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Skills Policy Update

unionlearn briefing

June 2010

Skills Policy Update

• Introduction
• General approach
• Skills funding and priorities for 2010-11
• Skills funding and priorities beyond 2010-11?
• New flexibilities for FE colleges
• Union learning
• Skills bodies
• Lifelong Learning Accounts and Adult Careers Service
• Right to Request Time to Train
• References and notes

Introduction

A number of recent ministerial announcements have begun to clarify the emerging skills policy of the Coalition Government. An early priority has been to divert funding from the Train to Gain budget to support more apprenticeships, announced as part of the initial statement on the £6B of cuts being applied in the current financial year. Secondly, a number of new measures were announced to set colleges free from what the government refers to as 'unnecessary bureaucracy', including giving them more flexibility to move money between budgets to better meet local need.

More detail on the government's priorities for skills funding this financial year was set out in a letter from the Secretary of State to the Chief Executive of the Skills Funding Agency. However, the longer-term prospects for skills funding will not be known until the spending review announcement in October. As highlighted in the Budget, it is anticipated that the spending review will impose very large spending cuts with most departments facing an average cut of 25 per cent, including the department responsible for adult skills.

As of yet there have not been any announcements regarding government funding to support union learning (i.e. the Union Learning Fund* and unionlearn) and it is not anticipated that there will be until the autumn. However, the new Skills Minister has explicitly acknowledged that the new government is supportive of this agenda.

General approach

The Coalition Government's original 'programme for government' had provided very little information on skills policy beyond the following two commitments:

• We will seek ways to support the creation of apprenticeships, internships, work pairings, and college and workplace training places as part of our wider programme to get Britain working.
• We will set colleges free from direct state control and abolish many of the further education quangos. Public funding should be fair and follow the choices of students.

Over recent weeks however the government has begun to flesh out its skills policy and to provide more detail on funding priorities for the current financial year.

Skills funding and priorities for 2010-11

The government announcement of £6B cuts during the current financial year largely impacted on skills via the cuts to the Department for Business, Innovation and Skills (BIS). The main impact was felt on the Train to Gain programme with £200m of its budget redirected to 0ther priorities: £150M to create an additional 50,000 adult apprenticeships (19 years+) in SMEs* and the other £50M going to support improvements to college buildings. Whilst it is welcome that there will be more apprenticeship places and improvements to college buildings, there are a number of unanswered questions about the impact of the changes to Train to Gain on the total number of planned training places.

First, the move to divert £50M to FE* capital means that an equivalent amount will be cut from the budget for directly training employees this year (and presumably also over the longer-term). Secondly, diverting money to apprenticeships will mean taking it away from other areas that this Train to Gain funding previously prioritised (e.g. training directed at people with few or no qualifications who are not ready to progress to an apprenticeship). It is difficult to tell at this stage what the overall reduction in adult training places will be this year as a result of these changes, but it is bound to be significant.

The funding for younger apprentices (16-19 year-olds) falls within the budget for the Department for Education (DfE). Whilst this department also had to make a significant contribution to the £6B spending cut, the government did give a commitment to safeguard the budget for education and skills provision for 16-19 year-olds during the current financial year and this means that the number of apprenticeships and college places for this age group should remain as previously planned.

These two government departments also implemented cuts to national initiatives and strategies relating to skills provision. For example, BIS announced a cut of £11M this year to the UK vocational reform programme which largely refers to the large scale project to develop a new Qualifications and Credit Framework so that qualifications can be broken down into units and credits. The DfE also announced a cut of £60m to the 14-19 agenda largely drawn from savings from scaling back the Diploma programme. Both departments also announced 'efficiency' savings to a range of education and skills bodies with some already scheduled for abolition (see subsequent section of this briefing covering skills bodies).

More detail on the government's priorities for FE and skills funding during this financial year was set out in a letter from the Secretary of State for BIS to the Chief Executive of the Skills Funding Agency on 17^th June. A summary of the recommendations can be found in a BIS press release and the detailed letter is available on the BIS website. This letter indicates that the government is providing nearly £3.5bn this year to the Skills Funding Agency to support FE and workplace training places for adults (19 years+) and a further £1B to support other areas of FE spending. Full details of the funding breakdown are available in a table in an appendix to the letter.

In the letter, the Secretary of State set out the following priorities for the Skills Funding Agency during this financial year:

• Support progression for students through different types of education and strengthen the supply of technician level skills to the economy, particularly through level 3 apprenticeships
• Prioritise vocational qualifications that are understood and valued by employers
• Work with business and skills organisations to promote greater employer engagement and better use of existing skills in the workplace
• Reduce the number of 18 to 24-year-olds not in employment, education or training
• Secure high quality training opportunities for unemployed people to get the skills needed for work-readiness, sustainable employment and progression in learning and work
• Provide independent careers guidance to enable people to make better choices about their future
• Develop a programme of Lifelong Learning Accounts to create informed and empowered learners with a thirst for learning and new knowledge
• Encourage more people to participate in adult and community learning
• Implement joint investment proposals in high-value areas of the economy, working with employers to boost skills

Skills funding and priorities beyond 2010-11?

In this letter the Secretary of State also says that 'depending on the outcomes of the spending review' the government expects 'to pursue these goals in future contacting rounds'. It is therefore likely that an increasing proportion of Train to Gain funding will be redirected to apprenticeships and that the above priorities will continue to govern the funding of adult skills. How government subsidies for non-apprenticeship training is funded and delivered in the future is another question as there are major question marks around the continuation of the Train to Gain model.

In this respect the new Skills Minister has given a clear acknowledgement that, while expansion of apprenticeships is a priority, 'they are not the be-all and end-all of workplace training'. On this basis he has given a commitment that over the coming months his department will be looking at 'what are the right things for the government to do to support employers and people for whom apprenticeships aren't the right answer, as we create a comprehensive, efficient and effective workplace training offer'.

However, the major unknown is what the size of the adult FE and skills budget will be following the autumn spending review. As highlighted in the Budget speech, it is anticipated that the spending review will impose very large spending cuts with most departments facing an 'average real cut of around 25 per cent over four years'. In addition some departments possibly face even larger cuts as the Chancellor said that that 'not all departments will receive the same settlement' because he recognised the 'particular pressures on our education system and on defence'. Young people aged 16-19 on FE courses or apprenticeships may be better protected as a result of this commitment but it is very unclear at this stage what the exact prospects are for the adult FE and skills budget.

New flexibilities for FE colleges

The Government has also announced a range of new flexibilities for FE colleges as part of its drive to 'set colleges free from unnecessary bureaucracy, as the first stage of a new skills strategy that will give them the flexibility they need to respond to the demands of employers and learners.'² A significant aspect of these new flexibilities involves allowing most colleges to move money between budgets. According to the Skills Minister, this will 'enable all colleges except those which are performing poorly to move money between adult learner and employer budgets, because [colleges] know best how to help [their] learners fulfil their potential and meet employer needs.'⁴ Previously colleges were very restricted in transferring money from the employer (i.e. Train to Gain) budget in order to support other kinds of FE provision.

Union learning

As of yet there have not been any announcements regarding government funding to support union learning (i.e. the Union Learning Fund and unionlearn) and it is not anticipated that there will be until following the spending review in October. However, the new Skills Minister has explicitly acknowledged that the new government is supportive of this agenda. In a major debate on skills in the House of Commons on 17^th June the Minister made the following statement:

'We were talking to employers about their skills needs and to union learning representatives about the obstacles they face in creating a learning culture among their members. So that it is unequivocal, so that there is no question and no doubt, let me say that I and the Government are committed to unionlearn; we celebrate all it does and all that it will continue to do with our support and encouragement.'

Skills bodies

According to the government, cutting back on skills bodies and quangos either by abolishing them or applying efficiencies savings is another major policy priority because it can deliver significant savings and also tackles 'unnecessary bureaucracy' in the skills system. While the abolition of a number of major education bodies (e.g. Becta and QCDA) has already been announced, there has not yet been any major announcements on this front regarding the main skills bodies, especially the two funding bodies (i.e. the Skills Funding Agency and Young People's Learning Agency). The main action to date has been to impose efficiency savings of 11 per cent on a range of skills bodies and quangos, including the funding bodies.

However, there remain question marks around the government's longer term plans in this area especially considering that both parties comprising the coalition were committed to further institutional change with regard to the funding of FE and skills (and even HE*). If the Government proceeds with plans to reform these funding bodies in its first Parliamentary term it is most likely that this will be achieved via the Public Bodies Reform Bill announced in the Queen's speech. The stated aim of this Bill is to 'ensure that there will be a greater degree of transparency and accountability for all public bodies ('quangos') and provide Ministers with the powers to abolish, merge or transfer functions.'

Lifelong Learning Accounts and Adult Careers Service

The Coalition Government is also committed to impose its stamp in another two interlinked aspects of adult skills policy through the development of lifelong learning accounts and a new adult careers service. In his advice to the Skills Funding Agency, the Secretary of State asked it to prioritise:

• Providing independent careers guidance to enable people to make better choices about their future; and
• Developing a programme of Lifelong Learning Accounts to create informed and empowered learners with a thirst for learning and new knowledge.

Clearly policy development in these two areas will build on the foundations of two major policy initiatives of the previous government, namely Skills Accounts and the Adult Advancement and Careers Service. However, with the exception of previous policy statements by the Conservative Party and the Liberal Democrat Party there is little concrete information in the public domain at present about the detailed implementation of these two policy initiatives.

Right to Request Time to Train

As of yet the Coalition Government has not made any explicit reference to the Right to Request Time to Train. However, the government has issued a strongly worded statement about its determination to reduce regulation and to undertake 'an immediate review of all regulation in the pipeline for implementation which has been inherited from the last Government'. The new right was introduced in April 2010 for organisations with a workforce of 250 employees or more. From April 2011 the right will be open to employees in all workplaces.

During the passage of the Apprenticeships*, Skills, Children and Learning Act the previous government gave a commitment to review the range of 'business reasons' that employers can legitimately use to reject requests on the grounds that the training sought is not relevant, not cost effective or not practicable. This review will examine the case for an additional business reason for refusal when an employer already has a 'training review system' in place. The TUC has previously opposed the introduction of this extra business reason on the basis that it could be exploited as a loophole by unscrupulous employers and could make the right inaccessible to workers in large organisations, particularly public services. The previous government committed to review the case for the extra business reason before the operation of the right being extended in April 2011.

References and notes

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HM Government (2010) The Coalition: our programme for Government

BIS press release (17 June, 2010) Hayes announces new freedoms for colleges

The letter is available at: www.bis.gov.uk/assets/biscore/corporate/docs/s/10-1013-sfa-funding-letter-2010-11.pdf

Speech by John Hayes, Minister of State for FE, Skills and Lifelong Learning , City and Islington College, 17^th June (available on BIS website)

The Conservative Party was proposing a Further Education Funding Council for England and the Liberal Democrat Party was proposing a Council for Adult Skills and Higher Education

BIS Press Release (2 June, 2010) Business Secretary Vince Cable today announced an action plan to bring an end to the excessive regulation that is stifling business growth

Briefing document (2,400 words) issued 30 Jun 2010

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