PARLIAMENTARY DEBATE
Further Education College Finances - 7 September 2020 (Commons/Commons Chamber)

Colleges are facing financial uncertainty as a result of covid-19, and many face reductions in commercial income and uncertainty with apprenticeship starts. We have a team, including skilled finance professionals, who are working closely to support colleges, and we are also working with banks to ensure access to commercial lending where required. Since April, only five colleges have needed to access emergency funding.

Further education colleges provide lifelong learning, and they will be essential if we are to provide the levelling-up agenda that the Prime Minister speaks so fondly of. However, coronavirus has left many with a black hole in their funding. We understand that it could be as much as £2 billion, and at the moment we are facing unprecedented demand. I fear that the Government do not understand the value of further education to the economy and the new skills we require in this country. FE colleges are flexible and adaptable, and they can help many young people who have been let down by this Government during the fiasco of the GCSE and A-level results. Will the Minister confirm today that she will look into this and provide the necessary funding, which, according to the Sixth Form Colleges Association, should be £4,760 per year for 16 to 17-year-olds and 18-year-olds?

Let me assure the hon. Lady that we absolutely have FE colleges at the very heart and centre. We are planning a big reform of the sector, and as somebody who went to FE college myself from the age of 16, I am absolutely passionate about this area. The colleges have done an amazing job in responding to covid-19 to support students throughout coronavirus. We continue to pay the grant funding and monthly payments for 2019-20, and will do so for 2020-21. We have also provided catch-up funding of £96 million for small group tutoring for disadvantaged students who need it. On top of that, we have allocated £200 million to enable FE colleges to improve their buildings. We have a team of officials right now working with every college that needs that support. We are working with 40, and so far only five have needed financial assistance, but we will keep this under review.

The Government’s own commissioner for further education has warned that as many as 40 colleges are currently at risk of running out of cash, and despite the measures that the Minister has just spoken of, the Association of Colleges is warning of a £2 billion cash shortfall. We also know from the May report that the Government have inadequate mechanisms for identifying colleges in crisis, so the truth is that all those measures that the Minister speaks about simply are not enough. We need far greater action if we are going to see our colleges and their pupils and staff not being let down and left in financial crisis this autumn.

I thank the hon. Gentleman for his question. Just so we are clear, we have provided grant funding to the FE sector, with more than £3 billion for a full year, and it received that gratefully. We have also announced an increase of £400 million for 2020-21, an increase of 7% in overall funding. As he rightly said—and as I said in answer to the earlier question—we are working with 40 colleges to structure their finances and helping them to get the advice and support they need. If they need emergency funding, as has been available, it will be available to them as well. We have a team of people working on this all the time, and the colleges accept that we are putting our arms around them to ensure that they get through this period.