Skills in the Recession
Opposition Day — [11th Allotted Day]
3:30 pm

3:48 pm
Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I beg to move,

That this House
regrets the Government's failure to deliver the skills training and education needed if the economy is to emerge stronger from the recession;
condemns the incompetent management of further education colleges' capital projects;
is concerned that the percentage of young people not in education, employment or training has risen significantly since the start of the decade;
notes the concerns of training providers that funding allocations for 2009-10 will not support current apprentices to the end of their training;
is disappointed that an estimated 1.4 million adult learning places have been lost since 2005;
and urges the Government to set out, in consultation with the Association of Colleges, clear criteria for the prioritisation of funding for college building projects, to provide support for more Masters degrees in science, technology, engineering and mathematics (STEM) subjects during the downturn, to fund learners over the age of 25 in level 3 STEM skills and to help apprentices at risk of losing their places to find new employers or new training places.

Our motion is about the economic crisis facing our country, but I sense that it is not the House's preoccupation at this very moment. However, the situation that we are in is perilous, because we face serious economic difficulties, which is the subject that we are debating, at a time when the country has clearly lost confidence in us as the House of Commons. We have to reflect on the seriousness of the constitutional challenges that we face, as well as the economic challenges. It is the combination of the two that makes our situation so serious.

The seriousness of the economic situation was brought home to us by last week's unemployment figures, which showed an increase of 250,000 in three months—the fastest quarterly increase on record, taking unemployment to the level it was when Labour came to office in 1997. The Opposition's fear is that young people in particular will be the victims of the recession, one estimate being that if, tragically, unemployment were to rise to 3 million, more than 1.25 million of those unemployed people would be aged under 25.

Photo of Ian Stewart

Ian Stewart (Eccles, Labour)

If unemployment is a tragedy now, why would the hon. Gentleman not accept and admit it was a tragedy for 3 million people to be unemployed when he was in government?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

Indeed, it was a tragedy when 3 million people were unemployed before. The aim of our debate today is to identify the measures that can avoid that happening again. That is what we are focusing on.

Photo of Oliver Heald

Oliver Heald (North East Hertfordshire, Conservative)

I do not know whether my hon. Friend had an opportunity to see the recent statement by the Association of Learning Providers, pointing out how excellent the community programme under the Conservatives in the 1980s was, and saying that something similar, coupled with apprenticeships, could be a way of ensuring that apprentices do not lose their education and skills because they are thrown out of work. Will he look at that idea?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend makes a valid point. It is certainly an idea that needs to be considered.

Although the recession has increased unemployment already, it is worth remembering that even in the boom years when the economy was growing, we were suffering from an increase in the rate of youth unemployment. The rate of unemployment among people aged 16 to 24 grew from 13.4 per cent. in 1997 to 14.4 per cent. in 2007, so even in the good times before the recession hit we were already going backwards and losing ground, compared with other OECD countries.

Photo of Lindsay Hoyle

Lindsay Hoyle (Chorley, Labour)

The hon. Gentleman is very generous with his time. I agree that skills are important, not only for young people but for everyone. Does he share my belief that we should be investing in skills and keeping people in employment through the short-time working subsidy, rather than allowing them to go to the jobcentre and trying to reskill them there? Would we not be better off investing in employment through the short-time working subsidy?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

That is an interesting idea that is worth considering. Indeed, that is something else—going back to the intervention from my hon. Friend Mr. Heald—that we introduced in the early 1980s, when unemployment was high before.

Photo of John Bercow

John Bercow (Buckingham, Conservative)

I have an unresolved concern about clause 84 of the Apprenticeships, Skills, Children and Learning Bill. My hon. Friend has at least two brains and probably an exemplary memory, so I trust he will recall that both on Second Reading of that Bill and at questions to the Department for Innovation, Universities and Skills—that is to say, on two separate occasions—I raised my concern that clause 84 as it stands is overly prescriptive because it would preclude from participation in apprenticeship schemes people with special educational needs, who might be well suited to an apprenticeship but who do not have level 2 and level 3 qualifications. The Under-Secretary of State for Innovation, Universities and Skills, Mr. Simon, and the Minister of State, Mr. Lammy, said that that concern would be addressed. I hope that in the other place it will be.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

For a terrible moment I thought my hon. Friend expected me to remember what was in that clause, without jogging my memory. I am grateful to him for reminding us. It is an issue about which he is rightly passionate, and he is correct. One of our concerns about the Government's approach to skills is that they are so obsessed with funding only the production of paper qualifications that people who, for whatever reason, may not be capable of getting a national vocational qualification level 2 are often deprived of access to training under the Government's new model.

I remember a conversation at, I think, Coventry college, with a young lady with learning difficulties who was doing a course in horticulture. Because that course would not get her to an NVQ level 2, it was no longer going to be provided because of the priorities that the Government had set for the Learning and Skills Council. It is very important that people who can benefit from learning and from the most basic training, even if it will not get them an NVQ level 2, continue to have access to training and apprenticeships. My hon. Friend is absolutely right on that.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I shall give way to Lembit Öpik.

Photo of Lembit Ípik

Lembit Ípik (Montgomeryshire, Liberal Democrat)

I am grateful to the hon. Gentleman for making just that point. It strikes me, as a former training and development manager, that the worst thing we can do is to be over-prescriptive on the process and outcomes from a distance. Does he agree that the best thing we can do is find a system that delivers high-quality training but allows training providers to provide what is needed to achieve the outcome we all want—namely, employment?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

The hon. Gentleman may have been studying the widely read green paper that we produced on the subject, because that is absolutely our approach on the Conservative Benches.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I shall take one more intervention and then try to make some progress.

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Rob Marris (Wolverhampton South West, Labour)

I am grateful to the hon. Gentleman for his generosity. Further to his response to the intervention by John Bercow, will he have a word with the Conservative-run council in Wolverhampton, which has cut £640,000 from the adult education service budget over a two-year period? That is absolutely monstrous, because it cuts courses for the very people whose access to education and training the hon. Gentleman supports.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

There have been savage reductions in adult education because of the priorities of the hon. Gentleman's Government and the way in which the Learning and Skills Council allocates funding only to those courses that produce paper qualifications. If the hon. Gentleman cares so much about the subject, he should sign the early-day motion that I and my hon. Friends have tabled, supporting adult learning and asking the Government to change their approach so that the cuts of 1.5 million places in adult learning over the past few years are reversed.

Photo of Oliver Heald

Oliver Heald (North East Hertfordshire, Conservative)

Does my hon. Friend not think it a real cheek for Rob Marris to talk that way when the LSC has said that the Hitchin campus of North Hertfordshire college cannot go ahead with the building project that it has been encouraged to put up? The hon. Gentleman tells us about cuts, but, goodness gracious, this Government have cut back hard. My constituents really use the facilities, and we in Hitchin need the building programme to go ahead.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend speaks for many Members, from all parts of the House, who are very concerned about what is happening to the proposals for their local further education colleges and their capital programmes.

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Julian Lewis (Shadow Minister, Defence; New Forest East, Conservative)

Will my hon. Friend give way?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

Before dealing with that issue, I give way to my hon. Friend.

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Julian Lewis (Shadow Minister, Defence; New Forest East, Conservative)

When my hon. Friend turns to that horrific topic, will he make reference to Brockenhurst college in my constituency, which I think he knows a considerable amount about, and the terrible position it has been left in as a result of the LSC's appalling mismanagement?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend is absolutely right: I did indeed visit Brockenhurst college recently for a briefing on the problems that it faces. I hope to turn to that specific issue in a moment, but, first, I should like to make some progress, because I have a bone to pick with the Secretary of State.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I shall take the hon. Gentleman's intervention in a moment.

The bone that I have to pick concerns what is happening to the number of young people not in education, employment or training. On the Government's own figures, which we obtained in a parliamentary answer, and which have been constructed in a consistent series only since 2000, the number of young people not in education, employment or training in 2000 was 630,000. In 2008, eight years later, the figure had increased shockingly to 860,000. When I released the Government's figures, the Secretary of State responded by saying that there had been a "straightforward deception". He added:

"What the Conservatives don't take into account is that there are far more young people of that age group in our society than there were 10 years ago."

He therefore says that, because there has been such a big increase in the number of young people, it is misleading to count the absolute figures. However, I invite him to make that point to the Prime Minister, who, when challenged in this Chamber on the number of NEETs, said:

"In 1997, 5.2 million 16 to-24-year-olds were in full-time education or employment. The figure is now 6.1 million."—[ Hansard, 22 April 2009; Vol. 491, c. 229.]

If the Secretary of State believes that referring to absolute figures is a straightforward deception, I invite him to agree that the Prime Minister's use of absolute figures in that answer in the House was clearly a straightforward deception. If the Secretary of State looks not simply at the absolute figures but at the proportions in respect of what is indeed a growing number of young people, he will find that in 2000—the base from which we have to take these statistics—12.3 per cent. of young people were NEETs, and that by 2008 that proportion had gone up to 14.2 per cent.

There has been an increase in both the absolute figure and the proportion of young people not in education, employment or training—and it happened even during the boom years. It is important that the Government recognise the scale of the problem over which they have presided and do not attempt to avoid the implications of the failure of their own policies.

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David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I now give way to Ian Stewart.

Photo of Ian Stewart

Ian Stewart (Eccles, Labour)

I thank the hon. Gentleman, who has been extremely kind in allowing me to intervene again. He will not know of my personal interest in these matters, although some of his colleagues will, and I should say that at times I am not an uncritical friend of the Government. My point is meant constructively. I recruited and served youth training scheme trainees, youth opportunities programme, or YOP, trainees, community enterprise scheme trainees and community programme participants. I have to say to the hon. Gentleman that in those days, his Government's provisions were make-work programmes without technical and training content. Does he agree that the Government should spend more money, because training and skills are expensive? Would he spend more money on the training and skills element?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

We have put forward practical proposals on how, in this very financial year, we could put in more money—particularly, for example, to help young people who need training in science, technology, engineering or maths, also known as the STEM subjects. However, we need a mix. We need work experience; it is better to be doing something than to be doing nothing. If we are to emerge from this recession with a stronger and better balanced economy, it is absolutely essential that we invest in training and skills. That is why the Department for Innovation, Universities and Skills is so important and why my hon. Friends and I have called this debate.

Photo of Mark Lancaster

Mark Lancaster (Shadow Minister, International Development; North East Milton Keynes, Conservative)

On a more positive note, I am sure my hon. Friend will join me in commending the innovative work of the Open university when it comes to reskilling young people. Does he share my concerns that that fine institution has not been well served by the Government in the past couple of years?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend is an eloquent advocate of the Open university, which I have enjoyed visiting with him. He is absolutely right: the Open university, which has an enormous role to play, has suffered from the Government's reductions in funding through the notorious equivalent or lower qualification, or ELQ, cuts. To be doing that during a recession seems absolutely extraordinary.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I give way to the hon. Gentleman, who I hope will speak eloquently in favour of the case for his college.

Photo of Eric Illsley

Eric Illsley (Barnsley Central, Labour)

I hope to do that a little later. For now, I just want to address the hon. Gentleman's point about young people not in education, employment or training. It is not true that the Government did not make efforts to reduce the figures. My area of Barnsley has traditionally had a low take-up of post-16 education and training; last year, however, it managed to reduce its number of NEETs from about 15 to 8 per cent. thanks to the valiant efforts of the Connexions service and Government funding. If a constituency such as mine can do that, other areas obviously can. We managed to do it through Government funding and very hard work by our local Connexions service.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I completely agree that it is possible to reduce the number of NEETs. Indeed, I have visited some fantastic programmes, often run by social enterprises, that do just that. I remember going to one in Keighley, for example, that was clearly reducing the number of young people not in education, employment or training. However, as in the example of those with learning difficulties, I was told that when the programmes do not yield a level 2 or level 3 national vocational qualification rapidly enough, the LSC cuts back the funding. A lot of programmes help to get young NEETs doing something—motorbike repair or whatever. However, programmes that do not immediately get students a paper qualification of the type that the LSC is willing to fund are suffering. That is partly why the number of NEETs is going up—it has gone up in absolute terms and as a percentage of the number of young people—and why the Secretary of State's attempt to escape the implications of those figures was so irresponsible.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I will give way to the hon. Lady, although I seem to be giving way a lot at the moment.

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Ann Cryer (Keighley, Labour)

The hon. Gentleman mentioned Keighley, my constituency. I understand that he was recently there, but is he aware that Keighley now has a £35 million LSC-funded capital build programme due to be completed next year, and within budget? I look forward to that development, which will form part of Leeds City college, and I hope he will wish it well. We are heading in a new direction in Keighley, and I am very proud of what is going on.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I am pleased for the hon. Lady that that capital programme is going on in her area. There is a lively debate about the Leeds City college plan. I personally think it is important that the merger mania in further education does not go too far. I am here to speak on behalf of the 144 colleges with capital projects that are not being funded in the same way as in her area.

Photo of Maria Miller

Maria Miller (Shadow Minister, Children, Schools and Families; Basingstoke, Conservative)

As a fellow Hampshire MP, my hon. Friend may be aware of an organisation in my constituency called ITeC. It has a fantastic record of success—87 per cent. of its students, who are between the ages of 16 and 24, go forward to be placed in employment—yet it is facing significant cuts because of LSC funding problems. It is also facing the prospect of cutting up to 50 places before the end of July—the sorts of places that would help my constituents to get back into work. Would he care to comment on that?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend is absolutely right. The reason for this debate, and the point that we make in the motion, is that there is an enormous gap between the rhetoric from the Prime Minister, the Chancellor and the Secretary of State, which is all about the importance of investing in skills in the recession, and the reality on the ground, which is the complete opposite of what they talk about in this Chamber. Further education colleges cannot secure the capital funding that they need to improve their provision, and many practical training courses are being cut because of the inability of DIUS and the LSC properly to manage their funding streams.

Undoubtedly the most serious crisis in skills provision is in the financing of further education capital projects. I would like—on behalf, I am sure, of Members on both sides of the House—to pay tribute to the work that colleges do. Many of us who visit colleges in our own constituencies and around the country realise that they are crucial in improving social mobility, providing practical training and giving people hope that they can emerge from this recession with more skills and better opportunities in life. I am sure that we all also appreciate the excellent work that the Association of Colleges does on behalf of colleges.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I will just make a tiny bit more progress, and then give way.

I have been visiting a range of colleges that are suffering from the capital funding crisis, and I have been shocked by what I have discovered. Last week, I was at Huntingdon college, where I was briefed at first hand about the problems that it faces. It clearly needs to move to a new site, which it has already secured. It is part of a regeneration project that now has a question mark over it.

Photo of Jonathan Djanogly

Jonathan Djanogly (Shadow Minister, Business, Enterprise and Regulatory Reform; Huntingdon, Conservative)

rose—

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend, who represents that constituency, is catching my eye, and I happily give way to him.

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Jonathan Djanogly (Shadow Minister, Business, Enterprise and Regulatory Reform; Huntingdon, Conservative)

I am pleased that my hon. Friend is mentioning the college in my constituency, which was grateful to him for visiting and taking the time to hear about what is going on there. He will have seen the state of its dilapidated 1960s buildings, where the staff are doing the best they can. Does he therefore understand why my constituents and staff at the college are appalled that they have lost out on £40 million that was promised for redevelopment at a time when we need to be investing in training, not taking money away?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

rose—

Photo of Michael Lord

Michael Lord (Deputy Speaker)

Order. Before the hon. Gentleman responds, may I say that some of the interventions are now long enough to be mini-speeches? A large number of Members will be seeking to catch my eye, and this is a half-day debate. Although interventions are important, contribute to the debate and help the whole thing along, every one means that it is less likely that an hon. Member will have the opportunity to make his speech.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My speech is being cut even more rapidly than the FE capital programme.

I accept the point that my hon. Friend Mr. Djanogly makes—I have listed other colleges, which have a similar story to tell. One example is Brockenhurst—my hon. Friend Dr. Lewis is in his place—to which a clear commitment was made to provide new training opportunities. Colleges have often been encouraged to bid and then told, "Ah, you're only bidding for £20 million—that's pathetic. Have you thought of bidding for £50 million or £60 million?" They have been actively encouraged to do that. Even when the original idea was for refurbishment or a modest set of improvements, they were told, "No, knock the whole thing down and go for a grandiose capital project." Having had their hopes raised by the LSC, the Department and Ministers, they now find those hopes dashed. That is a cruel trick to play on a crucial part of training and skills in our country.

Photo of John Denham

John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The hon. Gentleman has said several times in the House and outside that Ministers have encouraged colleges to submit inflated or over-grand bids. Will he give me just one example of a Minister going to a college and asking it to withdraw its bid and submit a new one? If he cannot, I would be grateful if he stopped making that allegation.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I shall deal with the Secretary of State's responsibility in a moment. He has to accept some responsibility for the LSC's actions. As with his denial of the figures for NEETs, it is not good enough for him to try to escape responsibility for the policy, when he must have known what was going on. If he intends to tell us that, for the past 18 months, when the LSC was telling colleges to bid for more capital, he knew nothing about it, he is admitting to incompetence and failure to discharge his responsibility as Secretary of State.

Photo of Justine Greening

Justine Greening (Shadow Minister, Communities and Local Government; Putney, Conservative)

South Thames college, which is just outside my constituency and used by many of my constituents, received the other piece of bad advice that colleges got. It had an ambitious project and was advised to submit it in two halves. It got funding for the first half, but funding for the second has been put on hold, so it is stuck with a half done project that is no use to anyone.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

My hon. Friend is right. Some colleges have already started demolishing part of their fabric, and lessons are taking place in temporary classrooms as they wait for permission for a capital project. In other colleges, the new project was to be part of the wider regeneration of an area. Many serious problems face at least 144 colleges.

I want to ask the Secretary of State some specific questions on behalf of many of those colleges about what is going on. My first question follows from his intervention. Why did it take so long for the Department for Innovation, Universities and Skills, for which he is responsible, to realise what was happening?

We know from Sir Andrew Foster's excellent report that alarm bells were sounding as early as February 2008, when the LSC's director of property and infrastructure prepared a report. Its analysis of the capital promises being made concluded:

"This simply proves that the continuation of the current payment profile of projects is unaffordable to the Council."

We know that that report from February 2008 was discussed by the LSC's capital policy group in April 2008. We also know from Sir Andrew Foster's report that the Department attended all the meetings of these groups at a senior level as an observer. Nevertheless, the Secretary of State said, and I accept his word, that he knew about the problems with the capital funding of FE only in November 2008.

How on earth can we have a Department in which senior officials are aware from April, possibly February, that they have an unaffordable set of capital commitments—we know from the minutes, which I obtained through freedom of information requests, that members of the Department's top management team attended the meetings—and the Secretary of State seems to have been kept in ignorance for six months? That is an extraordinary way to run a Department.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

If the Secretary of State will not answer that challenge, I will happily accept the hon. Gentleman's intervention.

Photo of Gordon Marsden

Gordon Marsden (Blackpool South, Labour)

The hon. Gentleman's litany of concern for colleges would have rather more force if the Government whom he supported in the 1990s had done anything about their funding. Does the shadow Secretary of State agree that his position is greatly undermined by the fact that last year the National Audit Office pointed out the appalling lack of investment from his Government before 1997?

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

The one thing that colleges all say is that when they were funded by the Further Education Funding Council they were trusted to exercise discretion, which meant that they could tackle local problems such as NEETs without being funded by the Learning and Skills Council simply to produce paper qualifications. Colleges look back upon that freedom to run their own affairs very fondly indeed, and we are committed to restoring it to them. The best way to ensure efficiency and high performance from colleges is to give them the freedom to run their own affairs, and that is what we are committed to doing.

I want to pursue the important question of exactly why it took almost a year, from the first report by the Learning and Skills Council, in February 2008, for the Secretary of State to make his first public comment on the matter, which he did in late January 2009. Indeed, even now we are still waiting for him to come to the House to make a proper oral statement about what is happening to college funding. It is now 15 months since the problem was first identified. When he last made a written statement to the House, he said:

"I will make a further statement to the House after the recess".—[ Hansard, 1 April 2009; Vol. 490, c. 72WS.]

We have already had that recess; in fact, we are about to have another one, and still there is no sign of the Secretary of State volunteering any information. At every stage, the information has had to be secured by us, making freedom of information requests, tabling written questions and calling debates. It is a pity that at no point has he felt able to come to the House to volunteer information in Government time about what is happening to our colleges.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I am going to make some progress.

We know from Sir Andrew Foster's excellent report why the problem built up in the way that it did. Sir Andrew gave one reason why the information was not percolating through to the Secretary of State:

"I am left with a distinct feeling that bad news was itself bad news, too difficult to handle; yet this is exactly what management has to do."

People were not willing to bring to the Secretary of State the bad news about what was happening in the Learning and Skills Council and in further education capital projects. I regard that as a serious dereliction of duty.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

Let me make some more progress.

The problem is worse than that, however. We know, from the freedom of information requests that we have made and from the minutes that we have read, that the "no bad news" culture spread as far as giving deliberately misleading accounts of what happened at some of the crucial meetings of the Learning and Skills Council. The minutes of the meeting on 17 December 2008, which was attended by the Secretary of State's senior officials, as all the previous ones were, show the following crucial item, when the problem was finally confronted:

"Council asked that a correction"

be made to the minutes of the previous meeting. The minutes continued:

"The report stated that 'At its meeting on 5 November 2008 the Council did not have time to consider and determine the project proposals...recommended at the...October Capital Committee meeting'."

That was what the minutes of the November meeting stated. This is what was added subsequently:

"It was noted and acknowledged that the main underlying reason had been concern over affordability."

In other words, it was recognised that the minutes of the previous meeting had been misleading. The council had pretended that the problem was that there was no time to discuss the capital projects; they admitted, at the subsequent meeting, that the underlying reason was "concern over affordability".

The problem reached the stage that the minute-taking in the Learning and Skills Council was deceitful, in that it was not willing to acknowledge the capital problem. That is why there was a failure of management in the capital project. At no stage was anyone openly reporting between the LSC and DIUS or between DIUS officials and Ministers about what was happening. The Secretary of State has to take responsibility for that culture, and for the way in which the Learning and Skills Council functions.

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Ian Stewart (Eccles, Labour)

I thank the hon. Gentleman for giving way; he has been generous with his time. This is an important issue, and it is important for us to get to the bottom of it. I am intrigued by the details that he has put forward today, but is he aware that, when the former chief executive of the Learning and Skills Council stood down, he went on record to say that he did not become aware of the issue until October, and that the reason for that was, he claimed, that the council was looking at in-year figures? The hon. Gentleman has hit on some interesting points today, and perhaps we can get to the bottom of this.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

There were clearly managerial failings within the Learning and Skills Council, but I do not think that it is feasible to say that the problem was simply a matter of those failings. We, the Opposition, are trying to hold the Government to account and to find out why there was a culture of bad news not being reported, of minutes of meetings being misleadingly reported, and of crucial information not being conveyed. We need to find out why there was almost a year between the problem first being identified and any public statement being made by the Secretary of State, and why we still have not had the statement that was promised before the last recess. As hon. Members in all parts of the House understand from other contexts, there is a need for openness, and a lack of openness has contributed to the scale of this problem.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I am going to try to make some progress, because many other Members want to speak.

I want the Secretary of State to comment on certain other crucial points. We need him to tell us, authoritatively, how many colleges are affected by this problem. The figure of 144 comes from a letter that I received from the Learning and Skills Council after I had asked questions in the House, but we need the Secretary of State to give us an updated account. As soon as the list of colleges was released, I started getting e-mails from people asking why their college was not on it. We then discovered that there were other colleges involved that had not been on the first, official list, but we have not had a further, authoritative update from the Department on how many colleges it thinks are affected by the crisis.

May I also ask the Secretary of State what criteria will be applied as he tries to get the further education colleges out of the appalling mess that they find themselves in? We realise that there will have to be priorities, because there is a capital overhang of £3 billion or more, and that the needs of all the colleges cannot be met easily or rapidly. However, there needs to be far more public information than we have had so far on the criteria that will be applied and on how the limited amount of money will be dispensed.

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David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

No, I want to make some more progress.

We are told that one criterion will be whether a project is shovel-ready, but there will be others. What about the projects that are part of the wider regeneration of a town or district, for example? What priority will go to them? We also need to know what will happen to those colleges that have made commitments to buy land or commitments to move. How much weight will be attached to that consideration?

It will be tempting—and I suspect that the Secretary of State will succumb to the temptation—to say that the crucial issue will be to knock down the building costs charged by the building industry, and indeed there might be some savings to be made in that way. Will he acknowledge, however, that one reason that these projects have turned out to be so expensive is the extraordinarily cumbersome regulatory procedures surrounding them, involving preferred builders and preferred planning consultants who might be approved of for one region but not for another? Many colleges have told me that they could have delivered their capital project at a much more modest price than it was ultimately billed for, if only they had been free from the bureaucracy of the LSC.

Will the Secretary of State also explain exactly how costs that have already been incurred by colleges will be treated? According to the Association of Colleges, £187 million-worth of expenditure that was thought to be part of capital projects might already have been incurred, but if those projects are no longer going ahead, that money could count as current expenditure instead. Counting it as current expenditure could drive colleges into deficit. I see my right hon. Friend Sir George Young in his place. He, too, has raised that matter, because it affects his local college. Some colleges might find themselves in breach of banking covenants if their current expenditure budgets are suddenly hit. Therefore, we need authoritative advice about the accounting treatment in these circumstances and about the prospects for colleges to get redress for the costs that they have already incurred.

It is interesting to look through the minutes, because another revealing item from them suggests one of the reasons for the secrecy surrounding all these matters. The minutes state:

"Members asked that a clear action plan be in place to respond to any legal challenges arising from its decision to carryover project approvals from its December 2008 meeting".

One suspects that the LSC is legally vulnerable when colleges have incurred these items of expenditure; again, we are waiting to hear some authoritative guidance from the Secretary of State.

Members of all parties will be concerned about the problems facing colleges in their constituencies and I want to give as many of them as possible the opportunity to raise their specific concerns. However, as well as noting the individual injustices and grievances, we should not lose sight of what this tells us about the importance of investing in skills in a recession and this Government's failure to give FE colleges the opportunity to do just that.

If we wanted to know what was wrong with this Government's approach to skills, I could think of no more vivid example than the recent report from the UK Commission for Employment and Skills. The Secretary of State would not need to read even the executive summary; all he needs to read are the statistics on the cover, which show the international ranking for the three levels of skills. For the highest level, the UK's position is 12th internationally. The Government's ambition is that we should be eighth by 2020, but the report projects that, on current policies, we will be 10th. For intermediate skills, we are currently 18th in the international league table. The Government's aim is for us to be in the top eight, but the report says that on current policies we will go down to 21st by 2020. As regards low skills—we have a particular obligation to people with low skills because the issue is fundamental to social mobility—our current international position is 17th. The Government's aim is for us to be eighth by 2020, but the independent report suggests that, at this rate under this Government's policies, we will be 23rd internationally in 2020. That is why we need a different approach and why I commend the motion to the House.

4:27 pm
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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

I beg to move an amendment, to leave out from "House" to the end of the Question and add:

"notes the Government's belief that in a recession it is important to give people the skills they and their employers need to recover from the downturn;
commends this year's Budget for investing £1.2 billion in creating jobs and providing training to young people who have been unemployed for 12 months;
further notes that there are now more 18 to 24 year-olds working or engaged in full-time education compared to 1997;
commends the Government for its sustained investment in skills with record numbers of people now receiving training, far more than was originally planned for this year;
further commends the Government for spending over £5 billion on adult skills this year, helping three million learners, and for increasing investment in higher education by 24 per cent. in real terms since 1997;
further notes that the Government is prioritising helping people to gain employability skills;
further notes that the Train to Gain budget has risen to £925 million this year;
further notes the budget for apprenticeships is over £1 billion this year and that there are 250,000 starts planned;
commends the Government for confirming that no current learner will lack the funds to complete their course;
further notes that this Government is spending £2.6 billion on further education capital projects over this spending review period;
and further notes that Sir Andrew Foster has recently produced an independent review of the Building Colleges for the Future programme."

I welcome this debate, but I am surprised by the temerity of Mr. Willetts in raising it. The hon. Gentleman quite often repeats unfounded allegations that, as the House heard earlier, he is unable to justify. That is a shame, because the issues we are debating are of real importance to our society and they are better conducted by not making allegations that cannot be substantiated.

It is true that, as this country works to recover from the impact of the global recession, it is going to be British business and the skills of the British people that ultimately ensure that the upturn comes as quickly, as strongly and as sustainably as possible. Investing in the skills of the British people is one of the most important things we can do. Through training, we can improve their productivity and the productivity of their companies. Through training, we can give individuals the skills they need—skills to keep their jobs, skills to get new jobs and skills to develop their careers and provide a decent life for themselves and their families.

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Oliver Heald (North East Hertfordshire, Conservative)

When I was a Minister, I expected my officials to tell me as soon as they knew something was going wrong, in case the Opposition spokesman gave me a hard time. In fact, it was the right hon. Gentleman. I would like to know whether he works on the same basis; and, if so, what went wrong? Was the junior Minister not told about the meetings that officials were attending where all the money was obviously wrong?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

We will come on to the Learning and Skills Council in due course, but I point out to the hon. Gentleman that, yes, I do expect to be told. One of the reasons I commissioned the Foster report—it did not just appear out of nowhere; I commissioned it before anyone had a clear picture of the size and scale of the problem—was that I wanted to understand what had happened. That is the way I have always worked as a Minister. I gave him a hard time when he was a Minister and I was Opposition spokesman, and I think I often told him things that he did not know, but Ministers do and should expect to be informed. Where that does not happen, clearly it is a matter of regret and we usually follow such things through.

The hon. Member for Havant set out a series of charges. I intend to rebut each one. I will set out clearly why he is wrong and why his criticisms are misplaced, and say why the Government should be proud, although never complacent, about our record. I will do more than that: I will set out why, according to all the evidence we have on the Opposition's record and their current plans, they pose a threat to everything that has been achieved in recent years.

I warn any Conservative Member who plans to intervene on me that I will challenge them to tell their constituents the truth about how Conservative plans would hit their constituents and their colleges.

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Rob Marris (Wolverhampton South West, Labour)

Does my right hon. Friend find it surprising that Mr. Willetts lambasted rhetoric, but then proceeded—in speaking to a motion containing some good points, albeit not many—to put no flesh whatever on the bones of how the worthy proposals that he might propose would be funded? It is just rhetoric unless the Opposition say how much they would spend and how they would raise that money.

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

My hon. Friend makes a good point that I will come to later, but I make the point now that, having read the Opposition motion, I was looking forward to a detailed explanation of the plans for young people that were announced with a flourish a few weeks ago and of where the £600 million that is to be invested would come from. Despite speaking for the best part of 50 minutes, the hon. Member for Havant did not even mention his party's policies, where the money would come from and how it would be funded. I will explain why he—despite what I have said, he is a man of integrity, honesty and intelligence—could not bring himself to discuss those policies in the House.

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Gordon Marsden (Blackpool South, Labour)

Among the rather curious lacunae in the shadow Secretary of State's speech was any reference to the importance of higher education delivered via further education, yet we know that 12 per cent. is so delivered in this country, notably in my constituency at Blackpool and The Fylde college.

Does my right hon. Friend the Secretary of State agree that if we were to take the previous Government's record of investment in higher education from 1992 as an indication of what this Conservative party would do for higher and further education, my constituents and my college in Blackpool would be right to be concerned?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

My hon. Friend is absolutely right. The Government's record of investment over 10 years and of increasing real spending in higher education stands in sharp contrast to what happened in the previous 10 years, when funding per student fell by 30 per cent. The expansion of colleges such as his, which bring the opportunity of higher education to many students who, for all sorts of reasons, either choose not to or cannot travel away from home to go to university, has been an enormous achievement over that period.

The truth is that much of the speech made by the hon. Member for Havant was made up of complaints that we are not spending enough money on something when everybody knows that the Opposition's policy is to spend less money on everything.

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David Tredinnick (Bosworth, Conservative)

I understand that the Secretary of State is trying to blunt the attack from this side of the House, but we are the Opposition and it is our job to bring the problems to his attention. I was at North Warwickshire & Hinckley college on Thursday, at the college's request. It is confronted with a £2.5 million cut in expenditure to which it is already committed, including £1.5 million on Train to Gain, which is 30 per cent. of the budget. Will he please be generous enough to allow me a short meeting with him to explain the situation at the college, where a little extra money would solve a lot of problems to do with committed expenditure?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

Given the motion, I rather expected some reference to be made to these issues by the Conservative spokesman, but he missed them out entirely. If I may, I shall turn straight away to the position of Train to Gain and the apprenticeships programme, and the hon. Gentleman may then feel that he has been reassured.

The most important and fastest-growing programme of training for people at work is Train to Gain. It provides training at work, chosen by employers and described by the deputy director general of the CBI as

"exactly the product we need at this time."

Last summer, of course, the Opposition promised to abolish Train to Gain. In the two years 2008 to 2010—this academic year and the next—we set out to train 1.291 million people. Train to Gain has been hugely successful—so successful that overall we will deliver 100,000 more starts and learners over those two years than we had previously planned. That success means that we are training tens of thousands of people today who might otherwise have started their training only late this year or next year, and who would not have been trained at all if the Opposition had their way. We need as much training as possible in the recession, so that people being trained and their employers can benefit now and make the recovery stronger.

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Rob Marris (Wolverhampton South West, Labour)

My right hon. Friend is making a powerful case in relation to the official Opposition, the Conservative party. May I urge him, when he has finished wisely and carefully savaging the official Opposition, to turn his attention to savaging the Liberal Democrats? In this debate on skills in the recession, they can muster one MP for a debate that has now been going on for more than 45 minutes. Does he not agree that that indicates what a low priority the Liberal Democrats place on skills in the recession?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

I am grateful to my hon. Friend for drawing that to my attention, because I must admit that I had not noticed the Liberal Democrat.

I return to the success of Train to Gain and the Opposition's plans to abolish it and prevent 1.291 million people from learning at work over two years. It is a huge tribute to colleges, training providers and employers that they have done so much to expand training. That backs up the changes that we made to make Train to Gain more flexible and better tailored to company needs, particularly those of small businesses. Obviously no budget can be unlimited, and in the longer term we need to ensure that the commitments made do not outstrip our resources. Because the programme has been so successful, I have considered every way in which I can find more resources. Today, I am confident that the number of people who start Train to Gain this year will be in line with our published plans. As I have said, overall there will be 100,000 more starts and learners in 2008-09 and 2010-11 than we first planned.

There has also been a huge increase in apprenticeships for the over-25s. We expect 60,000 over-25s to start apprenticeships this year, compared with the 29,000 that we had planned. That, too, is good news, and we still have sufficient money—more than £1 billion—to start 250,000 apprenticeships in the coming year.

In relation to the point made by David Tredinnick about north Warwickshire, the very success of the programme, which is doing so much for the country and for learners, has meant the LSC adjusting and readjusting contracts with colleges and providers. That has created uncertainty for some colleges and other providers. The LSC is writing to providers today, giving a similar message to mine about the coming year. It is working quickly with individual providers to resolve funding allocations for the rest of the year. I refer to the Opposition motion in saying that that letter will include an absolute guarantee that the funding will be there for every learner who has started a course or apprenticeship to complete it.

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Joan Walley (Stoke-on-Trent North, Labour)

I am heartened by the news that we have just heard, but in view of the announcement that he has just made, can my right hon. Friend give me an undertaking that where there is uncertainty about local colleges having sufficient funds to carry on providing all these wonderful training opportunities, there will not be any need to make redundancies of any kind?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The Learning and Skills Council is working with colleges as quickly as possible in order to provide certainty. What I wanted to do today was give the headline news that the number of learners whom we expect to start on Train to Gain in the coming year is the same as the number that people will have seen in published plans. It is hard for me to give details of each college, but I have at least been able to specify the global amount of training that is available.

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David Anderson (Blaydon, Labour)

The Secretary of State has referred to the policy vacuum in the Conservative party. What does he think are the party's plans for the 22,000 union learning reps or the 250,000 learners who went to learn at work last year? Does he think that it has any plans for them?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

As far as I know, the Conservatives are completely silent on the issue. On Friday I presented certificates to learners at the town depot union learning centre in Southampton, in my constituency, and everyone there was well aware that it was the Government who had invested in union learning reps and made it possible for so many people to learn.

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Gordon Marsden (Blackpool South, Labour)

I thank my right hon. Friend for being so generous in giving way. Is he aware that the Conservatives recently produced a lengthy policy document on skills in which union learning reps were not mentioned once? Given their failure to make any commitment, is it not the case that we can have no trust or belief in their ability to support the programme if they ever came to office?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

My hon. Friend makes a very good point, which I am sure will be noted by all who care about the future of union learning reps. Incidentally, that does not apply only to union learning reps themselves. One of the interesting aspects of the programme is the number of employers who say that it has transformed their productivity and the quality of service they provide for the people to whom they sell products.

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David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

The Secretary of State is trying to address what is indeed a serious worry felt by many learning providers about their funding for 2009-10, but may I ask him to clarify one key point? When he refers to 2009-10, does he mean the Government's financial year or the academic year, which is what many providers use for the purposes of their planning? The letters that they received recently from the Learning and Skills Council concern the academic year 2009-10.

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

I am glad that the hon. Gentleman has raised that point now. His motion refers to it, but he forgot to mention it in his speech. That will suggest to many providers that he does not consider it a particularly important issue and would rather spend his time reading out large chunks of the Foster report, which all Members have been able to read for themselves.

The answer to the hon. Gentleman's question is that the figures that we published, which I have described as planning totals, relate to academic years. The Department obviously works in the context of financial years, as do all of us who come under the Treasury's remit, but the figures to which I referred related to the current academic year. I made that clear at the time, but I have now clarified it again.

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Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)

The Secretary of State spoke of the uncertainty of funding for colleges for the next academic year. Fareham college in my constituency expects to recruit another 100 to 150 16-to-18-year-olds in line with increasing participation, but there is currently no certainty in regard to whether that increase will be funded by the Hampshire branch of the Learning and Skills Council.

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

I shall deal with that point later, but I shall deal with it now as well. The hon. Gentleman should know that the budget for the next two academic years includes a total of £655 million for the sixth-form and 16-to-18 college sector to enable those colleges to expand and offer additional places. That is a very significant investment in the future of young people, but the Conservative party's policy of refusing to borrow and refusing to invest so that we can grow our way out of the recession means that it could not be made if it came to power. The hon. Gentleman should tell Fareham college that the Labour Government is to invest £655 million in young people over the next two years, and then say "If you vote Conservative in Fareham you will not get the money." That would be the honest way of approaching his constituents.

It is our belief in a demand-led training system that has enabled the successful expansion of Train to Gain and adult apprenticeships. As I acknowledged, it has created tensions between the dynamic entrepreneurial training system we want and the need to manage public finances, and I know that the LSC wants to work out with providers how those tensions should be managed in future.

Our work is not just about delivering the promises we made in the past. The recent Budget gave us new resources to invest, but the Opposition could not do that; they oppose our decision to use borrowing to sustain investment to grow our way out of recession, so they could not have introduced the guaranteed offer of work or training for young people who are out of work for a long period. As part of that package of £1.7 billion of investment, my Department will be able offer more than 80,000 training places for young adults who have been unemployed for more than 12 months. We will start that from the autumn. The Opposition also could not match the extra £250 million we are already putting in place to help people with flexible training and advice to improve employability skills and to get them back into work, including 75,000 training places for people who have been out of work for six months. People will be able to start that training when they are out of work by going to college, and then continue it when they are in work through Train to Gain.

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Ann Cryer (Keighley, Labour)

Keighley is doing very well, with a new-build college, which will be excellent, and I appreciate that. Does my right hon. Friend remember, however, that the Thatcher Government got rid of the industrial training boards, which were wonderful organisations for producing training for skills? What will the Conservatives' demolition job be next time if, unfortunately, they get elected again?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The reality is that everything we hear from the Conservatives suggests that they will return pretty much to the same position, which is that if employers are not prepared to pay for skills training, that should not happen.

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Maria Miller (Shadow Minister, Children, Schools and Families; Basingstoke, Conservative)

The Secretary of State talks a great deal about the investment he plans to put into this sector but, as my hon. Friend Mr. Hoban pointed out, that does not marry with the reality on the ground. What message would the Secretary of State give to organisations, such as ITeC in my constituency, which are cutting places before the summer comes because the money he is talking about simply is not forthcoming?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The hon. Lady clearly has not quite grasped the gist of the debate so far. What I have said—very clearly—is that we have far more people in training today than we had planned to have in training today. I have also said that in the coming year we will train the same amount of people whom we had planned to train. Because we have had the great success of training people early and because budgets are not unlimited, we are having to adjust the budgets of training providers, but I say to the hon. Lady that this is not a cut. We are not reducing the number of people being trained. More people will have been trained over this two-year period than we had planned. Next year, as many people will be planned for as the providers would have been expecting. I have acknowledged tensions in the handling of that, but that is the picture that she needs to take back to her college. She should say to it, "The good news is that, despite the fact that the training system in this country is currently training more people than it had planned, it is still confident that it will be planning for as many people next year as it had set out." That is enormously good news, and I hope I can rely on the hon. Lady—I am absolutely sure that I can—to take that message back to Basingstoke, rather than to return there and say that the situation is different. The LSC will send the detailed allocations out to colleges as soon as possible.

I have talked about the investment that the Budget enables us to make in the future of young people, and which the hon. Member for Havant and his party would not match. That is why it is so extraordinary that the hon. Gentleman raises the NEETs issue. There is an old debate here, and at the crux of it are two issues. The first issue is the hon. Gentleman's reluctance to give the Government the credit for having 1 million more young people in education, work and training than 10 years ago. That was not an act of God or an accident; it was something that Government policy set out to achieve. The second reason we have disagreed with him is that he has always made the most of the figures by including in his list of NEETs young mothers who are at home bringing up families. I always feel that he comes here to attack the Government over NEETs and then goes outside to make speeches about the importance of family policy. I have always acknowledged that we should focus on a smaller group of young people who seriously are detached from the labour market—from education, work and training. In some ways, that is the debate that he and I have had with great regularity over the past two years.

Let us acknowledge that today there is a more pressing debate, because times are harder for young people. We are determined not to write off a generation of young people, as the Conservative party did in the recession of the late '80s and early '90s. That is why we are raising the participation age over the next few years to keep young people in education and training and work with training—that practical measure to help young people is opposed by the Conservatives—and why we are putting a further £655 million into 16 to 18 learning this year and next to enable colleges and sixth forms to meet rising demand. The Conservatives' policies could not match that investment, and the hon. Gentleman cannot honestly match our guaranteed offer of work and training to young people who cannot find work for a long time. I am happy to debate NEETs. It is a serious issue and we recognise the challenges facing young people today, so I must say to him that investing in those young people and creating opportunities for work, for training and for education is how we must tackle the number of young people who are doing none of those things, not cutting the support we provide for them.

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Gordon Marsden (Blackpool South, Labour)

Does my right hon. Friend acknowledge that work-based learning is a key element and that in my county of Lancashire that grew by 30 to 35 per cent. between 2006 and 2007? Does he also agree that part of this is about using frameworks and structures in which employers and the general public can have confidence and that the Conservative party, by its failure to get wholeheartedly behind the diplomas process and, indeed, aspects of the apprenticeships process, has hindered rather than assisted the process?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

Yes, it has always been a matter of shame that the Conservative party has blown so hot and cold on the development of the diplomas. For many young people, they provide a range of options of learning that has not been in place previously, including the important work-based learning.

Let us turn to the further education capital programme. The position we are in, with over-commitments made and expectations raised unrealistically high, should not have happened. I have made that clear and, as Secretary of State, I have also come to the House to apologise to those who have been affected. It was me who asked Sir Andrew Foster to carry out the review, and I, like the hon. Member for Havant, think that his report has set out fairly the mismanagement that led to the problem. But let us be clear about the background to this debate. Twelve years ago, when the Opposition were in power, there was no budget for FE capital. [Interruption.] This is rather important, because when hon. Members talk movingly about their dilapidated 1960s buildings, as happened today, we must ask how long buildings—sometimes those much older than that—were left to be dilapidated. It is relevant that the starting point —[Interruption.]

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Adam Afriyie (Shadow Minister, Innovation, Universities and Skills; Windsor, Conservative)

They have had 12 years to sort it out but failed.

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The hon. Gentleman asks me about 12 years and whether a Government should have managed, within that period, to transform all the legacy that his party left. I have to say no, but we have made a very good start—we have done much better than we would have done with the zero capital budget that we found.

The second background point is that the Conservative party, despite its history, fails to give any credit—ever—to the huge scale of investment that has been and is being made in FE capital. I would have a lot more time for the criticisms that are made by the Conservatives if they acknowledged the scale of what is being achieved. Since 2001, 700 projects, at nearly 330 colleges, have been funded and in those areas that has transformed the FE estate for learners. In the current spending review we were committed to, and will spend, £2.3 billion, and that was on top of the £2 billion spent between 1997 and 2008. It is true that despite the huge scale of that programme, its management by the LSC has raised the expectations and hopes of colleges. I can understand the feelings of those who do not know where they stand or feel that they might not get their colleges within the time scale that they had hoped. That is why, in the recent Budget, my Department was allocated £1.2 billion on top of the investment that we had already received, enabling us to get vital schemes going within the next two years and to plan for the future.

By contrast, the hon. Member for Havant went to the Association of Colleges conference last October, where he was asked whether he could guarantee that the Conservatives would deliver the planned spending even for 2010-11. He told the conference that he could not. That is the truth. While we are working through the LSC and with the AOC to begin to prioritise more schemes and to get them under way, a Government with the hon. Gentleman in it would cut the schemes that are already under way.

We are doing what the resolution calls for—or, rather, the LSC is working with the AOC to work out priorities and to deal with the difficult task of prioritisation. The LSC is out to consultation at the moment and is working with the AOC on those criteria. When I have received advice from the LSC on that, it will be in a position to publish the criteria.

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John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

rose—

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The hon. Gentleman is trying to intervene as if there is a major issue here. This has to be got right. We know that large numbers of colleges are anxiously awaiting these decisions and that is why it is important that the LSC, working with people in the sector, gets this right.

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John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I acknowledge the investment that the Government have made in FE capital in the past, but there is a major issue, so will the Secretary of State answer two very simple questions? First, how many colleges are affected—140, 150, 180 or 200? Secondly, did the officials in his Department know about the problem in the first half of last year?

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John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

The figure of 144 colleges that we have published is the information supplied to us in March by the LSC through its analysis. I understand that it has been suggested that other colleges felt that they had schemes in preparation, regarded those schemes as being in the pipeline, had been in discussions and so on. In reality, that is the latest and most accurate figure with which I have been provided by the LSC.

The Foster report sets out in some detail the meetings that took place where my Department was represented at official level in the early part of last year. Foster's conclusion is that opportunities were not taken to prevent this problem from happening. That is undoubtedly a fair judgment. I would say two things about that. First, there is no ambiguity that Ministers were first alerted to the existence of a problem—not the problem as we now define it, but a potential or emerging problem—in November. Secondly, Foster raised the core issue of the clarity or otherwise of how accountability is exercised between a Department and its non-departmental bodies. Mr. Hayes will know that when we published the Foster review, I asked the permanent secretary of my Department to carry out a view of the accountability arrangements. We have many non-departmental bodies, and they are all different in nature. It is critical that officials know precisely what level of authority they are expected to exercise.

The hon. Gentleman will know that in the case of the LSC the previous chief executive, who was himself not informed until late in the day, took responsibility for what happened and left the LSC. The hon. Gentleman will also know that the LSC is being replaced by the Skills Funding Agency, which will not be a non-departmental public body. I think that that will help. I hope that something like this will not happen in the future, but in such a situation the lines of accountability and responsibility will be much clearer.

Photo of Joan Walley

Joan Walley (Stoke-on-Trent North, Labour)

I recognise that the Secretary of State has come to the House and said that there are problems, and that he takes responsibility for putting those problems right. However, in respect of the Foster review and the discussions taking place between the Learning and Skills Council, further education colleges and their associations, it is critical that he looks at the role of regeneration in places where communities need to be transformed. I welcome the fact that on 4 March he announced to the House that detailed consent would now go ahead for the Building Colleges for the Future programme in Stoke-on-Trent and for seven other colleges. I have already had a meeting with a Minister in his Department on that. The Stoke-on-Trent college application related to a phased programme, which included two new builds on the Shelton and Burslem sites. It is critical that regeneration and the ability of people to change their aspirations and skills are part of the new review, so that the much-needed investment in the Burslem campus in Stoke-on-Trent can go ahead, too.

Photo of John Denham

John Denham (Secretary of State, Department for Innovation, Universities and Skills; Southampton, Itchen, Labour)

I recognise the points that my hon. Friend raises, and the way in which she has argued the case for her constituency. Of course she is right that the relationship between a college programme and regeneration must be one of the criteria. I do not want to get drawn into the criteria debate. I simply say, and I hope that the House will understand, that it is relatively simple to list the issues that should be taken into account; the challenge is to decide what weighting should be given to the different factors, so that when everybody looks at the final outcome, people at least feel that it is fair and consistent, although it will be impossible to produce an outcome in which everybody is happy. That work is going on at the moment.

I should make some progress, and bring my remarks to a close. The hon. Member for Havant repeated his criticism about the reduction in the number of non-vocational leisure courses as a result of our having prioritised training for work. That is one of the reasons he wants to scrap Train to Gain, but his priority is wrong. It is not just me saying so; the CBI and the Institute of Directors have both said that Train to Gain is the right policy. The CBI said that it was

"concerned by plans"—

that is, Opposition plans—

"to divert money from the Train to Gain programme, as this is designed to ensure that public funds are invested in training that delivers improved business and workforce performance."

The Institute of Directors said, in response to the Opposition's proposal:

"The Train to Gain scheme is not perfect, requires greater flexibility and needs to promote higher level skills as well as the basics. But the principle of the initiative has great merit and the focus of policy should be on improving the service rather than diverting funds away."

I am as keen on learning for its own sake as anyone. That is why I worked across Government to launch the White Paper, "The Learning Revolution", and why we have just opened bids for a £20 million fund to get informal learning going in new ways and new venues. However, the real priority today must be the skills that we need to get Britain out of recession.

Finally, let me turn to the hon. Gentleman's proposals for new investment, because I find them a little distasteful. We are talking not about party political point-scoring, but about the hopes and aspirations of an anxious generation of young people, who deserve to be treated honestly and with respect. When he announced his £600 million package, we could not understand where the money was coming from. Then the Conservatives told us: it was to come from the cuts that they had already announced—the £610 million-worth of cuts to my Department's budget for this year, announced by the Leader of the Opposition on 5 January. I wrote to the hon. Member for Havant on 15 January, asking what he would cut. He never replied. That is the disgraceful scam revealed. The idea is to claim that one could cut £600 million without saying how, and then publish a really attractive list of proposals funded from the same non-existent cuts. The point is that that is not the way to treat young people or their parents. They deserve to be treated honestly and with respect. The hon. Gentleman proposed this debate, but I think that he made a mistake.

5:04 pm
Photo of Stephen Williams

Stephen Williams (Bristol West, Liberal Democrat)

Investment in skills and training is always important, whether we are in the middle of a period of prosperity or a recession; the latter is the background to this debate. I am sure that all three Front-Bench spokesmen visit many further education colleges as part of our work. I certainly visit the City of Bristol college and Filton college in Greater Bristol, and see the important work that is done in those colleges to upskill the population of Bristol. I have seen the skills work that they do in construction, and in catering. I have even had several lunches at City of Bristol college prepared by its excellent catering students, and served by those who are learning waitressing and waitering skills, if that is the right word, in the college.

I have even been offered hair and beauty treatments on some of those visits. You and I have something in common, Mr. Deputy Speaker, and I do not think that tonsorial assistance in those matters would be very productive. I have had to decline several offers to have my legs waxed. However, I was interested to learn that accountancy training was offered in further education colleges. I am the only Member of the House to hold a professional qualification in taxation and business as a member of the Chartered Institute of Taxation. Given Mr. Speaker's earlier statement, an innovation urgently required for all hon. Members would be a crash course in accountancy, audit, transparency, disclosure and perhaps in some cases, professional ethics. The reputation of the House and the skills sets of all hon. Members would benefit from such a course.

Last week was adult learners week, and the Under-Secretary of State for Innovation, Universities and Skills, Mr. Simon, Mr. Hayes and I spoke at the excellent reception on the Terrace to promote adult learning. Several reports from the National Institute of Adult Continuing Education were discussed. One stark finding was that after 12 years of a Labour Government, while much has indeed been done, there is still a real social mobility gap affecting those who participate in adult education and learning. People from the top two social classes are twice as likely to participate in learning post-school as people from the two lower socio-economic groups. At the reception, I quoted Helena Kennedy, a Member of the other place, who some time ago said that the problem with English education in particular was as follows:

"If at first you don't succeed, you don't succeed."

That is a serious problem with English education and skills.

That is not helped by the Government's fixation on the belief that learning should lead to an accredited qualification or certificate. Learning, as the Secretary of State acknowledged in his closing remarks, can have other purposes relating to emotional well-being. This morning, in Bristol, I visited the charity Studio Upstairs, which works with adults with emotional and mental health problems through the medium of art. It invited me to do a drawing, and I did a not-very-good illustration of the Houses of Parliament as seen from the other side of the Thames. None the less, the work that the charity does is important, and learning does not necessarily need to lead to an accredited qualification—it has other purposes as well.

The motion tabled by Mr. Willetts rightly mentioned the fact that far too many people are not in education, employment or training. We can have a debate about the number of people involved and what the situation was in 1997, and what the situation is in 2009, but I must tell the Secretary of State that the Education and Skills Act 2008, which raises the age of compulsory participation in education and training, is not the answer. Engagement, particularly with young people, is much more important. If, at the age of 14, people have mentally dropped out of education and at 16 are deemed to have failed the academic education offered to them under existing arrangements, forcing them to stay until they are 17 or 18 is probably not going to lead to a significant improvement in their life chances. Positive engagement with those young people, however, could make a difference. Many of us are well aware of the work of the Prince's Trust, and in my constituency, the charity Fairbridge does excellent work with young people who have been marginalised, perhaps from their families, and have certainly not achieved well in education.

There is an important role, too, for social enterprise—a new type of business model that should be encouraged. Last week, I visited the social enterprise, Aspire Bristol. It works with adults who have been unemployed for a significant time, or people who have recently been homeless but who are now seeking to return to a productive role in society. It takes them on and pays them just above the national minimum wage in order to learn such skills as window cleaning, gardening and decorating. Social enterprise could be more encouraged and would be able to earn a decent income that it could pass on to participants if local government and central Government were able to find more of a place for it in their multimillion pound—or, in the case of central Government, multibillion pound—contracts and procurement programme.

I turn briefly to the further education capital programme. I shall not repeat everything—

Photo of John Hayes

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

The hon. Gentleman, as ever, is making a well-informed case, but before he moves on to the nub of the FE issue, will he acknowledge what the Secretary of State did not acknowledge—that many of what the Secretary of State calls non-vocational, recreational courses are the very routes by which some of the most difficult disengaged people are able to re-engage in education and training, and that they provide opportunities for further training, leading to employment, for those such as women returning to work after having time out?

Photo of Stephen Williams

Stephen Williams (Bristol West, Liberal Democrat)

As usual, the hon. Gentleman makes a pertinent point. I could be cruel and mention the mistake that the Government made in their decision on equivalent and lower qualifications cuts last year. One consequence is that the ability of universities to offer evening classes to their community—for instance, in Bristol, where people from all walks of life can come together to study for a course that does not necessarily lead to a certificate at the end of it—will be taken away. Many universities will probably start closing down continuing education departments as a direct result of a decision that the Secretary of State instructed the Higher Education Funding Council to take, and many people will lose out on the introduction to learning that the hon. Member for South Holland and The Deepings mentioned.

I come back to further education colleges. I shall not repeat everything that the hon. Member for Havant said, or all the many points that have been made as we discussed the issue over recent months, both in the Chamber and in Westminster Hall. Last week I visited Sussex Downs college and met the principal there, and the principal of Plumpton college, along with my hon. Friend Norman Baker. Those colleges are in a difficult situation. They have not, under the Learning and Skills Council's criteria, got as far as approval in detail, but none the less, they have well worked-up schemes.

Plumpton college had a three-stage scheme. Stages one and two have already progressed and stage three was the conclusion. Sussex Downs college has invested millions of pounds in professional fees in building up the case that the LSC required for it to make its application. It was specifically encouraged by the LSC to come forward with ambitious plans. The Secretary of State asked the hon. Member for Havant for an example of encouragement having been given to a college to come forward with ambitious plans. There is one for him. But now those ambitious plans do not look as though they will be realised. Many other colleges throughout the country are in the same situation.

We need certainty from the Government soon as to what will happen both to those capital schemes and to the professional costs that the colleges have already incurred in working up their plans. As the hon. Gentleman said, we also need some transparency from the Learning and Skills Council. Unlike the Higher Education Funding Council for England, the LSC does not routinely publish its minutes on its website to show how it arrived at its decisions.

The Budget, which has not featured much in the discussion so far, announced a further £300 million in order to try to apply some sticking-plaster solutions to the further education capital funding fiasco. As well as that sum being given to the FE sector, the Budget contains a target for efficiency gains for the Department for Innovation, Universities and Skills to find. I understand that the target over the rest of the comprehensive spending review period for the FE and skills part of the Department is £340 million. On the one hand, the Government promise something to sort out a problem that they have created, but, on the other, they are going to take it away through efficiency savings.

The provision of adequate buildings is not the only barrier to participation in learning; there are other costs, too. The motion refers to the training costs of those who are

"over the age of 25",

although I do not remember the hon. Gentleman speaking to it specifically in his speech. There is, nevertheless, an absurd anomaly in our financial structure, whereby, once someone reaches 25, it is not deemed appropriate for the state to fund their first participation in a level 3 qualification. We are in a time of recession and the work force are ageing, and people in a dynamic economy, whether in a recession or prosperous, will have to retrain throughout their working lives, so enabling adults over the age of 25 to acquire a level 3 qualification free of cost should be a priority.

There is also the question of encouraging employers to take on more apprentices. For small employers, in particular, the cost of off-the-job training is often an important barrier, so re-allocating the growth in the Train to Gain budget of £500 million over the forthcoming years would make an enormous difference to employers and their ability to take more people into adult apprenticeships. The Government have set themselves some ambitious training and educational attainment targets for 2020 as a result of the Leitch report. However, they will be much harder to realise if we do not have investment in further education and skills or ensure that it is secure for the future.

One of the most interesting parts of the hon. Gentleman's motion which, again, he seemed to skate over in his speech, is the section about science, technology, engineering and maths—STEM—subjects. Last week, it was my pleasure to welcome to the House some Bristol university young engineers and a graduate engineer who are working with Airbus in Bristol. They are taking part in a national project, sponsored by Airbus, to discuss the relationship between aviation and climate change. I have said many times in such debates that there is a consensus around what we are going to do about our other 2020 targets—apart from the Leitch targets—on climate change. If we are to meet our ambitious targets for a carbon neutral economy, or for a much lower dependence on carbon, we will need more scientists, engineers and technicians. Otherwise, it will be impossible to realise those aims. If we do not have the people to construct the wind farms, service the dynamos or expand nuclear energy, although my party does not support that, we will not be able to meet our 2020 climate change targets.

The problem with STEM subjects begins right the way back in our secondary schools, as do many of our problems in education, so we need to enthuse children to take part in science and engineering subjects. In that respect, I praise the work of Bristol university's ChemLabS outreach programme, which goes to schools all over the west country and invites pupils and teachers into the chemistry laboratories at Bristol university to show children experiments, retrain teachers in experimentation and make science exciting and appealing. As ever, information, advice and guidance are absolutely essential, too.

There is a big gender imbalance in engineering. When I met those five individuals last week, I said to them, "There's only one problem with you: you're all men." That is a problem for the engineering profession, but the profession itself has to do some work, too. Government is not always the answer to every problem; the engineering profession must do more to raise the esteem in which it is held. Two or three years ago in Bristol, we commemorated the bicentenary of Brunel's birth. In the 19th century, Brunel was a celebrity figure comparable to many well-known politicians, authors and artists, but we do not have a celebrity engineer at the moment. There is a gender balance and high participation in catering; perhaps engineering needs to find equivalents to Jamie and Delia to encourage young people to take part.

There is a national emergency; we are in a deep recession. In his concluding remarks, the Secretary of State referred to the "anxious generation" of young people who are leaving school and do not know what is ahead of them—particularly if they aspire to go to university. As we already know, there is to be a crisis in respect of finding sufficient places for those who get the right A-levels or other level 3 qualifications sufficient for university entry in September this year; it looks as if there will not be enough university places to meet the demand. Those who will leave as graduates in just a couple of months' time, after doing their finals and receiving their degrees, will enter the most uncertain graduate job market for decades.

There is a stark statistic from the last deep recession of the 1980s. I hope that we will not see in this recession a mirror image of what happened to adults, particularly those over 40, who lost their jobs in previous recessions. Many such people in south Wales, where I grew up, and other depressed industrial areas of the country, did not find another job for a couple of decades afterwards; they were never able to return to full productive work. In this recession, we must all agree that investment in skills for those people is absolutely essential. The issue is not only about young people.

Photo of Stephen Williams

Stephen Williams (Bristol West, Liberal Democrat)

I see that the hon. Gentleman agrees.

We need investment in capital and skills now. We need a new, sustainable and ethical business model for the future. Above all, we need to give everyone in this country a sense of urgency and of hope that we are going to solve the crisis in our economy and in our politics as well.

Several hon. Members:

rose —

Photo of Michael Lord

Michael Lord (Deputy Speaker)

Order. I remind the House that there is a 15-minute limit on Back-Bench speeches. That starts from now.

5:22 pm
Photo of Eric Illsley

Eric Illsley (Barnsley Central, Labour)

I want to make a few comments about Barnsley college in the context of the motion and the amendment to it. Obviously, I will speak about the Building Colleges for the Future programme as it affects the college. I shall go on to say a little about the college's performance in relation to the motions before the House.

As the House knows from previous debates, Barnsley college was part of the Building Colleges for the Future programme. Like other colleges, it had a four-phase college programme. Two phases have been completed on budget and to time, but unfortunately the third phase, which started towards the end of 2008, was halted in January when the funding was stopped. Unfortunately, the college had started demolition work on its Old Mill Lane site. The town centre has been left with a completely demolished area, which was the flagship part of Barnsley college.

Construction stopped. Miller Construction, the contractors, had to stop work; its contractors have been laid off and some have been made redundant. We are now waiting for the results of the Foster review and what follows on from it. We Barnsley MPs have had meetings with Ministers and the Prime Minister to try to find a way forward. We have a real difficulty: there is a demolition site where part of the college once was. The building programme has been delayed for several months and it looks as if that will continue.

When we met representatives of the Yorkshire and the Humber learning and skills council, we were told that the Foster review would draw up criteria which, hopefully, would be considered by the end of April. We were also told that decisions would be made by the beginning of May. That has not happened. The Foster report has been produced, the criteria are being drawn up and the meetings are being held. However, the announcement on which colleges will go forward will be made, we hope, on 3 June—that, at least, is what the colleges were led to believe. Since then, it looks as though the timetable may have been reviewed. In discussions with the college principal as recently as Friday, it came to light that perhaps the decisions will be made only tentatively on 3 June. It should be borne in mind that the applications of 145 colleges will be decided on, and only a handful will go forward. We are obviously anxious, as are all the other colleges, that our application should be proceeded with, because we do not have accommodation for our students. We will have temporary buildings, but not the buildings that we had hoped for.

The LSC drew up its so-called "Key Steps and Timetable", with five steps and a timetable for progressing the situation:

"Cross LSC National Officers group meeting to score potential projects against criteria w/c 18 May...LSC National Officers group send recommendations on projects to be funded to LSC National Capital Committee enhanced with regional council chairs attending w/c 18 May...LSC National Capital Committee meeting to score potential projects against criteria enhanced with regional council chairs attending w/c 25 May...National Capital Committee send recommendations to LSC National Council 27 May...LSC National Council meeting to approve National Capital Committee recommendations 3 June."

So far, so good. However, that appears to have been amended, with the contractors to the LSC now stating:

"3rd June 09—Discussion on how many and which projects will be selected as the initial (Priority 1) tranche to go forward (selection only—not approval)...The selected colleges will then have to go through the VfM"—

value for money—

"process to reduce costs which will comprise...5 week period post 3rd June to sort out project/tender costs and achieve savings as required...6 weeks after that to finalise all costs...Final approval during August 09...September 09 Start on site."

If that timetable is applied to Barnsley college, assuming that we are successful in getting our programme back on track, it will mean a nine-month delay in the programme going forward. None of the colleges decided upon on 3 June will be able to start work until September.

It is possible that because Barnsley college is halfway through the programme and has already gone through most of the paperwork, planning process and so on, those post-3 June criteria may not apply. I sincerely hope not. We hear about a value for money process to reduce costs and to achieve savings, but Barnsley college has already been required by the Foster review to reduce the third-phase costs from £42 million to £33 million, and the programme had to be quickly redesigned to accommodate that, so we have already lost £9 million of our project funding through the consultation process and the problems that have been created. In addition, the college has spent £12 million of its reserves and borrowings and has a substantial interest bill to meet in 2010. If our college is not selected on 3 June, it will face real financial difficulties, because it cannot expand its student base on the basis that it had hoped in order to meet the extra costs. The refurbishment and redevelopment were carried out on the basis that the student body would increase and the college would receive further funding to help to meet the costs of what has been spent.

It is extremely important to Barnsley that the college capital rebuilding programme is completed. We are extremely concerned not only for the third phase, which is to rebuild a demolition site, but for the fourth phase, which is to rebuild the sixth-form college provision.

Barnsley college deals with 90 per cent. of sixth-form teaching in Barnsley, yet we are contemplating not having a sixth-form college if the final phase of the project goes by the wayside. It is important to look at those items, and the time scale and the reason for its sliding further from 3 June—as far as September. Given the intervention of summer holidays and so on, that start date is likely to slip even further.

The refurbishment programme is important to Barnsley college because our record on post-16 education has historically never been good, but it has improved in recent years and continues to improve, and the college is in a strong position to ensure that it meets Government and local priorities. That was shown in its annual Ofsted inspection, which took place in March and resulted in four "significant progress" and three "reasonable progress" judgments—one of the best results in the country. The college has an ambitious business plan to consolidate and grow its success in surpassing targets and meeting national and local priorities.

We will have 300 more FE-funded learners later this year—a 9 per cent. increase on last year. Student numbers in that category are currently 241 above the LSC target. We have recruited 1,830 adult FE-funded learners—100 more than the LSC target. There are approximately 150 more learners than the previous year in that category—a 6 per cent. increase. We have heard much about Train to Gain this afternoon. The number of learners under that scheme is 198 more than the LSC target.

There are currently 20 per cent. more applications for the 16-to-18 programmes. That is wonderful news for Barnsley. We have heard about the problems of NEETs—indeed, I intervened on the Opposition spokesperson because we have worked hard in Barnsley to try to reduce the number of young people in that category. A 20 per cent. increase in the number of applications for post-16 education is therefore encouraging.

Adult success rates have improved by 8 per cent. in the past three years. The Train to Gain success rate is 91 per cent.—well above the national average. That is not something that one has associated with Barnsley's education in the past few years.

The apprenticeships programme has rapidly expanded, with success rates of 81 per cent.—again, well above the national average. The college will deliver the diploma programme—10 separate diploma lines—in September. It has been approved to provide 14 diploma lines, and the remainder will start in September 2010.

On worklessness, the college has just been successful in winning a contract to improve the employability and skills base of long-term unemployed people who live in Barnsley. That is great news and a success story for Barnsley college.

However, all that will go to waste if we get it wrong or if the capital programme is not reinstated quickly. We have already considered redundancies for the college's construction programme. I am concerned about whether we can deliver all that increased education provision in the forthcoming academic year and the subsequent one. Without the college rebuilding programme, we will struggle. Again, I urge my right hon. Friend the Secretary of State to examine the timetable and try to encourage the LSC to stick to the time scales that it has set out in its programme. I also urge him to try to get decisions made and, particularly for Barnsley, allow the programme to continue. Otherwise, we have only half a college.

5:34 pm
Photo of David Curry

David Curry (Skipton and Ripon, Conservative)

Although we are, of course, all interested in how we got into this mess, I am much more interested in how we get out of it. It would be easy to give a litany of complaints and simply recite the virtues of one's own college—I will not omit to do that. However, I want to pay tribute to the LSC's regional staff, who deal with Yorkshire and Humber. They are deeply embarrassed by what has happened, they are doing their best to help and I would not like the contamination of mismanagement at the centre to be attributed to everybody who works for that organisation, which will be replaced in any case.

I want to begin by talking about the district of Craven. The north Pennines is fairly remote and has an economy that rests on extremely fragile pillars. A lot of the area is a national park, but tourism has a relatively low value and is predominantly made up of day visitors—indeed, many people spend precious little when they get into the dales. The area depends on agriculture, and we all know that some sectors have experienced extraordinary difficulties. Indeed, the Rural Payments Agency was probably ahead in the charts as the agency that had made the biggest financial mess, until the Learning and Skills Council came along as a late competitor for that accolade, and there are still problems in getting the money to farmers.

There is also the hidden industry of all areas of the countryside, which is looking after the elderly. Anyone who goes to any significant village in my constituency will find households looking after elderly people and an awful lot of people working part time to make money to supplement low income being earned elsewhere in the family, enabling people to maintain, for example, an agriculture holding. There is also a host of small businesses. We have the Skipton building society, which is the giant in the area—a very prudent giant, as a matter of fact—but there is also a huge constellation of small businesses, ranging from micro breweries, of which there has been a refreshing multiplication, to those involved in package recycling and other tiny operations.

Craven is therefore an area of high employment. I do not claim that the demands of Craven rest on economic hardship in the way that it might be experienced in places such as Barnsley, which Mr. Illsley spoke about. However, although there is high employment, there is also low pay and a lot of part-time employment. If anything were to illustrate the vulnerability of Craven's economy, it is foot and mouth disease, which simultaneously shut down agriculture and tourism. That demonstrates the urgency of finding an economic base that is more diversified and less vulnerable to catastrophic events.

Many people in Craven would also complain of a draining of public services from the area, as there has been pressure to introduce economies in public expenditure. The police presence, as well as the rank of the police establishment, and many other public services, if not the ability of the people doing the serving, have been seen to be reduced.

What Craven needs is a much better skills base. Indeed, Skipton building society and the smallest small businesses both complain about their difficulty in recruiting people with sufficient skills, whether they be IT or more basic skills. Craven also needs much better facilities in winter, so that there is a tourist offer in the winter months to supplement the tourist offer in the summer, and a vigorous small business sector that can take advantage of the spread of broadband, which is not yet universal in my constituency, and the exceptional environmental advantages of Craven. Broughton hall, with its sophisticated business park, is the exception, not the rule.

There are also particular needs that stem from the fact that Craven is not merely a rural area; rather, a great deal of it is upland, which is the most difficult kind of rural area. There is a huge difference between a rural area in East Anglia, where someone could strike a billiard ball and watch it go for miles, and my constituency, which straddles the Pennines. In addition, Craven is the only area in North Yorkshire that has selective education. The two excellent selective schools in Skipton—Ermysted's and Skipton girls high school—are outstanding, but they ought to be outstanding, given the sociology of North Yorkshire and the selection process. However, that means that it is incredibly important to ensure adequate provision for the 16 to 18-year-olds who do not come out of the selective system.

That brings me to Craven college in Skipton, which is at the heart of a series of interlocking programmes designed to address the broad economic disadvantages and the particular sociology of Craven. Ten years ago, Craven college had between 500 and 600 full-time students in one year group, and about 2,000 part-time students. Now it has 1,600 full-time students, of whom 1,250 are 16 to 18-year-olds drawn from some 80 schools—the college serves not only Craven but a huge rural constituency that goes way beyond the boundaries of Craven itself—and some 5,000 people in part-time employment in any one year.

So the college's expansion has been constant, and it has taken place using very limited resources and in the context of certain disadvantages, which I shall explain. First, it operates on 11 sites. My hon. Friend Mr. Djanogly was complaining that his college had to operate in 1960s buildings. How lucky it is! Two of our buildings are Victorian, and the college operates in 11 sites across Skipton. This has two implications: the first relates to costs and the division of effort; the second is the very real health and safety problem of operating in buildings that are far from being fit for purpose.

A further disadvantage of being in a rural catchment area is that it is often difficult to achieve the necessary critical mass of students to make a course viable. It might not be too difficult to assemble nine or 10 people who want to study the same subject at the same time and in the same place in a metropolitan area, but it is difficult to do so in a rural area. That means that the college is punished in the sense that it does not get the funding, but there are also fewer opportunities because it cannot achieve the critical mass necessary to realise them. The rurality issue has not been addressed in the funding of colleges of further education.

I said that Craven college was at the heart of the regeneration programme for the Craven area. There is a new campus planned. It is in the third tier of progress; the work is awaiting approval, but the plan is very well developed. It is part of one of the wider regeneration programmes that so many colleagues have mentioned today. In particular, it will incorporate a complex for climbing and caving. That might sound eccentric, but climbing and caving are major tourist attractions in that part of the Pennines and the Yorkshire dales, and a knowledge of those subjects will assist the development of winter facilities and enhance what is a unique selling point economically in the area.

If the activities of the college could be brought together on one site, it would gain through much greater economies of scale in terms of costs and teaching efficiency, and such a move would also make a huge difference to the social environment of the college. It would enable all sorts of interactions to take place between the students that are impossible if they end their day in 11 different places around the town.

So what is going to happen? There have been two recent events, on the first of which I would like the advice of the Minister. Within the past few days, the Learning and Skills Council has offered to pay half the £356,000 fees that have been spent on developing the Craven college project, provided that the head of the college signs on the dotted line by noon tomorrow. Should he sign, or is the LSC offering an out-of-court settlement against the threat of a legal action to recover a greater proportion of the fees, such as I understand some colleges are nurturing?

I have had discussions with Craven college, with which I have dealt in every year since I have been a Member of Parliament, and I have to say that we have not carried the fiery cross around the countryside. We have not said that the college would collapse or that further education in Craven would to come to a halt. We will struggle through, as we have always done. So we are not being alarmist. We are trying to be responsible in dealing with this very real issue, but the head of the college faces a real dilemma over how he should respond to that offer. I pay tribute to the regional staff of the LSC for that offer, because I think they are trying to be helpful.

We have also talked about Train to Gain. Craven college was harried to step up its Train to Gain activities. It was positively cajoled to expand its programme. It has done so, and it was expecting to spend about £1.6 million on such provision up to the end of the academic year that we have been talking about. That money has been stopped in its tracks overnight, and the provision has been capped at some £1 million. There was no warning of that at all. So having gone out to employers to persuade them to sign up to the Train to Gain programme, the college now has to go back and say, "Sorry, we can't deliver on the very programmes that we encouraged you to sign up for a short while ago."

What is the way forward? We know that the Government have promised £300 million a year in capital expenditure until 2013, and we also know that there are going to be some transparent new criteria based on need rather than on "first come, first served", with the deadline set for spring 2010—still a long way away. I ask the Minister to ensure that when those criteria are drawn up, there is a fair assessment of rural needs.

Rural needs are not simply an offshoot of a national need; they respond to difference economic and social circumstances, and entirely different definitions of how to be efficient apply in serving the sort of wide rural area that my college serves. I do not want to do down any of the metropolitan areas; we are on the edge of Keighley, and we take students from Keighley as a matter of fact. What I do want to ensure, however, is that there is fair crack of the whip for the rural areas I am talking about. In other words, whether we are judged to have succeeded or not, we want to be able to say that at least it was a fair call and a fair judgment. We want to be judged by meaningful criteria that we are capable of delivering and fulfilling, not against criteria that are designed for entirely different circumstances.

I would ask that all programmes be started from scratch. We should start with a blank sheet of paper and the all programmes that have reached a certain degree of maturity should be examined in the light of those different criteria in the different circumstances. A set of programme priorities should be drawn up that reflect the new criteria—not simply the "first come, first served" basis. If the Government really want the best bang for their buck, if they really want to ensure that their money is being spent as well as possible and if they really want to be assured of value for money, they must do that. If they want to be able to turn around and say they have sorted out an appalling mess in an equitable way so that people feel that fairness has been applied to all sections of the country in all the different circumstances of the country, that is what they should do.

I hope that the Government will be fair in addressing those problems. I have not gone into too much detail today, as we will be joining the long procession of people intending to meet the poor Minister—he will be able to do a "Mastermind" on colleges of further education, I suspect, in a couple of months' time—and we can provide the detail then. If the Minister does what I have suggested, Craven will continue to give him, as it has always has done, the biggest possible bang for the buck. The benefits will then be spread over a huge area of rural England.

5:47 pm
Photo of Hugh Bayley

Hugh Bayley (City of York, Labour)

It is a great pleasure to follow two other Yorkshire Members in this debate.

Our country is in the middle of an extremely severe recession—the first global recession since the 1930s. It is global in the sense that, for the first time since the 1930s, global output is likely to fall. This recession, as we all know, was triggered by the sub-prime mortgage crisis in the United States. It spread quickly around the world because of the globalised nature of the banking and financial services sector these days, and it was amplified by light-touch regulation in this and other OECD countries. One of the lessons to be learned from this recession is that the Thatcher-Reagan doctrine that private institutions are always best regulated by themselves rather than the state has come to an end. I do not want more regulation, but I do want smarter regulation so that the lessons of the recession are learned.

Before I turn specifically to deal with further education, let me say that I chair the Economics and Security Committee of the NATO Parliamentary Assembly. The week before last, our committee was in Washington DC to meet the International Monetary Fund and the World Bank to discuss the recession. They predicted that, from the peak to the trough of the recession, global output is likely to fall by 3 to 4 per cent. They also say that if Governments such as ours and other OECD Governments had not adopted fiscal stimulus packages, global output would fall by something like 9 per cent.

Let me explain the difference. If global output falls by 3 or 4 per cent., it will mean a very severe recession—more severe than any since the second world war. But if output falls by 9 per cent., we will be in the territory that existed between the two world wars when there was a decade-long depression and unemployment soared for years at a time. The fiscal stimulus is a necessary response and it is right to put Government funding behind education and training, particularly vocational training. I was pleased to see hundreds of millions of pounds being set aside in the Budget for that purpose.

It is extremely important to invest in skills—both in vocational training and in broad liberal education—so that we see benefits in our national economy and so that individual citizens in our country see the benefits of jobs and job security. It is important to do so now, so that the country benefits when the upturn comes. We do not want to make the same mistake as was made when the Conservatives were in power and people were simply parked on benefits during the recession, without the funding for training, and vocational training in particular, that we have at the moment.

During the 12 years that the Labour party has been in government, a strong platform has been created within further education to provide the skills training that we need. In my constituency, in 1996-97, some £12.1 million was allocated to York college and the York sixth-form college, which was a separate institution. Since then, the two have merged, and in 2008-09, the budget was £20.5 million—an increase of £8.4 million, or 69 per cent.

It is not just in York that additional resources have gone into further education. There are eight colleges in York and North Yorkshire. Two are specialist colleges—Henshaws college, a specialist college in Harrogate that provides education and training for people with visual impairment and additional physical or learning difficulties, and Askham Bryan college, one of the largest land-based colleges in the country—and there are six more general further education or sixth-form colleges. Between them, and including Craven college, which Mr. Curry spoke about, they work with some 50,000 young people and have a combined turnover of £70 million a year.

In the past five years, the Government have allocated some £80 million of capital to improve the colleges. They have partnerships with almost 10,000 businesses and train some 7,000 employees a year. They have degree and higher-level programmes for more than 2,000 students. The colleges in York and North Yorkshire educate nearly 12,000 16 to 18-year-olds—more than all the school sixth forms in York and North Yorkshire put together.

It is important to have the right balance of numbers to guarantee choice for young people at the age of 16 between courses and between settings—school and further education. The two Departments—the Department for Innovation, Universities and Skills and the Department for Children, Schools and Families—need to talk further about how the school sixth form presumption works. In 2007-08, which is the latest year for which I have figures, there were 4,129 16 to 19-year-olds from York in college and 1,079 in school sixth forms. Each individual 16-year-old has a choice about whether to attend one of the five schools in York that has a sixth form or to go to York college, or indeed one of the other colleges, such as Askham Bryan or another further education college close to York.

The schools provide continuity and familiarity for the students. They are smaller and, as a result, provide a narrower range of subjects. They provide extremely good education. York college, like the schools, achieves excellent A-level results, but its curriculum provides about 40 subjects, including a full range of modern languages, which none of the school sixth forms can provide; specialist subjects such as archaeology and ancient history, which have a particular purpose and which we have a need for in a city such as York; and specialist art courses such as photography. Indeed, Freddy Bulmer, an 18-year-old at York college, has just won first prize in the national Colleges on Camera competition. His winning photograph shows the impact that the £65 million investment by the Government and the college in the new York college has had on him and his fellow students. It is good to see excellence coming from a further education college.

Perhaps I should tell hon. Members that four years ago, after the general election, I did what I usually do after elections—commissioned a local artist to make a limited-edition print to celebrate life in York. The artist I commissioned on that occasion was a young man from York college, Michael Kirkman, who produced a fabulous print of building work at York hospital. That was his choice of subject, which he felt summed up the type of life that people live in York now. I am pleased to say that one of his prints is in the collection of York art gallery while another hangs in the boardroom of York hospital. Several others hang in GP surgeries around the city—it is marvellous work. That, again, shows that colleges can provide excellence at the highest level.

Recently, Archbishop Holgate's school used the sixth-form presumption to establish its own sixth form. There were concerns from other 16-to-18 educational providers in the area that it might dilute provision elsewhere. There were discussions between the head of Archbishop Holgate's school—an old and venerable institution headed by John Harris, who is a head teacher I respect enormously—and the local education authority. They agreed that there was already good level 3 A-level provision in York, but that more level 1 provision was needed for the 4 or 5 per cent. of students who are not in education, employment or training. Archbishop's sixth form is making a real contribution in that field, focusing on the needs of the NEET group and of young people aged 16 to 18 who have disabilities.

However, there are other schools—good schools—in York seeking sixth forms. If they were all to take individual decisions, we could end up with poorer 16-to-19 provision overall. There is a tension between school choice on the one hand and the LEA's commissioning role on the other. I believe that a different balance is needed on who can take a decision. The Government's decision to give LEAs responsibility for further education and schools will help a new balance to be struck.

It is important for the Government and LEAs to recognise that learner choice is not the same as school choice. We need learner-centred provision so that young people in York and the surrounding area can choose between school or sixth-form college and between a wide range of subjects—not just A-levels, but vocational provision.

I also want to say a word or two about the discrepancy in funding between school sixth forms and further education. School sixth forms receive a premium of about 5.6 per cent. If York college received the same funding as school sixth forms, it would get about £900,000 more per year. Quite quickly, as I have been raising the matter for several years, I would like to see that gap being closed. It is more likely that that will be achieved now that LEAs have responsibility for further education as well as schools.

I congratulate the Government on their capital funding for schools and for colleges. In 1996-97, schools in York received capital funding of less than £1 million a year. In the 12 years since then, they have received, on average each year, more than £10 million—a tenfold increase for York's schools. As I said, we have a brand new York college, built at a cost of £65 million, more than £20 million of which came in the form of Government grant.

Once again, however, there is a gap between the capital regime for further education and that for school sixth forms, which receive 100 per cent. capital funding whereas further education does not. In order to build a new college building, York college had to borrow some £4.5 million on its own account, and a proportion of its general income is used to pay back that loan. Schools do not pay VAT on services and equipment, but colleges do. Although both school and college-goers receive the education maintenance allowance, which is an important Labour innovation because it makes it possible for people from low-income families to continue in education after 16, in schools young people from low-income families also receive the benefit of free school meals, which are not available in FE. If one takes all the funding differences together, the gap is not 5.6 per cent., which is what the Government acknowledge, but rather more—possibly as much as 15 per cent.

Colleges admit a greater proportion of students from disadvantaged neighbourhoods. Some 29 per cent. of those in FE come from such neighbourhoods, compared with 19 per cent. of those in school sixth forms and, for comparative purposes, some 20 per cent. of those in universities. It is important that students from more disadvantaged neighbourhoods get the same quality and level of funding as those in schools, and LEAs must address that.

I should say a word in response to what the Conservative spokesman said about the problem of overstretch in the Building Colleges for the Future budget. York is very fortunate to have its new college, and I want other people, such as those in Barnsley, to have that benefit, too. I have tabled an early-day motion expressing my concern about the cuts in Building Schools for the Future, and I urge hon. Members to sign it. It makes the case for increasing Government funding for FE capital projects. In an economic downturn, there is a strong case for investment in public infrastructure.

I regret that the Conservative spokesman did not welcome the level of investment that the Government are putting into colleges—some £2.6 billion in the current spending period. I see that he is coming back into the Chamber, and I hope that he will commit to a fiscal stimulus package to counter the recession, including further investment in further education.

6:02 pm
Photo of George Young

George Young (North West Hampshire, Conservative)

I commend Hugh Bayley for his tradition of commissioning an important work of art from a local artist following his election to Parliament. I am sure that his successor will wish to follow that tradition.

I want to drag the debate south from Yorkshire, where it has been for the past three speeches, to Hampshire, where it began with an excellent speech by my hon. Friend Mr. Willetts. I wish to pick up the point that the hon. Member for City of York and my right hon. Friend Mr. Curry made about the fiasco of the Building Colleges for the Future programme.

Many of us took part in a debate in Westminster Hall in March, when the Under-Secretary of State for Innovation, Universities and Skills had an uncomfortable 90 minutes being beaten up by Members of all parties. If I may give him some respectful advice, perhaps his response to this debate might be less pugnacious than it was on that occasion and a little more constructive, bridge-building and conciliatory. Whereas other Ministers have come to the House and told us that they are bringing forward the capital programme for counter-cyclical reasons, he has had to tell us of a freeze in the further education capital programme with projects, far from being brought forward, being indefinitely postponed.

Two years ago Cricklade college in Andover merged with Sparsholt college, just outside Winchester. Thanks to the energy and commitment of the principal, Tim Jackson, and his team, the quality of education in Andover has been driven up since the merger. They are doing a fantastic job in challenging circumstances, but they have not been assisted by recent events. At the time of the merger, the LSC wrote to me:

"Current thinking is that there will be a required investment of up to £30 million in Andover and £20 million in Winchester."

It went on to say that those figures were indicative at that stage, but concluded:

"I would wish to reiterate the LSC's commitment to ensuring an appropriate level of investment is forthcoming to support the ambitions of the merged college."

The scheme grew to £100 million, reflecting the encouragement given to colleges by the LSC to raise their sights and build for the 21st century. On one visit, the LSC officer told the college that he hoped the main administrative building would be knocked down and replaced because it looked dreadful. It was not, and that is not in the plan at the moment.

The college applied for in-principle approval in Andover last November, expecting the go-ahead in February or March. In the meantime, it got planning consent from Test Valley borough council. The scheme was an integral part of the regeneration of Andover town centre, complementing plans that have already been introduced in one part of the town and are about to be in another. Then, along with 143 other colleges, in March we were told that the deal was off. There is great disappointment in the town.

To pick up on points that have been made in the debate, I understand that decisions are about to be taken on how to spend the money that is available, topped up by the funds announced in the Budget, which I welcome. It seems that schemes that are "shovel-ready", to use the words of my hon. Friend the Member for Havant, will get the go-ahead, while other schemes that might have progressed in the near future will go to the back of the queue. It would be helpful if the Minister said a little more in his winding-up speech about the criteria that will be applied when deciding who goes first and who comes last, and if he could indicate for local consumption the earliest date at which the project in Andover might now get the go-ahead.

On top of the capital debacle, there is also a revenue headache as a result of the gamble that colleges were encouraged to take by the LSC in bidding for funds. Some will now turn in financial deficits, which would not have been the case, unless the LSC is able to step in and refund their fees. I was interested to hear my right hon. Friend the Member for Skipton and Ripon say that his local college has had an offer of a contribution towards abortive fees, although I am not quite sure why it has to decide so quickly. In the case of Andover, about 70 per cent. of the £2 million spent in fees is now abortive. That risks turning a potential surplus of £500,000 into a potential deficit of £900,000. Will the Minister say something about which colleges are getting help, and of what sort, in meeting the abortive fees?

The other frustrating thing is that the LSC is responsible for monitoring the financial health of colleges. In many cases, the reason for the deterioration has nothing to do with the college but is entirely due to the LSC. Unless it can come up with the necessary help with abortive fees, some colleges will go into deficit and may breach financial covenants. Many will have to borrow funds from the bank, incurring interest payments.

I move on to a subject that has not been touched on at all—provision for adults with learning difficulties and disabilities. There is a need for much greater clarity about what is done for adults on the education side of the equation and what is done by social service departments on the social and personal development side. A few years ago, colleges would accept those with learning difficulties on courses, and would interpret the rules broadly. People would continue to attend college year after year, even though they were not really progressing. It was an important part of their life and self-development.

A few years ago the rules were tightened, and colleges are now required to ensure that courses attended by adults with LDD lead to clear, successful outcomes in qualifications. When an adult has fulfilled the requirements of a particular qualification and there is not necessarily anything appropriate for them to progress to, they are unable to be recycled year after year, so they stop going. That change was made a few years ago at the point of transition. That issue might not be one for the Minister, but it is certainly one for the Government if we are to have joined-up government.

This morning I was rereading "Valuing people now", the Government's three-year strategy for people with learning disabilities. It is very much a health-focused document, with not a lot in it about education, but I found one sentence about education that I will have to read out, in the hope that the House will understand what it means better than I can. It states:

"The cross-government Work, Education and Life Group will also lead implementation of 'Progression through Partnership' (the post-16 education strategy) and the Getting a Life project, which aims to achieve an integrated assessment and decision-making process that will allow people to use public resources flexibly to get the outcomes they want".

I hope that that means that folk will be able to go on courses that are suitable for them, but I say to the Minister that it is by no means clear how the education-social services interface will work. I hope that he will ensure that there are suitable courses for people with learning difficulties that are provided either by social services or by education.

I turn briefly to some other issues in the motion. The number of NEETs in my constituency, as in those of other colleagues, has risen. It is now at 185, having risen from 135 in December, five months ago. Many fewer adults are now attending training courses at Andover college than was the case in 2005. I suspect that that is because in some cases there is a real issue of affordability when it comes to the fees. There was a 29 per cent. drop in 2007-08 compared to 2006-07, and a 41 per cent. drop in 2007-08 compared to 2005-06. I hope that the Minister will say a little about the Government's response to that.

We heard a great deal from the Secretary of State about Train to Gain, which, in a sense, has been too successful. In my constituency, as in Skipton and Ripon, we now have a moratorium on new starts. Private providers and colleges have been told to stop, current activity with employers has been curtailed, and future contracts are being held back to avoid over-commitment in the forthcoming year. There is considerable frustration about the fact that after everyone has been geared up, they are having to be geared down again.

The subject of unfunded students was raised earlier, and I need to see what the Secretary of State said in response. At present there are about 120 unfunded places for the autumn in my constituency. The college has submitted a bid. The Secretary of State's speech suggested that we might be given answers about the bids; perhaps the Minister could shed some light on that. As for apprentices, there is understandably less capacity in the workplace to take on, in particular, young and inexperienced trainees. Sadly, in Andover we have seen a rise in the number of apprenticeship redundancies, which has pushed up the number of NEETs.

Let me make a general point. Further education colleges find sudden changes in funding flows very challenging. When commitments to engaging additional staff are required, the stop-start approach to funding is very difficult to manage. As all Members have pointed out, colleges are crucial to the economic and social well-being of the areas in which they operate. They cannot be expected to operate as a very small business might be expected to, moving resources in and out from one week to the next.

I hope that the Government will exercise continuing stewardship over the financial well-being of colleges. That is especially important when the commissioning of much of their work switches to local authorities, with funding supplied via the Department for Children, Schools and Families, while the overarching stewardship of colleges rests with the Department for Innovation, Universities and Skills.

Finally, let me say to my hon. Friend Mr. Evennett, who will wind up the debate, that it would be interesting to hear whether he considers that we are totally satisfied with the rather blurred responsibility for the age group that we are discussing, or whether he thinks that the issue might need to be revisited in a year's time.

6:12 pm
Photo of David Anderson

David Anderson (Blaydon, Labour)

It is possible that I am the only Member present who served a full apprenticeship, although I stand to be corrected on that. When I served an apprenticeship as a mechanic, there was respect for the traditions of people who had served apprenticeships for many years. We felt, as apprentices and as craftsmen, that we were part of a culture in which what was learnt was passed on, and it was part and parcel of the pride that we took in doing the job that young people were introduced to it. It was heartening for me to become a time-served craftsman and work with young people in learning skills. However, it was disheartening for me to be part of a generation that saw the last of the apprenticeships in the industry in which I worked, the coal industry.

It was directly owing to the policy of the Conservative party that we saw a decline in apprenticeships. It made policy decisions that largely destroyed the coal industry, decimated the railway industry, did away with the shipyards, cut back the steelworks and privatised British Gas, the electricity boards, the water boards and BT. All those were national companies with major training schemes, which employed many, many young people. What happened to young people in my village was that, instead of working with people like me—as apprentice mechanics, electricians or welders—they ended up as apprentice burglars and apprentice drug-takers, and became very good at taking cars without the owners' consent and taking radios from cars. That is not much to pass on to the next generation.

In the days when I trained with the National Coal Board, everyone had some form of education, right up to degree level. People were not just given vocational training; they were taught how to stay alive underground and, importantly, how to keep their fellow workers alive. A huge vacuum was created at the end of the 1980s and during the 1990s, but I am thankful that my party's Government have begun to fill it. It is true that things are not perfect, but we have, without a doubt, modernised and restructured apprenticeships in a way that addresses the challenges of the 21st century. Those challenges are, and will continue to be, different from the challenges that I faced when I became an apprentice. The fact remains that the Government have invested additional money this year. They have agreed to provide a further £140 million, which will fund 35,000 apprenticeships. That is good for the public, and for the people for whom the apprentices are working. In 1997 there were only 65,000 apprenticeships in the country; today there are a quarter of a million, and completion rates are at an all-time high. That is something we can be very proud of.

During the Secretary of State's speech, I raised the subject of union learning reps, which is never mentioned by the Conservative party. That may appear unsurprising, given its attitude to trade unions. There are 22,000 accredited union learning reps out there working with people. I was involved, with the National Union of Public Employees, in a scheme called Return to Learn, which helped people many of whom had no literacy or numeracy skills, and experienced great problems even in reading or writing. For the first time since leaving school, in many cases as young as 15, people were told "We value you. You may only be doing menial, manual work in society's eyes, but your contribution is important, and because of that we want you to become re-engaged in the world of education." Such schemes have been one of the keystones of workplace learning in this country. Last year, a quarter of a million people were given access to learning at work through union learning reps.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I can assure the hon. Gentleman that I had a most enjoyable meeting with TUC representatives only the other week, during which they made the case for union learning reps almost as eloquently as the hon. Gentleman is making it now.

Photo of David Anderson

David Anderson (Blaydon, Labour)

I am very glad to hear that, but I did not hear the hon. Gentleman say "I agreed with what they said, and I will continue to provide and develop the union learning scheme." I will sit down and let him say it if he wants to, but it appears that he has no reply.

Photo of David Willetts

David Willetts (Shadow Secretary of State for Innovation, Universities and Skills, Innovation, Universities and Skills; Havant, Conservative)

I was very sympathetic to the case that they made.

Photo of David Anderson

David Anderson (Blaydon, Labour)

I love the hon. Gentleman's use of the word "sympathetic". I realise that he has two brains, but it does not take two brains to understand what the word "sympathetic" means. What I am asking him for is action, but he is clearly not prepared to commit himself to that.

Last week, I was not talking to the TUC; I was talking to learning reps on the ground at Gateshead council. I was talking to people such as David Smith, who has helped many young people, as well as older people, into the workplace. They benefited from real dedication and real praise from their employers and others who took part in the schemes. Last year I was very proud when an old colleague of mine, Felicity Mendelson, who works for Newcastle city council, was recognised by the Queen for the great work that she had done as a union learning rep. She was awarded the MBE.

Real credit has been given to people who have done real work for people on the ground. But credit must again be given to the Government for the money that they have invested in the foundations of building colleges, and expanding further education. I am aware of the problems, and it would be wrong for me or any other Member to deny that the LSC has let people down, but I do not think that the Secretary of State intends to do the same.

Last week I met representatives of Balfour Beatty, who are worried about what may happen if we do not put right what has gone wrong in the last few months. I know that the Conservatives do not agree with this, but I strongly believe that we should be building our way out of the recession. We should be using that terrible term "fiscal stimulus", and companies such as Balfour Beatty—along with many other people—should be rebuilding colleges and schools. The Balfour Beatty representatives told me that a potential 40,000 jobs are available to people who could be employed in the building industry, but may not be. The Government must start to address that. I hope that, when he responds, the Minister will go some way towards allaying my fears.

Like every other Member who has spoken so far, I shall say something about the colleges in my area. I want to tell the success story of Gateshead college, which has never been afraid of embarking on partnerships. It does not believe in standing about whingeing, or in promoting doom and gloom. It wants to get on with the real work. That is why last year it moved out of the building in Durham road where it had been for many years, sold that building and went forward in partnership. It has been given £60 million by the Government to build the new Baltic college on the regenerated Gateshead quayside. It has been a tremendous success. There are 7,000 students and 500 staff, working at a college that is a source of great pride to me and the people who live in the area.

A £5.5 million skills academy on a nearby industrial estate has done tremendous work with companies such as Nissan and others in the automotive industry, which is so important to our local economy. A £15 million academy for sport has also been developed on the former Gateshead stadium site, and I hope it will play a major part in the development of Olympic athletes for this country.

The college has been recognised across the board. In the last two years it gained "outstanding" grade 1 marks in Ofsted inspections in all six areas tested. It has a success rate of 83 per cent. and it is within the top 10 per cent. of colleges in the country.

The college completed the renovation of its estate with the opening of the Baltic campus and the skills academy, the result of a £60 million investment. It has been recognised by the LSC for outstanding financial performance in a very challenging environment, and by Ofsted for providing outstanding value for money. It has provided more than £10 million to local companies for Train to Gain, and turnover has increased by more than 25 per cent. In 2008-09, it also achieved growth in the number of full-time 16 to 18-year-old students, which rose from 1,757 to 2,272. It has been officially named as the top college in the region for delivery of apprenticeships and the lead provider for the National Skills Academy for Manufacturing. It secured the Ford master apprenticeship programme for the north-east and it is the preferred training provider for Nissan. It has also been awarded many other accolades.

We are proud of Gateshead college, and so we should be, but the outside world is also proud of it. It entered the culture for success competition, and Andrew Dixon, chief executive and judge, said this about it:

"Gateshead College is a shining example of cultural success alongside tremendous facilities and a huge range of effective external business partnerships. This is a business that has grown fast and is loved by its customers—thoroughly deserving of the Culture for Success Overall Winner award."

This is not a doom and gloom story, therefore; it is a story of real success on the back of hard work by many people.

The college is continuing that work. Shortly before Christmas, it answered the call; Nissan was facing serious problems and it asked the college to help it try to keep people in work. Working with MPs, and with a great contribution from the Secretary of State concerned, the college and Nissan drove forward training programmes from this year to the back end of last year, which extended the working life of hundreds of Nissan employees in Sunderland. Although for some of them it was extended only for a short period, it at least meant they were able to get to Christmas without facing the threat of the dole.

The college is also working closely with the Department for Work and Pensions, the regional development agency and local authorities to establish an early warning system, so that when people may be about to lose their jobs, or have lost their jobs and have been made redundant, the college and other partners are there to pick up the pieces and help them get back into work as quickly as possible. The college is working closely with the local council, which has decided to bring forward its capital programme. It is helping the council create 500 new apprenticeships, and it is also working with local businesses to get even more apprentices into work. If we want to use a slogan that many people may well have heard of, we could say that this is an example of "Real help now".

This is all about creating choices, and about denying the official Opposition's narrative that everything is doom and gloom and we should stand back and do nothing. We will not stand back and do nothing, either in this party, in this Government or in the place that I come from. We are going stand up for people, and stand by them; we are not going to stand back. The official Opposition may be led on this issue by a man with two brains, but the leaders on the issue should be people with some heart.

6:24 pm
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Adam Holloway (Gravesham, Conservative)

The importance of this debate is underlined by the OECD's economic outlook; it says that unemployment in our country could rise to 10 per cent., and it said in November that it could rise faster than in any other G7 country. Accurate and promptly published analysis of unemployment trends is important for the providers of training and further education, particularly in a recession, which is also an opportunity for reskilling. In terms of the data available to inform training providers, the jobseeker figures provided by Jobcentre Plus and the Office for National Statistics seem to vary by between 10 per cent. and 15 per cent. That is concerning in itself, but when we add in the number of those who are economically inactive but who want a job, the unemployment figure in Gravesham is almost trebled.

I wish to highlight a group of motivated adults who could not read or write but were turned away by their college of further education. They had all taken the difficult step of deciding to learn to read and write and had filled in all the forms. Some of them were motivated to do so because they wanted to start to do homework with their children, some because they wanted to expand their businesses, while others just wanted to achieve their potential. They went to their local FE college and, to its credit, they found a great class that they enjoyed, but there was a problem: the Government's policy to phase out funding on equivalent or lower qualifications. They had taken a huge step in admitting that they could not read or write, and had grasped the basics, but they wanted to do more advanced things such as write job application letters. That was deemed to be a bit too advanced to be funded, however. Indeed, the policy required members of the group to learn individually using a specially designed computer programme. The group set itself up in a local church hall, and a saint-like teacher from the local college agreed to work on a much lower rate of pay. Some of the adult learners valued what they were learning so much that they funded the course from their benefit payments. I am delighted that this community group was able to fund and deliver that learning and development, and such community-organised solutions are always refreshing, but do we want motivated people to be turned away from training?

Another group I wish to highlight is those who are already skilled but who want to retrain for work in sectors that are offering jobs. Let me offer the examples from Gravesham of a construction worker who had a back injury and a bus driver who had suffered a stroke, which prevented them from performing manual work and driving. Both men enjoyed computing and wanted to be retrained in that field, where one could expect a motivated and qualified person to find a job. The man with the stroke was expected to recover fully over about three years and, rather than sit around on disability benefits during that period, he wanted to spend the time retraining. He faced some hurdles, however. Under the current rules, jobseekers can wait up to 18 months before they are able to take a full-time training course while claiming benefits. Nevertheless, jobcentres can help to arrange shorter training courses sooner than that. The problem is that the choice is fairly limited unless one wants training in basic English or maths, which many newly unemployed people do not need.

I can also offer the example of a man who was a service manager in a car dealership, which is not a good organisation to be employed in right now. He therefore wants to reskill as a locksmith as he has identified a gap in the market, but he is finding it very difficult to get help to retrain to do that.

Another problem is that any additional training can be limited to what are described as "growth areas". I identified Gravesham's only growth area when making representations following a visit to 50 employees who had worked for the local branch of Woolworths. They were mainly women in their mid-40s and 50s, and a fair number of them had left school without qualifications, and had gone to work for Woolworths after raising a family. I made inquiries on their behalf at our jobcentre to determine what training they would receive, and was told that the only identified growth area was the care sector. The care sector offers good careers in Gravesham, of course, but what struck me was the idea that that was the only available option, because not everybody is suited to working in the care sector.

Training opportunities for people should be not only rational, but flexible; they should not simply be linked to the main growth areas. We must keep the recently unemployed keen, motivated and focused and then get them back into work. The Government must do more to differentiate the recently unemployed and the long-term unemployed. Of course all unemployed people should remain on our radar, but we must avoid the recently, first-time unemployed joining the long-term unemployed—their needs are not very subtly different. The newly unemployed need rapid training to avoid their joining the benefits-cycle club.

In conclusion, we need more accurate data; a streamlined funding model for further education that is flexible to the needs of the local community and individuals; and rapid retraining, specifically of the recently unemployed. Finally, I would be grateful if the Minister could update me on the position of the building works at North West Kent college in Gravesend.

6:30 pm
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David Evennett (Shadow Minister, Innovation, Universities and Skills; Bexleyheath and Crayford, Conservative)

This has been an important and interesting debate on the vital subject of skills in the recession. Regrettably, Britain is in a serious recession and there is a serious skills shortage within our society. A new approach is absolutely necessary, because this Government have undoubtedly failed in their attempt to improve skills. In the main, we have had a constructive debate about the issues highlighted in our motion, and Conservative Members have presented the Government's failings in the areas of college capital funding, apprenticeships, training, skills shortages and adult education. In our motion and in a number of speeches made by my Conservative colleagues, we have put forward an alternative approach with policies designed to ensure that we have the necessary skills for the future.

My hon. Friend Mr. Willetts opened the debate with a characteristically analytical approach to the failings of the Secretary of State and his team, highlighting the real problems facing us, noting the failings of Labour in government and presenting our approach. My hon. Friend's excellent speech raised the concerns of colleges, employers, students, workers and adult learners. Regrettably, in his speech, the Secretary of State floundered and gave the usual Government gloss —[Interruption.] Lyn Brown laughs, but he did flounder and did give a gloss, and he was very selective in his responses. He was terribly party political, backward-looking, disappointing, faltering and unconvincing— [ Interruption. ] And he enters the Chamber at this very moment. Even he did not appear to be convinced of his arguments and explanations, let alone the rest of us. Regrettably, he made wide generalisations and, as always, his contribution was rather lacking in detail. He said that the college failings should not have happened, but they did—they happened on his watch. Why was that? We heard too much history, not enough of the contemporary and not a lot for the future—it was very disappointing.

Stephen Williams, who spoke for the Liberal Democrats, made some very good points and covered, with a broad brush, most of the points in our motion. I agreed with some of what he said, but not with all of it.

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Stephen Williams (Bristol West, Liberal Democrat)

I owe the hon. Gentleman an apology, because it was of course he who spoke at the adult learners week reception last week. I had got the constituencies muddled and said that Mr. Hayes, who does so many joint events with me on such occasions, had done so. I just wanted to correct that point.

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David Evennett (Shadow Minister, Innovation, Universities and Skills; Bexleyheath and Crayford, Conservative)

I am very grateful for that. There are real concerns within our society and across the country about skills, training, opportunities and employment. As has been said, in every constituency, whatever its political colour, there are real concerns for the future. I congratulate my right hon. Friend Mr. Curry on his excellent speech, in which he gave an account of the issues facing Craven college in his constituency and small businesses in the area.

My right hon. Friend Sir George Young made an excellent contribution, highlighting, in a powerful speech, the issues of further education capital funding and regeneration, and the disappointment in his constituency at the situation in which the constituency and the college find themselves. He also raised the situation of adults with learning difficulties, on which he made some effective and constructive points. May I reassure him, as he wanted Conservative Front Benchers to do, that our further education funding council will have a simple funding flow? It will be one body and it will be less bureaucratic. I hope that that provides the reassurance that he sought on that matter.

My hon. Friend Mr. Holloway, who is my near neighbour, also made a powerful contribution, in which he spoke with real passion about his constituency, community groups, funding issues and North West Kent college—he was obviously particularly concerned about that. I also wish to note the contributions made by Labour Members, as they also highlighted the problems in their constituencies caused by the funding situation for the colleges.

Mr. Illsley made a powerful contribution, raising serious points about what would happen if the refurbishment and redevelopment did not take place in his area and his college. Hugh Bayley talked about the economic situation and the need for smarter regulation, rather than a lack of regulation. He went on to discuss NEETs and young people with disabilities, all of which are crucial issues that we should be addressing, as we have tried to do today. I did not agree with him on local education authorities taking responsibility for 16 to 19-year-olds, as per the Apprenticeships, Skills, Children and Learning Bill, which is going through Parliament at this time. We think that that is a retrograde step and not one that we could support. Mr. Anderson spoke with real passion about the issues in his area, and I listened with great interest to him.

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Hugh Bayley (City of York, Labour)

Even though the hon. Gentleman and I disagree on whether LEAs should take responsibility for the funding of FE colleges, does he agree that there should be a level playing field for funding—the same amount per pupil unit for sixth-formers in schools and colleges?

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David Evennett (Shadow Minister, Innovation, Universities and Skills; Bexleyheath and Crayford, Conservative)

This is an area that we need to look at. Everything has to be looked at on its merits, but we always want a fairer funding system.

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David Anderson (Blaydon, Labour)

The hon. Gentleman said that he was interested in what I had to say in my contribution, but is he interested enough to tell us whether he will commit to continue the funding of the union learning reps scheme?

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David Evennett (Shadow Minister, Innovation, Universities and Skills; Bexleyheath and Crayford, Conservative)

My hon. Friend the Member for Havant has already answered that by saying that we are looking at things very sympathetically. We must move on, because the time available to us is very short. [Interruption.] The hon. Member for West Ham, who is a Parliamentary Private Secretary, seems to want to make a contribution—she has made more of a contribution from a sedentary position than many others.

In the short time available I wish to concentrate on two things: NEETs and the college capital programme. Unemployment is a real tragedy and the failure of young people to be in training, education or employment is a real concern. This recession is hitting the younger people in our community even harder. The level of youth unemployment is rising and we are very concerned that it will continue to rise, with the result that there will be more people in this situation. A record number of people are not in any form of education, employment or training, as shown in the official figures. That is a tragedy for individuals, for local communities and for our country's future, thus it is so important that we look constructively at dealing with the situation.

In the past, the UK's position on youth unemployment was a lot better than the OECD average, but I regret to say that it is deteriorating. We have heard in speeches today how much more it will deteriorate—even by the Government's own admission—in the forthcoming future. This is a disaster and it is an indictment of what the Government have failed to do in their term in office.

The Prime Minister, long before entering No. 10, stated that youth unemployment would be one of his priorities. As my hon. Friend the Member for Havant said, this Government always have good intentions and they are good on rhetoric, but the reality is always something quite different. That is terribly disappointing. The Association of Colleges says that existing problems include a funding system that is "too slow", rules that restrict the movement of "money between funding pots" and an obsession with

"full level qualifications that are not appropriate in the current economic situation."

It has also said that

"there is a major disincentive for Colleges to deliver flexible packages of training which fall outside the rules."

Restrictions on other training providers are also causing problems. A number of training providers with tried and tested ways of helping young people engage with learning and the labour market have found that they are ineligible for public funding because they do not tick the right boxes. In some instances, they have had to halt all provision as a result. Training providers face a difficult and uncertain future due to constant internal reorganisation at the LSC and the Government's education Bill, which is going through Parliament at the moment and will create more new quangos, more bureaucracy and more ineffective delivery of facilities for training and opportunities for our young people.

The recession will result in there not being enough jobs for people leaving school, colleges and universities. We need to support those people along with the recently unemployed, and to give them advice, perhaps access to further training and opportunities for employment and new careers, so that they are prevented from becoming long-term claimants. The Conservatives are very concerned about how we can help young people coming out of colleges and universities to get into jobs.

Britain, regrettably, starts from a weak skills base. We hear too often how many people—5 million or whatever—are classed as functionally illiterate, and millions more struggle with basic literacy and numeracy. The Secretary of State scratches his head, and he might well do so, because such problems are real in today's society. [ Interruption. ] He can make comments from a sedentary position, but people matter and there is no point in being flippant about these situations.

We are looking to train more people. We heard that there has been a cut in adult learning places. My hon. Friend Mr. Hayes intervened and made it quite clear that it is often vital for many people to go to adult education and get some qualifications before they can go on to get further qualifications. Women returners, in particular, as well as other people, need that opportunity and focus to go into education again. The Government have cut those opportunities and we have seen the number of places dramatically reduce in the past few years.

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John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

By 1.4 million.

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David Evennett (Shadow Minister, Innovation, Universities and Skills; Bexleyheath and Crayford, Conservative)

Yes, by 1.4 million. I will reiterate the figure yet again to highlight the catastrophe.

Let me go on to the disaster of the capital funding for colleges. We have heard concerns today from both sides of the House that have highlighted the impact of the mismanagement of the capital programme, which has had consequences for the colleges and the young people who are learning or hoping to learn. We have heard the numbers—144 colleges were going ahead with major building work and are now at a standstill, incurring, as we understand it, an average of about £1.2 million in expenses. Many colleges have spent much more.

We welcome the report by Sir Andrew Foster for the Department. He was particularly damning of the Government's handling of the capital programme and suggested that the reorganisation of DIUS led directly to confusion and the prevailing financial problems in FE. He said that the

"the demise of the LSC and uncertainty about arrangements for the new agencies should not be underestimated."

There is a continuing problem. It is not just about the past, but about what will happen as we go forward.

I have been privileged enough to visit Thanet college and to have seen the problems there. There was regeneration and new building, which have been stopped. I have been to the Wellingborough, Corby and Kettering campuses to see the problems with their capital programmes. There are regeneration projects, too, as we heard from Members from both sides of the House. The college rebuilding programme and the capital programme are part of regeneration. I met some people from the college in King's Lynn in Norfolk who highlighted the problems. My hon. Friend Mr. Bellingham has given me more details. The college is in partnership with others—with businesses and the local community—to regenerate the centre of King's Lynn. It cannot do that if it does not get its part of the funding. That is the reality on the ground.

The Secretary of State is always unwilling to answer direct questions on these matters, but I want to put a couple to him. He did not answer my hon. Friend the Member for Havant on the subject of the criteria that will be set, which the Secretary of State highlighted and which will go through shortly. I want his colleague, the Under-Secretary, to respond to three points to do with the criteria. First, what are the criteria? Will regeneration be a top priority for the funding that will be available for the colleges' future? What is the chronology, and will it be the people who put in first—those who are "shovel ready"—who get the funding or not? What will be the effect on the other players, providers and agencies?

Most importantly, as mentioned in a brief from the Association of Colleges, the Government must confirm what happens to the money. For example, £215 million is being spent on capital expenditure on stalled projects; £187 million will be written off in colleges' accounts if the projects do not go forward, which will put most colleges in deficit and wipe out their reserves; and there will be £269 million spent on extra costs, such as maintenance, in the next five years. There needs to be a full, fair and fast compensation scheme that we run to a clear timetable and the Government need to get a grip of that—they should do so now—and to let us know openly what their priorities will be.

In conclusion, because time goes so quickly—

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David Evennett (Shadow Minister, Innovation, Universities and Skills; Bexleyheath and Crayford, Conservative)

The hon. Lady calls out again from the Parliamentary Private Secretary's Bench—she is an entertainment in herself.

What do we really need? The capital funding programme should have fairness, transparency and clarity, and rigorous criteria should be applied to the projects awaiting approval. On apprenticeships, we need an expansion of real, work-based programmes. We must make it easier for companies to mix apprenticeships by cutting excessive paperwork, instituting direct payment to employers and injecting support for apprentices of all ages, delivered through lifelong learning accounts. We need more community learning and employability, and to provide funds specifically for NEETs, targeting help to those most in need after leaving school. We also need investment in an adult and community learning fund for much-needed courses to help people to update their skills or to gain new skills. We need to set FE colleges free from the bureaucracy of the LSC and its planned successors. We need a revolution to improve the careers service, which is, at present, inadequate. In too many areas, the focus is just on universities. Funds should be refocused from the current provision to provide a new all-age service and to set up a new web-based skills matching service.

The Government have failed to deliver the skills, training and education needed if the economy is to emerge stronger from the recession. The Secretary of State and his team have neither the vision nor the constructive policies to deal with the situation.

6:47 pm
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Si˘n Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

This has been an interesting, serious, and slightly sombre debate. There has not been a lot of levity. The most that I can recall is Stephen Williams telling us about his leg waxing and—

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Si˘n Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

About his non-leg waxing and tonsorial treatments at his local FE college. Amusing though that was, he went on to make the point, "My local FE college even does accountancy." That was a good point, well made. People can do more at an FE college now than was traditionally the case. I recently went to Matthew Boulton college in Birmingham city centre. It is a fantastic college that was built four years ago but is still a state-of-the-art beacon of what can be done—and of what we have done all over this country, as we have built new FE colleges to allow vocational learners to do all kinds of training. At Matthew Boulton, students can do not only accountancy but dentistry, too. There are mini operating theatres and a state-of-the-art broadband wireless fitting thing on which all the Sky installation engineers in the country are trained. That is what one can do in an FE college these days, and that is what people are doing, up and down the land, in the colleges that we have built and that we are continuing to build.

However, having said that, there has been a serious problem in the future funding for the FE colleges that we plan to build. The hon. Member for Bristol, West began the debate on that subject by talking about the numbers of colleges involved in the current difficulties. It was also mentioned by Mr. Willetts and a couple of other Members, and I shall come back to it.

Before I mention the capital, which is the next issue that I shall deal with, I want to mention the thrust of the speech made by my hon. Friend Mr. Anderson. He spoke with great passion, and from experience, about the union learning fund, its representatives, what they do and achieve, and how important they are. The Secretary of State mentioned them in his opening speech, and said that he had recently been to a union learning facility in his constituency. A week or two before I was appointed to my current job, I visited a union learning facility in my constituency.

It is notable that the shadow Secretary of State did not mention union learning in his speech, and his party's lengthy documents never mention it. He intervened on my hon. Friend the Member for Blaydon to say that he had recently had a meeting with the Trades Union Congress, at which his attitude had been sympathetic. I have to say that to those of us on the Labour Benches it seemed more pathetic than sympathetic that he would not guarantee the £21.5 million that we invest in that learning. There was even a parliamentary question tabled by an hon. Member from his party about unionlearn, the thrust of which was, "Why are we spending public money funding people to learn about how to be trade unionists?" As hon. Members will know, that is not what unionlearn is about. It is about union representatives in the workplace signposting and directing into learning workers who otherwise would not get there. It is a great programme, and my hon. Friend the Member for Blaydon does great work by bringing it up.

I have a feeling that in the time available to me, I might not get very much further than the subject of capital. The hon. Member for Bristol, West, talked about the number of colleges affected by the current problem. There are 144 colleges directly affected; 79 have already received approval in principle, and a further 65 have submitted their applications in principle but have not yet received approval. As I have said on many occasions in this House and elsewhere, and to many college principals whom I have met, many other colleges will have invested time, money in some cases, and certainly energy and commitment in drawing up putative plans for future investment, but will not yet have submitted their papers. We are, and have always been, conscious—I have said this many times in the House—that in addition to the 144 colleges mentioned, another subset of colleges is affected in a real but lesser way. The 144 colleges mentioned are those that are directly involved in the current scheme.

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John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

The Minister is indeed giving a less pugnacious summing-up than he did on a previous occasion, as my right hon. Friend Sir George Young recommended he should. The Minister must by now have come to a conclusion about what that extra number is. It is inconceivable that the civil servants working with him would not have come up with a figure. How many colleges are we talking about? Is it 160, 180 or 200? He must know; it is time that he came clean.

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Si˘n Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

I was about to deal with the "pugnacious" slur, but then I found myself wanting to respond that if the hon. Gentleman had the slightest understanding of the issue, he could not possibly ask such a daft question. Of course we could not possibly put a figure on the number of people who may have been thinking about applying to have a new college in future.

Moving on to the serious points made on the issue, my hon. Friend Mr. Illsley asked about the timetable. Again, we have gone through that subject on several occasions. The Learning and Skills Council has convened a panel of college principals, which has met and is looking into the issue. The LSC will write to college principals shortly, letting them know what the prioritisation criteria will be. Subject to the publication of those criteria, decisions will be made very quickly about which colleges can go forward with the work. My hon. Friend suggested that that might be done not in one hit, but in a two-stage process. He suggested that in the first instance, a larger number of colleges would be deemed to have met the criteria, and then a value for money process would be undergone before there was a second phase, in which a final, formal allocation was made. As far as I am aware, the LSC has not made that decision yet, although I am aware that it has been having discussions of that nature. The fundamental point remains that it and we have committed to giving firm answers to colleges about the first tranche, or this year's tranche, of funding by the early summer—that is, imminently.

Mr. Curry, who I see is in the Chamber, mentioned regional LSC staff. I want to take this opportunity to agree with him: all the college principals I meet—and I meet dozens and dozens of them to talk about the issue—make it clear, time and again, that the regional LSC staff with whom they deal are doing a good job. They have no problems with those staff at all. This is a good opportunity to congratulate regional LSC staff from the Dispatch Box on the work that they do in a committed and successful way.

The right hon. Gentleman talked about Craven college and the importance of the rural. He has mentioned that issue before. I have spoken to principals who were on the reference panel that drew up the criteria. One principal of a land-based college assured me that he had raised the issue, that it had been considered by the reference panel, and that it would go forward and influence the decision on the criteria that college principals come up with.

My hon. Friend Hugh Bayley made the case for his local colleges, at least two of which I have visited; both are, as he says, extraordinary. He made slightly mistaken use of the word "cuts" when talking about his early-day motion. I hope it does not say "cuts" in his early-day motion; we should be clear that we were going to spend £2.3 billion on college capital this year anyway, and we are now going to spend £2.6 billion.

Sir George Young, who I see is in the Chamber, and who bizarrely said that I was pugnacious in the Westminster Hall debate, asked whether the schemes that do not go ahead in the current tranche will go to the back of the queue. It is important for people to understand that that is not the case. There will be two processes, one of which starts now; the gateway criterion for that process is shovel readiness, if I may use that phrase. There will then be a second process, using the same criteria that were drawn up in the first process except that of shovel readiness. Through that second process, the second set of colleges will be put through. It is not a question of those colleges going to the back of the queue; they will effectively be dealt with in the same way as the first lot, but more slowly and later.

I do not have time to deal with apprenticeships or NEETs, or the many other issues that hon. Members raised. All that I would say in conclusion is that I hope today's debate has caused the hon. Member for Havant to reconsider his calls for cuts in the skills budget, and caused him to recognise, as we do, that skills are the bedrock of our economic future. Neither issue—neither skills nor our economic future—can be trusted to the Tories.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

The House divided: Ayes 195, Noes 277.

Division number 131

See full list of votes (From The Public Whip)

Question accordingly negatived.

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House notes the Government's belief that in a recession it is important to give people the skills they and their employers need to recover from the downturn; commends this year's Budget for investing £1.2 billion in creating jobs and providing training to young people who have been unemployed for 12 months; further notes that there are now more 18 to 24 year-olds working or engaged in full-time education compared to 1997; commends the Government for its sustained investment in skills with record numbers of people now receiving training, far more than was originally planned for this year; further commends the Government for spending over £5 billion on adult skills this year, helping three million learners, and for increasing investment in higher education by 24 per cent. in real terms since 1997; further notes that the Government is prioritising helping people to gain employability skills; further notes that the Train to Gain budget has risen to £925 million this year; further notes the budget for apprenticeships is over £1 billion this year and that there are 250,000 starts planned; commends the Government for confirming that no current learner will lack the funds to complete their course; further notes that this Government is spending £2.6 billion on further education capital projects over this spending review period; and further notes that Sir Andrew Foster has recently produced an independent review of the Building Colleges for the Future programme.