I beg to move,
That this House has considered further education colleges and skills in Greater Manchester.
It is a pleasure to serve under your chairmanship, Ms Ryan. May I beg your indulgence and that of other Members? As this debate is about Greater Manchester, we should pause for just a second to reflect that today is the 20th anniversary of the devastating IRA bomb in our city. I remember exactly where I was that day: I was loading my bike on to a car in Northenden, five miles away, and I still heard and felt the blast. I was one of the first civilians to be allowed through the cordon by the security services that week to see the impact at first hand. There were 200 people injured and £1 billion-worth of damage, and 1,000 business properties were wrecked. I pay tribute to the then Prime Minister, John Major, who stood side by side with the Labour authority at the time and—it is worth putting on the record—with the European Union, which pumped tens of millions of pounds into the regeneration of our great city, which started its great renaissance back then.
Greater Manchester is a city region of 2.7 million people and the fastest-growing metropolitan economy outside Greater London. The GM economy has great assets in health and life sciences, finance and professional services, as well as the creative and digital sectors, but there are considerable challenges with employment inequality and regeneration, about which there is wide consensus between stakeholders. Greater Manchester is at the forefront of moves to devolve central Government powers in England, which reflects the strong governance in its combined authority. Although it faces some challenges, the college sector in Greater Manchester also has considerable strengths. There are 21 colleges in the Greater Manchester region: 10 further education colleges and 11 sixth-form colleges.
I want to preface my remarks today by talking about skills in Greater Manchester, productivity and the link between productivity and pay. Finally, I shall discuss in detail the current area review, which is ongoing and hopes to report back in June. In GM, the education, skills and work system is currently characterised by the fact that 40% of children who enter school are not school-ready. Some 47% of young people in GM are leaving school without English and Maths GCSEs. We have a long-standing issue with low skill levels in our working-age population. Qualifications are an imperfect proxy for skill: nevertheless, Greater Manchester has enduring skills gaps at both the bottom and the top end of the skills spectrum. In GM, 33% of the 16 to 64-year-old resident population had at least a level 4 qualification in 2015, compared with 37% across the UK.
However, it is important to remember that there are larger differences within the GM districts than between GM and the rest of the country. For example, 48.4% of Trafford residents hold a level 4 qualification or above, compared with 25% in Rochdale—my hon. Friend the Member for Rochdale (Simon Danczuk) is here today—where there is huge inequality in educational attainment. Last year, 10% of 16 to 64-year-old GM residents did not have any qualifications at all, compared with 8.8% across the UK. In part, skills difficulties in GM owe something to historical problems with schools in the city region. In GM as a whole, in the past academic year 55% of pupils obtained five GCSEs at grades A* to C, including maths and English, which compares with the English state-funded average of 57.3%. Again, there are large differences within districts in GM.
The Greater Manchester city region has been a long-standing and emphatic supporter of apprenticeships. The districts that comprise Greater Manchester co-ordinate a strategic approach to apprenticeships through the apprenticeship hub. Of just under 30,000 apprenticeship starts last year, 27% were for 16 to 18-year-olds, 29% were for 19 to 24-year-olds and 42% were for those aged 25 and older. By level, 64% of starts are at the intermediate level, just over a third are advanced and 2% are at the higher level.
Analysis of job growth and economic forecasting suggest that the strongest job growth will be at level 4. Meanwhile, only a small minority of starts in the further education system are at that level, so there is an active debate about supply and demand mismatching. Employers in several key sectors report difficulties in recruiting the skills they need, and any MP who visits factories, workshops or other places of work in their constituency will hear that from the managing directors of those companies. In my constituency alone, I have recently been speaking to HellermannTyton, Manchester Airport and Endress+Hauser, and they have all highlighted that.
The city region is taking active steps to encourage more provision at level 4, including investing in apprenticeships and supporting the concept of an institute of technology in Greater Manchester. If I may be so bold, I really think that the agenda our current mayoral candidates should be talking about is how we close the gap in the Manchester economy. We spend roughly £23 billion on public services and we raise roughly £18 billion. The first job of any new Mayor will be to break even—to bridge that gap—so that we can become more powerful as a conurbation.
The skills challenge is not simply on the supply side, however; there are also issues relating to skills utilisation. For example, in recent years the number of graduates has risen faster than the number of graduate jobs in the local economy, in spite of Media City, the growth of Spinningfields as a financial district and the growth of parts of central Manchester as an agglomeration of law firms. Demand for skills is also likely to be constrained by the business models of GM employers. I am loth to criticise employers, but it is clear that many in the city region pursue low-cost, low-value, low-skill business models to a greater extent than is the norm in the UK. That has to change.
Let me move on to productivity. Labour productivity in Greater Manchester is lower than the UK average. In 2014 gross value added per job in GM was £39,000; in the UK it was £45,000. There are productivity gaps between GM and the UK in all the main sectors, with the notable exception of manufacturing, where GM has an advantage. The largest productivity gaps are in the knowledge-intensive sectors, including financial and professional services and property. In my recent discussions with Accenture, the company was very clear that the Greater Manchester economy lacks digital skills, which will be one of the largest growth areas in years to come. The low-productivity sectors account for a growing share of jobs; in 2000 they represented 35% of employment, but by 2014 the proportion was 40%. Overall, GM has a £10.4 billion productivity gap with the rest of the country.
Low pay is a significant problem in Greater Manchester. Nearly a quarter of jobs in GM pay less than the living wage. In some districts, such as Oldham and Rochdale, the proportion is around 30%.
Will my hon. Friend give way?
I would be glad to give way; it has been a long stretch.
I am grateful for my hon. Friend’s gratitude—I can see that he is flagging a little. He makes a very good point about areas that get less than the living wage. My constituency is the second-worst in the north-west for constituents not being paid the living wage, which 40% of my constituents do not get.
I could not agree more. The key thing is that it is a complicated mix of skills, qualifications and pay. I do not want to turn this into a row with the Government, but Opposition Members do not believe that the national living wage is the actual living wage, as defined by the Living Wage Foundation. As I said earlier, we need employers to invest in technology and the skills of their workforce, so that people can move up from cleaner to chief executive in all the companies in the conurbation.
Greater Manchester wages are still recovering from the effects of the recession. There has been a decline of living standards in Greater Manchester, where they have fallen faster than elsewhere in the UK. Average hourly pay in 2014 was below that of 2002. In 2004 workers earned £11.62 on average for every hour they worked. By 2014 that was £11. Since 2009 wages have fallen by 10%, and last year inflation-adjusted annual median pay was more than £1,200 a year less than the UK average. Low-paying sectors account for 36% of all jobs in GM’s total employment market of 1.2 million jobs, and some 400,000 people work in those sectors. Approximately 130,000 women and 90,000 men were low paid in 2014. Men’s wages declined most during and after the recession, leading to a shrinking of the gender pay gap due to that levelling down. By 2014, after adjusting for inflation, men earned, on average, £12.92 an hour and women earned just £10.37—a 25% differential. Well over half of young people under 25 are low paid.
The national programme of post-16 reviews was announced in July 2015 and will run for almost two years until summer 2017. There will be 41 reviews in total, covering all parts of England. The University and College Union has raised a number of serious concerns about the Government’s area-based review programme, both in general terms and specifically in relation to Greater Manchester. Currently the net liabilities of the post-16 sector are estimated to be £1.5 billion and there are around 80 colleges in discussions about mergers. Over the past five years, funding has fallen by nearly a third in key areas such as adult education. If we add inflation-based costs, colleges need to make efficiency improvements of around 40% to 50%. At the same time, the general trend is that quality is worsening, according to Ofsted, which is a damning indictment of the Government’s record in the sector.
The review in Greater Manchester started in September 2015 and is now reaching a conclusion. The core aim of post-16 area-based reviews is to ensure that colleges are in a stronger position to deal with the challenges they face in the future, making them more financially sustainable and better placed to provide the education and training needed in their local economies and communities. The July 2015 policy statement on the area-based reviews set out the expectation that they will lead to fewer, larger colleges. The draft proposals would create a number of new groupings in the further education sector: a group in the north comprising Bolton College, the University of Bolton and Bury College; a group in the east comprising Stockport, Oldham and Tameside Colleges; and a group in the centre that would include the Manchester College and Trafford College, along with a number of other training partners. There are also FE colleges that are yet to declare any alignment.
A significant flaw in the review process has been the exclusion of 11-to-18 schools and university technical colleges from discussions about the future structure of 16-to-19 education in the city region. Although there are good logistical reasons for managing a review process with a limited number of institutions, there are more than 50 schools with sixth-form colleges in GM, educating more than 8,000 young people. Some of those sixth forms have very small numbers and may not be financially sustainable at current and future funding rates.
There is also a problem with the banking system. One of the key barriers to implementing change in GM is the banks’ attitude to the sector. They insist on charging colleges with contractual break clauses for their loans when merging with other colleges. Those fees can amount to more than £1 million, which restricts viable colleges from coming together for the benefit of Greater Manchester. Does the Minister believe that colleges will have to divert funds from community development to cover those fees? The Department for Business, Innovation and Skills and the Treasury have set aside a figure for restructuring the FE sector nationally, which is rumoured to be in the region of £500 million. In GM it is being described as funding that will be available only as loans and not as one-off grants. Viable colleges will not want to saddle themselves with debt from the merger with another college.
So what needs to be done? It is clear that Greater Manchester needs to make progress in tackling the large number of people in the workforce without qualifications, as well as attainment at age 16 and higher level skills development. The area-based review and devolution of the adult education budget will help, but in the main they are focused on the 19-plus skills system. Much of the funding is spent on tackling the lack of achievement by age 16. The combined authority would like further powers over the 0-to-19 skills system, rather than its existing powers over the 19-plus skills system alone. Work is under way to put in place a memorandum of understanding with the Department for Education to ensure that its commissioning of provision is aligned with Greater Manchester’s needs and that decisions taken in one part of the system are consistent with those that we are making in the 19-plus part of the system, which will be a devolved matter.
The skills system is confusing for many people and the quality of advice and guidance on careers and education is variable. The Sainsbury review of pathways, which is due to be published shortly, could be significant in helping to clarify that. However, we need to recognise that current Government policy is that skills at level 3 and above are the responsibility of employers and individuals via adult learner loans. Such loans are currently available only for full qualifications, but many people and employers want and need specific short courses to gain employment or tackle skills shortages. Research has shown that 40% of digital and creative companies in Greater Manchester have lost business due to skills shortages. Targeted short courses, for example in social media, could help to solve some of those issues. Greater Manchester is therefore working with BIS as part of the devolution deal to examine the potential for flexibility in adult learning loans. It would be great to hear the Minister’s views on that.
We need to increase employer engagement in the skills system. We know, as local MPs, that there is a huge mismatch. There are some great examples, but there is a lack of consistency across Greater Manchester. We have to work with employer groups to get the message out about investment in skills and to get their input into the provision that GM needs to meet its future needs. We need better modelling of workforce requirements, so that we can train our young people for the jobs of the future. The apprenticeship levy is an opportunity to drive higher level skills development for new recruits to GM companies and to upskill the existing workforce, which will drive higher levels of productivity in GM firms. Greater Manchester has made the case to the Government for greater involvement in the apprenticeship levy implementation. It should also be noted that the devolved Administrations in Scotland and Wales have far greater control over the way in which the levy is spent. The area-based review will help shape an important part of the infrastructure that GM needs to develop future skills, but it only will be part of the solution.
It is a pleasure to see you in the Chair, Ms Ryan. I congratulate my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) on getting this important debate for Greater Manchester. The decisions made in the review will have far-reaching consequences for young people and employers in the region. He gave an excellent and comprehensive outline of some of the issues that we need to tackle.
In my contribution, I will refer first to the excellent report prepared by Councillor Andy Sorton, who represents one of the priority 1 areas in Stockport—the Brinnington and Central ward. “Educational Attainment in Priority 1 Areas” was produced in July 2015. In his foreword, he sums up the problem:
“Recent GCSE results showed a substantial drop in attainment for secondary school children in priority areas. Attainment in the Central Area of my ward fell from a low base of 36% attaining 5 A*-Cs in 2012-13 to only 14.3% in 2013-2014, a drop of 21.7%. In Brinnington this drop was 43.2% to 20.9%, a 22.3% fall. To contextualise this, performance in Stockport was, on average, 58.4%.”
The latest available figures, for 2014-15, show an improvement on that 36% attaining five A* to Cs in Central, but in the Brinnington area there was a further fall back to 15.3 %, a drop of 6 % on the previous year. Average attainment for the borough was 58.3%, similar to the previous year. Those are shocking statistics.
Stockport is a borough of contrasts, with areas among the 1% most and 1% least deprived in England. The “State of the Nation 2014” report, in a summary of the overall progress being made across the north-west, commented:
“38 per cent of poor children fail to achieve the expected level in reading, writing and maths at age 11: this varies from 32 per cent in Halton to 48 per cent in Stockport.”
Interestingly, of the four secondary schools with the highest number of students from priority 1 areas, when looking at English and maths GCSE results, only disadvantaged pupils at Stockport Academy performed well when compared with their peers by Ofsted. Stockport Academy was built under the Building Schools for the Future initiative of the previous Labour Government, recognising that issue of inequality of attainment for children in poorer areas.
There are further statistics, such as the December 2014 ones on 16 to 18-year-olds classified as NEET—not in education, employment or training—which suggest that 11% of young people from priority 1 areas fall into that category. The comparable figure for the rest of the borough is 4%. Also, 18% of 18-year-olds in priority 1 areas are not in education, employment or training. On absences, pupils from priority 1 areas are almost three times more likely to have an unauthorised absence from school than pupils from outside the areas. Also, 12.4% of all pupils from priority 1 areas were recorded as “persistent absentees” in the 2013-14 school year. That is more than twice the average rate across Stockport, which stood at 6.1 %. The unemployment benefit claimant rate in priority 1 areas is three times the average for the borough. We all know the lifetime effect of failure in the education system for young people and their families.
In an October 2015 letter sent to Greater Manchester MPs, David Collins, the Further Education Commissioner, and Peter Mucklow, the Sixth Form College Commissioner, announced the area review of post-16 education and training institutions. The letter stated:
“This is an important opportunity to shape the provision for learners and employers in the Greater Manchester area and to ensure clear, high quality professional and technical routes to employment, alongside robust academic routes, and better responsiveness to local employer needs delivered by strong, high status, and where relevant specialist, institutions.”
I also agree that savings could be made by amalgamation, with consequent administrative changes, such as the sharing of human resources and payroll, or by looking at duplication of course offers, provided that no young people are disadvantaged by travelling costs. There could also be an argument for having one principal for all the colleges. The area review, however, must also address that issue of inequality of attainment in secondary schools, and the response of the post-16 sector to that.
In the area review, I want to see proposals for further education that will engage young people, such as those in Brinnington, because the challenges are huge. If young people have lost interest at school and have stopped attending, how will that change when they reach 16? How will their educational attainment be improved by a further education offer when they have already failed in the secondary system? At the very least, the offer that Stockport College or colleges in other areas make must be local, and attendance must be affordable for the young people and their families. They must believe that what is on offer will make a difference to their life, that it is something they want to do, and that they will get a job, or self-employment, from it.
Those young people have ability and they are creative, but they are young people for whom the education system and the wider social care system have failed. They are the children of the children I worked with as a social worker; some are the children of those children. Failure will be the inheritance of their children, and they and the wider community will continue to pay a price for that.
Those issues are, of course, not within the remit of the area review, but the response to the review has to have regard to the circumstances of those young people. I will be interested to hear whether, as part of the review, any young people talked to the commissioners about their issues and how they might be engaged more in learning and developing the skills that future employers will need.
As my hon. Friend the Member for Wythenshawe and Sale East mentioned, we are going through huge changes in jobs as a result of automation. I am the co-chair of the all-party group on retail, and we are undertaking an inquiry on the effect of automation on jobs. It is clear that there will be more jobs in retail, but entry-level jobs will be not shelf-stacking, but managing the robots that stack the shelves. That will change the entry-level skills needed. We have to meet those challenges by ensuring that all young people—particularly those who are difficult to engage—have those skills.
I would like, in the area review’s reorganisation of colleges and courses, an offer of partnership working between young people and secondary schools in every locality. Without that, any reorganisation will continue to exclude young people from the opportunity to achieve something in their life by making them an offer that they cannot or will not accept.
My hon. Friend makes a powerful point about joining up the skills system and the further education system. It is astonishing to most Labour Members, who have in general been warm supporters of devolution, that the schools sector has not been devolved. Michael Wilshaw, the chief inspector himself, has said that local politicians in Manchester and Liverpool should get more involved in improving standards in our schools. The one way in which we could do so is by having the school commissioner system devolved to the conurbations. Does she agree?
I absolutely agree. That is an excellent point, which I am glad my hon. Friend has made, because I was about to make it. I put that point to the FE Commissioner—indeed, I sent him a copy of that report—and he assured me that he was on the case. As my hon. Friend has just said, however, if we are to make partnerships work, we cannot have national Government in charge of one part of the partnership and local government in charge of the other. That is where there has been a history of failure in delivering social policy. On the provision of education and skills to young people, there is no longer a separate education agenda and skills agenda; they have to be integrated from quite an early age. I agree with my hon. Friend that for the partnership to work, it must all be devolved to Greater Manchester. That is my plea. I hope that we can have further discussions about how we can make the partnership work, engaging those all-important primary and secondary education systems in how the FE sector responds.
It is a pleasure to serve under your chairmanship, Ms Ryan. I thank my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) for calling this important debate. I will concentrate my comments on the area review that is taking place and how it relates particularly to my constituency of Rochdale but also to the wider conurbation.
That review will not solve but should have an impact on some key issues that need addressing, including the need to improve productivity, as my hon. Friend said, not just in Greater Manchester but right across the country, and to improve economic growth across the sub-region, particularly in the northern part of the conurbation around Rochdale and Oldham and perhaps into Tameside. The review could also help to reduce benefit dependency. It needs to address the “hourglass economy” that the UK Commission for Employment and Skills has described, in which we have too many low-level skills and some highly skilled workers but we do not have enough people with middle-level skills. I hope that the area review will go some way to helping to address that.
I like the ideas in the review of looking for economies of scale—that is positive—realising real savings so money can be redirected to funding real priorities rather than structures, and devolving to and involving local authorities. However, I have some concerns about whether the review genuinely addresses problems with the curriculum offer in Greater Manchester. Will it reduce duplication of courses? Are the right courses being offered in the right places for the right people and the right companies? I am also concerned about the review’s scope. As my hon. Friend said, it does not include 11-to-18 schools or university technical colleges. That said, the process has been more positive than negative. Let me say also that the combined authority has done good work in bringing the review together and acknowledging that there are gaps in the work that has been done, not least on the curriculum but also on how FE connects with transport and on quality and the estates. That must surely be the next stage of what follows from the review.
Let me turn to Rochdale. Rochdale Sixth Form College and Hopwood Hall College both perform very well and are highly regarded by both their respective sectors and, most importantly, the learners themselves. I was at Hopwood Hall’s awards ceremony just last week, and was extremely impressed by the diversity of learners and the progress that they are making. I am relaxed about the sixth-form college. It performs very well, is very well run and is beginning to go down the road of acquiring academy status. Although I am also exceptionally happy with the performance of Hopwood Hall College, I am a little worried that it is currently looking like it will remain an autonomous and independent college, which means that it will not merge with any other colleges. I think that the management and leadership of the college will be happy with that, but I have concerns on two levels. First, it is a missed opportunity for the college’s leadership and expertise to be fed into helping underperforming institutions. Secondly, I am worried that the college will be squeezed between the bigger beasts that are being created. Although it looks attractive to remain independent—I am not making a Brexit argument in this instance—and it would be positive for the college solely to serve the precise needs of Rochdale, the truth is that the larger establishments will have better and bigger lobbying power.
Let me conclude my remarks with some points that the Minister may want to consider addressing. First, if several colleges remain independent, how will we guard against that squeeze? Secondly, what further scope is there to address the curriculum offer? Thirdly, will it be possible for the combined authority to reshape the proposals during implementation if they appear to be inappropriate?
It is a pleasure to see you in the Chair, Ms Ryan. I pay tribute to my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) for securing this most timely and pertinent of debates. I think we can all agree that we like to talk about this subject, but to have 90 minutes in which we are not discussing the European referendum is extremely welcome.
I put it to colleagues that Greater Manchester is of course the greatest city region in the country. Anywhere we go in the world, people know who we are. We are a great city region that is, through devolution, on the verge of even further greatness. With more autonomy over long-term investment, infrastructure and innovation, we have a once in a generation opportunity proactively to reshape our economy. We can encourage the growth of specific industries, build proper communities, not just lists of houses, and attract better paid and better quality jobs; but to be ready for all that, we must first build a robust platform for educational attainment and significantly improve our population’s skillset. I share the aspirations that have already been expressed for even further local control and devolution in this area.
Further education is the bridge between schools and the world beyond. It is the link between education and the workplace. It is the sector through which life chances are enhanced, horizons are broadened and second chances are realised. Further education is a stepping stone. It is a leg up. It is a place where ambitions are fostered, new interests are cultivated and barriers are broken down. It is a vital chapter in my own story and in thousands of British success stories. Yet too often FE remains the poor relation in Britain’s education sector. It is undervalued, under-resourced and too often a political football.
I would like to join colleagues in taking the opportunity to reverse that position by making four brief points: first, that the skills revolution that we need in Greater Manchester depends upon a reasonably resourced and strategically valued FE sector; secondly, that we must improve our ability to predict what skills our economy and businesses will need in future; thirdly, that political interference and goalpost moving must be stopped for the sake of our local economy; and finally, that there needs to be a radical rethinking of FE provision for people with special educational needs in Greater Manchester to ensure that wider life chances are truly accessible to all.
Let me start with the need for resources and investment. As it stands, nearly half of the population of my borough of Tameside hold no qualifications beyond level 2. An enormous 48% of residents are only qualified to GCSE level or equivalent. Just 17% hold traditional degree-level qualifications and only 1% are qualified to postgraduate level. To boost wages, attract better jobs and reduce the local welfare bill, it is self-evident that we must urgently upskill the local economy.
It has long been my view that the most effective way to increase educational attainment is to invest heavily in early-years education. Interventions from birth will make the greatest difference to an individual’s life chances and provide the greatest return on investment to the taxpayer for every pound spent. However, to fail to invest adequately in further education is to write off successive generations of young people who did not benefit from the intensive early-years opportunities that we all want to see.
GCSE results have improved strongly in Tameside recently, but there are still significant legacy problems. It is imperative that an ambitious skills strategy forms part of the Greater Manchester devolution strategy and named funds are earmarked within that to support quality local FE institutions. It is also imperative that funds are directed to where they are needed most. I do not think that I am ever described as a parochial MP, and I absolutely understand that a strong Greater Manchester is essential to a strong Stalybridge and Hyde, but I am concerned that local FE leaders tell me that they simply cannot access capital funding and perceive a bias towards central Manchester in the funding of projects that they know the neediest people in our local population will not be able to access.
Tameside has shown that even in these times of quite painful austerity, local investment really works. Through the bold Vision Tameside project, which is a collaboration between Tameside Council and Tameside College, a newly built college in the centre of Ashton is bringing learning into the heart of our local economy. I can share the great news that Vision Tameside is already showing signs of success. Historically, one of the biggest problems in our borough has been an exodus of young learners to FE establishments elsewhere, but this morning the new principal of Tameside College confirmed to me that admissions to the newly built college in Ashton for this September are up on last year by a quite phenomenal 500 places. Students will now learn in an exciting environment that is fit for purpose, with local shops and cafés benefiting from their custom and Tameside becoming a net importer of FE students—not a net exporter. I cannot recommend that vision highly enough.
My second point is that we must diversify our local skills mix. We must get better at predicting what skills the economy in Greater Manchester will really need. As it stands, the skills base in Tameside is unequivocally too narrow. The latest labour market data that I have for this debate suggest that I have more individuals employed in health, social care and education in my constituency than in all other occupations put together. That is clearly not a sufficiently diverse employment base.
I also have, however, twice the national average number of constituents employed in the manufacturing industry, with thriving employers such as the Hyde Group, Smurfit Kappa and Kerry Foods. Even though I said I would not mention the EU, I cannot resist praying for a remain vote next week to protect jobs in the manufacturing sector. Although I will always value public sector jobs and will fight to defend the role of manufacturers and producers, we also need to understand what Tameside’s and Greater Manchester’s role might be in a future, more knowledge-based, economy.
Quality apprenticeships in relevant areas, like the creative and digital training opportunities, are being provided locally by Brother UK, and that is an excellent start. I would also like to see a focus on future roles in emerging sectors such as green and low carbon technologies. We need to work more closely with our existing employers to map their likely medium-term needs while we try to attract other employers and steer our economy’s longer term needs.
My third point is that political interference is actively harming the success of further education in Greater Manchester. Just as primary school teachers have seen SATs altered at the last minute and secondary teachers have seen GCSE requirements amended without sufficient warning, so educators in the further education sector have seen goalposts moved counterproductively by the Government with their heavy-handed approach to remodelling qualifications. The most acute example of this is perhaps the reforms to functional maths and functional English assessments. Such courses provide the opportunity for those who have missed out on essential GCSE-level qualifications to have a second chance at acquiring those core credentials. The Government have now introduced external testing to replace teacher assessment, which has moved the goalposts so dramatically that pass rates in Tameside have halved, and in many places have fallen to single figures. If we make it impossible for people to acquire basic level numeracy and literacy skills, we effectively consign them to the scrapheap, and there will be no winners from this approach.
Finally, as the parent of a child at a special educational needs school, I cannot contribute to a debate such as this without mentioning the dire need to improve further education opportunities for those with special and complex needs. Take autism, for example. It was my great privilege to help Ambitious about Autism’s youth patrons to develop their employ autism campaign, which highlights that although 99% of young people with autism want to work, only 15% of adults with autism are in work. That is a shocking one in four young people with autism not accessing education beyond school.
The employ autism campaign asks for more opportunities to develop skills post-16. As part of my drive to see Greater Manchester become an autism-friendly city, I want us to take a lead on this agenda with more specialist courses and more specialist day colleges, and with no young person left behind through a lack of post-school opportunities.
Ms Ryan, thank you for the opportunity to contribute to today’s debate and to re-establish further education in Greater Manchester as a top priority. Let us invest where it is needed and build a competitive sector that makes our region’s labour market fit for the future.
It is a great pleasure to serve under you as Chair, Ms Ryan. I congratulate my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) on securing this debate and on the way he comprehensively set out the context in the education landscape. It was an excellent introduction.
I want to make a few short remarks about the process and scope of the area review, and about the effect on my constituents in south Manchester. Further education plays a vital role in our local economies and our communities. It can boost growth and drive personal achievement and social mobility. The best FE colleges are adaptable to local needs and provide skills and training where local areas need them most, and they can design courses according to local needs, such as the innovative higher education/further education hybrid courses offered at the Fielden campus of Manchester College in my constituency, so I welcome the chance to discuss FE and skills in Greater Manchester today.
We have a mission in Greater Manchester to skill up our communities to meet the challenge of the modern economy and to give them the flexibility and adaptability to thrive. We need to match our economic success with educational success, so there are questions about how we change our system to educate our young people, and how we deal with adult retraining and skilling up an underqualified population. These are big challenges. Overshadowing any discussion about FE and skills in Greater Manchester is the area review. Some would say that the area review has overshadowed the sector itself in recent months. The view among some people I have spoken to in the sector is that it has come at the wrong time, has the wrong focus and has distracted people from getting on with the job of improving standards in the sector. Certainly the delay in the process has not helped anyone.
There are merits, as my colleagues have mentioned, in some of the aims of the area reviews, but there is certainly a feeling that the area reviews are more about saving money than improving access for students or raising standards, which is not helped by the fact that the initial guidance on the review was about cutting costs, not meeting learner needs. The Greater Manchester area review is a process that should serve the needs of students and the local economy, not the need of the Government to cut budgets.
There is a wider problem about the scope of the review. People in the sector feel that the review has not addressed the real problem, which is the skills shortage that we have heard about and how we design a whole sector to meet the challenge. The Library has confirmed that the most popular reason given by employers in Greater Manchester for having hard-to-fill vacancies was,
“Low number of applicants with the required skills.”
There is an argument that the area reviews have been too focused on structures and governance, rather than tackling the challenge. The review falls short of tackling the long-term reforms that Greater Manchester needs, and it may turn out to be a missed opportunity to properly review post-16 provision across the system.
Does my hon. Friend share my concern that the Greater Manchester Combined Authority has spoken of its dissatisfaction with the proposals made by the 10 FE and 11 sixth-form colleges involved in the steering group? The GMCA is concerned that only two mergers have so far been proposed involving five colleges. Is my hon. Friend going to talk about that in his speech?
I will certainly refer to that. Such concerns are legitimate and the combined authority is right to raise them. They certainly need to be addressed.
The process needs to look at further education provision as a whole and should consult all post-16 providers. The Association of Colleges, Unison, the University and College Union and others have all pointed out the dangers of a narrow review process that ignores large numbers of FE providers. In its review of post-16 Government policy, the Public Accounts Committee argued:
“It is unclear how area-based reviews of post-16 education, which are limited in scope, will deliver a more robust and sustainable further education sector.”
I believe that is the case in Greater Manchester.
The area review, as we have heard, has not encompassed university technical colleges or the 50 school sixth forms in Greater Manchester, in which more than 8,000 young people are taught. There are 11 sixth-form colleges included in the Greater Manchester area review, of which 100% are judged good or outstanding. They are already doing a really good job for the students they serve. I have no problem with including them in a review of further education and skills in the region, but they do not work in isolation. The system needs to work together. I do not see how we can design a system for the future without looking at the whole system in the present.
The review also does not deal with the key issue of devolved funding. As we know, the Government have already moved to devolve £6 billion of health and social care funding to Greater Manchester, and there are plans of course for a wide package of devolution of resources that we in Greater Manchester have long argued for. I echo the comments made earlier about the need to have oversight of school improvement on a local and regional basis. The devolution of the adult skills budgets was announced in March, but there is no real sign of the same for 16 to 19 and apprenticeship funding. There is a question to be answered here. This inconsistency of devolution of funding arguably prevents the Greater Manchester Combined Authority from shaping the reviews according to the real demands of the region and the various parts of the sector that are trying to deliver the change that we need.
The needs of Manchester’s students are changing. There is higher demand than ever for English and maths courses; more students are choosing work-based learning over traditional FE pathways; and there are big increases in demand for English for speakers of other languages—ESOL—courses at a time when there has been a cut in Government funding. Giving the Greater Manchester Combined Authority the power to manage and distribute funding according to need could help colleges to be more flexible in such developments. That feeds into the wider agenda. If we are going to devolve responsibility we need to give the combined authority the proper means to deliver it.
Finally, I want to highlight some specific concerns about the proposed Tameside, Oldham and Stockport merger that will particularly affect my constituents in south Manchester. The various merger possibilities have been described as shotgun weddings, and it does feel a little like that. I wonder how much consideration was given to the idea of some of the less successful colleges working with a variety of the more successful ones, rather than being forced into mergers that may not be appropriate. What appears to be happening on the east side of the conurbation is a merger of three less successful colleges into, potentially, one larger less successful college. I hope that that is not what will happen: we need to learn lessons from successful colleges.
Leaving aside the estimated £50 million of taxpayers’ money that may be needed to make the mergers viable, I am concerned about the effect on learners—particularly the nearly 400 constituents of mine who attend Stockport College. I am concerned about what the new arrangements may mean for them in terms of their courses and access to institutions. There is a worry that my constituents currently studying at Stockport and the other colleges will suffer reductions in the number of courses, increases in journey times or other disadvantages as a result of the proposed mergers. I seek reassurance that my constituents will not be detrimentally affected.
It appears to many people that the review has not yet dealt properly with issues of quality. It has simply looked at college mergers to address financial concerns. It has not dealt with retraining and reskilling and has not yet come up with a convincing plan that will give us the confidence that we have an FE sector fit for the job of equipping our residents for the future. Greater Manchester residents deserve better.
It is a pleasure to serve under your chairmanship, Mrs Ryan, and a great pleasure to be present at this debate. I congratulate all my colleagues who have spoken. My hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) gave a speech that was a tour de force, covering the whole area. That does not always happen in such debates; sometimes cobblers stick to their narrow lasts, but my hon. Friend should be congratulated, as should my hon. Friends the Members for Stockport (Ann Coffey), for Manchester, Withington (Jeff Smith), for Stalybridge and Hyde (Jonathan Reynolds), for Heywood and Middleton (Liz McInnes) and for Rochdale (Simon Danczuk).
My hon. Friend the Member for Wythenshawe and Sale East introduced a personal point at the beginning of his speech, and rightly so, because the event he referred to was a seminal moment in the history of Greater Manchester. I hope I may be forgiven for saying that it gives me particular pleasure to be here today to hear the things that have been said, because I was born in St Mary’s hospital in the centre of Manchester. My parents came from Didsbury and Burnage, and I spent my first years—until I left school—in Levenshulme and Stockport, so the places and names that I have heard today have a lot of personal resonance for me, as well as their strategic resonance.
It is right to think of Greater Manchester as an organic area that had a long period of emergence and evolution. As a historian I am tempted to give a paean to the role of Greater Manchester in the history of the industrial revolution. [Hon. Members: “Go on!”] We do not have the time. People talk about the northern powerhouse and other such things, and how to replicate them elsewhere; I have on occasion said that the Minister should remember that the Construction Industry Training Board apprenticeship levy took a long time to get together, and in the same way we need to recognise that Greater Manchester’s cohesiveness and forwardness has not come about in a period of two or three years. It came about over 30 or 40 years, going back to the mid-70s when the Greater Manchester county was created, and the 10 boroughs entered it. The Government in the 1980s negatively and vandalistically got rid of that, with consequences that remain today in the area of transport. At the same time, that period was of seminal importance, because the 10 boroughs of Greater Manchester came together in particular to defend their municipal ownership of Manchester airport. In a way that started the process of cohering and evolving to the point where we are today.
My hon. Friend the Member for Wythenshawe and Sale East particularly talked about the fact that the Greater Manchester districts have for a long time been initiators, cheerleaders and co-ordinators for apprenticeships. When my hon. Friend the Member for City of Durham (Dr Blackman-Woods) and I compiled a pamphlet for the Smith Institute in 2013 about the work of local councils on apprenticeships, we highlighted the work of a number of Greater Manchester councils. That is something to remember in the context of my hon. Friends’ comments about the fact that, with regard to skills, the current devolution process is but half-formed. Without that involvement in apprenticeships, there is much that needs to be done about skills shortages that cannot currently be done through area reviews or by Ministers, however well-meaning.
My hon. Friend the Member for Wythenshawe and Sale East made a huge number of salient points and referred to the skills shortages in key areas. He was right to quote, as other hon. Members have, the concerns of the University and College Union. One of the things that is missing, by and large, from the area review process is involvement and consultation. That is a frequent issue extending through government. I see it when I am wearing my other hat, in higher education, where we await a major Bill. It is not just a question of getting things right with college principals or vice-chancellors. It is also a matter of getting things right with the skilled people under their remit: the junior lecturers and assistants, and all the people who keep those colleges, universities and campuses going. That is too often missed out of the process.
As I have said, colleges have done great work to support young people, but also older people, in gaining skills. They are vital to sub-regional economies. We cannot afford damage to the link between colleges and businesses or the many decent networks of colleges and schools in the area, through errors and failures in the Government’s area review programme, even if it is an unintended consequence. That is why one of the first things I said when I took on my role on the Front Bench in October was that FE is all about getting local people into work, with skills, in the local economy. That is not just a pious plea. It is very necessary to think about it now. In January 2015 Professor Alison Wolf, who as the Minister will know was the author of the Wolf review of vocational education—which has been praised and much quoted by the Government—said that Britain’s supply of skilled workers could “vanish into history”. We cannot afford to let talented and skilled young people—and older ones—fall by the wayside because colleges have closed and the funding is not there to develop the skills needed to boost sub-regional economies. To that I would add the vital role of FE colleges in the community in working with local authorities and local enterprise partnerships.
We have heard a lot today about the working out of the devo max process—the devolution process in the Greater Manchester area. I particularly emphasise the point that my colleagues made to the Minister about the potential for combined authorities to take on skills, education and training powers. Over-centralised Whitehall-led area decisions that are taken now could hamper their ability to do that effectively. That is particularly the case for utilisation of the adult skills and community learning budgets that are being devolved under the relevant part of the settlement.
I want now to talk about some of the particular issues that have been touched on today in the Greater Manchester context. One hon. Friend—I cannot remember which one—referred to the Public Accounts Committee December report, which mentioned the absolute necessity of delivering “robust and sustainable” FE solutions. At the time that was said, we saw two things in the Greater Manchester process. First, the timescale that the Government set out—this is true across the country—was ludicrously optimistic. We know that there have been problems, delays, and everything that has gone with that.
The second point that has come out of what has been said today is the tension between what my hon. Friends are talking about doing—taking on more powers—and the clear frustration of the Greater Manchester Combined Authority that it is waiting in the wings, almost as a shadow boxer, while the process is going forward. I refer again to the points made by the Greater Manchester Combined Authority in the FE Week article, which came after the fifth steering group meeting on 25 May. The Minister needs to take account of this:
“The GMCA said it ‘remains to be convinced’ that the proposed outcomes will ‘deliver the integrated learning infrastructure that is needed, taking Greater Manchester as a whole rather than focusing institution by institution’.”
It also said that it
“wants to ask the Secretary of State to award it the ‘power to make further changes to these proposals, should it become clear that the current options cannot deliver a Greater Manchester-wide learning infrastructure that meets needs’.”
I do not want to rain on the commissioner’s parade and echo what my hon. Friends have said about the significant amount of co-operation that is needed to go forward in a sensible way, and I know that the commissioners are constrained by the narrow remit the Government gave them, which has been quite clear in some of the things that have been said publicly and even more clear in some of the things that have been said privately. This is an iterative process, and I ask the Minister what he proposes to do to widen that remit and to give more of that ability to his commissioners and others to be flexible. The Greater Manchester area-based review progress report, which went to the leaders of the town councils, says:
“As Leaders will recall, the options chosen are not the decision of the GMCA, they are up to FE Commissioner, Secretary of State and College Boards…which are still incorporated bodies which no one has the right to close at present”.
That is the factual state of play, and it is therefore important that it is taken into account.
The Minister will know that there have been massive funding pressures in further education for several years, which have led to a £1.5 billion deficit across institutions nationally. The report that Bury College put forward stating why it wanted, or felt it needed, to enter into this process, said:
“The Further Education Sector has been subject to five successive years of funding cuts and fiscal restraints, which has weakened the financial stability of Colleges across the sector. No college has been immune to this impact and many colleges have already sought to mitigate the impact by exploring different structural arrangements such as federation, merger or shared services.”
I could go on about our critique of the way in which the Government have, while promoting apprenticeships funding, treated them rather as a one-trick pony and have not looked at other serious cuts, such as in adult skills, retraining and so on, but I will not. FE colleges have often been very adaptable, but that statement from Bury College demonstrates that even adaptable organisations need to have a bit of framework to breathe.
As my hon. Friend the Member for Manchester, Withington said, this process seems to be a shotgun marriage. There would have been more confidence in the process if those broader institutions had been brought into the equation. Greater Manchester is a particularly sharp example of that. Figures were quoted of the numbers of sixth forms in schools and the number of sixth-form colleges. Comparative to the number of sixth-form colleges countrywide, there is a very high proportion. It is therefore particularly important that some of the particular needs are met, both of sixth-form colleges that are included in the process, but also of schools and academy sixth forms.
James Kewin, the deputy chief executive of the Sixth Form Colleges Association, has talked about some of the flaws in the process in not including school and academy sixth forms. That, too, has been a problem. I ask the Minister again whether there is any prospect, even at this late stage, of taking account of that broader framework in the remaining reviews. When he or whoever comes to decide on the recommendations, will they bear that in mind when accepting or modifying the recommendations the Secretary of State receives?
We have also heard about the impact on students. As I reminded the Minister when we had a debate on the north-east FE situation at the beginning of the year, mergers between colleges can be particularly harmful to the social fabric and social mobility of young people in rural and suburban areas. Suburban areas are an issue in Greater Manchester, and the observations of my hon. Friend the Member for Manchester, Withington about how his students will be affected by what happens at Stockport College are a very good example. However, it is not just about the mass of students; it is also about some of the particular groups of students who may be affected. At the University and College Union’s recent conference, Elane Heffernan, a member of its disabled members standing committee, made that point, saying that FE is
“one of the most integrated places where you can be”
as a learner. I am conscious of what my hon. Friend the Member for Stalybridge and Hyde said about the need to beef up the role and position of students with special educational needs in FE, which is part of the point.
Another point I want to make is that the process will affect not just FE, but higher education. Literally thousands of people in the HE sector get their qualifications at FE colleges. Because of that, what happens to those FE colleges in the context of mergers will have a significant impact on the provision of HE in the areas concerned. I do not want to comment on the merits or demerits of individual proposals, but I am thinking particularly about the potential merger of the University of Bolton with Bury College and Bolton College. The Minister needs to think about that process as well, and I would like him specifically to address what will happen to higher education under this set of reviews.
To put this into the broader context, the Government’s Sainsbury review, which is very important, is about to come out, and hopefully a skills White Paper will come along with it. It seems bizarre to many of us that what is actually the higher skills issue is likely to be dealt with not in the new Higher Education and Research Bill, but in the schools-for-all Bill. I am not particularly concerned about where things turn up—it could be in one Bill or another—but I am concerned about the apparent lack of co-ordination and co-operation between the Department for Education and the Department for Business, Innovation and Skills. I am even more concerned because, at the end of the day—this comes back to the points that my hon. Friends made—if we are to be successful in driving forward skills for older people as well as younger people in Greater Manchester and elsewhere, there has to be a strong engagement between that process and the process of job creation which, of course, also involves the Department for Work and Pensions. If it all goes wrong, the Government will have a lot to answer for, not simply because the structure process has sometimes been untimely, but because of the way in which they have framed it.
My hon. Friend the Member for Manchester, Withington referred to many people having felt that, in this process, they were part of a shotgun wedding. Many of the processes may have been shotgun weddings, but we need to see what sort of baby they produce. The baby that they produce will be firmly the responsibility of this Government and those two Departments. I hope they will take on board what has been said about the combined authority, and think positively and creatively about widening its powers and allowing it, and the boroughs concerned, to have a real say in the final outcome.
I am going to call the Minister now, but may I ask him to be sure to leave just a couple of minutes at the end, so that I can go back to the Member who moved the motion?
I will be very happy to, Ms Ryan. It is a pleasure to serve under your chairmanship, and to respond to what has been a really interesting and constructive debate. I congratulate the hon. Member for Wythenshawe and Sale East (Mike Kane) on securing the debate and on approaching it in such a thoughtful and constructive fashion.
The area review is taking place in the northern powerhouse, in the Greater Manchester authority. I am sure that we would all be happy to admit that the co-operation between the Manchester authorities has been long standing and has many mothers and fathers. Nevertheless, I hope that hon. Members will recognise that on the northern powerhouse’s birth certificate the name George Osborne is there as “father”. The delivery of the vision of the northern powerhouse is what the area review and devolution of skills to the Greater Manchester combined authority are critically designed to achieve.
The shadow Minister, my hon. Friend the Member for Blackpool South (Mr Marsden), is the historian, but I just want to point out to the Minister that it was Daniel Adamson who built the ship canal in 1860 and who coined the phrase “northern powerhouse” when he envisaged a single market from the banks of the Mersey estuary to the banks of the Humber estuary—but carry on.
I am always happy to be corrected on a point of history; I am sure that there is room for Mr Adamson’s name on the birth certificate as well.
It is a great pleasure to respond, because normally I find in these debates that, when the fundamental purpose of the Government’s policy has been attacked, I have to spend so much time explaining and defending it that I cannot actually address any of the more detailed questions of implementation that have been raised. Today, given that there seems to be a general acceptance that, at least in principle, the area review has the potential to create a stronger and more sustainable system of further education in Greater Manchester, I hope that I can actually spend the time available addressing some of the particular points.
I will start with the points made by the hon. Member for Wythenshawe and Sale East. As his hon. Friends have said, he gave a brilliant exposition of the skills challenges facing the Greater Manchester area. He specifically asked about concerns raised by the UCU. I want to reassure him that last week I met the union’s general secretary to discuss some of those concerns and how we can ensure that, where possible, we consult trade unions and their members on some of the ideas emerging from the area reviews. I have asked the union’s general secretary to come back with some specific ideas about how that might work. I hope that will satisfy some of the hon. Gentleman’s concerns.
The hon. Gentleman asked an important question about break clauses on bank loans—I have been asked it before in the House but have never had long enough to go into detail. I know that this has caused people some concern. We do not yet have a specific example of a college that is facing a very substantial payment that it was surprised by and that it does not want to enter into. The first point to make is that in the restructuring of bank facilities it may be, in a merger or some other kind of transaction, that the bank will have the technical right to impose certain charges. It is a matter of negotiation. They may have the right to, but if they see that the overall new construction or group is actually going to be a better borrowing risk for them, and make it more likely that they will get their money back or be able to lend more money, which is what banks are in the business of after all, then they can novate loans—to use the jargon—without break costs when the new loan is lower risk.
The critical point, which will apply not only to break clauses but to everything in a sense, is that although we will be strongly encouraging colleges to undertake the changes and mergers when that is what is recommended, ultimately that will be a decision for them. They are independent institutions and they will be able to take into account the full range of costs and benefits. There may be costs, to some extent, or bank charges, but they will need to go ahead only if the benefits of other cost savings or advantages are greater than those charges. As I said, I hope that in reality those charges will not prove to be as much of a problem as the hon. Gentleman perhaps feared.
The hon. Gentleman raised a very interesting question that we will not be able to go into in great detail now. However, I hear him and have some sympathy with his point that adult learner loans are not available for short courses. Although we have career development loans, their terms of repayment are less attractive to students than those of adult learner loans.
May I just finish my sentence and then I will be happy to give way? I understand the point. I think we need to learn from some past mistakes. If we start having the taxpayer subsidising loan provision for very short courses, which is not something I want to rule out in principle, one has to ask how the Government and the taxpayer will be reassured that those short courses are genuinely valuable—as well as being valuable to the individual and their employer, they have to have some transferrable skills value. That is so that taxpayers’ money is not subsidising activity that is beneficial only to that narrow employer in that narrow job. That is something we are wrestling with, and I would be happy to hear ideas from the hon. Member for Wythenshawe and Sale East and other hon. Members on the subject.
I am grateful to the Minister for giving way and entirely take his point about not wanting to subsidise—if I can put it that way—short-term courses that are not going anywhere. That might lead us into a broader discussion about credit accumulation processes and the rest, but I do not want to touch on that now. The point I want to make is that at the moment, as the Minister will be well aware, the take-up of those adult learner loans was somewhat less than 50% at the last count. It might be—dare I say it?—in his interests, or in the future interests of any person occupying his post, when negotiating with the Treasury, to make the point that there is this demand in the way that my hon. Friends have described, and that it could be valuable if a reasonable construction of it could be made.
I hear that, and I assure the hon. Gentleman that the Treasury is very much aware of the issue. We have obviously expanded the application of advanced learner loans to a broader age group and a broader range of levels, but he is right that we nevertheless have more budget than is currently being utilised and there may be a way safely to extend its use. There are also issues with the Student Loans Company, which has a pretty big administrative burden at the moment, as he will be well aware. It manages those loans, so there are also technical implications. I would be very happy to discuss detailed ideas about that with hon. Members in future.
I want to move on to the question, which a number of hon. Members raised, about the involvement of schools in the area reviews, the request by Greater Manchester Combined Authority for greater power over schools and—the hon. Member for Stockport (Ann Coffey) raised this—whether what is going on in those schools is going to be considered as part of the area review. There are a couple of things to say. First, the regional schools commissioners are required to contribute to the underlying analysis for the area review and to be closely involved. The Greater Manchester Combined Authority is absolutely encouraged to have a very close relationship with the regional schools commissioner, as are individual MPs. I know that Government Members have started meeting the regional schools commissioners, as we have encouraged, and have found the meetings to be incredibly useful. Regional schools commissioners are available to meet hon. Members to discuss any concerns they might have.
On integration, in the sense of the programme of study that leads people and makes it more likely that they are going to succeed when they move into college and post-16 education, I hope that hon. Members will be willing to wait until the Sainsbury review and the skills plan are published. I can promise them that it will be very soon after the referendum, so it will give us something rather more interesting to talk about. I hope that will give a more complete picture of how we are looking at the curriculum, how people, including people with special educational needs, as the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) said, can be best placed to succeed in that curriculum, and how we can ensure better access and a better step up into further education programmes than is currently the case. That will all be addressed in the skills plan and the Sainsbury review. We are keen to discuss that with hon. Members in time.
The hon. Member for Heywood and Middleton (Liz McInnes) intervened to raise a number of concerns—the hon. Member for Wythenshawe and Sale East also referred to them—about whether the area review specifically in Greater Manchester is ambitious enough and whether it is taking too long. Theresa Grant, who is chairing the review, is one of the most impressive public officials I have come across in my time in government. I am strongly inclined to agree with anything she says about any subject. As the representative of the combined authority, she does not believe that the colleges are being sufficiently ambitious. Concerns were raised that those that are hanging on to their independence, for understandable reasons—perhaps they are already good or outstanding—may not be looking far enough out and should think about the future landscape and opportunities, not just about rifts and threats.
I strongly encourage the colleges that are part of the review to take on board Theresa Grant’s comments and to work with her in further meetings—I believe that there will be another one next week—to try to see whether there is a way to grasp the opportunities more boldly than the initial proposals were grasped. That is my comment about her comments as chair, because ultimately it is for the review and the individual colleges within it to decide what recommendations they will adopt and to implement them.
I understand that there have been questions, not least by the shadow Minister, about whether we could give the Greater Manchester combined authority more power to enforce some of the recommendations. If we render colleges no longer independent, their whole balance sheet will suddenly come into the public sector balance sheet. I am not sure that Greater Manchester combined authority wants all the liabilities of the Greater Manchester college sector on its balance sheet as it starts life as a combined authority, and nor do we in Government. We must be a little prudent.
Having said that, those colleges will understand that the Greater Manchester combined authority will shortly control the entire adult skills budget. It will form outcome agreements with different colleges and will be able to move money around, as they can do already with capital, as has been noted. If we are in the business of pleasing our customers, I hope that all the colleges in the area review understand that the Greater Manchester combined authority will be a tremendously important one and take on board its recommendations on how the review should unfold.
I think I have addressed everything I had noted. If no one wants to intervene before I sit down, I am happy to hand over to the hon. Gentleman who introduced the debate.
It has been good to have the time and space to debate this matter and I thank everyone who has contributed. My hon. Friend the Member for Stockport (Ann Coffey) was right to highlight inequality within boroughs and not just between boroughs, as I did in my speech. We must reflect more on that in the review process. She continues to champion the cause of carers, people in care and their further education, which she does brilliantly in this House.
I could not agree more with my hon. friend the Member for Rochdale (Simon Danczuk), or rather I sort of agree and disagree. Level 2 to level 4 skills are missing. I believe, although I do not have empirical evidence, that globalisation and the advance of technology is sucking out some jobs as we go to advanced manufacturing in our economy. We must address that. People now in their 40s and 50s who did apprenticeships when they were young are being hit hard by globalisation and sometimes blame the wrong people politically. We as politicians must all think more about that.
My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) is right that we must have strong local colleges. They are doing amazing things in Tameside. Agglomeration and specialism are the way forward, but it must be remembered that that is easier in the south-east where there is fantastic transport. There must always be a strong local element.
My neighbour and hon. Friend the Member for Manchester, Withington (Jeff Smith) is right that there is a feeling that this is more about form than function. It must concentrate on what the outcomes are for young people rather than protecting institutions as they stand.
The shadow Minister is an historian, and he does not have to prove his Mancunian roots to me. We have been talking about this ever since Arkwright, who powered his mill in Miller Street in 1792, and the industrial revolution—I will match my hon. Friend history for history. He is right to highlight the concerns of the UCU.
It is good that the Minister is talking to the trade unions. I will take his word about the break clauses and we will try to find specific examples to help the Government work this through. I will take him up on his offer to provide ideas for learner loans. I agree with him that Theresa Grant is one of the finest local government officers in the conurbation. She is leading on this and we wish her all the very best in the review.
Question put and agreed to.
[Joan Ryan in the Chair]