Lifelong Learning (Higher Education Fee Limits) Bill (First sitting) Debate
Full Debate: Read Full DebateDepartment: Department for Education
Toby Perkins
Main Page: Toby Perkins (Labour - Chesterfield)Department Debates - View all Toby Perkins's debates with the Department for Education
Lifelong Learning (Higher Education Fee Limits) Bill (First sitting)
Toby Perkins ExcerptsTuesday 21st March 2023
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Lifelong Learning (Higher Education Fee Limits) Act 2023 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 March 2023 - (21 Mar 2023)
Mr Toby Perkins (Chesterfield) (Lab)
Q
Professor Press: Our university does not offer higher technical qualifications, and we do not validate providers that deliver HTQs. At the moment, the provision is targeted at a particular group of learners. Once it opens up in 2027-28, it will provide significant opportunities for both new and current learners who might want to space out their learning in a different way. My understanding—again, forgive me if I have misunderstood—is that this will develop slowly while we work out how we can operationalise it, and then there is a point at which it can open out and support many additional new learners.
Mr Perkins
Q
Professor Press: While local employers will not provide the courses, there is not much point in us putting on modular learning if there is not a demand for the students who have gained that learning. We are a large and accessible provider of degree apprenticeships, and we work with over 500 employers in thinking about what sort of apprenticeships to run. I will be thinking about extending engagement with our apprentice employers, so that we can have the same sorts of conversations about putting on modular learning. It is through the providers that the employers will have the opportunity.
Dan Jarvis (Barnsley Central) (Lab)
Q
Professor Press: In Greater Manchester, we have a civic university agreement between the five higher education providers and the Greater Manchester Combined Authority. We work very closely together. The proposed legislation gives us the opportunity to align much more closely what we can provide and the sorts of skills that the combined authority wishes to deliver, because of the benefit there will be to local businesses and employers. I am very positive about working with the combined authority. The key thing to note is that the relationships are good, the conversations take place and people know one another. That builds trust and confidence and enables us to have the right sorts of conversations that deliver positive outcomes.
Robert Halfon
Q
Julie Charge: It is the connectivity. Students will be familiar with modules as part of something that, when they are applying, they see described to them in a range of different ways. There is therefore some work that we as a university would need to do to make it easy for them to understand the relationship between the module of the course that they want to participate in and the credits.
I think there is another aspect here, which is that, again, as a university, we link hours to credits. If we can link all those things in a way that gives much more clarity for a student, by saying, “This is the undertaking in hours, which equates to number of credits, which is therefore part of a module, and the module then builds up your course,” that clarity will help with that sort of common understanding.
Mr Perkins
Q
Julie Charge: Probably a combination of both. We did the pilot on short courses. It was a very small sample size in terms of the take-up, but 40% of the applicants and those who went on to do the short course were in the 26 to 30 age group—and it was a combination of retraining after some initial work or an initial degree, and some initial training. Then we saw a different group: the other big group, who were retraining and upskilling, was aged 36 to 40. Of that group, some were continuing their studies, but the majority were external and returning to do that training. I cannot comment on whether there was unemployment, but there were certainly two big groups, in terms of age profile, that were returning to do the pilot course with us.
Mr Perkins
Q
Julie Charge: No—of the people who took part and were recruited to that course, 50% took up the lifelong learning loan entitlement.
Mr Perkins
Q
Julie Charge: I think there is some way to go to understand how that transfer will work in practice. Having a commonality of modules and credits per module helps with that level of understanding, but in terms of the qualifications that go alongside that and the end result, that is unclear at this stage. Further work would be needed to work out things like who the awarding power would be for a course set up in such a way.
There are also some other points regarding the outcome of the course. I will just reflect on what we have at the moment with a three-year course. As you work through your levels—through levels 4, 5 and 6—the complexity obviously builds, in terms of your learning and understanding. Therefore, when we work through this, we would need to be assured of the level of work and the level of learning that is occurring through those years, in order to be assured that at the end the student can be awarded at the right level, and we can maintain that quality.
Mr Perkins
Q
Julie Charge: This could absolutely play into an apprenticeship arrangement. Again, if we as an institution can think a bit more creatively about how we could do that, it would align quite nicely with the degree apprenticeships that already exist. It would need a bit of work, but that could sit alongside. Again, it is really important to reflect on trying to make it as easy as possible for students to understand their options and the outcomes—what this leads to for them; it will be important to join some of the dots, with a wide range of skills routes they can take. This is about making it easy, having clarity, and students understanding their outcomes.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Q
Julie Charge: If I go back to the experience that we had of trialling the short courses, it is possible to set this up. The administration is slightly more complex. It does not sit comfortably within an individual module or modules, because that is not how universities work. We have a three-year degree; a number of costs are included to support students during that period, and some modules are more expensive than others. There is some work here.
One of the learnings was not so much about the marketing, but about the understanding of what was available and ensuring there was enough knowledge in the marketplace for people to understand what they were coming into. In terms of cost, it is possible to do that, but there is something about the messaging of what is on offer, and making that clear for prospective students.
Mr Perkins
Q
Sir David Bell: I should probably remind the Committee that my experience of the Department is now long out of date, so I am not really in a position to comment on the current DFE. What I would say, however, is that the Department and the civil service more generally have always been used to managing these complex kinds of changes, so I have confidence there. I also know—this is an important part of the whole process—that the Student Loans Company is busily engaged in making all the preparations necessary to make the Bill a success. Looking in from the outside, I am confident that this will happen. Going back to the previous point, I think the time this will take is a good thing. Sometimes I am impatient about a slower pace of change, but in this case it is a very sensible and pragmatic approach.
Mr Perkins
Q
Rachel Sandby-Thomas: I am glad you raised that because I think there are obstacles. I am not saying this to obstruct the policy; I am actually trying to be constructive. It will introduce a lot more complexity into the higher education system, both for the students and for the institutions, and at lots of levels. It will kick off with uploading the courses on to the UCAS site. That might not seem complex, but the modules, how they all fit together and how they potentially fit with other institutions’ modules will actually be complex. Then, it is about how we market that clearly, because as was said, rightly, communicating clearly with prospective students is key to the success of the system.
There will need to be a lot of advice and guidance given to prospective students, who will want to know whether their prior learning will be taken into account and whether what they have done before and are proposing to do will actually form a coherent structural programme that will be recognised. You will then have the admissions. We hope that there will be a greater volume of admissions, but each of those admissions will have to be looked at very carefully on an individual basis, because of the matters of recognising prior learning and so on.
Data is another big and complex area. At the moment, the Data Futures programme is trying to get rid of the need to return data on modules, whereas this will obviously need the return of data on modules. There is a tension there that needs to be resolved. I could easily see it going into an extra framework of data returns, so that will be an issue. There is a big issue with the student information technical services, called SITS—I was going to say “fondly called”, except it is not—which is very much programmed on a system’s architecture, which is based on programmes that comprise modules, but is at that programme level. That will have to be completely refigured, which will be timely and costly.
Of course, you then have the issue of services and all the wraparound support services that we offer students, which will see an increase in volume. There are also tricky issues about how long students will have access to them. Do we know when they leave the university; how do we know when they go elsewhere for university; and do they have some sort of associated student status for a while? None of us knows the answers, but they are all things that need to be worked out. I say this because there is little by way of incentive for a business case at the moment. While I completely understand—going back to the first question—not wanting to provide a disincentive for students to do a modular course, there is a business disincentive in terms of the cost to the higher education institutions, unless they are already doing lots of modular provision.
Matt Western
Rachel, I am keen to understand how you see this fitting within the current regulatory landscape for higher education, particularly in the light of what it is fair to describe as an increased regulatory burden on the sector in recent years.
Rachel Sandby-Thomas: I think there will have to be differentiation between the two systems. There are quite a lot of concepts in the current OfS regulatory system that sit unhappily with this new system. For example, the concept of the completion of an award is key to the current system, but of course a student might not be completing an award as such when they are doing a module at one’s institution, so that needs to be changed. In the current degree system, there is quite an emphasis, for perfectly understandable reasons, on continuation and the importance of having a student continue for a year from the beginning of the course. Quite a lot of judgment is implied in that continuation being a good thing, whereas actually whether or not a student completes a module within or outside a year is a neutral thing, judgment-wise, in a modularised approach.
We also have the question of who will “own” the student in terms of graduate outcomes. Who can claim success, or to whom can success be attributed? I am reminded of that lovely quote of how success has many fathers, but failure is an orphan. I think there might well be many fathers for these students. Again, none of these things is insurmountable by any means, but they all need to be thought about in an intelligent manner.
Lifelong Learning (Higher Education Fee Limits) Bill (Second sitting) Debate
Full Debate: Read Full DebateDepartment: Department for Education
Toby Perkins
Main Page: Toby Perkins (Labour - Chesterfield)Department Debates - View all Toby Perkins's debates with the Department for Education
Lifelong Learning (Higher Education Fee Limits) Bill (Second sitting)
Toby Perkins ExcerptsTuesday 21st March 2023
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Lifelong Learning (Higher Education Fee Limits) Act 2023 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 March 2023 - (21 Mar 2023)
Matt Western
Q
Simon Ashworth: That is a really good question. You can look back in history at the individual skills accounts and some of the challenges. We have moved forward significantly and have some learnings, including ensuring that we have regulated providers who are delivering from a regulated list of qualifications. Some online platforms now negate some of the challenges we had historically around a paper-based system, which was probably a little bit of its time. There are key principles there around the controls and the providers.
As I said, the Office for Students regulates the provider base. I think we have moved on significantly from where we were previously in terms of access to providers and how the system can and does work. The whole concept of empowering learners and giving them an individual lifelong learning account is a really exciting move. It gives them much more control over where they access their provision, who they choose and when they choose it. I think it is a real game-changer for the individual. I would be less worried about some of the challenges we saw 20 years ago when we moved to a similar approach.
Mr Toby Perkins (Chesterfield) (Lab)
Q
Matthew Percival: There is an interesting dynamic at play, particularly at the moment, around labour shortages. Given the extent of the skills and labour shortages, there is a stronger incentive and a stronger need than ever to be able to meet your skills needs, yet, at the same time, there are forces pulling in the opposite direction. I mentioned that in this environment, we have had a lot of job-to-job moves within our labour market. People have been able to move into different roles for more money, and there is pressure around salaries on hiring and salaries for retention. If you do not do something on retention salaries, you incentivise everybody to move more and to swap employers, so you get that element of the squeezing of budgets.
There are other things that we see going on in relation to the current shortage environment. There can be an element of the off-the-job opportunity cost of a worker going off to do training. When you are already short on the frontline, it is even harder to free somebody up to go and put the time into the training, and we see a number of the providers in our membership—we have a mix; as well as the plcs that we are most synonymous with, there are universities, colleges and independent providers in our membership—particularly the colleges feeling the pinch when there are these shortages. They also have their own workforce challenges, which often make it so much more difficult to be able to provide the training where the employer is willing to do so. It is more important than ever to be able to address the skills gaps, but it is also more difficult to be able to deliver that at the same time, rather than a universally positive driver towards unlocking more investment than we have.
I think we miss a trick in terms of policy to be able to think about the question of what it would take to create an environment to unlock higher levels of business investment in skills. A lot of our political debate around skills often gets focused on what the state will buy for the individual, rather than on how the state could play a role in creating an environment for higher levels of business investment. An imperative for us would be to have more of that conversation.
Mr Perkins
Q
Simon Ashworth: I think there is a real possibility of that risk materialising. As you say, one of the big challenges for SMEs is the complexity of accessing and funding the system. We know that large employers have a significant influence, certainly on institutions, around course development and course design, so we could see some of the challenges that you have articulated replicated here in terms of the provision and some of the accessibility arrangements. As you say, on the apprenticeship side, the role of providers to support SMEs is pivotal, because SMEs and small employers tend to be time poor as well—I am thinking about their engaging with the system. But I would absolutely echo the challenges with the LLE that we have seen in apprenticeships.
Sir David Evennett (Bexleyheath and Crayford) (Con)
Q
Secondly, one of the things we find when going around the country in various roles is that businesses complain that they are not getting people trained to have the skills they require. Do you think that the Bill will encourage more businesses to get more involved with universities and colleges, so that they can work together to make sure that they are encouraging colleges and universities to have the courses to fill the skills shortages? Subsequently, the firms will be able to participate in the upskilling, as well as individuals, or the Government.
Matthew Percival: I completely agree with the sentiment and the objective of how we get employers more involved in the system; I am not sure this is the mechanism we are pinning our hopes on for that. You would expect more of that objective to be achieved through a reform like the local skills improvement plans, which try to get that employer voice out to provide us with that bit more, rather than this being the specific mechanism for it.
To your earlier comment about employer engagement with programmes, the job we really have to do is not just to say, “Let’s make employers aware of the LLE”, but to ask whether we actually have a coherent story to take to employers and say to them, “This is what is valuable for you about engaging in this process and why you should do it.” If we have that story to tell, we can be a lot more effective in helping to engage people.
Often the way it comes across to employers is that there is a whole plethora of initiatives and they will say, “I am confused as to which one”. I know part of my job, as a representative employer, is to hold a bit of that challenge back to them and say, “Well, you can’t say both that you need it to be dead simple and there to be only one option, and when there is only one option say, ‘There isn’t an option that works for me.’”
We need a plurality of different initiatives and options, but we also need to challenge and support employers to navigate that environment. Rather than just saying, “Let’s try to raise awareness” and getting them to tick the box that says, “I’ve heard of the LLE”, because they might have heard about it as individuals rather than as employers, it is about how much we can get to the objective of them giving us quite a consistent message that, “This is the value in it for me, and I am confident that I know that element of it”, rather than just brand awareness.
Simon Ashworth: We refer to our members—providers —as the sales force. I think there is absolutely a role for Government to do with engaging employers. Our members—independent training providers, colleges and universities—deal with employers all the time. It is important to harness their links with industry and employers around awareness of the LLE. Ultimately, the LLE and the entitlement is about the individual as well. There is the employer demand and the employer support, but there is also the individual because, at the end of the day, it will be the individual who takes out the loan entitlement. There is a role for organisations such as UCAS to help promote that.
I would certainly encourage the Government to work with stakeholders and providers, which could do some of the heavy lifting around awareness. I do not think it is just the Government’s role to try to reach a million employers. I think they need to pull on all the different stakeholders that can promote the programme and make it a success.
Mr Perkins
Q
The Chair
Thank you to both Simon and Matthew. If you have anything else to say, you can always do so in writing.
Matthew Percival: Happy to follow up.
Examination of Witness
Sir Philip Augar gave evidence.
Mr Perkins
Q
Sir Philip Augar: That is a question that I ask myself quite a lot, Mr Perkins. It is hard to come up with a definitive answer. Obviously, for the independent providers and FE colleges, this is a massive opportunity. This is a chance to completely expand their market, and I would have thought that they are already on to it. For the universities, I am not so sure, because there is considerable demand from domestic and overseas students for the full three-year degrees.
I would hope that the forward-thinking institutions are looking at that demographic downturn in 2030 and thinking that it is not far away. This will come by very quickly. The cohort that starts in 2025 will have its three years and then we are into it. I hope that the forward-thinking institutions—the type that will be interested and able to offer modularised, credit-based lifelong learning—will be thinking about this: if not now, then pretty quickly.
Mr Perkins
Q
Sir Philip Augar: That is clearly a risk, but a lot depends on how lifelong learning is portrayed by the schools and colleges that are speaking to young people and parents. Not everyone is suited to an academic route. That does not make someone who pursues a vocational route a less worthy person; it just makes them different. I very much hope that we can get away from thinking it is university or bust. It is absolutely not, and this is an important way to get us there.
Andy McDonald
Q
Sir Philip Augar: It is a very good point, and the panel did engage directly with employers and representative organisations. We had a number of roundtable meetings and invited them all along. The response varied, frankly. Some representative bodies and some employers absolutely got it. There is possibly a sense in other quarters of, “Look, this really isn’t our problem. We can’t get the staff, you know.” Actually, that is your problem. I am a big fan of the LSIPs. The engagement between local business, local education providers, chambers of commerce and the rest has the potential to close the gap that you identify, and I agree with you.
Robert Halfon
Q
Professor Rigby: Probably, in this Bill, the solution resides in that course year. If one could identify a course year with a loose allocation of credit—let’s say, plus or minus 20 or 25—that would not break the intent of the lifelong loan entitlement being a 30-credit minimum, but it allows 18-year-olds to fall over once or twice during a year and to be picked up in-year, rather than getting another £3,000 taken off their lifelong loan entitlement.
Mr Perkins
Q
Dr Norton: Coventry has multiple start dates throughout the year already—we have six, I believe—so the volume of applications may increase throughout the year, which would cause some capacity issues, but overall I think it is a positive.
Professor Rigby: Most universities currently have multiple start dates, even the research-intensive ones, mainly because a lot of international students start their master’s courses in January. In the Bill as written, this is a technical realignment, which means that instead of someone starting partway through a year and their fees running through four years if they are on a three-year course, their fees will run over three years but in practice they will start and end in the same month. It is a technical change.
Throughout the Bill, I have identified a multitude of technical changes that will affect the provision of probably a couple of million existing students in order that, in ’27-28, we will start to see the roll-out of the LLE. Intuitively, I wonder why form does not follow function, in that we should design the LLE and then make sure that the funding system will permit it, rather than changing the funding system ahead and precluding some of the design opportunities that would otherwise reside in the LLE.
Mr Perkins
Q
Professor Rigby: All undergraduate degrees tend to be 4, 5, 6. We currently accept top-ups into 5 and into 6, but there is limited demand at the moment for that provision. The real opportunity here exists in growing this ecosystem almost organically, and colleges working with their cognate universities—we are federated with Bath College, for example, and New City College in London. We are developing novel provision in that space, assuming that the funding will permit it. There is little that the funding will not permit; it is just not so obvious to the person in receipt of it. There is little in terms of top-up, one-year, short courses that we cannot do currently, but we sometimes have to look for something from commercial entities, rather than individuals taking out loans.
Matt Western
Q
Professor Rigby: As I read the Bill as written, nothing gives me direct cause for concern, but it does give permissions for things to happen down the line that are not part of what is conceptualised at the moment in the lifelong learning entitlement. For example, nothing in the Bill would stop the Secretary of State in future refusing to fund a module or course in a particular discipline. Universities are worried about that, because we have seen the removal of extra funding for courses such as archaeology and design over the past few years. It makes us conscious that the Bill, while not designed for that function, gives permission to the Secretary of State to set fees at whatever level they might want for a degree that they might like, or to refuse funds at any level for a degree that they do not like. All of us around the table might worry about archaeology—notwithstanding that you did it; people do move on later—but most of us would see that design is something that is broadly useful to the economy.
Lifelong Learning (Higher Education Fee Limits) Bill (Third sitting) Debate
Full Debate: Read Full DebateDepartment: Department for Education
Toby Perkins
Main Page: Toby Perkins (Labour - Chesterfield)Department Debates - View all Toby Perkins's debates with the Department for Education
Lifelong Learning (Higher Education Fee Limits) Bill (Third sitting)
Toby Perkins ExcerptsThursday 23rd March 2023
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Lifelong Learning (Higher Education Fee Limits) Act 2023 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 March 2023 - (23 Mar 2023)
Matt Western
Thank you, Sir Robert, in advance of this morning’s sitting, and thanks to the Clerks for all their work hitherto.
I thought that the evidence sessions the other day were useful. The contributions of the Government witnesses, as well as those whom we had proposed, were extremely helpful. What we heard consistently was that the previous consultation was healthy, but we did not have the report back until relatively late. Perhaps there could be greater consultation.
The purpose behind the two grouped amendments 3 and 5 is to incorporate more consultation in the Bill and in particular the need for the Minister to consult stakeholders when deciding what method should be used to determine the fee limit. A second expectation to be included would be that the Minister consult the provider in question, higher education stakeholders and other stakeholders relevant to how many credits are attached to the credit-differentiated activity—that is the term used to describe non-traditional modes of teaching, or placement.
I start with amendment 3. The Bill gives the Secretary of State sweeping powers to decide unilaterally what method to apply to courses in determining the fee method, whether the credit-based method or the fixed method. In the evidence sessions, we heard from Professor Press, the Vice-Chancellor of Manchester Metropolitan University, who has done a lot of work in this area. In what was not so much a confession as a revelation, he said that
“the bit I find most difficult to understand is the difference between the credit-based and the fixed-mechanism methods of calculating the fee cap.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 5, Q4.]
In addition, we also helpfully heard from Julie Charge, the deputy chief executive officer at the University of Salford, about their experience of the Office for Students’ short-course trial, as it was the Office for Students that conducted the trail. We heard that that might have been better had it been undertaken by the Department for Education itself. Salford’s experience revealed two significant cohorts of people taking the loan: the 26 to 30-year-olds in one; and the 36 to 40-year-olds in the other. That is valuable data for the Government. I like to think that that will provide behavioural insight into how the opportunity for lifelong learning will apply, because there seems to be a market and a need for such provision among those cohorts. I hope that the Minister will be interested in learning from the trial and implementing it when deciding many of the things that he has the power to do in regulations.
The memorandum from the Department for Education to the Delegated Powers and Regulatory Reform Committee states that the fixed method will be used only
“for courses which do not easily lend themselves to the credit-based system”.
However, the Bill grants sweeping powers to the Secretary of State to decide what method should be used, irrespective of whether the fixed method should be used exceptionally. There is a concern here. If it is decided that the credit-based method should be used, it is important that that does not lead to unintended consequences for providers or learners. The Minister would therefore surely accept that there is a real benefit to sector consultation.
The importance and relevance was underlined by the fact that the Russell Group has expressed its support for the amendment, as it believes universities should have autonomy on all decisions relating to the types of courses and provision offered, and whether or not to modularise the courses and the associated credit. I expect the Minister might not want to include sector stakeholder consultation in the Bill, but, if he does not, what assurances can he give the sector that, first, there will be an avenue for sector stakeholders to contribute before the Secretary of State decides on the fee limit to be applied? Secondly, universities will have the ability to express an opinion as to what type of courses
“do not easily lend themselves to the credit-based system”,
and the Secretary of State will take that into account in deciding what method to apply.
Mr Toby Perkins (Chesterfield) (Lab)
My hon. Friend raises an important point. The consultation that he refers to sets up an opportunity to debate clause 1. For me there were two key concerns that came out of the evidence sessions on Tuesday. The first was whether the policy would lead to a shift from employers having responsibility for their staff’s learning to employees now being expected to take responsibility. The second was whether that would be attractive enough for institutions to take them on, and whether the concerns about the financial stability of the sector had been considered in the Bill. The evidence sessions showed why it is so important that we have a full consultation on the issues.
Matt Western
My hon. Friend is right that we heard quite widely from all the witnesses. Over the last 30 years, there has been a significant fall-off in the provision of adult education and of education or training through employers—we heard that from the CBI and others. There is a real concern about whether the proposal will lead to an individualisation of the responsibility for all training and skills, which would be to the detriment of what is needed for us economically as well as socially. I agree with his point about whether what is being proposed might be a burden in the context of the current education landscape and the financial precarity, which we particularly see in colleges and also in higher education institutions. We will come on to that when we discuss other amendments.
I will come back to the assurances I am seeking from the Minister on the need for consultation. I spoke of two. The final one I want to raise is that there was seemingly some confusion among the witnesses we heard from on Tuesday. These are heavyweight college leaders, who are widely respected across the sector. I am really seeking assurance from the Minister and his team that he himself will reassure the sector on the difference between the two fee limit methods.
I will turn to amendment 5. In the Bill, “credit-differentiated activity” is the term used to describe non-traditional learning activity, such as placements with employers. That is not a term that a lot of people will be familiar with; I am not sure if you, Sir Robert, or others would have been familiar with it ahead of getting involved with this legislation. An obvious example is in hospitals, where placements are a vital part of nursing degrees and other medicine-related courses.
Providers may wish to define future courses with a placement element to them or that include engagement with employers. That is to be welcomed, of course; it is a vital part of the learning experience—the direct, practical experience—that a person can have by being in that place of work and learning very much on the job alongside the theory they may have learned in the classroom. That is a vital part of their training—understanding not just the theory but how that relates in practice to the workspace.
The Bill currently allows the Secretary of State to set down in the regulations the description of the credit-differentiated activity to be undertaken and make provision about the number of credits attached to that type of activity. Given the vast range of areas that such activity could fall in and the number of sectors and bodies that could and, I believe, should be engaged—national health service trusts, other sector-representative bodies involved in course provision and qualification bodies—would it not make sense to ensure they are consulted before the Secretary of State puts a number of credits on the activity?
The amendment also includes consultation with the provider, which is important. Let us take the worst-case scenario. Say that a provider allows a student to undergo a placement during a course year: the Secretary of State provides for that activity to be 20 credits—i.e. 200 hours —but say, in reality, the placement is much more onerous, and the university envisaged that the student would spend 300 hours on placement, or 37.5 hours for eight weeks. That example illustrates that there would be a clear discrepancy. What mechanisms are in place in the legislation to prevent that happening? Would consultation with the provider not be sensible?
We also heard from Simon Ashworth of the Association of Employment and Learning Providers that
“awareness of the LLE is still underdeveloped.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 39, Q78.]
That is backed up by the CBI’s education and skills survey 2022. We heard from Matthew Percival about that, and he explained that the survey revealed that four in five respondents were totally unaware of the plans to introduce the lifelong loan entitlement. We also heard examples on Tuesday of how previous Government initiatives in the skills space have massively underperformed the expectations of Government. I do not mean to criticise that, because some of the initiatives have been very positive, but it demonstrates how difficult it is to get some of those new initiatives up, running and accepted by institutions, and understood by employers and learners. We have seen that with T-levels and accelerated degrees.
Mr Perkins
My hon. Friend is more generous than I am; he touches on one of the crucial parts of this entire debate. For the measures to have the force that we all hope for, providers have to be able to afford to run the courses, and, in the context of independent providers, to do so profitably. The Government have been very good at allotting budgets for projects that never get taken on and never deliver the numbers originally hoped for. There is every prospect, given the evidence that we heard this week, that this measure could fall into the same trap, if the issues raised by my hon. Friend are not addressed. It behoves the Government to ensure that they not only come up with a good idea but make it work for those who are being asked to deliver it.
Matt Western
My hon. Friend has a lot of experience as a Member of Parliament for Middlesbrough, and understands how important it is, with economic change and new sectors emerging, that training and skills provision is available and co-ordinated. I worked with my hon. Friend the Member for Chesterfield on the Skills and Post-16 Education Act 2022; the introduction of local skills improvement plans was seen as a good proposal, but it is about delivery and making it work. It is important to have the right people involved in those plans, who are acting not simply out of self-interest but in the interests of the long-term—10 or 15 years hence. I still believe there is much work to be done on that.
Our amendment would bring all the relevant stakeholders together, simultaneously limiting unintended consequences and engaging the relevant groups with the policy while boosting awareness of the lifelong loan entitlement policy. I think this is a very sensible suggestion, but I guess I would say that.
So, on behalf of the sector, I just ask the Minister to provide some assurances that decisions made under clause 1(4) will not be implemented without sector and representative consultation and approval, and that is what these two amendments seek to ensure.
Mr Perkins
I do not intend to dwell on these two amendments; my hon. Friend the Member for Warwick and Leamington has forcefully set out their purpose. Regarding the consultation, given what we heard in the evidence session, it is important that the sector is engaged. There is a real concern that until there is clarity about a new method of funding further education and skills, which we know will be more expensive for providers to provide, although—quite rightly—it will not be any more expensive for learners to learn, there will be a gap there. So, unless someone steps forward, there is a real danger that an excellent opportunity will be created for learners that they will not actually be able to access in their local area.
On the subject of the definition of a credit, it is important to remind the Committee what we heard in the evidence session. My hon. Friend asked:
“Should the Bill have written into it some sort of definition of what a credit is?”
Ellen Thinnesen from Sunderland College responded:
“My personal and professional opinion is that it should. If we are defining fee limits attached to credits, it is really important to communicate to a student what a credit means. Essentially, a student wants to know a number of things. First, how much is this going to cost me? Secondly, what will I have to expend in effort and energy to complete this module? Thirdly, what will I get for that module and those credits from the institution that I am choosing to go to? So transparency about the relationship of credit to fees, and of credit to module content and what is expected within that, is very important.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 12.]
It was crucial and right that she said that, with her understanding of what motivates learners. It is also important, of course, that future employers understand what those credits mean; other witnesses referred to receiving a handful of certificates, but said that there was no clarity about what those certificates meant.
Alun Francis from Oldham College responded to a question from the hon. Member for Bassetlaw by saying:
“The more important questions will be about the standardisation of the credits…so that learners know what they are getting and paying for. That needs to be absolutely transparent.
It is also important to say that in these technical areas there is a big difference between what learners pay for here and in a traditional degree, because some degrees are positional goods—they are paying for the credential as much as the content—but in these qualifications they are paying for the content. Learners therefore need to be clear that what they are getting is what it says on the tin. The other aspects, I think, we will just get used to.”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 13.]
Those are very powerful voices from the sector speaking in support of my hon. Friend’s amendment and if the Minister is not minded to support it, we will need real clarity for the sector as to how the definition of a credit will be assured if it is not in the Bill.
The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)
I thank the shadow spokesman, the hon. Member for Warwick and Leamington, for tabling his amendment and for his comments on it. He talked about the timing of the consultation and he said that it came out quite late. It came out quite late because we wanted to make sure that we got it right: we were having extensive consultation with the sector and with other stakeholders, as he rightly wants, and we wanted to make sure that we responded carefully. I do not know if he has seen the recent tweet by the vice-chancellor of the Open University, who said that he welcomed the engagement with the Government. There has been an LLE roundtable with previous Ministers and officials. I attended one such meeting only a few days ago on the LLE.
Mr Perkins
If I have understood correctly, the Minister is effectively saying that what makes up a credit is up to the providers. They can decide what constitutes a credit, 10 credits or whatever else. Given the feedback we heard from Ellen Thinnesen and Mr Francis, and given the reservations we heard from those in the sector that there is a danger this might be burdensome and costly for them, how will the Government ensure that providers will not stretch what is worth 10 credits or a credit? How can we ensure that there is quality within this?
Matt Western
It is interesting to hear the voice of one of my hon. Friend’s local colleges in Middlesborough. The need for standardisation is at the heart of the issue; as I say, where this is working currently there is an existing relationship between education providers—whether colleges or higher education institutions—when it comes to the person who may be transferring out or in and what they will have attained by arriving at the other institution. That is really important.
We have to establish a currency or there will not be trust between the institutions when it comes to taking people on—they might not appreciate the value or standard that the learner may have previously achieved. It will take time for providers to build up these relationships and that is why standardised academic transcripts are important.
Mr Perkins
In the evidence session, we heard the Minister at pains to encourage our witnesses to say that as a result of the new approach there might be greater collaboration between the further and higher education sectors. We all recognise that that would be a good thing, and my hon. Friend and I have seen good examples of that. Does amendment 9 not give the opportunity for that collaboration to be far more consistent than it currently is? If someone has clarity about what they are getting at every stage, about the transfer and about where the responsibilities lie in the learning, it is much easier for those partnerships to form.
Matt Western
My hon. Friend is absolutely right. It is important that these relationships form—and they are relationships of trust, really. That is why consistency and a standardised approach are really important to give substance to that trust and relationship.
We also heard from Coventry University, which is very much at the vanguard of modular study. We heard from Dr Norton, who was concerned about how stackability might actually work in practice. She was keen to ensure that credits are widely recognised and that there is a currency across the sector. She suggested that standardised transcripts would provide the absolute clarity and brand recognition—perhaps acceptance—that are needed. I would be grateful if the Minister can explain a bit more about what a standardised transcript looks like, what it could include and, importantly, what value it will hold.
Mr Perkins
My hon. Friend raises an important point. In this place, we often talk about the cost of learning as if the major cost to an employer is paying for the training. Of course, one of the other costs to an employer is the amount of time that an employee is out of the workplace in the learning institution. That is a very real consideration for many employers. For precisely that reason, a shorter-form commitment is often very attractive to employers, but it might enable their employee to develop skills that will either help them in their current job or help them into their next job. Particularly given that as a country, we are way below the OECD average in the amount that employers spend on training their staff, anything that can be done to make it more affordable for employers to let their employees have time away from work should be encouraged. Does my hon. Friend agree?
Matt Western
It may come as no surprise that I often do agree with my hon. Friend. He genuinely has insight into and expertise in this sector.
I have a particular concern from not only the evidence that we heard from Matthew Percival of the CBI but my anecdotal experience of talking to businesses in my constituency, the Federation of Small Businesses, the chamber of commerce and others. There is a desire to upskill and improve the training provided to employees, but small and medium-sized enterprises face a particular challenge in doing so. There is a barrier to their taking up opportunities because the size of the course, the commitment and the financial obligations are just too much.
Robert Halfon
I thank the hon. Gentleman for moving the amendments. Let me respond first to how they are worded before I address the specific issue of the 30 credits. Amendments 2 and 6 have been worded to limit the default credit value to 10 and 20 credits respectively. I completely get that the intention is to probe the extent to which the Government are prepared to loan-fund modules of fewer than 30 credits under the LLE, but the amendments would not achieve that end because that is not what the default credit values in the Bill relate to.
It is worth clarifying the purpose of the default credit value: it is intended to allow fee limits to be set on full courses if they are not credit-bearing or the course is more suited to annual fee limits than credit-based fee limits. As mentioned, such courses may include some degree programmes at Oxford and Cambridge, and other courses such as nursing. For those types of courses, the fee limit will be calculated using a default number of credits instead of any provider-assigned credits. The default values will be set at 120 credits a year for full-time courses, which aligns with the sector-recognised standard number of credits in a full year.
The default credit values are there to provide a credit value for non-credit-bearing full courses only. They will not apply to modules. As all modules under the LLE will be credit bearing, modules will always have the fee limit calculated using the actual provider-assigned number of credits, not a default number of credits.
The Government have been clear that the modules must have a minimum size of 30 credits for funding purposes. We believe this is a suitable level to attract fees and maintenance loans as it represents a substantial-enough package of learning. It is based on significant consultation with stakeholders and is much smaller and more flexible for training, retraining and upskilling opportunities than the current one-academic-year minimum-size offer.
As mentioned, modules of a smaller size can also be funded—provided that they are bundled together in a single entry from a parent course to meet the 30 credits—to allow sufficient flexibility for retraining purposes. This will mean that funding will be available for a 20-credit module and a 10-credit module of the same course combined.
The hon. Gentleman cited the Augar report. Philip Augar is the key architect of this reform, alongside the former shadow spokesman for skills and universities, Gordon Marsden, who often spoke about lifelong learning. The Augar report is clear that a 30-hour credit represents a
“a significant amount of teaching and learning, and is an appropriate minimum for upskilling or reskilling.”
Mr Perkins
Will the Minister clarify for the Committee and for others listening to our proceedings how much loan a student who took on 30 credits would need?
Robert Halfon
Under the current loan system, the loan would be divided up in proportion to the 30 credits that the student was taking. It would depend on whether the credit is charged at £77 or £60, which would depend on whether the provider had a teaching excellence framework or an access and participation plan. If the credit was charged at £77, it would be £77 times the 30 credits. It would then be up to the student to decide whether they wanted to do the course.
To return to amendment 2, to cap all default values at 10 credits would make them unfit for purpose, as a full-time year is 120 credits. With that in mind, the Government cannot support the amendment.
Lifelong Learning (Higher Education Fee Limits) Bill (Fourth sitting) Debate
Full Debate: Read Full DebateDepartment: Department for Education
Toby Perkins
Main Page: Toby Perkins (Labour - Chesterfield)Department Debates - View all Toby Perkins's debates with the Department for Education
Lifelong Learning (Higher Education Fee Limits) Bill (Fourth sitting)
Toby Perkins ExcerptsThursday 23rd March 2023
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Lifelong Learning (Higher Education Fee Limits) Act 2023 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 23 March 2023 - (23 Mar 2023)
Matt Western
It is a pleasure to serve under your chairship this afternoon, Mrs Cummins, and to welcome everyone back for this second sitting of the day. We had a constructive discussion on our various amendments under clause 1 this morning. We continue now with amendments 7 and 8, which have rightly been grouped together as they address a pretty thorny issue: financial sustainability. The amendments set out that in exercising their powers under clause 1, the Secretary of State should first have due regard to the additional costs associated with delivery and secondly look at financial sustainability in the round.
On the additional costs associated with the delivery of modular learning, we heard collectively a plethora of evidence from our witnesses during Tuesday’s sitting about how the impact of lifelong learning might affect providers. Indeed, when it comes to higher education providers, Professor Press from Manchester Metropolitan University made it clear that there were difficulties for institutions in the “mechanics” of the delivery of lifelong learning, partly due to the additional cost of delivery when moving from a full year or full three years of a course to a module. Quite understandably, that will introduce an additional cost burden, whether that be costs of onboarding or administrative processing. Worryingly, given the take-up for lifelong learning is so uncertain—the pilot programme did not attract high numbers at all—Professor Press found it difficult to predict what precisely the costs would be. That is concerning.
It is important that we have seen that uncertainty, seen what it might mean and seen the additional costs. There has been very low take-up of the apprenticeship levy, T-levels and accelerated learning. Accelerated learning and the apprenticeship levy certainly have real merits, but they can bring an additional cost burden, and a restructuring or reshaping of courses for institutions. That means more financial pressure on institutions when things are already difficult—as I am sure, Mrs Cummins, you will be aware, given that you have a university on your doorstep.
The effect may be far worse for colleges, as acknowledged by Liz Bromley of Newcastle and Stafford Colleges Group and David Hughes of the Association of Colleges. Colleges clearly have already been facing a dire financial settlement over the past 13 years—a point that I am sure my hon. Friend the Member for Chesterfield will want to build on and explore thoroughly in his comments, given his expertise in and knowledge of the sector. Certainly, almost all the witnesses representing the further education sector whom we heard from on Tuesday called for an injection of cash—presumably, to combat a gradual decline in the real-terms funding settlement for further education colleges. Lecturer pay, workload, staff retention, the administrative burden and regulatory costs were all cited as reasons why modular provision in the form of lifelong learning may hit roadblocks in the years ahead. The recent decision to take the further education sector into the public sector, denying colleges the ability to borrow and limiting their access to risk capital, will also dampen the supply of new course provision.
In the impact assessment as published, there is an estimated cost of £211,000 for all providers to familiarise themselves with lifelong learning, although it is worth pointing out that the Russell Group thinks that that is a large underestimation. Perhaps the Minister can explain how the figure of £211,000 was arrived at. When we look at how many institutions we have, whether they be further education colleges or higher education institutions, that figure probably works out at about 300 quid each. I am sure the Minister can explain how the figure was arrived at and, indeed, what the approximate cost will be for those institutions, but even that rough calculation suggests that the cost is massively understated by the Government in their impact assessment. That is concerning, because we all want to start this scheme on solid ground and ensure that it is being approached correctly and has the best chance of delivery and success. That example suggests that it has not been accurately thought out, but I will wait to hear what the Minister has to say.
Not only does the financial capacity of the sector affect the provision of courses; it also risks the financial sustainability of the whole sector. On Tuesday we heard from Dr Norton of Coventry University, who helpfully demonstrated that higher education providers work on a five-year forecasting model, which is made harder if students are opting for modular study over a several-years-long course. At a time when over one in three higher education providers are reporting a deficit, the real-terms value of tuition fees has crumbled to below £6,750—my understanding is that it is probably more like £6,400—and the Government’s own policy impact assessment for the Bill admits that the lifelong learning entitlement
“could result in providers having less financial certainty”,
the concern is that this mammoth reform may well be the straw that breaks the camel’s back. There is a real concern that it could bring down institutions in the sector. As of today, I am not entirely sure of the level of Government concern at that prospect. I hope the Minister will reassure us with his perspective of financial sustain-ability versus precarity of institutions in the sector—higher education and further education colleges alike.
This skeletal Bill introduces sweeping reforms to the way in which the student finance model works, and I would hope that the Minister would be totally assured that the reforms will pose as little risk as possible to institutional financial sustainability. That is why I was so concerned to read what I did in the impact assessment. What stress tests have the Department conducted ahead of implementation to ensure the sector can cope with the changes introduced in the Bill? What additional financial support, if any, does the Minister intend to provide to higher education providers and colleges seeking to implement modular study, given the limited financial capacity of the sector?
The amendments are important in establishing what risk there is to the wider tertiary education sector, and in ensuring sustainability. It cannot be logical that the costs per student unit will remain the same for modular learning provision. There will be a significant increase in the cost burden to institutions through the delivery of courses, but also in the administration and onboarding of students, and in managing departing students, and all the data needs around those changes. As we heard in our witness sessions, we have not even got to the wraparound support that students may require.
Mr Toby Perkins (Chesterfield) (Lab)
Has my hon. Friend reflected particularly on the evidence from Professor Rigby in the evidence session? She went into quite some detail about the administrative costs and the regulatory burdens of the modular approach, and the costs that that approach is likely to add to providers. Does my hon. Friend share my concern that the result of those administrative burdens might be that, without the additional funds he is asking for, colleges will find these courses unsustainable to run, and we will not get the amount of provision that we all want to see?
Matt Western
My hon. Friend is totally right that one of the huge issues in the sector is the paucity of remuneration to further education college lecturers and staff. While going around the country, I have heard lots of anecdotal evidence about how difficult it is to recruit good staff. We clearly want the best, most inspiring people to deliver and impart information through their teaching. Whether it be in pure vocational education or in academic subjects, we want the best people, with expertise and talent, who can really inspire others to get into that subject and to succeed.
I hear, from talking to establishments around the country, that there is a huge remuneration or salary disadvantage—a difference between what people can earn vocationally in roles versus what they earn as lecturers in colleges. What I am hearing indicates that there is a 40% difference in pay between delivering a vocational role and teaching. That is really to the detriment of the next generation, and it is why we do not have the number of people coming into teaching as we should have across the board. I totally agree with my hon. Friend’s points, which highlight another immense challenge for the sector in the financial burden; the remuneration would ideally be greater.
Amendments 7 and 8 identify a real pressure point for the sector, in terms of the burden from this Bill. As I evidenced through the degree apprenticeships, institutions have to bear additional costs to deliver good-quality courses, but the yield—the cost cover—is not there. It is actually to the cost of the institution to provide them; it is the right thing to do, but it is coming at great cost to them to do that. With that, I will end my remarks.
Mr Perkins
It is a great pleasure to serve under your chairship, Mrs Cummins. I rise to speak to my hon. Friend’s amendments. I think that he has already made the case well, but there are a few points that I would like to add, particularly regarding the financial sustainability of further education colleges and independent learning providers.
The amendments absolutely speak to the heart of our reservations about the approach being taken. They are quite modest in their scope, but given the evidence that we heard in the evidence sessions, which was touched on in earlier discussions on other amendments, they do, as I say, cut to the heart of our concerns. Amendment 7 asks the Secretary of State to have regard for additional costs associated with the delivery of the course, and amendment 8 asks the Secretary of State to have regard to the financial sustainability of providers.
I will speak to amendment 7 first. In the evidence session, David Hughes explained that colleges,
“do not have any of what the private sector might call risk capital”.––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 50, Q105.]
Given that FE college funding has fallen by 27% in real terms between 2010 and 2019, according to the House of Commons Library, and given the increasing financial pressures—with the booming energy prices and wage inflation all affecting colleges too—the financial picture for many of our colleges, crucial as they are, is very difficult indeed.
For that reason, David Hughes told us that the risk appetite of colleges for putting on courses that they do not know that anyone will study is likely to be pretty limited and restrained. As my hon. Friend the Member for Warwick and Leamington said, with colleges now being inside the public sector and therefore unable to seek private-sector borrowing, and being forced to run balanced budgets, colleges will just not be able to run courses that they cannot be pretty certain will have learners taking them.
Andy McDonald (Middlesbrough) (Lab)
My hon. Friend is making an excellent point about the difficult landscape that FE colleges find themselves in, but is he as surprised as I was to hear that Eton College was proposing to enter into the fray across the country—my own constituency included, notwithstanding that there was an oversupply in the sector already—thereby adding to the difficulties and undermining existing colleges? Is that not exactly the wrong way to go when the landscape is already so difficult?
Mr Perkins
My hon. Friend makes an interesting point. I am not specifically aware of the intended provision that he raised but, absolutely, the strength of his oratory on the issues facing further education colleges is absolutely right, and I would be very interested to learn more about what it is that Eton College believes it can offer that is not currently being provided.
Returning to the point I was making, there is a real need for somebody to step in and provide the certainty of funding that might allow more courses to be put on. Realistically, this legislation will not even come into force until 2025, so it will fall on the next Government to make this work, not the current Government, with all their best intentions. It will fall on the next Government to ensure that our constituents and learners across the country can actually take advantage of what is being offered.
Over the course of the 13 years I have been a Member of Parliament, I have become used to quizzing Ministers on pieces of legislation: “How is it going to work? What are you going to do?” This is one of those situations where the Minister is laying out what he anticipates might happen with the legislation, but all these questions will probably be for his successor. He may still be the Minister—no one knows the outcome of a future election.
However, as His Majesty’s Opposition, as a responsible Opposition, we have to think carefully about the fact that we might inherit this legislation and inherit responsibility for ensuring that these courses are available, that colleges and independent learning providers are sustainable, and that this provision is available to our constituents. It is therefore important for the Minister to confirm at this stage, given the recent Budget, whether any provision has put in place to recognise the additional costs for FE colleges or independent learning providers in delivering a more modular form of learning.
As we heard in evidence—I will expand on that in a moment—additional administrative and cost burdens will be placed on colleges. Will money be put aside to ensure that they are able to run these courses sustainably? If it is not the Department for Education or the Minister that will be ensuring additional funds, will it fall on local mayors to provide financial reassurance? Might the need for this kind of provision appear in local skills improvement plan? There would then be an expectation that a Metro Mayor would provide additional financial reassurance.
If not, I fear that this scheme will end up being something that largely happens in the private sector, where there is maybe a bit more risk appetite, and only with employers who can provide certainty about the economies of scale by placing several learners on courses. If a particular employer says, “Well, I want seven of my staff to do a specific course,” then someone might run one on that basis. But we are looking for colleges or independent providers to pre-emptively offer a course and see who signs up for it, so all these financial implications will only add to the potential nervousness around that. We heard several witnesses say that this measure has the potential to be a game changer for colleges, but only if they can afford to take the risk. This amendment, proposed by my hon. Friend the Member for Warwick and Leamington, offers some potential for the Government to illustrate that that risk has been seriously considered.
It will be useful for the Committee if I specify some of the additional costs that learning providers will face. We know that one of the Bill’s objectives is that someone who studies in this kind of modular way should not pay any more than they would have done had they studied in what you might call the usual way on a short-term, full-time course. Providers are saying that delivering in this new way will be more expensive, so there is a gap. Someone has to fill that gap, and it will either be some form of Government or the provider themselves. If it is going to be the providers, they will have to think carefully about whether that will be affordable.
If we think, for example, about the recruitment costs for any college that takes on lecturers—advertising a position, going through the interviews, all the administrative costs with collating CVs and going through and meeting to discuss those CVs—and all those things that might normally happen in advance of a three-year university degree, with all the revenues that will come in from that, all those costs still apply. However, it might be that those costs apply to someone who will actually be working for a short length of time and with far less revenue coming into the learning provider, and the barriers to recruitment will arguably grow.
The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)
It is an honour to serve under you, Mrs Cummins. I am supportive of the sentiment behind these amendments and recognise the importance of considering the impacts on providers. The Government have been fully mindful of the financial sustainability of providers during the development of the LLE, particularly of FE colleges. The Government are also mindful of the additional costs that providers may incur when offering shorter modular provision at large scale.
We engaged with a wide range of stakeholders to gather input, to inform policy development and to build awareness of the LLE. We are grateful to the stakeholders that have engaged with the Department on the LLE and, of course, we will continue to work closely with the sector on its design and delivery. It is important to note that the LLE and its ambitions have been strongly welcomed by the sector for the most part. Stakeholders responded positively to the flexibility and the keenness of a simpler finance system.
The Committee will be aware that the Government published an impact assessment for the Bill, which included a consideration of impact on the providers. The hon. Member for Warwick and Leamington and the hon. Member for Chesterfield both asked how the cost was constructed. The basis of the calculation is set out on pages 36 and 37 of the impact assessment. That sets out the estimates of the potential implementation costs to providers, which is separate to the wider assessment of the benefits of the LLE.
The hon. Member for Warwick and Leamington also mentioned FE reclassification. He will know that the decision was taken by the Office for National Statistics, but we are supporting colleges with a package that includes an additional allocation of £150 million over the 2023-24 period, and we have invested £300 million in the reprofiling of payments before the end of the financial year, to eliminate the current deficit.
Mr Perkins
How does that capital allocation compare with the number of colleges that had, were in the process of negotiating, or have received offers for, private sector loans in advance of becoming public sector institutions? Will the amount of money allocated enable all those arrangements to go forward? Or is it likely that some will no longer go forward?
Robert Halfon
As well as the figures I mentioned, the DFE is working closely with colleges to try to deal with the difficulties that have come about because of the reclassification of FE colleges. I hope to be able to set out more on that in the weeks ahead.
Mr Perkins
Is the Minister saying that he is cognisant of the concerns, but that no additional money has been allocated in the recent Budget for the additional costs that providers have told us will be attached to this style of learning?
Robert Halfon
These things will be decided in future spending statements, and I have highlighted the extra money going into further education over the Parliament and over the coming Budget period.
The pilot scheme was mentioned briefly. I strongly recommend an article about the pilot scheme—the hon. Member for Warwick and Leamington has probably read it—by a witness to our Committee, the vice-chancellor of Nottingham Trent University, who says that the whole purpose of the scheme was to show the system working. It was not about quantity, even though there are 100 available courses. He writes that
“the effective administration of those received shows that SLC systems and processes are ready to support modular study.”
In the rest of the article, which I will not detain the Committee by quoting at length, he mentions all the other courses and pilots on modular learning that there have been, stating:
“The In-Work Skills pilot was also a pathway policy for the LLE. Delivered by Institutes of Technology (IoTs)…10 IoTs delivered the In-Work Skills pilot, which was a 1-year pilot that delivered high quality, higher technical short courses…The IoTs delivered a total of 59 short courses to 3,060 learners”.
He also cites other figures to show the extent of the move towards flexible and modular learning.
Importantly, as the hon. Member for Warwick and Leamington will know, the strategic priorities grant provides Government funding on an annual basis to support higher education providers’ ongoing teaching, and of course funding levels will be considered in the round at the next spending review, with the LLE in mind. Therefore, as the Government have been mindful of these concerns throughout the development of the LLE, and are confident that providers will be able to consider their own financial sustainability and costs when deciding which courses and modules to offer, we will not support the amendment.
Matt Western
We have had a pretty healthy debate on the amendments. I particularly appreciated the contribution of my hon. Friend the Member for Chesterfield, who has expertise specifically across the further education sector, but also in the delivery of apprenticeships.
I hear what the Minister says about the Government being mindful of the costs and so on, but when I look at the provision of further education and the costs at FE colleges, I wonder whether the Government are really being mindful of the cost pressures for them, and I wonder whether they are being mindful of the cost pressures that face the higher education sector, in which 32% of providers are currently in deficit, or of the cost of delivering degree apprenticeships.
Mr Perkins
This is a crucial point. We have already heard about the 27% cuts to the further education sector between 2010 and 2019. The Minister was at pains to say, “Well, there are some pots of money that we are looking at,” but he has also made it absolutely clear that, as things stand, this is being handed over to the next Government with an additional price tag on it and no money allocated. That is what we have heard in today’s debate.
Matt Western
Indeed, which is why the amendments are important. We want to start this policy on solid foundations, because we buy into and support it, but currently it just does not have the financial structure to make it deliverable, because these institutions are already facing massive costs. As my hon. Friend said, there are pots of money, but they are small pots of money when the sectors—particularly the further education sector—are already at a significant disadvantage.
I admire the Minister’s ambition in wanting to increase the retention of staff across the further education sector, but we are also seeing in schools a massive haemorrhaging of the staff—expert teachers and lecturers and so on—and the technicians who support so many of these courses, because they just are not getting the remuneration that they deserve so are leaving. To retain people, we must give them the right reward, and they currently feel massively undervalued by the way the Government are doing things.
As the Minister said—he mentioned his two favourite words—he believes in the sector and its value. I urge him, in future Budget negotiations, to get the support that education needs, particularly in respect of the sectors we are discussing. Too often, they are described as the Cinderella sector, and it is just not good enough. We absolutely must believe in delivering proper education, whether it be technical or otherwise, across society, and presently that is just not happening.
My hon. Friend the Member for Chesterfield reminded us of the issue of risk capital, as described by David Hughes, and the situation we have with the reclassification of debt. I am sure the sector feels completely financially handcuffed by where it is, because it just does not have the funds to do what it needs to do.
On top of that, my hon. Friend reminded us of the statement from Professor Rigby. When we think of an institution delivering a course once or twice a year—with a September, October or January start date for the delivery of courses—and suddenly increasing that from two to 12, it has six times as many. How does an institution staff that? How does it make that happen, as opposed to having modules and courses delivered by a certain number of staff at those start dates? It must lead to a multiplication of the resource, which comes with a significant financial burden. I just do not believe that the impact assessment underlines the reality of what the sector will face. As my hon. Friend reminded us, the context is the 27% reduction in real-terms funding in the FE sector between 2010 and 2019, which has made it all the more difficult.
Let me go back to the Minister’s point, because I love the words “degree apprenticeships” as well. They are fantastic programmes, but as I understand it the problem is that we are seeing a tailing off, and institutions are already saying they will not expand the programmes because of the associated costs. That gives the lie to the ambition, because if that is already beginning to reduce, what chance does this policy have? We will face the same sorts of challenges with lifelong learning, as it is currently set out, that institutions face with the delivery of degree apprenticeships.
Matt Western
I thank my hon. Friend the Member for Middlesbrough for tabling this amendment and arguing for it so well. He is quite right that, given what we have been through over the past decade or so, the effective freeze in tuition fees has led to a significant decline in the value of the unit of resource, and he is right about the need for some form of futureproof guarantee that, should there be a rise in tuition fees, that should be matched by a consequent rise in the value of the lifelong loan entitlement.
Over the last decade, we have seen tuition fees reach £9,250 but they have essentially been frozen for the last five years, having had, as my hon. Friend explained, a marginal reduction back in 2017. We have seen a real-terms decline in their value. Indeed, Universities UK calculated that by the end of the 2024 academic year inflation would reduce the value of the annual tuition fee to £6,600 based on prices in 2012, when the fees cap was trebled to £9,000. That is a reduction of almost £2,500 in the unit of resource to an institution, which is putting huge pressures on those institutions. That was the point we were making in the debate on amendments 7 and 8. Institutions are under real financial pressure as there has been such a massive decline in the value of that unit of resource. London Economics has estimated that over the past decade, the overall income for students per unit of resource would be back at 2006 levels, when fees were £3,000. That gives some context as to just how much the sums involved have been devalued over time.
As I mentioned earlier, that devaluation is having a tangible effect on institutional financial sustainability, with many institutions reporting deficits and having to cross-subsidise their courses, take on more international students or borrow from the private sector. The amendment would seek to tie the lifelong learning loan to any rise in the value of tuition fees, as I have said. The point is that if this really is to be a lifelong loan entitlement, it is important that learners who benefit from a module in, say, two years’ time and who wish to return to studying 20 years later, in 2045, have access to the same quantity of learning as they would have done 20 years before. Otherwise, we will see the risk of individuals using their entitlement very early on in their lives paying the price of that and not being able to access further training or tuition later in life because they have used up their entitlements.
Given that there is a real need to make this work and to make the system as attractive as possible, we urge the Government to consider some form of indexation. Sir Philip Augar described this system as having
“the potential to be a game changer”––[Official Report, Lifelong Learning (Higher Education Fee Limits) Public Bill Committee, 21 March 2023; c. 45, Q89.]
We have heard that description before. But that potential can be realised only if the system is protected against the real risk of inflation. We saw inflation peak yet again yesterday—to, I think, 10.6%.
Mr Perkins
I want to come in at this moment, because we would all hope that learners who are looking for work and on universal credit might, as part of their efforts to get another job, take on courses and develop their skills. During the progression of the Bill that became the Skills and Post-16 Education Act 2022, we highlighted issues about the entitlement to study for those in receipt of universal credit, and amendments to the skills Bill in both the Commons and the Lords would have enabled some people in receipt of universal credit to study. Those were removed by the Government, but at the time, they offered the reassurance that they were consulting with the Department for Work and Pensions about the issue. I have heard nothing more since, so I hope the Minister might be able to tell us what happened with that consultation. Does my hon. Friend agree that in order for this measure to be as transformational and game changing as we hope, people who are in receipt of universal credit must be able to access a loan to develop their skills in order to get into another job, rather than being told, “No, you can’t do that because you’re not spending enough time looking for another job”?
Matt Western
My hon. Friend brings up a valid and pertinent point about the reality for so many people. The intent behind this legislation and policy is a good one, and it should be there to assist people in that particular predicament, but, as he says, it does not seem that that will necessarily be the case. However, I am sure that the Minister listened to his points and will address them in his response.
This amendment would ensure the long-term sustainability of the lifelong learning model and allow students who “bank” their credits to have the same chances later on in life to add to that bank. I will understand if the Minister is unable to accept the amendment as drafted, but given that he is planning on introducing long-lasting reforms to be used by people in the course of their lives, I would like to press him on how he envisages the value of the LLE being maintained over the years.