BIS Skills Strategy 2010

On 16 November 2010, the Department for Business Innovation & Skills launched two publications - Skills for Sustainable Growth and Investing in Skills for Sustainable Growth.

Together these papers outline the future funding and policy direction of further education, updating the previous government’s skills strategy [1] and providing more detail on how the 25% cuts to further education detailed in the spending review will occur.

The key principles of the new skills strategy are:

Fairness – help for the most vulnerable, such as young people, the unemployed and those without basic skills.
Responsibility - a greater role for employers and citizens in covering the costs of skills provision.
Freedom - greater accountability to learners and employers rather than government.

The strategy promises to abandon the “culture of bureaucratic planning and regulatory control” of the previous government, enabling colleges to respond to the needs of learners and employers rather than qualification targets. Accordingly, the targets of the Leitch Review [2], which were central to the last skills strategy, have been abandoned and a range of reforms have been announced.

This briefing explores key points in the following areas:

Funding
Simplification
Information Advice and Guidance
Employer Engagement
Apprenticeships/Vocational Learning
Adult and Community Learning
Worklessness
Reflections…

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Funding

A range of measures have been announced with regards funding entitlements, placing a greater emphasis on employer/learner co-investment.

First full qualifications in Basic Skills, Level 2 and Level 3 will continue to be fully funded for all 19-24 year olds.
Those aged 24+ will only be fully funded for Basic Skills qualifications (with exceptions for those on employment-related benefits).
Level 2 Adult Apprenticeships will continue to be co-funded by 50%.
Level 2 work-based learning for those aged 24+ will be 50% co-funded for SMEs (those with less than 250 staff), with a particular emphasis on leadership and management.
From 2013/14, government-backed loans will be available for learners aged 24+ to undertake Level 3 and 4 qualifications. Training will be free at the point of access with repayments on an income-contingent basis of £21,000. These loans will be available for training both inside and outside the workplace and will cover apprenticeships.

Simplification

The strategy aims to simplify the funding structure of the skills system whilst diversifying provision and stimulating greater competition.

The Skills Funding Agency is to be reduced in size with a renewed focus on dispensing funding and efficiently sharing information.
Colleges and providers will be expected to report their own performance information to customers and stakeholders.
The number of intermediary bodies in the skills landscape will be reduced and those that remain will be streamlined.
Adult Learner Responsive and Employer Learner Responsive budgets will be pooled into a single budget from 2011/12. [3]
All colleges and training organisations will need to be on the Approved College and Training Organisation Register (ACTOR) in order to receive public funding for the 2011/12 academic year.
Simplified funding will be achieved through a reduction in separate budget lines, cutting down the number of interactions between colleges and training providers with the SFA, and reducing the number of providers with SFA contracts.
A minimum contract level threshold will be set at £500k in 2011/12 but is likely to increase over the Spending Review period.
All providers falling below the minimum contract level will receive a notional allocation for the 2011/12 academic year which they can take into the new arrangements. Where a provider chooses not to enter into new arrangements, they will be issued with a run-down contract to cover the costs of existing learners.
Where there is a risk of specialist provision being lost the SFA will consider whether alternative arrangements should be made.

Information Advice and Guidance

The new system is to be driven by information on available funding, provider performance, and potential employment/wage gains.

Lifelong Learning Accounts will be made available for all adult learners from Sep 2011. These will contain information on the funding available and the employment/wage benefits of learning. This will be internet-based but with services available via telephone for excluded learners. Learning accounts will also recognise time spent volunteering through a credit system.
New all-ages careers service from Sep 2011 to provide more streamlined advice on available provision and work in partnership with Jobcentre Plus. This will be accessible via telephone and internet but will also provide face-to-face support for those in the greatest need.
The current range of skills websites will be brought together into Businesslink.gov and backed by a national call centre.
Information gathered on the quality and outcomes of further education provision will be published in Dec 2010 and made available via a customer-facing website.

Employer Engagement

In terms of employer engagement, the Strategy still holds a vital role for the UK Commission for Employment & Skills and for Sector Skills Councils.

A new “workforce pledge” among leading employers, Sector Skills Councils, trade unions and other representatives of workers will set out their commitments to work together to create high performance workplaces.
An investigation will be undertaken into the funding and organisational structure of UKCES. The new focus will be on social partnership.
Sector Skills Councils funding from Government will increasingly be expected to come through support for specific projects.
An investigation of the scope for introducing professional standards and levy-based arrangements in areas of professional need (such as social care).
National skills academies will continue to play a vital role as specialist employer-led delivery organisations, many of them as delivery arms of Sector Skills Councils.
A new Growth and Innovation Fund will provide up to £50 million of support to pump-prime and pilot new initiatives developed by businesses to increase the contribution skills makes to growth in their sectors. This intends to draw in employer co-funding.
Colleges will be encouraged to work with LEPs to see how public funding can be aligned to contribute to local economic and community demand. LEPS will not, however, have formal powers to direct or control the activity of skills providers.
Continued investment of £21.5m in Unionlearn to build on their work in promoting and supporting learning in the workplace, especially in reaching out to those who are poorly-qualified and most in need of support.

Apprenticeships/Vocational Learning

Apprenticeships will continue to grow in stature and importance according to the new skills strategy.

An additional 75,000 Adult Apprenticeships will be available by 2014/15 with an investment of £250m.
Sector Skills Councils will work to ensure that apprenticeship frameworks offer high-quality, economically-relevant provision which cuts across sectoral boundaries.
Work will be undertaken to ensure a consistent “Apprenticeship brand” to compete with higher education degrees.
Public sector bodies will be encouraged to use public procurement as a lever to raise employer engagement with Apprenticeships.
Group Training Associations will help spread the costs and risks of Apprenticeships among smaller businesses.
Apprenticeship Diversity pilots will look to improve access for underrepresented sections of society, aiming to create 5,000 new opportunities.
The Qualifications and Credit Framework will allow individuals and employers to access units of training that meet their specific needs in a more flexible way.
Sector Skills Councils will regularly update national occupational standards, and qualification awarding bodies will be expected to take these standards into account as they update and introduce vocational qualifications.

Adult and Community Learning

The strategy promises to protect funding for informal adult and community learning.

Informal adult learning will continue to receive £210m in annual funding for its four components: Neighbourhood Learning in Deprived Communities; Personal and Community Development Learning; Wider Family Learning; and Family Literacy, Language and Numeracy. These components will be pooled into a single budget for providers to deliver a balanced offer that is responsive to local communities.
Work will be undertaken on how to reinvigorate informal adult and community learning to engage the disadvantaged and provide progression routes into formal learning.
Ensure that organisations that provide expert brokerage, facilitation, and provision (often the voluntary and community sector) have the capability and capacity to work with disadvantaged groups.

Worklessness

A range of measures aim to better align the skills system with welfare.

Funding will be provided to support specific training for those on active benefits, working closely with Jobcentre Plus to identify the people who could most benefit from support.
English as a Second Language (ESOL) provision will only be available for those on employment-related benefits (e.g. JSA or ESA).
Will enable Work Programme providers, where they identify an outstanding skills barrier to work, to refer clients to the flexible skills training on offer locally.
Expect skills providers to work with Jobcentre Plus to identify the most appropriate training, and will introduce Job Outcome Payments of approximately £80m to reward those colleges and training organisations who work effectively with unemployed people.
Skills providers will be able to use their flexibilities to provide training to complement work experience brokered by Jobcentre Plus, and which is expected to lead to a guaranteed job interview.

Reflections…

Overall the new skills strategy offers many welcome freedoms and flexibilities for learning and skills providers in terms of clearer funding streams and less excessive inspection procedures. Nevertheless, there are a range of concerns around future funding or specific policy proposals which still need to be explored.

It is important that the vital role of UKCES and the various SSCs has been recognised. Such bodies will provide the means to ensure that qualifications remain occupationally-relevant and that employers are appropriately engaged to make the best investments in the learning and skills needs of their workforces. We await more detail, however, on proposed reforms to UKCES. Government has previously commented that the SSC network will be streamlined and if they are to be funded on the basis of specific projects, this may necessitate more collaborative work between those SSCs with similar workforces on qualification development, policy and labour market intelligence.

A significant issue for the voluntary sector as a training provider is the implementation of the Approved Colleges Training Organisation Register and £500k minimum contract levels. Many voluntary organisations do not have the capacity to deliver at this level so will either lose funding or have to enter into new sub-contracting arrangements. Previous experience within the Department for Work and Pensions led to the development of the Merlin Standard in order to promote best practice among supply chains [4]. Such a measure may be necessary in the skills system to ensure best practice between prime providers and voluntary organisations. There are also issues in terms of how best to retain specialist learning and skills provision in particular subject areas or across isolated geographical regions, especially when such specialist provision leads to long-term savings in other areas of public spending.

Protection of the adult and community learning budget is to be welcomed. However, there should be some degree of vigilance as demand for such services are likely to increase during the recession, especially with increasing unemployment and reduced welfare eligibility. Additionally, cuts to ESOL funding may also present a problem in that it could remove provision for migrant learners in very low paid employment or part-time work.

Greater support for SMEs is to be welcomed; especially since the majority of voluntary sector organisations have less than 50 staff [5]. The additional funding for Apprenticeships could also provide a useful tool for the sector to upskill and bring in a younger workforce

alongside a systematic approach to training. Yet for this to be successful the sector will need to steer clear of its historic aversion to such forms of vocational learning. There are a range of Apprenticeship frameworks of relevance to the sector (e.g. Community Development, Youth Work, Social Care, etc.) in addition to the voluntary sector-specific frameworks under development by Skills – Third Sector. There is also great scope here for Fair Train, the Group Training Association for the sector to promote Apprenticeships and provide practical advice on how costs might be spread among smaller organisations.

Loans for further education on a similar principle to higher education are a worthwhile measure and may help address the disparity of esteem between FE and HE. Nonetheless, as the University and College Union has already warned, many adult students doing vocational courses are already in low-skilled, low-paid jobs and are likely to come from those low-income households most likely to be put off by the prospect of debt.

Lifelong Learning Accounts may offer greater clarity to an often bewildering array of training provision. Experience, however, has shown that such online guidance works most effectively when placed within real-life learning networks, especially for the disadvantaged or those without IT literacy. More on how the credit-based volunteering system is to operate would also be welcomed, especially on how information on volunteering is to be collected.

Finally, there is still a lack of clarity about exactly how colleges/training providers will sit within the new Local Enterprise Partnership arrangements. There is to be no obligation that they are a part and the FE sector will need to be vigilant that any such involvement is of mutual benefit.

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Skills for Growth – The National Skills Strategy (PDF, 2009)
The targets of the Leitch Review specified that by 2020: 95% of adults should have functional literacy and numeracy; over 90% should be qualified to Level 2 or above; there would be 1.9 million additional Level 3 attainments and 500,000 apprenticeships; and over 40% of adults would be educated to degree level. Prosperity for all in the global economy, Leitch Review of Skills (PDF, 2006)
This will exclude Adult Safeguarded Learning; Offender Learning; and the European Social Fund.
Merlin Standard – promoting supply chain excellence (PDF, 2010)
Workforce Chapter, UK Civil Society Almanac (2010)

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