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I am grateful for this opportunity to discuss the Manchester College of Arts and Technology. Before I do so I should like to declare what I think is an interest. I am not sure that it is, but it is better to have it on the record that the Fees Office pays for an office that I use within MANCAT. That has enabled me to witness first-hand a wonderful story of institutional success and improvement at the Manchester College of Arts and Technology, alongside the individual success of many students.
To understand the background to that success one has to understand both the position that MANCAT was in in 1997 and the levels of educational attainment and poverty in north Manchester, where my constituency is. In 1997, MANCAT's budget was in deficit. It did not have a good reputation for partnership working. In fact, it did very little of it. The educational achievement of young people in north Manchester was such that approximately 25 per cent were staying on into post-16 education and only about 20 per cent were staying on into post-18 education.
In the 1991 census one of the wards was one of the very few in the whole country, if not the only one, where there was not a single person with a second degree living in it. Many wards in the constituency come within the top 100 most impoverished wards in the country.
Since 2000 MANCAT has had an unqualified audit. It has increased by 150 per cent. over the last four years the number of 16- to 18-year-olds in education. I do not have the figures for 1997, but I guess that the increase is more than 150 per cent. over that six or seven-year period. And from that average 25 per cent. staying on in post-16 education on a ward by ward basis in Manchester, Blackley, the lowest percentage now is 62 per cent. and the highest is 72 per cent., which is almost a threefold increase and compares to national averages. The national average is 67 per cent. across all constituencies. For urban areas, it is 63 per cent. It is an extraordinary achievement—and it is not just educational achievement. The Government's priorities are for regeneration and joined-up government, but we know that it is not possible to have regeneration without educational achievement alongside it.
The college is now working on educational schemes in partnership and is sponsored by Jaguar and a local company that does coatings in the motor industry, called H. Marcel Guest. It also works in partnership with the health authority, the city council and schools and it has been involved in an investment programme of £35 million, leading to new sixth-form colleges in St. Matthew's in my constituency and the North Manchester high school for girls. It is hoped that another sixth-form college will be located on the old Harpurhey Baths site at the corner of Moston lane and Rochdale road.
I am talking about my own constituency, but similar achievements apply in the constituencies of my hon. Friends the Members for Manchester, Central (Tony Lloyd) and for Wythenshawe and Sale, East (Mr. Goggins). As I said, it is a remarkable achievement, and it is a tribute to all the staff of the college from top to bottom, and to the leadership of the college principal, Peter Tavernor. What explains such an extraordinary achievement? It has gone from being a college with one of the lowest success rates to one of the highest in the country.
Clearly, it has not been achieved through standard methods. For a start, the college has employed youth workers, guidance workers, social workers and care workers, alongside the usual qualified lecturers that one finds in a college of education. All those people have been working on flexible contracts. They have had to work with some of the most difficult young people, in the sense that their educational achievement at school has not been good. Either the education system has failed them or they have failed within the education system—whichever way one likes to look at it. About 50 per cent. of the people entering the college in that age group are from ethnic minorities, and English is the second language for many of them. About 20 per cent. of extra people attending have been offenders, and social workers believe that they could offend again.
Flexible working was necessary. Obviously, we could not expect many of the students who do not read and write in English—literacy levels are poor—to sit in front of a lecturer and be lectured at in the traditional sixth-form way. What it boils down to is adopting many innovative ways of proceeding. Sometimes the support and youth workers have had to knock on doors to get people to attend the college. Those forms of support have led to a 71 per cent. success rate in terms of getting those people into college. It is an extraordinarily good story, and it has not been achieved in the traditional way.
There have been real difficulties, however, with the audit process—the main purpose of the debate. To avoid any misunderstanding, I should like to make it clear that I believe, along with virtually every hon. Member in the House, that whenever public money is spent, it should be audited. There is no question about that. When I spoke to Liz Davis, the chief executive of the local learning and skills council, which is responsible for the audit, she told me that there is no question that any money has gone missing.
However, because of the innovative working arrangements—involving youth workers, and perhaps people who might put a cross down on a piece of paper because they do not have a signature, English not being their first language—there has been a real problem with the audit.
It is true that public money should be looked after, and we should know how it is spent, but it is now the view of senior management at the college that the audit is being carried out in a racist way. That is not to say that any individual member of the learning and skills council is racist; the process is at fault. That view is shared not only by the leadership of the college but by the deputy leader of Manchester city council, Martin Pagel.
It is obvious that if we are dealing with young people at the extreme end of the spectrum of difficulty in getting them into colleges, and 50 per cent. of them are from ethnic minorities, many of those coming in from elsewhere, there will be those difficulties. Any auditors should be responsive to those immediate difficulties, such as people not being able to write English, and not being in the classroom or the lecture hall. It is the view of the principals that the auditors do not understand that.
The process has also been extremely expensive for the college. The principals say that it costs them, in that successful and innovative area, hundreds of times more in staff time to talk to the auditors than it does in traditional colleges. They also say that one third of a million pounds has been taken out of MANCAT's budget because of its innovative approach. If lecturers in traditional lecture theatres and classrooms had been doing the teaching, the money would have been paid, but because the activities are non-traditional, the college has been penalised by that sum.
I wrote to Liz Davis, the chief executive of the learning and skills council, and I was disappointed by her response. It would not be out of context to quote from her letter, but I do not have time to read out more than one sentence:
"We do however also need to ensure that the policy is developed properly and in consultation with others to ensure consistency and accountability for public funds is maintained, and not in response to the demands of individual providers."
I find that extraordinary. We have a successful provider, and the people who are financing it and checking it are saying, "You're very successful, but you aren't doing it in the right way, so we won't fund you."
I congratulate my hon. Friend on securing a debate so important to colleges that serve both our constituencies, which adjoin each other in northern Manchester. As I understand it, the issue is the flexibility of the audit of the additional learning support grant. Does my hon. Friend agree that many colleges have come up against the problems of the tight restrictive audit mechanisms? I offer support from my local college, Hopwood Hall, but does my hon. Friend also agree that in the relaxing of the audit mechanism, none of the other colleges that serve his constituency, such as Hopwood Hall, should be discouraged in any way from adopting measures as flexible and engaging as those that MANCAT has used?
I am talking primarily about MANCAT, and I am trying to ensure that the rules set down and implemented for mainstream provision do not further disadvantage those young people who need education. I do not know about Hopwood Hall, but it certainly would not be my intention for there to be any negative impact on it. When I have been informed about what is happening in other colleges, very little of MANCAT's sort of work, using youth workers and other such people, as opposed to lecturers, seems to be going on elsewhere, so I cannot imagine that what I suggest would have many implications for other colleges.
The deputy leader of Manchester city council, who is also a governor of MANCAT, said in a letter to me that he thought that the way in which the audit was being carried out broke the anti-discrimination laws on disability. I think that that should be investigated.
This debate is about MANCAT, but the young people who need education are our most important priority. In that connection, I want to mention two matters. The first has to do with the co-financing by the European social fund. In a report that is available to the public, Manchester city council has described how the local learning and skills council sought ESF bids without making any forward planning. No partnership work was undertaken, there was no guidance for bidding, and the process was not transparent.
The result was a huge overbid, after which £800,000 was taken away from the youth college that deals with those young people aged between 14 and 18 who are likely to be excluded from school—exactly the category of young people for whom MANCAT is doing so well. In addition, £2 million was taken away from the fund for lifelong learning libraries. That is unfortunate, as those libraries help the same group of people.
Secondly, I happened to receive a letter today from Carolyn Caldwell, the executive director of Connexions. She complained that mistakes in value-added tax meant that money would be taken away from the Manchester Connexions service, which helps people in the same 16 to 19-year-old age group to find jobs or get into education.
MANCAT has been doing an extraordinarily good job, but there have been three separate attacks on its funding. One attack was made directly on the college, the second came through ESF funding organised by the learning and skills council, and the third came through Connexions.
That cannot be right. MANCAT has done so well because the Government have given it money, while for its part the college has followed the Government's priorities. Because the quango involved does not appear able to work in partnership with the city council or the college, the objectives of using joined-up government to facilitate regeneration and give a second—and possibly final—chance to young people who missed their first chance at education have been damaged.
The problem has been caused by a perversity in the audit process. Although we need to know where public money is going, it cannot be a sensible policy to spend so much extra time on what is a very difficult area. Staff are angry, and money has been withdrawn: that is certainly not an example of working in partnership.
I am not a quango basher, by any means. Sometimes, quangos can focus and direct their efforts better than organisations with wider remits and more policy priorities. However, where a quango fails, the Government must look at what is going on. I hope that they resist the temptation of saying, "This quango isn't doing so well. It has lost the support of some of its partners, so we'd better move its responsibilities up to the regional level."
That would be a huge mistake. The success that has been achieved at local level stems from the work done by people who understand their local communities. It is immediately clear that the take up of education by young people has increased in those sixth form centres in which MANCAT has invested. I have seen that happen in the building in Moston where I work.
I want to take this opportunity of thanking the Under-Secretary of State for Education and Skills, my hon. Friend Mr. Lewis who has discussed this matter with me previously. I hope that my hon. Friend the Minister for Lifelong Learning, Further and Higher Education, who will respond to this debate, will be able to say that the problem that I have set out will be investigated, with a view to restoring the third of a million pounds that has been taken away. I hope that he recognises the enormous success achieved by MANCAT, and that he will do all that he can to prevent that success being dimmed.
I congratulate my hon. Friend Mr. Stringer on securing the debate.
Before I discuss MANCAT, it is worth saying that the funding methodology for further education colleges is clearly set out in the Learning and Skills Council's annual funding guidance, which prescribes not only what the LSC can and will fund but also provides the terms and conditions for that funding. The LSC monitors compliance with its funding rules through an annual reconciliation and audit arrangement, and that compliance work is contracted out to specialist audit firms.
Although we are keen for colleges to be innovative and we would not want to stifle innovation, any such provision has to take place within the rules. It is a sad fact nationally that the major failures in the sector have been in aspects of innovative provision. We thus need to balance the desire for new and imaginative ways of working with the need for proper accountability and the necessary compliance activity. My hon. Friend fairly said that such work was essential and did not form part of his argument.
It is important to note that MANCAT is the highest funded college for 16 to 18-year-old full-time equivalent students in the LSC Greater Manchester area, and by some distance the highest funded general FE college. That is primarily because it receives substantial amounts of both disadvantage and additional learner support funding, which reflects the deprivation of the college's catchment area and the individual difficulties of each student, to which my hon. Friend referred.
In fact, the college has received an allocation of £27.8 million for 2003–04, which represents a 25 per cent. increase on the previous year, and includes £2.3 million disadvantage funding and £3.4 million to meet learners' additional support requirements. Together, those two strands represent 12.2 per cent. of the college's total funding, which compares favourably with a national average for general further education colleges of between 9 and 10 per cent.
I know that the LSC recognises the fact that MANCAT is doing a good job—I shall say more about that in a second—especially to engage learners who otherwise would probably not be in education. Since 2000, the council has backed that up by investing substantial additional growth funding in the college to enable rapid expansion of 16-to-18 participation and of English for speakers of other languages.
Recent events related to the 2002–03 funding claim have caused difficulties in finalising the subsequent audit. In fact, over the past two years, MANCAT has challenged the LSC over its annual funding audit whenever the compliance of the college's ESOL, open college network and additional learner support provision has been scrutinised in any detail. It is clear that the LSC and the college have differences of opinion with regard to the approach to audit. As my hon. Friend said, the college thinks that the scrutiny requirements for that type of funding are excessive, while the LSC believes that the record keeping and evidence provided by the college could be better.
For the sake of clarity, I shall briefly set out the background to the situation and explain how we need to work to resolve the matter. First, the college sought funding for a range of broader innovative learning support activities which, in the college's view, incurred additional costs linked to the nature of the disadvantaged cohort. The costs included those for the college's team of youth support workers, which my hon. Friend mentioned. Those workers provide an important wider support package for young learners at risk of dropping out of education. The auditors and the LSC looked closely at that aspect of provision and concluded from the evidence available that, although those activities were effective, much of the claim fell within the scope of the disadvantage funding that the college had already received as part of its core allocation. The auditors also found that some of the open college network provision was complex and poorly recorded, which made assessing the evidence, and thus validating the funding claim, almost impossible.
The crux of the issue, therefore, is not that the wider support activities offered by the college do not provide educational value, but that claims for funding were insufficiently evidenced, and without such evidence it is not possible for the auditors to give an assurance that the activities in question are legitimate. The LSC has been working closely with the college to resolve that, and there has been significant progress in recent months.
In December 2004, the LSC recognised that the auditors are not educational experts, so it sought advice from someone who definitely is an expert, Dr. Terry Melia, who is a respected former chief inspector. Dr. Melia concluded that, although there were weaknesses in the recording of the additional learner support activities, the activities themselves represented support as funded by the LSC. The findings also indicated a well-motivated student body that is gaining a great deal from the MANCAT experience. In the light of his findings, the LSC agreed to meet a substantial element of the college's additional learner support claim in full, but it asked that the college seek to improve its record keeping in the future. That shows the LSC's willingness to respond positively to the college's efforts. The outcome is considerably more positive for the college than would have been the case if the standard audit approach had been applied rigidly, without considering the outcomes achieved.
It should be noted that the local LSC works well with MANCAT on many other issues—for example, the 14-to-19 strategy and action plan, following the area inspection of Manchester. The LSC also recognises that the college's strategy of developing its accommodation across the city has made a major contribution to increased 16-to-18 participation in Greater Manchester. The LSC has provided substantial financial support to the college in helping it to implement its accommodation strategy. For example, it has contributed £8.37 million towards eight separate capital projects at a total cost of £22.5 million—easily the highest contribution committed to a college in Greater Manchester.
In addition, the LSC has recently approved financial support of about £2.5 million for MANCAT's proposal to create a new sixth-form centre. The LSC has also written to the Northwest Development Agency to assist the college in securing further contributions towards the project costs. The college is clearly in a strong position, both financially and with regard to the quality of its provision.
I endorse my hon. Friend's comments about what a good college MANCAT is. At its last inspection in April 2002, the college's ESOL provision was graded as outstanding, along with many other good curriculum grades. Leadership and management were also found to be good, and the college's response to educational and social exclusion was deemed to be outstanding. MANCAT is an excellent college.
The latest three-year financial forecasts, from 2003 to 2006, confirm that MANCAT should continue to be in the highest financial health category for the next three years. The college has also succeeded in developing some effective partnership arrangements, with good links to schools in the area and to higher education, and employer links with the automotive sector.
My hon. Friend was absolutely right when he said that there was controversy about the failure to achieve European social fund money. I am assured that that has nothing to do with the quality of the bid but rather with the quality of the competition. I also think that it is fair to say that the way that the process was handled, with 400 applications getting through to the final stage, was not a good one. That is accepted by everyone involved, and they need to learn from the mistakes.
I congratulate the college on its successes. I hope that it will continue to work constructively with the LSC and other partners to develop further its contribution to education and learning in the Manchester area.
On my hon. Friend's specific point about institutional racism, he has had a meeting with my hon. Friend Mr. Lewis, the Under-Secretary responsible for skills and vocational education, who is investigating his concerns and will respond in the very near future.
My hon. Friend the Member for Manchester, Blackley and other hon. Friends have raised an important issue that is of concern to the community that they represent. I hope that, in this short debate, I have managed to give an assurance that we intend to resolve the problems by working together to continue the excellent provision of further education provided by MANCAT in my hon. Friend's constituency.
Question put and agreed to.
Adjourned accordingly at fifteen minutes past Eight o'clock.