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Cable's plans full of unknowns, warn MPs

Business department accused of failing to state where 90% of its savings will fall

Business department accused of failing to state where 90% of its savings will fall

MPs have slammed Department for Business, Innovation and Skills spending plans, warning that they fail to set out where 90 per cent of its cuts would fall.

Adrian Bailey, Labour MP and chair of the corresponding select committee, said the "unknowns" in the proposed budget accounted for almost all the cuts, raising fears that savings would not be achieved without unexpected casualties.

Mr Bailey told Business Secretary Vince Cable: "We've highlighted a significant number of unknowns, which have to deliver 90 per cent of the Department's savings. That makes me slightly uncomfortable.

"In earlier days, as a finance chair of a major metropolitan authority when we had to budget for another round of cuts, we would be doing profiling for certain percentages. I can't believe your department didn't go through a similar exercise."

Among the "unknowns" in further education are the size of the cut to Train to Gain and the funding for its successor programme for small businesses, the costs of the loan system, and the size of savings from restricting free level 2 and 3 qualifications.

Mr Cable said: "It's a big, complex department and there is a lot of detail that has to be worked through. But we are confident that we can deliver the savings in a way that can still contribute to growth."

Mr Cable mistakenly suggested that the new apprenticeships announced in last week's comprehensive spending review would come on top of the 50,000 announced earlier this year, taking the additional investment to pound;400 million, but he was corrected by a member of the committee. Universities and science minister David Willetts said that the investment in apprenticeships already made was paying off and recruitment was on course to meet its target. "I believe we should be funding over 300,000 apprenticeships this year," he said.

Mr Cable said he was considering whether to introduce licence to practise requirements in more industries in order to encourage more training, comparing them to the specialist entry requirements for professions such as medicine and law. "That's one factor that will improve apprenticeships," he said.

But the ministers were unable to explain some significant changes mentioned in the spending review, such as the restriction of English for speakers of other languages (Esol) classes for people living in "settled communities".

Mr Willetts said: "This work is under way. So far, as far as we have got is for this to be for settled communities. There was concern that people were coming to the country with no intention of settling and accessing Esol classes."

Mr Cable said that FE colleges would have to make "efficiencies" for the budget savings to be achieved. "Some of the efficiencies will come from us clearing up administrative costs," he said. "Some will come from reductions in the participation budget. Colleges themselves will have to make efficiency savings, as will universities and the whole department. But we can't produce a figure for that."

Mr Willetts said the spending review meant the Department would only reduce its activity by 10 per cent, despite a quarter of its budget being cut, but it was not clear if that ratio would apply specifically in FE.

Editorial, page 6.

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