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Further and Higher Education (Employer Engagement)

: As we move forward with the roll-out of the diplomas, we are working proactively with higher education institutions, particularly the research-intensive ones, to get them to recognise the diplomas and to see them as a clear route of access to higher education. That will be their decision, because admissions decisions are autonomous within universities. If we can do that—if the institutions regarded as the best in the country are seen to recognise and to value the diplomas—that will send out a strong signal to young people undertaking those qualifications. The hon. Lady referred to what I would describe as the stepping stone provision issue in adult education. By statute, we fund at level 2, but what about the courses that need to be undertaken in order for someone to get a full level 2 qualification? Under the existing framework, if a course of that stepping stone-type is properly mapped against the national framework, it is funded. We need to ensure that that happens locally. There is another issue that I am considering. It has been put to me repeatedly over the past nine months that, particularly in disadvantaged communities, people sometimes progress at a slower rate. At the moment, there is a statutory cut-off for funding at the age of 19. Arguably, there is a case for looking into that, and we are considering the issue. The hon. Lady referred to dead weight. Where the state steps in and funds the full level 2, so that the employer who was funding that is no longer required to do so, part of what we—the Government, learning and skills councils and colleges—have to do is work with employers actively to encourage them to trade up and displace that investment to level 3 and indeed beyond. The hon. Lady asked whether we should have a target at level 3. The reality of the situation is that sector skills councils will consider the level 3 needs in each sector, through their sector skills agreements. She is right to say that we will need level 3 qualifications in 2012 for two thirds of jobs. We are prioritising level 3 training at the moment, with two pilots, one in the west midlands and one in the north-west. Certainly, we will look into that issue again when Sandy Leitch reports later this year. However, the debate about level 2 and level 3 is sometimes artificially polarised. If we look at the figures, £457 million is spent on level 2 and £418 million on level 3, so there is not such a disparity in funding commitment, contrary to what is sometimes suggested. The hon. Lady referred to the concerns of the Association of Colleges about the pace of change in terms of the funding strategy that we are pursuing. All I will say is that, when I came to my post last May, one thing that I heard time and again was that colleges wanted information about the new financial settlement as quickly as possible. We listened and responded. In relation to the funding letter to the Learning and Skills Council for the coming financial year and its being made public, that is the earliest that that information has ever gone out, according to my understanding. Not only have we done that, but we have given an indication of where we are going for the following year as well. That gives further education colleges the ability to plan ahead, knowing what the terrain is likely to look like. My hon. Friend the Member for Eltham (Clive Efford) is a champion for his local college and I pay tribute to the work that he does in that area. I take his point about flexibility. One of the success stories of the further education sector is its flexibility and willingness to respond. I take his points about Greenwich Leisure. Representing a constituency not far from his, I am aware of the work that it undertakes. I welcome my hon. Friend's acknowledgement of the step change in funding that we have brought to the further education sector in the past years. He raised questions about the prioritisation of funding. I am keen to get across that this is not a simple divide between 16 to 19-year-olds and adults. We are prioritising 16 to 19-year-olds, but we are also prioritising adults, through the national employer training programme, or train2gain, and through adult basic skills. Again, colleges say that their adult education budget is being reduced. Part of that is because of a shift in priorities, but part of it is because they have yet to build into their budget allocations the money that will be forthcoming, which they can bid for, under train2gain, which totals £238 million for the coming year. Colleges will not yet have built that sum into their planning assumptions. People need to see the whole picture before reflecting on what the overall financial settlement is. With regard to my hon. Friend's last point, I will bear in mind his invitation to see the good work being undertaken by the college and Charlton Athletic, but I think that I will wait until after Spurs have beaten Charlton on Sunday before agreeing to that. Finally, the hon. Member for South Holland and The Deepings (Mr. Hayes) made an important point about NEETs—those not in education, employment or training. This is an important area of concern. We have estimated that some 9 per cent. of 16 to 19-year-olds are not in education, employment or training. We have made some progress through the Connexions service and have set ourselves a justifiable and ambitious public service agreement target to reduce the NEET group by two points by 2010. One mechanism that we are using is the activity allowance pilot. We have already rolled out educational maintenance allowances, which are benefiting some 270,000 young people, and there is evidence that that is leading to increased participation rates. We now want to pilot the extension of those principles to young people in the NEET group, with an activity agreement and an activity allowance to help them to move into education and training.