Briefing. 24 February 2016

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Clifford Small
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1 The EU referendum and colleges Briefing The EU referendum and colleges 24 February 2016 The referendum on the UK's continuing membership of the European Union (EU) will take place on Thursday 23 June 206 and will have significant implications for colleges. This note summarises key points. The referendum The referendum will ask people to decide the following question Should the UK remain a member of the European Union or should the UK leave the European Union" The Electoral Commission decided the wording which is different other recent referendums have been Yes/No questions (e.g. Yes Scotland or No2AV ), the EU referendum slogans will be remain or leave. The electorate British, Irish and Commonwealth citizens aged 18 or over who are resident in the UK along with UK nationals who have lived overseas for less than 15 years. The Opposition pushed hard for 16 and 17-year-olds to be given a vote but the Government resisted this attempt - partly on cost grounds 1. The law The Conservative party promised in its 2015 manifesto that, if elected, to hold a vote. David Cameron first made this promise in January After the election, the Government acted quickly to bring the European Union Referendum Act 2015 into law (just before Christmas). The Act develops some of the legislation that already governs elections and referendums (set out in the Political Parties Elections and Referendum Act 2000). The campaign The Electoral Commission will designate official campaigns for the leave and stay side 2. The official campaigns will get access to 600,000 in public funds, have a spending limits of up to 7 million and free access to some public rooms. Other groups and political parties are free to run their own campaigns but will be limited to spending less than 10,000. AoC has no current plans to register as a campaigning organisation. 1 Lords amendments to lower the voting age to 16 were rejected by the Commons at a late stage of the bill s passage through Parliament. 2 The Electoral Commission has issued some guidance on the campaign but promises more in the coming weeks. 1

2 Pre-Referendum Publicity In the 28 days leading up to the referendum, local government and national government (including ministers, civil servants and special advisers) will be bound by section 125 of the Political Parties Elections and Referendums Act This prohibits the publication of information relating to the referendum including the issues raised, arguments for and against and encouraging voting 3. The Act applied to the 2004 North East Regional Assembly referendum and the 2011 AV referendum without difficulty but it is worth noting that clause 125 applies to "any body whose expenses are defrayed wholly or mainly out of public funds". Colleges are classified as private sector bodies in the UK national accounts and win the majority of their funds (including those from EU) under contract. They have not previously been considered to be covered by this definition. Nevertheless the passions engendered by the referendum debate mean that colleges will need to tread carefully on this issue. Timing Section 1 of the European Union Referendum Act stated that the vote cannot happen on the same day as the May local elections. This means there will be restrictions on government publicity for 8 of the weeks between early April and late June. The government s position The Prime Minister has had a series of meetings with leaders of EU member states since May 2015 and set out four areas for reform in a letter sent in November The areas relate to the EU/Eurozone relationship, promoting competitiveness, ending Britain's obligation to work for an ever closer union and controlling immigration - potentially by restricting access to benefits. There was a deal at the European Council on February The negotiations do not directly cover education and training apart from indirectly - in its role in developing the internal market. This briefing examines some of the issues in a little more detail. Section 6 of the EU Referendum Act 2015 required the UK government to publish a statement. The government published its statement on 22 February with a clear recommendation that the UK will be stronger, safer and better off by remaining inside the United Kingdom. For the period of the referendum, collective cabinet responsibility has been suspended on the EU referendum issue in that individual ministers are allowed to campaign for a leave vote. Seven cabinet ministers have taken this decision. Cabinet Secretary 3 The Cabinet office will offer more detailed guidance on pre-election rules for government and public bodies in due course 4 2

3 guidance published on 22 February 2016 explains the rules for ministers, special advisers and officials 5. The timetable for an exit Article 50 of the Lisbon Treaty requires a member state to give two year's notice of a decision to leave the EU. There is some uncertainty about when the Government would initiate this procedure because there might be a decision to first negotiate a post-exit deal covering trade, migration, transport, policing and other issues 6. European funds The Government is a net contributor to the EU budget although the amount varies from year to year 7. In 2015, net contributions (taking into account the rebate) are 12.9 billion and total public sector receipts are 4.4 billion of which: 2.5 billion is for agriculture 0.5 billion for the European Agricultural Fund for Rural Development (EAFRD) 1.0 billion for the European Regional Development Fund (ERDF) 0.2 billion and the European Social Fund (ESF) The EU operates a six year budget. The current budget runs from 2014 to It took until late 2015 for the EU to approve the UK's Operational Programme for the European Structural Investment programme and a number of two year tenders have recently been issued. The current plan anticipates full devolution of the ESIF budget to combined authorities after Colleges will be making bids in the latest European funding round but have a 25 track record in the programme. The latest available national figures (from ) show that colleges received 57 million in European Social Fund (ESF) income and 18 million in direct European grants. This represents 1% of total income and is less in absolute and relative terms than the 1 billion a year (3% of total income) received by UK universities from EU research funds. Nevertheless, the money is very important to colleges in the more economically disadvantaged parts of the country. 10 colleges received 41 million in ESF income in This is how one college used ESF funding in the 2007 to 2013 period: Calderdale College is running the Skills Enhancement Fund project with up to 33 million of ESF funding via the Skills Funding Agency. The project, which ends in 2015, 5 Jeremy Heywood letter to permanent secretaries nt_secretaries_-_eu_referendum_guidance.pdf 6 House of Commons Library Briefing Paper 07214, Exiting the EU: Uk reform proposals, legal impact and alternatives to membership 16 October House of Commons Library Briefing Paper 06455, EU budget , 11 December There is a lot of information on the 2014 to 2020 ESIF programme on the gov.uk website 3

4 engages with employers to invest in skills development and helps them respond to changes in market needs and the economy. Through contracts with providers and employers, the project has so far supported 43,400 starts on learning and helped people to gain over 14,700 accredited qualifications or units. 9 A vote to leave the EU in 2016 might result in exit by 2018 but the timetable is likely to be later than this. In the event of an exit, it would be open to the Government to use its own resources to fund a new programme with similar objectives to ESF, namely one that focuses on re-integrating people from excluded groups into the labour force, supporting retraining in new skills and creating the right conditions for growth. Mobility Since the early 1990s, EU member states have offered access to education on the same terms to nationals of other member states as citizens of their own state. This principle is enshrined in EU law and it has a number of practical implications for the UK education system. DFE guidance is that children arriving from overseas have the right to attend state funded schools in England except for children from non-european Economic Area (EEA) countries who are short-term visitors or whose permission to study was given on the basis that they attend an independent fee paying school 10. DFE s School Admissions Code restricts the factors that can be used to decide admission which means that other EU nationals are treated on the same basis as UK nationals 11. Increased mobility within the EU suggests that there are a higher proportion of children of other EU nationals in UK schools but DfE does not collect data on this issue in the school census. However it is worth noting that the national 2011 census reported that the vast majority of the UK residents born overseas were adults rather than children 12. The situation for publicly funded education and training outside schools is similar but slightly more restrictive. EU nationals living and working in the UK have been able to enrol on further education courses or take apprenticeships on the same basis as UK citizens with the key test being three year's ordinary residence. BIS used to collect nationality data via the Individual Learner Record (ILR) but it was unreliable and the collection has been discontinued. The last available data (for ) reported 18,000 EU nationals (outside the UK) which is 0.8% of the total of whom 3,700 were DWP ESF in England 2007 to DFE guidance on school admissions, applications from overseas children 11 School Admissions Code Admissions_Code_2014_-_19_Dec.pdf 12 ONS detailed country of birth and nationality analysis from 2011 census states that the most common non-uk nationalities in the UK were Polish, Irish and Indian but that the fewer than 10% of each of these groups was less than 19 years old. 4

5 years old but this data is probably incomplete. In higher education, students from the rest of the EU are able to apply for student loans. In , there were 125,000 EU students at UK universities and 224 milllion was paid in fee loans to EU students on full-time courses in England (3.7% of the total) 13. Access to education in case of a leave vote In the event of a vote to leave, the UK government could decide to redraw the education arrangements though this would presumably be a topic for negotiation about free movement. The situation is complicated by the fact that existing education entitlements extend to the European Economic Area (ie the EU plus Norway, Iceland and Liechtenstein). One widely discussed option is the possibility that an EU exit might lead to the UK government reclassifying higher education students from other EU countries as international students and restricting their access to student finance. This would have adverse consequences for UK universities and might result in counter measures by EU universities so the decision might be tied up with the pre-exit negotiations. There has been less discussion about scenarios for children of compulsory school age, further education students and apprentices might change less. The current school admission rules do not test nationality or residence and it would be a massive reform if a decision was taken to do so. The higher numbers of children born outside the UK in UK schools is a function of higher immigration. An EU exit would only change this if migration flows reduced or if the Government also changed the school admission rules. The impact of the EU on laws affecting colleges UK membership of the EU means that a large body of legislation has been shaped by EU directives including employment, public procurement, consumer protection, competition, energy, intellectual property and social security law. It is a matter of conjecture what EU exit would mean for these various laws because this would be a decision for the Government in future, would be tied up in the UK/EU exit negotiations and would be affected by the UK s wider international commitments. Some of the laws that vex colleges most (for example public procurement laws) are part of World Trade Organisation commitments. One small possible area of freedom would be VAT and the way it affects education. VAT rules in EU members states are partly controlled by the EU treaties because a slice of VAT revenues is used to calculate contributions to the total budget. However, although college students are disadvantaged by the current unjust VAT regime which reduces the resources available to them by about 3% compared to school sixth form students, there is no certainty that an EU exit would 13 House of Commons Library Briefing Paper 07213, Exiting the EU, 4 June

6 result in an extension of VAT relief for colleges. The decisions could easily go the other way. The UK government carried out a balance of competences review which looked at the distribution of power between the EU and UK government in 32 sectors. This work was carried out between 2012 and 2013 and is complicated but is a useful starting point for anyone wanting to understand the fine detail of policy. The report on education, training and youth explains a range of issues including the nature of EU policy-making, the functioning of programmes like Erasmus and some of the issues covered in this note 14. Queries or comments This note is designed to provide information for those working in colleges or interested in the sector about some of the issues which arise from the EU referendum. Any queries or comments to Julian_gravatt@aoc.co.uk Association of Colleges 24 February

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