Transcript For HOLEX Network Event June 2010

Funding prospects
as at end June 2010
BOB POWELL
Executive Director, OHA Ltd and
Chief Officer, HOLEX
Election aftermath
• BIS still in place, and Vince Cable speaking
warmly about FE (and HE) contribution to
economic revival and financial wellbeing
• Back to “Department for Education”
• David Willetts and John Hayes
• “Sharp”, “cute”, “clever” ministers
• Taking time to determine policy direction and
priorities – “unravelling two sets of manifesto
commitments”
Coalition agreement
• seeking 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.
• reviewing support for part-time students in terms of loans and fees.
• improving the quality of vocational education, including increasing
flexibility for 14–19 year olds and creating new Technical Academies
as part of our plans to diversify schools provision.
• publishing performance data on educational providers, as well as
past exam papers.
• setting colleges free from direct state control - ‘public funding
should be fair and follow the choices of students’ – and abolishing
many of the further education quangos.
• drawing on a range of Service Academies to offer pre-employment
training and work placements for unemployed people.
Vince Cable speech, 3 June
• “... we face deep-seated problems. A very fragile recovery – both at home
and in our continental European neighbours. A massive budget deficit. A
dysfunctional banking system. An economy that is seriously unbalanced
both in its sectoral mix and in its regions. That’s why we have deliberately
projected this coalition’s ambitions over a full Parliament, because the
task is that big. […] We cannot have sustainable growth without fiscal
stabilisation. And fiscal stabilisation will only be successful if it leads to
growth.”
• “The Department’s central task, and my central task, is making sure that
Britain is a place where enterprise and innovation are made easier and can
succeed. Where ideas are generated and are turned into jobs. Where
people have the skills we need.”
BIS priorities (1)
• First, an agenda for cuts has to be offset by a clear focus on policy
designed to be a stimulus to growth. Our challenge is to redefine
growth policy for an age of constrained public spending. I want a
genuine audit of what the state has taken upon itself to do in
business support, higher and further education, science and
research over the last decade and how it does it. This is our window
for transformational change. You’ll see the results in the weeks
ahead.
• I’m specifically committed to getting rid of some of the BIS
quangos. We had 74 last year. 13 are now being got rid of, merged
or having their funding cut. I aim to merge or abolish another 20 or
so within a year – that’s a third of the rest. And we will keep
scrutinising the others – if they fail to perform or the world has
moved on, I will take action.
BIS priorities (2)
• Second, I will take a tougher line on regulation, because I believe
that often the most useful thing governments can do is simply to
get out of the way. Of course regulation can be necessary to protect
consumers, the environment and the labour force. But it must be
proportionate. This Government will embark on radical steps to
remove and stop unnecessary and costly regulation.
• Third, I want BIS to play a central role in putting Higher and Further
Education on a sound footing for the future and linking both better
into the economy. Bringing HE, skills and enterprise together under
the one departmental roof is central to the ‘BIS dividend’. My
priorities are an increased emphasis on lifelong learning, stripping
out some of the bureaucracy around FE and making sure that the
outdated value distinction between blue collar apprenticeships, and
further education on one hand and university on the other is
disposed of for good.
Vince’s broader vision
• Education and learning are of course desirable in their own
right. Education for education’s sake – learning how to
learn - benefits the economy in the long term. Philistinism
is bad economics. It is also fundamentally unacceptable.
• A story from own life makes the point. My mother and
father left school at fifteen to work in factories. My father
eventually taught building trades in the local technical
college: we need more people like him. My mother was a
housewife and when I was ten she had a major nervous
breakdown and spent time in a mental hospital. When she
recovered she saved her mind through adult education –
learning for the first time about history, literature,
philosophy and art. We need more people like her too.
• “Getting from where we are to a highly-skilled, enterprisebased entrepreneurial economy is a lot more difficult than
making speeches about it. I recognise that we can’t make
this leap from one day to the next. Regions with long
histories of mass industrial employment, or large scale
public employment can’t be turned into entrepreneurial
silicon valleys of private enterprise overnight. “
• “To achieve that shift requires looking at enterprise in the
widest sense. I have always believed that the value of
mutualism, cooperatives and social enterprise lies precisely
in the way they help people be self-motivated
entrepreneurs with a clear stake in what they do for a
living, while still remaining part of a supportive community
of fellow workers. We will be encouraging more of them.”
Third sector (Francis Maude speech, 9 June)
• National Centres of Community Organising, and a Communities First Fund
targeted towards the most disadvantaged areas
• a National Citizenship Service to give 16 year olds the chance to develop skills
needed to be active and responsible citizens
• giving public sector workers a new right to form employee owned
cooperatives and bid to take over services
• making it easier to set up and run a charity, social enterprise or voluntary
organisation
• working straight away to reduce unnecessary red tape
• resources to be directed via a Big Society Bank, using money from dormant
accounts to invest in social goals
• encouraging a social norm of volunteering and philanthropic giving, inc a
national day to celebrate/encourage social action
Hayes during ALW
• And adult education – make no mistake – brings hope and the
promise of a better society founded on social mobility, social justice
and social cohesion. It both enriches the lives of individuals and the
communities of which they are a part. Adult learning is not a
luxury, it is an essential component of our education system. If we
want to build a bigger society as the Prime Minister has missioned
us to, then we must recognise the value of community learning to
civil society.
• In all its forms, learning is a powerful glue that can bind us together
as families, as friends, as communities. Recognising, once again,
that engagement learning leads to greater self-esteem, better
health and greater community engagement. And when parents are
engaged in learning, then their children are more likely to value
education and take more interest in school.
John Hayes speech, 10 June
• FHE as a public service
• Much previous investment wasted – spending rising faster
than performance, lack of focus on teaching and learning
• Education for adults must be about “giving the reality of
opportunity, a driver of social, economic and personal
improvement, not a means of keeping the unemployment
statistics artificially low”
• “... the most radical reform that skills has seen in at least a
generation”
• Three key priorities:
– set colleges/providers free from central control
– a robust attitude to value for money
– focus on helping individuals as learners
• “there are better ways of measuring outcomes than simply
counting the number of qualifications gained. The emphasis must
be put on progression, whether that’s to higher skills or to other
forms of lifelong learning, including informal learning”
• “what must continue is training in the workplace and public support
for employers who want to offer it. Vocational qualifications
delivered in the workplace provide better wage returns on average
than qualifications delivered in colleges, while apprenticeships offer
the highest returns of all”
• “the contribution of post-compulsory education to [growth] is
essential. I don’t just mean its contribution to economic growth,
driven by the higher productivity that better work-related skills
bring, but also its capacity to spark personal growth and the growth
of a more developed sense of community that all learning brings”
Letter to VCs and Principals
• Universities and colleges have a “central role to play” in
rebuilding the economy and securing sustainable growth
• BIS is committed to sustaining and building on proven
strengths
• But all who receive public funds to deliver public services
must play a part in reducing public debt – this will require
“strong leadership”
• “We are all going to have to do more with less and stop doing
some of the things we currently do”
• Government respects provider autonomy and the freedom to
decide mission, structures and strategies
• Government will also remove unnecessary regulation and
bureaucracy from colleges, and will be making practical plans
to do so quickly
• It is not for government to prescribe how individual providers
should make savings, but note what the Department is doing:
– 11% savings in running costs, with minimal impact on
front-line services
– apply restraint to all aspects of pay and bonuses, with a
lead being given by senior staff
– recruitment freeze
– reductions in discretionary spend: IT projects, building
projects, consultancy, travel and subsistence, hospitality,
marketing, communications
• “There will be a need in the next spending review to look
again at options for further savings”
• We expect “further acute financial pressures” over the next
spending period
Bob Fryer open letter
• Learning and skills sector “overfull” as a result of multiple
initiatives and projects etc
• Need a clear, limited set of priorities, co-ordinated crossgovernment by BIS
• Don’t rush to replace SFA with “FEFC-lite” – structural change
will happen, over time
• Ensure simple, accessible fit-for-purpose funding for
apprenticeships of all ages
• Listen to UK CES, a “serious-minded, independent, critical and
outspoken advisor”
• Hold honest and robust discussion with employers, and
legislate to ensure their contribution to the learning and
development of their workforces:
– time off to learn
– make more of Union Learning Reps
– transparency in company accounts re investment in
learning
• Stimulate a steady supply of well-managed, decently paid jobs
and work with the social partners to secure this
• Recommended reading: Blunkett’s introduction to The
Learning Age and Delors’ Learning: The Treasure Within
(UNESCO)
• “Please always remember that learning and development is
about much more than people’s jobs and skills, important
though they are. It is about ensuring they can enjoy life in all
its dimensions and thrive in a world of change and risk. It is
about their sense of themselves and the meaning they give to
their lives – practically, intellectually, aesthetically, morally
and spiritually. It is about their families, the communities in
which they live, about what counts as the good life, and about
what it means to be a citizen, not just of this country but of a
world facing huge international challenges of equality, fairness
and sustainability.”
BIS summary, as of 16 June
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Very early days – things may not be clear until December
No cuts to FE budget (yet)
Train to Gain being reduced, Apprenticeships up
Reducing NEETs is a key priority
“Real commitment to ACL, but not clear where this will take
us”
Greater simplification
Freedoms and flexibilities for providers - full virement?
Looking at the whole funding system – expect a summer
consultation paper
Transparency and accessibility of information on
performance
No agreement on funding body structure
Working on investment priorities, with CSR in October
Cable remit to SFA, 17 June
• supporting progression, and strengthening the supply of
technician level skills(L3 apprenticeships); prioritising
vocational qualifications that are understood and valued by
employers; and working with employers/UKCES/ SSCs on
promoting greater employer engagement and better
utilisation of skills
• reducing the number of 18-24 year old NEETs by funding a
wide rage of FHE access routes which better support
transition from education into productive work and fulfilling
lives
• securing high quality training opportunities for unemployed
people – work-readiness, sustainable employment,
progression in learning and work
• providing independent careers advice – better choices
• developing a programme of Lifelong Learning Accounts to
create informed and empowered learners
• encouraging an increased number of people to participate in
adult and community learning – re-engagement, entry point
and life enrichment
• implementing sector-based joint investment proposals in
high-growth and dynamic areas  new growth and
innovation fund
• The Skills Funding Agency will be expected to take a
lead role in ensuring that colleges and training
organisations ‘have greater freedom to innovate and
excel, within a rigorous and transparent process of
accountability through information on quality and
performance’
• ‘clear, comparable and consistent’ information about
provider performance including learner success
rates, learner and employer satisfaction and learner
destinations
• ‘light touch, integrated quality assurance’
THE QUALITY ASSURANCE SYSTEM : A HIGH LEVEL OVERVIEW
Rewards
Satisfactory
performance –
or better
Standard
setting inc
MLPs
Commissioning /
Contracting
through NCF or
ACTOR
Continual quality improvement
and self-evaluation
Evidence of
performance
Delivery
Performance
Reviews
Self-Assessment informed by Ofsted,
FfE and labelling
(annual + in year)
Re-recognition as
an approved
provider
Unsatisfactory
performance – or
cause for concern
Unsatisfactory
improvement
Recovery planning
Strategic solutions
Improvement Support
Satisfactory improvement
Hayes 17 June speech
• New freedoms, including:
– ALR/ER virement (other than for poor providers)
– an end to Summary Statement of Activity
– no inspection of “outstanding” providers
– PQP no longer a requirement
• ‘Responsiveness is crucial if we are to provide the
skills that employers need and students want.
Removing unnecessary burdens and freeing colleges
to react to local demand will help achieve just that.’
• in my view, no learning should be treated as if it were without
point and every new element added to our collective stock of
knowledge and skill should be applauded. Everything any of
us learns adds a new brick to the edifice of civilised life. Those
with the will and commitment to learn, however they do it
and whatever they choose to study, should be admired and
encouraged. None should be disparaged as one of Browning’s
“picker-up of learning’s crumbs”.
• it’s the economic rather than the social or cultural case for
skills that has been used by some not just to downgrade
learning for its own sake, but as an excuse for the centralised
command and control arrangements that have been foisted
on adult educators over the past decade and more. Now we
must finally acknowledge that this approach, even in the
terms of its own narrow criteria, has failed.
WEA Parliamentary Reception, 22 June
• Lifelong learning brings with it hope and the promise of a
better society because it feeds social mobility helping to
create a just and cohesive society. If we are to build a bigger,
better society then we must ensure that everyone has the
chance to participate in education and training. I want to
construct a ladder of learning that helps even the most
disengaged climb all the way up to high level skills. And to
build this ladder we must see learning not as a series of self
contained silos but a coherent whole.
• It’s time we looked beyond often artificial distinctions
between economic, social and cultural learning and once
again value learning for its own sake. The fire that drove adult
education’s pioneers still burns. And it drives my plans for
further education and skills.
• Learning that enriches the fabric of community life.
• We need to make it easier for front line organisations to
deliver these benefits. I’m keen to have discussions … on
how we can lighten the regulatory burden to support
flexible delivery. The transformation we need to build a
truly inclusive society is not only economic, it’s social, too.
And that’s why I see learning not as something that can be
carved up into useful and less useful pieces, but as a
continuum. Unless every part is healthy, the whole can
only be diminished.
• And that’s we see adult and community learning as such a
priority. Learning, once again at the heart of life in every
town and village. Every city. Helping everyone to be their
best.
Hiatus
• “it looks like we are going to have to postpone yet again our
session [a workshop for HOLEX LSF managers, planned for
10 June]. It looks like there are going to be possible
changes to Adult Policy which will mean that whatever is
said next week could quite well change over the course of
the next few weeks. I'm so sorry but do hope you
understand that one hour is a long time in Government
circles at the moment and anything can happen! ”
• “we’re aware though the new Government are looking at
every policy area and during this period we have been
asked not to promote or to discuss/seek views on, possible
future developments of individual programmes”
SFA/YPLA meeting, 28 June
• Freedoms and flexibilities (Guidance Note 4)
– strong onus on providers to "do the right thing“: ensure
evidence of real demand, and a rationale for using the 19+
SFA money in ways you determine
– note the continuing volume/frequency of data returns,
and SFA intent to publish periodic information on sectorwide and individual provider performance
– post-hoc accountability , and the “trust” agenda
• Consultation paper in July about simplification of the funding
system: BIS/SFA field visits
• Guidance Note 5, within next few weeks, will focus on
performance and take a "robust and challenging" line on MLP
(expect baselines to increase)
Show me the money
• Early announcement about in-year savings of £6.2bn (ie
savings to be realised by March 2011)
– BECTA and QCDA closed with immediate effect
– 16-18 budgets protected
– £200m taken from Train to Gain, £11m from QCF
implementation
– General 11.2% savings in Departmental expenditure will have
impact ... eg. cut in LSIS budget
• Some expansion in Adult Apprenticeships, via transfer from
Train to Gain budget
• Emergency Budget held 22nd June – forecasts 25%
departmental savings
• Civil servants already gearing up for CSR this autumn
CSR Framework
• This Spending Review is not envisaged to be solely about cutting spending
and setting budgets, but rather “a complete re-evaluation of the
Government’s role in providing public services”
• Application of a new set of criteria to deliver value for money:
– is the activity being funded essential to the Government’s priorities?
– does the Government need to fund the activity?
– can it be provided more efficiently?
• Open consultation
• Star Chamber, and a Spending Review Challenge Group of experts
• A comprehensive examination of areas such as social security, tax credits
and public service pensions
• Ending Public Service Agreements and an over-reliance on targets Departments are to publish business plans that show the resources they
need to put in place in order to protect key frontline services and deliver
on their objectives
Review of past spending decisions
• Projects have been cancelled where ‘they were not
affordable, did not represent good value for money, or where
they did not reflect the [new] Government’s priorities’
– Rollout of the Future Jobs Fund (lifetime cost of £290m)
– Six month offer recruitment subsidies (£30m)
– Extension of Young Person's Guarantee to 2011/12
(£450m)
– 2-year Jobseeker’s Guarantee (£515m)
• Building Schools for the Future programme also under
fundamental review
2010/11 – funding overview
• 16-18:
– new monies found, and general response is positive – but some big changes as
a result of demographic shifts being taken into account, and still a
schools/colleges funding gap
• ALR cuts:
– 14% in fEIs, 16% in General FE Colleges, up to 24% in specialist college
providers … ameliorated somewhat after national moderation
– concern about transfer of qualifications onto the QCF, and SfL, and LDD
– fees review (chaired by Chris Banks: report early July 2010)
• Employer responsive:
– withdrawal of contracts
– Large Employer Rate – 25% reduction in the TTG funding rates for work with
large employers (over 1000 employees)
• Steady state for ASL budgets (but some pressure to increase “first steps”)
Pressure issues
• The YPLA and SFA will start to make different decisions on
priorities (eg fees, disadvantage etc) and the formula is likely
to diverge  different funding rates for the same provision,
depending on whether learners are 16-18 or 19+
• Adult Education providers (fEIs) with small 16-18 allocations …
• Sixth form colleges with small 19+ numbers …
• This “marginal” funding may be subsumed - a paper will be
prepared “for consultation”
• Minimum contract values (currently only in respect of TtG,
and not until 2011/12, but….) – must raise questions about
viability of small and/or niche providers
Priorities
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No longer an “in” word
Steering via funding incentives: who, what, where
Otherwise, market rules apply in a demand-led system
Providers need to be :
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–
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financially robust (large?) enough to cope with volatility
canny enough to generate a gap between cost and income
confident in their planning
able to justify their spending decisions to funders
ensure they keep up/improve their performance
UKCES Sector Priority Matrix
Low economic significance
High skills deficits
1
Transport equipment
Agriculture etc.
0.9
Textiles etc.
Vehicle maintenance
0.8
Computing
Food and drink
0.7
Skills deficits
High economic significance
High skills deficits
Hotels and restaurants
Retail trade
Wood, pulp, etc.
0.6
Publishing etc.
0.5
Mining etc.
Electricity, gas and water
Health and social care
Wholesale trade
Machinery etc.
Metals etc.
0.4
Construction
Miscellaneous services
Manufacturing (other)
Transport
Chemicals etc.
0.3
Real estate etc.
Post and telecoms
0.2
0.1
Low economic significance
Low skills deficits
0
0
0.1
0.2
Business services
Education
High economic significance
Low skills deficits
Public administration
0.3
0.4
Financial services
0.5
0.6
Economic significance
0.7
0.8
0.9
1
UKCES findings - overview
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The size, value and maturity of the NINJ sectors varies, but there is a degree of
interdependence between them
– Low Carbon Economy
- Financial and Professional Services
– Advanced Manufacturing
- Digital Economy
– Engineering Construction
- Life Sciences
Together, these sectors are seen as catalysts for future economic growth
There is some commonality between them in terms of skills needs:
– Importance of R&D and STEM skills
– Importance of skills at levels 3, 4 and 5
– Management and leadership skills
– Commercialisation skills
– Project management skills
– Focus on re-skilling and upskilling existing workforces
Analysis of SSC research reveals additional 4 key sectors: Creative, Social Care,
Retail and Hospitality
Priority RED
High priority skill needs with scale and/or long lead time –
for immediate action
Occupation and/or skills
Level
Key sectors, industries or specialisation
Corporate Managers across
many sectors
4+
Retail, business services, computing, digital media, finance and professional
services, health and social care, education, public administration and
hospitality
Managers and professionals
with computing and software
skills
4+
Especially in harnessing the potential of new media, effectively delivering
multi-platform content, successful operation of networks, exploitation of
broader ICTs in manufacturing , and in the service sectors
Health and social care
professionals
4+
Medical specialisms such as audiological medicine, genitourinary medicine,
haematology, paediatric surgery
Pharmacists
Qualified social workers
Science and technology
professionals
4+
Pharmaceutical and medical technology industries
Traditional and advanced manufacturing
Low carbon and environmental sciences
- with a wide range of specialisms including biology, chemistry, physics,
mathematics and statistics
Teaching and research
professionals
4+
Across further and higher education, especially teacher educators.
Major requirements in all science, technology, engineering and maths areas,
and an emerging need for multi-disciplinary teachers and researchers across
scientific, technical and business areas
Priority RED
High priority skill needs with scale and/or long lead time –
for immediate action
Occupation and/or skills
Level
Key sectors, industries or specialisation
Health and social care associate
professionals
3+
Many areas of nursing, including operating theatres, neonatal, and intensive
care units
Many areas of therapeutic care
Associate professional and
technical roles in manufacturing
3+
Widespread and extensive shortages in oil, gas, electricity, nuclear,
chemicals, pharmaceuticals, automotive, engineering and broadcasting.
Skilled trades in construction
3
Persistent and increasing shortages for fully qualified craftsmen in building,
electrical trades, plumbing, joinery, heating, ventilation and air-conditioning,
together with specialist skills in prefabrication construction, cross-trade
skills and specialist sub-skills (e.g. roofing)
Care assistants, esp. care for
children and the aged
2-3
Persistent and increasing shortages of trained care assistants, including
greater understanding of ICT to use modern diagnostic systems, and support
people using assisted living technologies.
Future prospects
• 2010/11 is “year zero” of a 3-5 year project to reduce the
national debt - speed of change is the key question
• Various agencies getting strident about where the cuts should
fall (eg CBI call to cease ASL, reduce literacy funding)
• Working SFA assumption is 100 fewer colleges … no prognosis
for other types of provider … but minimum contract values
being introduced, guidance on franchising being developed etc
• New and different ways of working, and of organising, will be
required
• “Invest to Save” – an SFA loans scheme, to offset institutional
collapse
Learning Revolution*
• Lead Accountable Bodies for IAL (as intended)
– 2010/11 a “shadow” year, but will require pooling of information and
agreeing on future priorities  a planning document
– from 2011/12, SFA to contract with LAB
– local pooling of ASL/PCDL budgets
•
•
•
•
Year 2 Learning Champions support
Showing the outputs from work over the last year
Local Authorities in the driving seat, if they choose to be
Provision likely to be very different
• Inspection arrangements
• Workforce qualifications
* NOTE: BIS now indicates that the “Learning Revolution” branding is discontinued