Post-16 Education and Skills: Funding

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare an interest as a governor of a 16-19 academy.

My Lords, additional funding for 16-19 schools and further education over the next two years was announced yesterday. As a result, overall 16-19 programme funding per student in the academic year 2026-27 will rise by about 4% compared with 2025-26, rather than the 1.66% that we had previously estimated. This will build on the significant increase in funding rates in the academic year 2025-26, when the average per-student funding rose by 8.7%.

I thank the Minister for her reply and was delighted to hear the announcement yesterday. But there is a more general issue. This country, unusually, underfunds 16-19 education compared with 11-16—lower secondary—education. The post-16 White Paper was very welcome because it acknowledged the critical importance of this phase. Yesterday the Government announced an increase to previously announced funding, but the details are unclear. The key point for teachers is the base rate funding. The base rate funding that has been confirmed for 2026-27 is an increase of marginally over 0.5%, which is way below inflation and about a fifth of the increase estimated for pre-16. Meanwhile, we have a confirmed 3.5% pay increase next year for all teachers, which the Government have accepted will not be fully funded. We have FE colleges facing unfunded growth in student numbers; 16-19 schools are among the very best in the country for results in social mobility, but they are cutting their teaching programmes. Can the Minister tell us when we will get at least clarity on the 16-19 funding rate, the base rate, for the imminent new academic year?

I pay tribute to the noble Baroness’s dedication and persistence in supporting the FE sector, which I too believe is fundamental for the future success of our young people but also for the economy of this country. I cannot give her the detail that she wants, as she is probably aware, but we will announce the revised rates for the coming academic year later this month. There will be an increase in the 16-19 base funding rate—but also in the disadvantaged block funding rate for low prior attaining students, children in care and care leavers. Institutions will receive their increased allocations in the autumn.

My Lords, although the funding increase in the post-16 FE sector is welcome, I press the Minister on that increase: will it reflect some of the increasing costs in that sector, particularly of energy, staffing, et cetera?

I thank the noble Lord. I anticipated his question. Yes, of course, we are very mindful of increasing pressures and costs—particularly energy, as he mentioned. There is a package of support going into the whole education sector, including better purchasing policy, collaboration with other institutions and looking at reducing the need to heat our schools. Of course, the cost of the heatwave is another factor at the moment. We are very mindful of those costs and in deep discussions with the sector, as we speak.

My Lords, to be clear, teachers deserve the best deal possible for their brilliant work, but yesterday the Government brought forward a 6.5% increase, bringing their overall pay rise to 17% since the election. The issue is that schools are expected to fund 1% of this increase through efficiency savings. School budgets have already been squeezed by national insurance rises and, as the noble Lord, Lord Mohammed, said, increasing energy costs; now they are being asked to make more savings to fund government spending. Would it not be incrementally beneficial to cut just a sliver of the welfare bill to fund this pay increase, instead of placing even more pressure on our already struggling schools?

The announcement was made only yesterday, so we are still in conversations with all the relevant parties. But in this large sector, there is welcome surprise at the actual numbers that were announced, in a very difficult fiscal climate. I hope that teachers recognise the real esteem in which we hold them and the important role that they have. There are always tough choices to be made and we will address the wider implications, as the noble Earl suggests.

My Lords, does my noble friend get increasingly exasperated, as I do, when Front-Bench spokesmen opposite get increasingly strident in their attacks on the Government? We have not cleared up their mess in defence spending, immigration and schools, which they left us after 14 years in power.

I thank my noble friend, as always, for his continued support from the Benches behind me. As well as that, the frustration I have is that there is no recognition or acceptance from the other side of the mistakes made and opportunities missed in those years. We see this particularly in the awful plight of the nearly 1 million young people who are NEET—not engaged in education and training. That is what we should be focusing on, and making sure that we do everything that we can for young people in this country.

My Lords, one way for schools and colleges to get the funding they need is through the pupil premium, and one way to ensure that they get the pupil premium funding to which they are entitled is through automatic enrolment for free school meals. Can the Minister confirm that local authorities wishing to run automatic enrolment schemes in their area would be acting in line with their duties to support the most disadvantaged children?

I was not expecting quite that angle, but the right reverend Prelate raises a very important point. It is absolutely heartbreaking when you know that children are eligible for this funding but, for whatever reason, the family do not come to the attention of people who could support them. I will look into the detail that the right reverend Prelate asked for and get back to him.

My Lords, I refer to my registered interests in the FE sector. Although there is an excellent job being done by schools and FE bodies in support of young people aged 16-19, we sometimes concentrate on the institutions rather than the individual students. There is a concern that some young people with additional needs do not necessarily fit into the funding categories. What additional steps are the Government taking to ensure that young people do not fall between the cracks of the different levels of funding, which risks them getting into a downward cycle and ending up as NEETs?

The noble Lord raises a very complex issue. There are no simple answers for why an individual young person falls out of the system. The point that he makes, quite rightly, is that there needs to be far better connection and communication between all the relevant agencies that might have contact with that young person, whether through their families, parents or previous schools. There is still a terrible gap between the primary and secondary phases, for example. I reassure the noble Lord that we are investing significantly in SEND funding and are targeting the funding that we have at the most disadvantaged, but his point is right: we need to focus on those young people. We need to reach out to them, understand what barriers are preventing them from taking part in education and move with them, together.

My noble friend Lord Effingham is one of the politest men in your Lordships’ House. Would the Minister disassociate herself from the accusation that he is “strident”?

I have a very good relationship with the noble Earl and I think he might be slightly flattered to be described as “strident”. I rest my case.

My Lords, before the Lord Speaker calls the third Question, I urge all Members—those asking and those answering questions—to be short, sharp, succinct and to the point. In that way, more Members can ask more questions of the Government, which I know the whole House wants.