§ Sir John StanleyTo ask the Secretary of State for Education in what areas of his Department's responsibilities he has introduced, or may introduce, private finance; and if he will describe in each case the procedures by which private finance is sought.
§ Mr. ForthPrivate finance already plays an important part in many areas of education. Thus, the introduction of private finance into inner city education, in partnership with the Government, is integral to the programme of city technology colleges. Private sector sponsors commit an agreed proportion of the initial and continuing capital costs of CTCs, while the Department meets the balance of capital costs and makes grants to meet running costs.
Building on the CTC programme, the Government have introduced legislation providing for voluntary-aided and grant-maintained schools to propose the appointment of representatives of private sector sponsors to their board of governors. Such sponsor governors will play a direct role in the school's management, in return for financial and other support. The involvement of sponsor governors may be particularly appropriate where the school is seeking to develop a special emphasis on teaching technology or some other area of the curriculum.
In addition, the Department supports a range of school-business links organisations and projects, and in many cases does so jointly with private sector sponsors. Our practice is to secure such joint funding whenever appropriate, through discussion with the organisation seeking our support.
Private finance has long been important in higher education. The Government believe that it is in the interests of higher education institutions to continue to look for increased levels of funding from private sources —in particular from industry and commerce, benefactors and alumni, and from present sources of fee income. We announced at the time of the autumn statement a relaxation of controls to enable higher education institutions to borrow on the security of Exchequer-funded assets as well as on the security of local authority-funded and private assets. It is for universities and colleges to approach commercial lenders for loans.
The Further and Higher Education Act 1992 provides specifically that there should be no discouragement to higher education institutions or to further education colleges from developing their funding from sources other than the relevant funding council.