Earlier this week, the Prime Minister set out an ambitious and forward-thinking agenda for the UK to become a skills-based, tech and innovation powerhouse that leads the world as a growing, dynamic economy. I think the focus of his future economic policy is exactly right, however, if we are to really get serious about science and innovation, we need to prioritise it and value it more as a country and we must equally get serious about skills and give more support to Further Education colleges.
At the time of the Budget last month, I argued for more funding for Further Education colleges like Cornwall College which are providing the real skills needed for the new economy. Some additional funding was made available last year to help with cost pressures but not as much as was given to schools although the challenges are the same. Although further funding to help address cost pressures was not forthcoming last month, it is an agenda that I and others will continue to argue for. As it stands, the formula for funding FE colleges does not match the ambition set-out by the government for a modern economy that values manufacturing and industry over the professions. Economic growth cannot be built on lawyers, business consultants, and communications professionals alone. We need to make and build things again.
Currently, if a student in England goes to university to do a degree course, the institution they attend will get £9250 per year. However, if the same student chooses instead to go to an FE college as an apprentice this funding is significantly lower at £4250 per head. Colleges have found it increasingly difficult to recruit staff in recent years to teach courses like plumbing, engineering, electrics, and construction as lecturers often can earn as much as £8000 more per year on average by working as a teacher in schools or as much as double their current salary in the private sector. Finally, FE colleges often have considerably higher overheads on average compared to universities due to the practicality of delivering their courses such as equipment, and smaller average class sizes. While it is possible to deliver a history course to a room of 80 or 90, it is much harder to do the same when teaching how to rebuild an engine or rewire a house.
Some other countries with more successful industries and manufacturing put more emphasis on real skills for the modern economy and value vocational education better than we have traditionally as a country. It is vital we find new ways of closing this apparent funding gap as soon as possible. One such way would be to end the disparity faced by FE colleges when compared to schools on VAT. In November last year, the Office for National Statistics reclassified colleges and their subsidiaries into the central government sector, changing their status to similar to that of an academy. However, while schools and academies are VAT-exempt, FE colleges are not. I am calling on the Government to match its ambition with the funding it deserves and remove the VAT burden faced by colleges to bring clarity and consistency. This will in turn provide a significant increase in funding to help deliver a new generation of skilled workers and prove we are really serious about growing the economy. It would be a first and important step towards a fairer system of support for local colleges like Cornwall College and giving the students who are starting their careers there an equal opportunity for success.
