The Government are not the employer of further education staff. Further education colleges were established as independent organisations by the Conservative Government in 1992. We believe that it is important that colleges retain the discretion to make their own decisions about pay for their staff, within their overall budget. However, the 48 per cent. real-terms increase in funding that this Government have delivered to the further education sector has helped to improve pay levels in FE.
I am grateful to the Minister for his reply, although he must now go back a long way—1992—for justification in relation to the problems for which the Government are responsible. A report from the Learning and Skills Council makes it clear that colleges are receiving 13 per cent. less per student than schools for providing the same type of course. That equates to about £400 per pupil or £600,000 per college. If we are to allow colleges, such as the Bournemouth and Poole college in my constituency, to compete more fairly with schools, does he agree that we should pump money not only into lower and intermediate skills but into further education?
I was not going back a long way; I was comparing like with like. Since 1997, the Government have increased funding to further education colleges by 48 per cent. in real terms, which compares favourably with a 14 per cent. real terms cut in the last five years of the previous Conservative Government. The funding gap, however, is an issue. Last year, we made a commitment that that 13 per cent. gap should be reduced. In one year, we reduced it by 5 per cent. and we have plans to reduce it by a further 3 per cent. by 2008. In the longer term, we will establish a common funding arrangement system for all post-16 provision to ensure comparable funding for comparable activity, regardless of institution. The Government have credibility on the issue, and I fail to understand how the Conservative party, which is committed to £21 billion of public expenditure cuts, can have that.
I welcome my hon. Friend’s commitment to establishing a common funding system in the longer term. Given the development of the 14-to-19 curriculum following the Tomlinson report’s recommendations, should not the common funding system apply from 14, not just 16? Does he not agree that the best way to deliver the 14-to-19 curriculum is through a managed, co-ordinated tertiary system, and not through the proliferation of more new small sixth forms?
In direct response to my hon. Friend’s last point, different options are needed for young people, and we should not shut off such choices. On reducing the funding gap, before the Government’s commitment last year, the critique that that was just warm words had some validity. But the commitment last year to reduce the funding gap by 5 per cent. in one year, by a further 3 per cent. by 2008, and then to establish a common funding system, is real evidence that we are making progress.
The gap in staff pay and per pupil funding has already been mentioned as but one of numerous funding discrepancies between colleges and schools. Colleges, for example, pay VAT on supplies, whereas schools can reclaim it from the Government. Does the Minister consider that fair?
That is a long-standing issue, and the independent status under incorporation of further education colleges confers real advantages, which is right and proper. FE colleges have prospered under that system. The increased funding available has driven up success rates, but funding anomalies remain between the two systems. Our commitments of last year are starting to make progress on that, as FE college principals up and down the country to whom I talk recognise.