8.28 There are a number of other funding issues which require attention, which we shall report on further once we have received the Task Group report, early in 1998. In the meantime, the Government might wish to begin to address them, in consultation with relevant organisations. They include:

• The introduction of incentives to learn for people unemployed for short periods.

• The further expansion of the Workskill pilot programmes.

• The use of Schedule 2(d) of the 1992 Further and Higher Education Act to ensure that adults taking a first step back to learning can benefit from the new learning pathway.

• The use, until better measures for assessing need are found, of postcodes to identify learners from under-represented groups, and to provide funding incentives to institutions to recruit from those areas.

• The shift in the balance of expenditure needed to widen participation in further education, to be met by changing the proportion of fees paid by individuals and employers, rather than by a narrowing of the range of courses funded by FEFC.

• The possible extension of the FEFC's powers under the 1992 Further and Higher Education Act to permit spending in curriculum areas where the duty lies with the LEAs.

• The steps that Government should take to ensure that changes arising from the European Union's Agenda 2000 do not lead to a diminution in investment in education and training in the United Kingdom.

• Whether Government should consider reasserting its policy of treating education provision for adults offered by higher, further and LEA sector bodies, and by not-for-profit voluntary organisations with an educational remit, as non-business activities. They could then fall outside the scope of VAT, except where institutions apply to Customs and Excise for permission to be treated as exempt.

• Whether Government should consider exempting expenditure on books, information technology and other learning equipment and other educational materials from VAT where used for education provision by those bodies.

• Whether the provisions made in the 1996 budget extending the range of studies qualifying for tax remission, where the employer pays the fees, to include non-vocational courses, could be similarly broadened where individuals meet their own costs.

• Whether priority in the allocation of lifelong learning funds through the proposed Millennium Foundation should be accorded to initiatives aimed at raising participation among minority ethnic and linguistic communities.

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