Minutes of Evidence 6 July 2000

Committee for Employment and Learning

Thursday 6 July 2000

MINUTES OF EVIDENCE

Spending Review

Members Present:

Dr Birnie (Chairman)
Mr Carrick (Deputy Chairman)
Rev Robert Coulter
Mr Hay
Mr R Hutchinson
Mr J Kelly
Ms McWilliams
Mrs Nelis

Witnesses:

Dr S Farren (Minister of Higher and Further Education Training and Employment)
Mr A Shannon ) Permanent Secretary
Mr G O'Doherty ) Finance Division
Mr J Russell ) Finance Division

The Chairman: It is my pleasure to welcome the Minister, Dr Séan Farren; the permanent secretary, Alan Shannon; the head of Finance Division, George O'Doherty; and Jim Russell and others from Finance Division. We are grateful to you for coming to the Committee.

The Minister of Higher and Further Education, Training and Employment, (Dr Farren): Thank you for the opportunity to appear before the Committee for a second time. While the long period between my first appearance and this one was not my responsibility, I am sorry that we were not able to engage more with each other over the last few months.

I understand that you want to concentrate on the spending review. I will make some introductory remarks about that and then I will welcome questions. We will then move on to a number of other issues that you have identified.

Our focus in the spending review follows on from the key items set out in the current business plan, which is hot off the press - you have probably received a copy of it now. The key items in the business plan are the pursuit of life-long learning and helping people without a job into a job.

During a recent debate, Mr Chairman, you said that the services of this Department are an investment, not a consumption. I fully agree with that description. Recent research by Harmon and Walker, which many of you may have seen highlighted in the media, quite clearly indicates that additional years spent in education - I suppose we can include training, but they were particularly focusing on higher education - add considerably to subsequent earning levels.

I do not suggest that sustained learning of itself will deliver high economic growth, but I certainly regard it as a necessary precondition. I draw reassurance from the Committee's willingness to help direct investment to the right areas, and I welcome its advice.

The Department can, and does, make a central contribution to economic progress and social improvement. We need to ensure that what we do in the future builds the economic contribution, draws people into learning and enables them to access it. We need to ensure that the education and training provided is of a good standard and is relevant to the needs of the economy and the individual. Therefore, it is important that such ambitions are reflected in the programme for government and that our spending bids are closely linked. Our needs are significant, and I am sure that most members of the Committee will appreciate many, if not all, of them.

In comparison with Great Britain, we still have a higher level of long-term unemployment, proportionally so among more people in tertiary education age groups. We have a high level of literacy problems among adults and we have a need to adapt workers from old industries, which continue to decline, to new ones.

On a purely quantitative basis, we estimate that we need provision levels that are some 20%-30% higher than those in England because of differences in our population make-up. That is a significant base line to bear in mind.

I want to make two or three general points before moving on to the specific areas we propose to cover in our spending bid. First, we must ensure that existing services will continue as sine qua non, and there will be a cost for that which we will need to bid for. Secondly, there will be a need, as far as possible, to ensure that we achieve at least parity of provision with that in England or Great Britain. In that regard we will need to take account of changes in England as a result of the spending review in our computations. That increment is not yet known to us, but should become clearer as the summer progresses.

I ask the Committee to understand that our spending bid preparation is currently work-in-progress. I am content to review the Committee's specific areas of interest but I am not in a position to suggest the amounts we should seek. Nor would I be content - and I ask the Committee's understanding in this - to seek to make any bids from this chair in open forum. Perhaps, therefore, we should consider how I take the Committee into our confidence at the appropriate time. This is an important part of the consultation process that we should discuss further.

I will mention a number of specific areas over and above the increased costs of maintaining services and retaining parity of provision. There are ten key issues for the spending review detailed on the list before you.

The first area that I wish to mention is the student support review. Until the outcome of the review is known we are unable to specify any cost implications. Nevertheless, we will include a marker amount.

Funding of research in our two universities has been falling behind the levels in Great Britain. I was pleased, as all members of the Committee now know, to announce the support programme for university research (SPUR). I am committed to making the necessary funds available. I have to seek further funding in the review to ensure that SPUR funding does not cause difficulties elsewhere in the Department. Many of you may be aware of the Chancellor's announcement yesterday with respect to additional funding for research, the specifics of which are as yet unclear, but I hope this will provide some new opportunities.

As regards additional places in higher education, this is an ongoing issue highlighted yet again in Vice-Chancellors comments at recent graduations in both universities. I welcome the support that has been expressed by the Committee in this regard. The quantum of the bid will depend on just how many places we wish to provide. A bid in this area would be substantive given unit annual costs ranging from about £6,000 to £15,000 per place, depending on the nature of the course of study. The Committee might offer a view on how many places it would deem essential and to what subject areas additional capacity should be given.

Information and communications technology is a major cross-cutting theme, not just between the different elements of the Department's work but also at inter-departmental level. I know that the Committee has a particular interest in this area, and I welcome and share that interest. Significant work has been done recently within particular sectors, but we need to examine how we tie it all together into a coherent strategy. We also need to recognise that the rate of technological development is such that we need to invest to aim to compete with European and world standards. I am sure that that is something that members around this table appreciate and would endorse.

In respect of further education capital, I am sure that we all agree that the further education capital stock of premises and equipment requires considerable improvement. To maximise what we cannot deliver, we will need to draw in private finance as much as possible. We will need to update equipment and provide facilities which will attract adults and allow proper access for disabled students. We should set ourselves a target to eliminate any negative distinction between further education and higher education students.

Turning to adult basic education, the International Adult Literacy Survey reveals that one in four here has the lowest levels of literacy and numeracy. Our figures are comparative to the South of Ireland, but proportionately higher than those in Great Britain. I hope our efforts within the further education sector and the related services of the Department will significantly reduce the low level of literacy and numeracy, if not eliminate it completely.

As regards preparation for work, there is still a significant task to be undertaken in helping those who are out of work get into work. We need to focus on unemployed adults and unemployed disabled persons and to provide for better links between business and education.

Non-participating young people - around 5% to 6% of those of school-leaving age - appear to drop out after leaving school. Unless we invest in them, they become a problem and a persistent component in the long-term unemployed figures. I anticipate two linked provisions; additional staff in our job centres who would focus on this target group, and a flexible training provision tailored to the individual's needs. That may mean slightly higher unit costs, but it is an investment worth making. In this regard, we might want to note a report the research work for which the Department has supported. Researchers at the University of Ulster worked on this, and within the next week or so, it will be published by the Northern Ireland Economic Research Council (NIER). I think it is called 'Status Zero'. It may not be released as yet but we do have a pre-publication copy. I have been reading it with considerable interest, and it underlines in many pertinent ways the challenge posed by the non-participation of young people.

In respect of lifelong learning, we must ensure the skills that industry needs exist. We must roll out further the university for industry (UFI) and individual learning account provision to assist us in meeting our share of national targets. We must avoid skill shortages by investing in adult skills at Level 3 NVQ and above.

Finally, there is the issue of labour market services. Good employee relations and business success go hand in hand. I believe we need to make a comparatively modest but important investment in the Labour Relations Agency to ensure it is able, through arbitration, to maximise its contribution towards promoting best practice in the resolving of tribunal cases early.

Mr Chairman, and members of the Committee, I have listed the main intentions in our prospective bid. There are, other minor elements, but I have concentrated today on the major ones. I am keen to hear the Committee's views on whether the matters I have mentioned are ones they would support. Are there additional matters which the Committee views as important, which I have not covered that the Committee would like me to cover? I am mindful that in continued additional services the Department must seek to address social need, assist social inclusion contribute to TSN and ensure equality of opportunity.

Finally, I am keen to discuss resource issues with members when all are ready to do so, but in such a way that does not expose our intended bid. It is comparatively easy to identify needs but much more difficult to prioritise them in the knowledge that there may not be sufficient money for everything. I suggest we discuss separately, Chairman, how the Committee might engage on this issue.

Those are my opening remarks. I hope they are helpful in identifying the key areas of the spending review that we are addressing. With the assistance of officials from the Department I am open to questions. I hope that we can assist the Committee through our answers to give an understanding of the responsibilities that we have to discharge.

Rev Robert Coulter: I have a question about ensuring value for money in all areas of your Department. In connection with grants awarded by your Department, what are the key targets in training and employment, the universities and further education colleges, and what are the associated priorities, apart from what you have listed here today?

Dr Farren: I am not clear about what you are getting at, if it has not been addressed in what I have said?

Rev Robert Coulter: Basically, is this everything, as far as your priorities are concerned?

Dr Farren: These are the key areas that we have identified. At the end of my remarks I asked if anything was missing. Maybe your question implies that there are omissions and, if there are, obviously that needs to be put right.

Rev Robert Coulter: What you have said on the training side of the Training and Employment Agency seems to be a bit light.

Mr O'Doherty: In our business plan for the current year we set out our baseline services, and the Minister has been presenting those issues on which he goes forward to bid for more money. If people feel that other priorities should be brought up the list above existing apposite provisions in other areas, the Training & Employment Agency, for example, that is obviously an option. In the business plan set out today you will see a number of targets on existing services. The spending review is not zero-based budgeting. It is about increments rather than absolutes. Increments can be negative or positive, but it does not mean that the existing services are going to disappear.

Rev Robert Coulter: What I am worried about, with training coming under further education, is ensuring value for money on the training side, in other words that further education will not cream off grants and allocate them to other sections of further education rather than to the training section that is under the same wing.

Dr Farren: Are you referring to the merger of the government training centres with further education?

Rev Robert Coulter: Yes.

Dr Farren: In a sense it is precisely to achieve value for money in one respect, given that there was a degree of overlap in the provision of training by further education colleges, many of which are now involved in job skills and other areas of training, and the government training centres, that the merger was deemed appropriate. We are assured that there will not be any creaming-off.

If I am not mistaken, there may be concern that a number of the further education colleges might have some difficulties with course provision. Knowing the area you represent, I am having a stab at identifying what you are getting at, but maybe it is an issue that I do not want to get into here. If we are thinking along the same lines I want to assure you that the apprehension and fear that you have is not one that we think is likely to be realised. If you look at the business plan that Mr O'Doherty has referred to, and you received a published copy this morning, you will see, under the training section, that the key objectives have been set out in this year's operational plan. They should reassure you about our priorities and targets.

Mr A Shannon: The mechanism will also be important. The Training and Employment Agency buys places in the technical colleges for job skills and other programmes, so it has the option either to buy the places in the colleges or to buy them elsewhere - the levers are still with the Training and Employment Agency.

Mr Kelly: It is a pity we did not have this earlier; we did not have much time to look through it.

Dr Farren: The plan is in operation and in a sense we are reviewing what has already taken place rather than making any changes to it. We are now discussing the spending review and what we intend to do. We cannot alter what is already in train although this gives members an understanding of current targets. We are not, however, in a position to change them.

Mr Kelly: Nevertheless, an earlier look at this would have helped us.

Dr Farren: If we had not been in suspension we could have looked at it earlier.

Mr Kelly: We all support your ten points, they are quite laudable. How do you envisage the facilitation of paragraph 9 of Strand One of the Good Friday Agreement which says that Committees will have the power to consider a rise in departmental budgets and annual plans in the context of overall budget allocation? How closely do you intend to involve the Committee in the setting of priorities? I ask this in relation to student support, which underlines our education system. Why can you not, prior to the review, give us any indication of your thinking or views on student support?

Dr Farren: I cannot answer your first question alone. It is a matter on which I have sought guidance from the Executive Committee. It raises questions on the kind of protocols that need to be established across all of the departmental Committees and their relationships with Executive Members. These protocols have not yet been established, and, despite my raising this about three weeks ago at an Executive meeting, it has still not been dealt with. I am not in a position to give a precise answer to the question as it is one which is peculiar to my relationship with this Committee. I want to be seen to act consistently with my colleagues in the Executive on this matter, but before we engage in further discussion on this, we must await more general guidelines. I am not being awkward. This is a matter which goes beyond my relationships with this Committee.

Mr Kelly: I believe this may underpin the question of student support.

Dr Farren: In what way?

Mr Kelly: In our input with regard to the financial arrangements for students.

Dr Farren: Have you made your submission to the Department about student financial support?

The Chairman: The Committee has not.

Dr Farren: As soon as your final submission is in, the Department intends to examine all the options available. At that stage they will be submitted to myself for consideration. Obviously, when considering options, I may want to narrow them down or I may want to reject them all and work on something entirely different. There is no guarantee that what is submitted will be the best possible option. That is only a theoretical point; it is highly unlikely that we will simply ignore the submissions. We will move as quickly as possible because we need to try to catch the spending round - as I indicated in my opening remarks - and also to make sure that mechanisms are in place for students in time for the academic year beginning 2001. That requires a degree of expedition in dealing with the matter. I am not sure what scope exists within that to come back to the Committee. I hope that we can engage with each other in some respect or other as we move towards making the final decisions in this matter. At this point I have not seen any set of options.

Mr Hay: I welcome the Minister, and I think that he has outlined the priorities that we as a Committee should be focusing on. In relation to the New Deal scheme, I believe that over the last few months there has been a decrease in the numbers of young people going onto the scheme. New Deal has been around for a while now. Does the Minister feel that we are getting value for money, particularly when one considers the old ACE scheme and the fact that community projects have decreased over the last five years? My second question concerns the issue of how the Department will take forward the 'Strategy 2010' report. Will additional resources be needed to take it forward? Are these additional resources available?

Dr Farren: I will deal with that question first because it is the easiest. The list of key areas we provided reflects the issues identified within 'Strategy 2010' which are relevant to this Department. The answer to your question, therefore, is yes, we are taking it forward insofar as those areas relate to issues and recommendations underlined in 'Strategy 2010'and, our submissions to the spending review will seek the necessary resources. I cannot say anymore than that.

With respect to New Deal, I do not know the precise details off the top of my head, but before I ask officials for the details, I would make the point that it is not appropriate to compare New Deal with ACE. I think we have discussed this issue before, and the points have been underlined before. ACE was essentially a community action for community employment, and for the most part it provided community services. Our Department's responsibility is training, and the focus must be on training. As far as New Deal is concerned, I am sure that there are people who can point to those for whom the scheme has not been the great success they believed it was going to be, but, by and large, the figures do indicate a considerable degree of success.

As Members will know, it is a UK-wide programme and not peculiar to Northern Ireland. We do not, therefore, have much discretion and must work within a context that has been set down elsewhere.

The matter is under review, and the joint ministerial committee meetings, which will involve Ministers from the devolved institutions and the Government in London, will offer opportunities to conduct an informal review that will examine observations and feedback drawn from our own experiences and consider how we move forward.

Mr O'Doherty: It was anticipated that the numbers entering New Deal within the last number of months would have fallen. When I joined the agency last summer, I undertook an exercise to model the New Deal flows, and when it began, there was a stock figure to be pulled in over the first 18 months or so. It was our expectation that the numbers entering New Deal would drop from the spring of this year; that is a simple, logistical, mathematical problem.

Sixteen thousand young people have entered the compulsory 18 to 24 New Deal programme since April 1998, and 6,500 young people have gained sustained employment since that time; sustained meaning that they are still in that employment after three months.

With regard to value for money, the costs of New Deal have been less than anticipated, and we have had budgetary underspends. The numbers on the register have decreased much faster that was expected, and that has contributed to the situation. It is reflected in the budget and re-profiling of expenditure from current to future years in the hope that that provision can be extended beyond its prevailing terminal dates. We have no reason to believe that it will not be extended, other than that there has been no indication.

Mr R Hutchinson: I welcome this document and realise that we are all working under tremendous pressure. I am confident that if it could have been published earlier, then it would have been.

In theme 1 of your business plan you talk about key goals for March 2001 and outline a number of priorities. It says

"By March 2001 we will have made recommendations for the future development of further and higher education"

You list a number of them and then state

"reviewed and made recommendations on enhancing the provision of basic skills education in further education (involving both the statutory and non-statutory sectors) and on reducing significantly the number of adults with low basic skills".

How do you intend to identify this, and will areas of deprivation be taken into account?

Dr Farren: Yes, they most definitely will be. The Department has a basic skills advisory group that draws representation from both education and industry. Its responsibility is to advise as to how we develop responses to the needs in this particular area, and the needs are not insignificant as the figures indicate. Many community groups, particularly in the areas that are most likely to have higher levels of low literacy and numeracy skills, are active in addressing this problem.

We hope we shall be able to address the matter as expeditiously and effectively as possible in conjunction and co-operation with them. The FE sector is quite intensely involved in this, and this morning I met representatives of the Northern Ireland committee of the Irish Congress of Trade Unions (ICTU). They too are concerned with this issue, and we are supporting with them the appointment of additional personnel, among whose functions will be a number of initiatives to address low levels of numeracy.

Mr R Hutchinson: I should like to welcome your commitment to this, Minister. I believe it to be very important. Thank you very much.

Ms McWilliams: Before I get into some of the finance questions, I should like to ask for some clarification. It is great to have targets in the business plan, but one of them has left me slightly confused. Under further education, there is mention of an increase of 2,500 places, after which 1999-00 is written in brackets, yet the plan is for 2000-01?

Mr A Shannon: It is an increase over what is already there in 1999-00.

Ms McWilliams: That is what I needed. Reading that just as it was left me needing that slight clarification.

Mr A Shannon: I do not want to interrupt you, but the Training and Employment Agency (T&EA) has been well accustomed to setting targets and assessing its performance on meeting them. We have not done this before in the education sectors. It is the beginning of a process, and we must work at it a little to get it absolutely right and ensure everyone is comfortable with it.

Dr Farren: Perhaps I might add to what Mr Shannon has just said. We are undertaking a strategic approach to FE, which has been absent in that sector, and we are presently quite intensively engaged with it. We hope to be able to articulate that and discuss it with the Committee later this year.

Ms McWilliams: It is useful to have these targets so we can judge whether they are realistic. As you know, Minister, we are currently having an inquiry into the whole area of skills and matching skills. You have set an uptake target of 5% in the six broad skill areas, which is fairly low. Do we currently have any indicators of absolute levels year on year?

Dr Farren: We know the levels of enrolment in the different courses, and we have identified an imbalance. I believe I drew this to the Committee's attention last time I appeared. The imbalance might be between enrolments in some courses in the FE sector and our needs for the foreseeable future. Traditions relating to such choices die hard, and last year, when the additional places were created, these were put out to tender to the FE colleges to see if they could deliver in the particular areas to which we decided the places should go.

We are trying to encourage engagement. When we focus on any area of educational provision, we must obviously ensure we have the facilities and above all the personnel to deliver. If we suddenly make a decision that we shall have more people enrolled in electronic engineering or something like that, we must make sure the facilities and personnel are there for them to be educated and trained. We cannot suddenly do this with areas where an imbalance might be identified, such as business management courses, which are heavily subscribed.

It is not easy to apply to a college and suddenly find that one has to switch and now needs three more instructors or lecturers in electronic engineering. These are the kind of things that we have to plan for.

Ms McWilliams: We will have to plan across the whole region for what each college offers. The Committee should look not just at recruitment, input, throughput and outcome, but at the drop-out rate and, in particular, at skills areas. This will be a huge task as our equipment is outdated and has not kept pace with FE sectors in other regions of the UK and of Europe. I note that you are going down the road of private finance initiatives, and that you have a couple of projects for the FE sector. Are these for buildings and equipment?

Dr Farren: Yes.

Ms McWilliams: The education and health sectors are trying to obtain PFIs to solve our problems, and this is raising concerns.

Dr Farren: Such as?

Ms McWilliams: Carving off slices of the budget to make sure that the parts of it for PFIs are sustained.

Dr Farren: It would allow us to realise certain schemes more quickly than if we took the traditional route. PFIs offer us the opportunity of bringing forward considerable investment in the renewal of plant, buildings and accommodation in the FE sector. This seems to offer us the opportunity of doing that more quickly than the traditional route does. We would have to wait longer to do the things we want to.

Ms McWilliams: Nonetheless, there are concerns.

Dr Farren: What are the precise concerns about PFIs?

Ms McWilliams: That we might have an income now, but we will pay for it for longer in the future.

Dr Farren: We all make that choice when we buy a house.

The Chairman: We may not have a choice.

Dr Farren: It is not something of the same order of choice?

Ms McWilliams: Far from it. I agree with Mr Hay's comments. We can do nothing about ACE now - it has gone - and we are back to relying on community projects. Some initiatives are coming from our Department and some are coming from other Departments. The cross-cutting themes targeted in this plan are useful. I was at a launch yesterday at which a superb way forward for our young people through peer education was discussed. It used that as a methodology for life skills, personal development, and confidence building, but also for career choices. 13,000 had gone through it for job skills, but they argue that we do not seem to have a cross-cutting approach between what belongs to community development and health, and what belongs to Further and Higher Education.

We talk about joined-up government, and this seems an ideal opportunity to develop it for our business plan and for a strategic plan for 2001-2005. How do you intend to tackle this?

Dr Farren: I endorse the idea of more joined-up government and insofar as the Department is concerned, we have met with both the Minister of Education, Mr McGuinness and the Minister of Enterprise, Trade and Investment, Mr Empey. We also have plans to meet with the Minister of Culture, Arts and Leisure, Mr McGimpsey. We would like to meet with the Minister for Social Development. However, I am not aware who the Minister for Social Development is likely to be.

Ms McWilliams: Mr Morrow?

Dr Farren: Not until 27July. I certainly accept the point that there is a need for our Department to engage with the Department for Social Development, because this is where there is most support for pushing a joined-up approach. All I can do at this stage is to give a guarantee that we will meet with the Department for Social Development. We need to identify precisely what we need to achieve together. I welcome advice from people such as yourself - I know you are very experienced in a number of these areas. I also welcome input from the Committee generally as to what direction they think such a joined-up approach should take. If you are making a point in principle, I certainly endorse it. If one reads the 'Status Zero' report and the recommendations in it, there is a strong plea for professional engagement across a number of different areas of responsibility. That is something I endorse and would want to see taken forward. The authors of the report point to the need in our job centres to engage with youth and community workers in addressing the problems of very low achievers and those who are most at risk in the immediate post-compulsory school age group. I hope we can act on this area together.

Mr A Shannon: The Office of the First and the Deputy First Minister has been looking at a number of issues which require a co-ordinated approach between Departments. The issue of employability has been identified as an area in need of some work. We have agreed that our Department will chair a working group which will address some of the issues about which you have expressed concern.

Mr O'Doherty: There is an on-going process of formulating the programme for government. Currently there are no rules in place as to how that can be brought about, but it provides an opportunity for these issues to be addressed in a cross-cutting manner. We are all learning a new process here and, perhaps, inventing it as we go forward.

The Chairman: We had a Committee meeting just before you came in this morning, and we cleared the submission of our initial thoughts on the programme for government.

Mrs Nelis: I want to add to Monica's question. This may be an issue for another discussion, but one of the concerns about PFI initiatives is that education will become a profit-making, rather than a life-long learning experience.

I welcome the key areas you have identified in the spending review. Many of them are inter-related areas, and I want to look at some of the details. In particular, you identified very clearly the fact that investment in information and communications technology (ICT) has to progress alongside the rate of technological change. The focus of the economy towards a knowledge-based product will exclude large parts of the labour force. Would you agree that large parts of the labour force may be excluded by virtue of inadequate levels of skills and competence and that they are at risk of social exclusion? Do you also agree that those who are most at risk are those with no further education or training after the period of compulsory education? How could this be addressed?

You say that you are investing in level 3 NVQs to address skill shortages. What skills have you identified there? I am particularly pleased to see that you are addressing the issue of non-participation as there is quite a high drop-out rate (5% to 6%). Most of these young people end up in court or under the watchful eye of the probation service. Have you given any consideration to alternative education forums? In the Foyle area, where I come from, people in the voluntary sector - some of those who were working under ACE schemes are now in voluntary work, because ACE has gone - have been developing a programme to address this need. I believe that merits investigation and, perhaps, some resources as well.

I want to ask another, interrelated question. As regards expansion of higher and further provision, I believe that we need to address the shortages of places where they have been most acutely felt. On the radio this morning, and I am sure you heard it, Minister, your own party identified that the largest number of students leave our city because of a lack of degree courses at Magee. We have the largest number of people going to other universities, and that has to be recognised.

Dr Farren: It is always easier to start with the last question, because it is the one that I remember best, especially as it is also one that I am familiar with the answer to.

Mr O'Doherty: The Minister has said that it is not just about some particular skills at some levels. Of course, there are particular higher level skills needed. He has spelt that out. If I shuffled my papers, I would find the list again. There is a need at different levels for different skills. The Minister talked about adult literacy. Certainly that is a significant exclusion factor. You need to address some of these things before you move on to computer literacy. There will be others who have no problems in those areas, but need to move to higher level skills and can do so quickly. Certainly there is a grading of need up the skill ladder that is needed. Firstly getting people up, and secondly focussing where the skill needs are, as you go up that ladder.

Dr Farren: I do not know to what extent members of the Committee are familiar with the establishment of the Learn Direct centres under the umbrella of the University for Industry. We are rolling out that programme. In that context, we like to think that we will be adding considerably to the number of adults of all ages who will become involved in further education and training. The Learn Direct centres which will be established by lead providers in particular areas will embrace community groups as well as the traditional educational institutions, primarily the further education colleges.

To answer another point that you raised, Mary, we are anxious to use the expertise and experience of community groups in providing outreach, perhaps in non-traditional ways, to people who might otherwise not become involved in education. We want to see them involved in the process as much as possible.

It would be for individual local initiatives to identify how best this could be done. The Committee might seek a special briefing on the way in which the university for industry, the learn direct centres associated with that, and the establishment of individual learning accounts, are going to unfold from the autumn onwards.

Two weeks ago, in the premises of the Educational Guidance Service for Adults in Linenhall Street I launched the helpline service, which provides immediate information on courses. The number of calls to the helpline has been surprisingly high, and as awareness of the whole learn direct university for industry enterprise grows I am sure that people will increasingly use the service. The Committee might want to bear that in mind as part of the unfolding provision to help people become more involved in education and training during whatever stage of their careers.

You asked several other questions and I wanted to mention information and computer technology. We will be exploiting new means of course delivery. Therefore, there will be opportunities for people to become familiar with online services, and, in a sense, the use of the computer will become a necessity. People will need to become familiar with using all of the electronic facilities now available and they will be helped to do so. Hopefully, although there are no guarantees, more people, particularly those who would not have access to further and higher education traditionally will become familiar with IT. If there are gaps in our strategy we would want to know what they are so that we can decide how to address them.

On the question of additional places, I indicated the steps we have been taking and they are also stated in the operating business plan. We are increasing the number of places being made available in higher education. I would draw the Committee's attention to an article in Labour Market Bulletin number 13 entitled 'Brain Drain or Brain Gain? The evidence for Northern Ireland'. The article tells us that of the number of Northern Ireland domiciled students who proceed to higher education - wherever that may be given - one third are no longer in Northern Ireland a year after graduating. Therefore, adding to the number of places, in itself, is no guarantee that people are going to stay here. The implication has always been that if we add to the number of university places available, more people will stay in Northern Ireland when they graduate. However, in addition to those leaving for education at university level and who do not come back, a percentage of those staying here for university education also find their way to occupations outside Northern Ireland.

So the question really is - do we have jobs for people when they graduate, and how do we ensure that we have jobs for them? That is not an argument against providing more places, but it is a point to bear in mind when we make the assumption that if people stay here for their university education, they will stay and work here once they graduate.

We need to increase the number of places, and we are increasing the number of places. We have been consulting universities about that matter. I would ask if we getting the balance right between the number of places in higher and further education? You will see the figures for the number of additional places being made available to universities and to the further education sector. Is the balance correct? Is there a case for adding more to one or the other? Should we add more places to the further education sector?

Quoting the total number of students pursuing their university education outside Northern Ireland is not always helpful. This can be anything between 15,000 and 17,000, which would be more than adequate to justify another university. However, would we have the resources to build another university? Those are points that need to be considered in order to address this issue. I am not arguing against increasing places, because we are. They are being increased in the University of Ulster. Proportionately more additional places are being provided in the University of Ulster at Magee than at any of the other campuses.

Mr Carrick: Has the Department sufficient funds for 2000/01 to meet the delivery of the priorities raised this morning? To put it another way, will the development of those priorities be limited by budgetary constraints, and if so, when will adequate funding be in place to deliver on those priorities?

I also refer to

"The relationship between statutory and non-statutory further education provision including the university for industry."

in theme 1 of the Department's business plan. Will there be a geographical spread of that initiative and will it be targeted at the various cross sectors within the industry? The plan also talks about the

"New arrangements for the provision of curricular and other support for the further education sector."

Minister, can you point us to the budget head that includes the funding for driving that forward?

Dr Farren: Our commitments are limited by the availability of the necessary funds. The commitments that we have made have been underwritten by the provision of the necessary funds. You may regard some of our commitments as inadequate, but we believe they are achievable, and as such they are underwritten.

Mr Carrick: I appreciate that, Minister, but can you point us to the budget head that includes the funding for this particular initiative?

Dr Farren: Yes. I was just making a general point. We are not saying that these are plans for which the money has yet to be sought. The money is there.

Mr O'Doherty: We couldbreak down the further education spending, as shown in the table copied to you, and make it available to the Committee.

Mr Carrick: I think that would be useful, and I would be interested to know if there was a comparable figure in the previous year for that particular initiative. If it is a new initiative, what precise funding has been targeted to deliver that priority?

Mr O'Doherty: Can we follow up on that later. Certainly there is difficulty in the sense that we could provide you with any amount of detail but not all of it would be relevant to your interests.

Dr Farren: The learn direct centres will be established on a geographical basis, and there will be about 20 of them.

Mr A Shannon: Yes. There will be about 20, and, of course, most of the cost will not fall in the current year, because we will be half way through the year before they are up and running.

Mr Carrick: What about the sectoral spread over industry?

Dr Farren: They are going to be located geographically.

Mr Carrick: We are talking about provision, including the university for industry.

Dr Farren: The title of the initiative is 'University for Industry'. In itself it is not a university in the traditional sense of the word. It will provide the learn direct centres, which will then be organised geographically in the manner I described a moment ago, with lead partners in consortia at local level. The local level will straddle several district council areas.

I attended a meeting in Coleraine where the Limavady FE College was the lead partner working with the FE Colleges in Coleraine and Ballymoney and making provision for Limavady, Coleraine, Ballymoney and Moyle District Council areas. It is up to them in that consortia to take the whole concept forward and provide the necessary local support for those who avail of the Learn Direct form of assistance for learning.

Mr Carrick: So it is tailored to a local area and the industries in that area will be able to tap into that facility?

Mr A Shannon: Yes, it is not directly connected with industry; that is just the title the Government gave it at the time. It is primarily a new learning opportunity with a lot of new materials becoming available and a lot of suppliers of education coming together to offer a specific range of services.

Dr Farren: This is very much in the course of evolution and development. Courses will be provided in a number of specific areas. To begin with there will be a concentration, and it is the commercial or economic association with those courses that is of primary concern - hence the word industry. It is industry in a very broad sense.

The Chairman: Thank you very much. At the beginning, when you presented the 10 key areas, you asked were there any omissions. There is one possible area where more emphasis needs to be placed, and that is in-company training. I noticed from the breakdown of historical spending over the last five years, which you provided in your letter of 3 July, that the vote B programme line of expenditure promoting details of those in work has gone up and down over the years. It has always been relatively small at about £5 million. Is that enough? It might be said that lifelong learning will move into that area, but I have questions about whether lifelong learning and the 20 centres as currently constituted would be able to give training at a sufficient level to deal with skill upgrading for people currently in work.

Unfortunately time is moving on, and we hope to release you for lunch followed by the Executive meeting. The other point I should like to make is that we have hardly managed to talk at all about how you and the Committee will engage over the issue of bidding and so forth. I appreciate your point that certain things would not be appropriate to discuss in public session. We shall have to return to that point. However, the recess is about to begin, and the Committee will not meet again until September. Could you say a little about how things are likely to develop over July and August regarding the process of bidding? What will happen in England, and how will the Department react?

Dr Farren: Mr O'Doherty will outline the time constraints we are under, which are quite severe.

Mr O'Doherty: The figures in the line in vote B which promotes the skills of those in work are constructed with the benefit of hindsight. You will appreciate that we have gone back and looked at what we call the final budget control totals for each year which come from the Supplementary Estimate. There are three things in that line: Investor in People activity; the management development programme; and sectoral initiatives.

The main programme for training those in work is the company development programme, an issue moved from the Training and Employment Agency to the Department of Enterprise, Trade and Investment. It still exists, so you were probably quite reasonable in saying the line looked light.

The second element was the process from here. We certainly still have homework to do looking at numbers and considering any views on priorities you are able to put forward yourselves. If one looks at the list put forward today, despite our trying to cut it back and focus it, the numbers become quite considerable, even though it is already a subset. There will be a need at least to put them in order. That is a very difficult thing to do, for how does one mediate on that process? One can expect the Chancellor to make a statement in the Budget sometime this month announcing the Northern Ireland allocation. We believe it is coming in a couple of weeks, but no one has given us a precise date.

Dr Farren: It is as close to the recess as possible.

Mr O'Doherty: We will produce figures and put them in to the Department of Finance and Personnel this month. However, we must recognise that, until we know these parity issues, we shall not know our final bids. In parallel, we shall process the development of the programme for Government. It would be inconsistent if the Department somehow put forward priorities which were not also their issues and priorities in the programme for Government. I suspect that will be going on over the remaining months.

The final point brings us back to what I said earlier. This is a completely new process for us. To be honest, it has been invented almost on a week-to-week basis as we go on. However, a great deal of work will have to be done over the summer, and at some stage in the coming weeks, figures will go from Departments to the Department of Finance and Personnel. It will work on them, and there will be substantial negotiations between the Department of Finance and ourselves. Some time in the autumn, the Minister of Finance will make a budget statement. My understanding is that, thereafter, Committees will have an opportunity to debate all that. It is not for me to state or anticipate through what process this occurs before we reach our final estimates near the end of this calendar year. I am sorry the process is not more definite.

The Chairman: No, I appreciate this is inherent. Thank you very much, Minister and officials, for coming along. We have kept you a little longer than the hour intended.

Dr Farren: The engagement was a very useful one. I want to refer to the concerns that were expressed about PFI. We should try to give the Committee an overview of how PFI fits into our plans. It is not an opportunity for profit-making: it is an opportunity to provide much needed investment in a manner that ensures it can be delivered as soon as possible.

We would not go down that route if it were not necessary. It takes time to get the planning process through before we can start work on the ground. In the case of the two PFI projects announced recently for Omagh and Dungannon, there will be a long time lag. However, they will be provided with their new buildings much earlier than by traditional means. We might return to reassure Committee members on our thinking and on how this is being implemented.

The Chairman: Thank you.