans announced today allow for the level of student support through the main rates for grants and loans to be increased next year in line with inflation. In 1997–98 the loan and grant rates will increase by 2.5 per cent. in line with the retail prices index exclusive of mortgage interest payments. Parental contributions will also be increased in line with changes in the retail prices index. Net planned expenditure in England and Wales in the financial year 1997–98 is £802 million on loans and £1,985 million on mandatory awards covering maintenance grants and tuition fees. Access funds for further and higher education will be maintained at £28 million a year.

Tuition fees

The maximum tuition fees reimbursed through mandatory awards in 1997–98 will be the same as for 1996–97: £750 for classroom-based courses; £1,600 for laboratory and workshop-based courses; and, £2,800 for the clinical elements of medical, dental and veterinary courses. The maximum tuition fee paid through post-graduate awards funded by my Department will be increased in line with forecast inflation to £2,540 in 1997–98.

University and college funding

Total provision for universities and colleges in England through HEFCE grant and income from tuition fees paid through mandatory awards is planned to rise from £4,359 million in 1996–97 to £4,407 million in 1997–98 and £4,429 million in 1998–99. The Government have asked the funding council to earmark £20 million in 1997–98 for challenge funding for scientific research equipment.

The Government are also making additional grant available to the funding council in this financial year for challenge funding for scientific research equipment. Taken with the initial allocations from public funds and contributions from private funds, this initiative will be providing nearly £50 million for research equipment in 1996–97.

Further and higher education and capital

The Government believe that colleges in the further education sector and higher education institutions can, and should, make the fullest possible use of private finance through the private finance initiative and other entrepreneurial activity. My Department has asked the funding councils to distribute grant to institutions on the basis that they promote the private finance initiative for capital investment and encourage institutions to make the maximum appropriate use of private finance and associated commercial expertise. Within the provision being made available to the funding councils, the Government are also making available resources to enable them to pay a special VAT-related grant in respect of certain PFI projects. Within this remit, and aside from some minor exceptions, the funding councils are able to distribute grant to institutions as they see fit.

Other initiatives

On top of the increase in general provision for schools, extra funding is also being provided for a range of programmes designed to widen choice, enhance diversity and promote excellence across all educational sectors as follows.

Nursery provision

Nursery vouchers will be extended throughout England on 1 April 1997, following the successful pilots that have been run in 1996–97. Provision for 1997–98 will be £674 million, including the necessary transfer from Education Standard Spending.

Grants for educational support and training

The overall level of funding available for grants for educational support and training—GEST—will increase by some 10 per cent. over the 1996–97 equivalent programme. The new total will support expenditure of £290 million by schools and local education authorities on a wide range of important educational priorities—in particular measures for supporting schools' own development plans and the in-service training of teachers. A new grant will help potential heads develop the skills needed for headship. Other new grants will focus on improving school security and child protection. Another new grant will support the introduction of nation-wide baseline assessment of children entering primary school. Literacy will also receive a boost through the innovative family literacy grant, which will help underachieving parents and their children. Full details of these and all other GEST grants will be announced shortly.

Assisted places scheme

The plans cover the expansion of the assisted places scheme. Provision is made for continued funding of the new places allocated from September 1996 under the first phase of the expansion programme, and for an additional 1,000 entry places from September 1997 under the second phase. Subject to the passage of the Education Bill, most of the places allocated in 1997 will be for children of primary age.