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Education: Adult Learners

My Lords, I join others in thanking the noble Baroness, Lady Sharp—and, indeed, all the speakers in the debate. I must confess that I have not detected an outpouring of warm support for the proposals; none the less, I will do my best to deal with the issues raised. Governments have to take decisions about priorities. We have increased funding by about 25 per cent in real terms since 1997, and we now spend more than £10 billion a year on higher education and £7 billion a year on further education. However, we face enormous challenges. In today’s workforce, 20 million people do not have higher level skills. We need to produce another 4 million people with the first higher level qualification between now and 2020 if we are to meet the challenges that Sandy Leitch—the noble Lord, Lord Leitch—has identified. Eleven million people do not have level 3 qualifications, and 6 million have not yet achieved a first qualification at level 2. In both distributing and increasing what is none the less a finite sum of public funding, there is no getting away from choosing between competing priorities. It is possible to disagree with the choice that we have made, but quite impossible to avoid making a choice one way or another. Against that background, let me try to explain what we are going to do. In further education, we have introduced an entitlement to free tuition for adults to achieve their first full level 2 qualification, and for young adults under 25 to achieve a first qualification at level 3. We are we focusing further education funding on those priorities, in line with the Leitch recommendations for addressing low skills. The noble Baroness, Lady Verma, puts to me what I think is a rhetorical question. Of course we want people with first opportunities at all those levels and we also want progression, but that does not of itself write larger cheques. Let me focus my remarks on higher education, because that is the subject. In higher education, we have asked HEFCE by 2010 to redistribute £100 million of teaching grant that currently goes to fund students studying for an HE qualification when they already have a qualification at the same or higher level—an ELQ. We ought to acknowledge in this debate that the amounts in the first two years will be far less than that—about £25 million next year and about £60 million in the following year. That is a redistribution—not a cut—of less than 1.5 per cent of the total teaching grant, even before the significant increases during the CSR period come into play. All the grant will remain in the system. It will be allocated by HEFCE to HE providers. It is a reallocation. The overall grant does not change, except in one sense: a significant increase for funding of higher education during the CSR period of 2 per cent in real terms per annum. That is a major and continuing increase. Let me say that we did not ask HEFCE to stop funding all ELQ students. Indeed, the £100 million is less than a third of the total funding of £327 million that we are currently spending on ELQ students. We asked HEFCE to implement a change that took account of both the wider policy imperatives and the need to provide the institutions that might lose money with time to adjust. No institution will lose cash on its 2007-08 baseline over a three-year period, and no decision has been taken about whether to make additional savings after 2010-11. That is something for the next spending review. The fact is that the more money we spend on students doing ELQs, the less there is for those who have never yet participated in higher education. We estimate that by 2010-11, 20,000 people will be studying for a first higher education qualification who otherwise would not have been able to do so. That is enough to fill an entire large university—I am not sure that I will do a comparison with how many modest-sized universities might be impacted. That group is our priority. Those who criticise the policy should explain why they would have made a different choice about the priorities. Why would it have been better to have 20,000 fewer students studying for a first qualification and left the ELQ policy unchanged?