College Spending: Effect of VAT

11. What assessment he has made of the effect of VAT applied to college spending on the financial sustainability of those institutions.

We have announced a £400 million increase in 16-to-19 funding in 2020-21; this is the biggest year-on-year increase since 2010 and will have great benefits for FE and sixth-form colleges. Colleges are independent organisations and are responsible for managing their own financial sustainability, which includes their liability for VAT.

I thank the Secretary of State for his response, but does he believe, as I do, that no matter where a 16 to 19-year-old student studies they should have the same funding, resource and status, and if he does why do school sixth forms and 16-to-19 academies get their VAT refunded and the teacher pay grant but FE institutions, such as the brilliant Abingdon and Witney college in my constituency, do not?

I am very conscious that this has been a long-running issue, and I remember from when I was a governor at a further education college the impact that this has. We are always looking at how we can reduce the impact, and that is why we have the funding settlement that we have achieved this year of £400 million plus £100 million for pension liability costs.

These funding announcements are extremely welcome in my constituency, and I have lobbied hard at all levels for these funding increases. Does the Secretary of State share my concern, however, that the Labour party has threatened to vote down the Queen’s Speech, which would mean that all these funding improvements would fall by the wayside?

I should like to pay tribute to my hon. Friend’s campaigning to deliver better funding for schools and post-16 education in her constituency. Many of the actions of Labour Members and their reckless approach give me great concern as they seem unwilling to listen to the will of the British people.