Further Education – New Horizon Investing in Skills for Sustainable Growth David Hughes National Director of College &a

1. Further Education – New Horizon Investing in Skills for Sustainable Growth David Hughes National Director of College & Provider Services Skills Funding Agency 17 November 2010 AoC Conference

2. Coalition Approach • Investment strategy for truly lifelong learning, nurturing sustainable economic growth & social renewal • Based on: • Fairness • Shared responsibility • Greater freedom • And in context of Skills for Sustainable Growth strategy

3. Reform Programme: 1 Confirm, restate and communicate the need for a skilled nation Work with employers over the need to train and where appropriate introduce levies and licences to practice 2 Empower the prospective student by providing a career service that gives impartial advice 3 4 Provide a prestigious suite of qualifications that are well regarded by employers and portable • Through the development of Life Long Learning Accounts financially support the most vulnerable in society by fully subsidising programmes: • For those with poor basic skills, Young adults (19-24) who didn’t complete their secondary education (level 2 qualification)‏ and who could progress and gain level 3. 5 6 Rebalance Government investment by introducing co-funding and loans for full time adults (over 24) programmes leading to a recognised Level 3 QCF qualification. 7 Deregulating the sector, simplifying the funding system and reducing the number of organisations involved in the skills delivery landscape

4. Headlines • FE resource budget reduced by 25% to 2014-15 • Savings through: • Efficiencies • Policy changes • Unit cost reductions • Changes to statutory entitlements • Re-balancing who pays • More freedoms for colleges

5. (£000s)‏ SR baseline 2010-11 Budget 2011-12 Indicative Budget 2012-13 Adult Skills Budget 2,835 2,795 2,685 of which Apprenticeships 360 605 648 OLASS 134 133 131 Adult Safeguarded Learning 210 210 210, Learner Support 144 151 163 Information Advice and Guidance 82 81 84 Skills Infrastructure (including LSIS)‏ 137 56 51 Capital Grants 305 278 Total Skills Funding Agency 3,734 3,607 Funding not routed through the Skills Funding Agency 337 179 172 Funding andInvestment

6. Skills Strategy sets out key commitments • Expand Adult Apprenticeships • Over 200,000 starts per year • 75,000 increase by 2014/15 • Reshape programme so Level 3 becomes the level to aspire to • Employers • New Growth and Innovation Fund • Financial support to SMEs to co-fund the costs of training up to and including a Level 2 • Unemployed • State subsidy for targeted provision for people on active benefits to help them obtain work

7. Skills Strategy sets out key commitments (2)‏ • Individuals • Government backed loans to help finance intermediate and higher level qualifications from 2013/14 • Lifelong Learning Accounts for all adults • All Age Careers Service • The Funding System • Simplified systems and processes • Greater alignment across pre- and post-19 systems • Remove regulations to free colleges to deliver to their local communities

8. Reform of Funding • Who is eligible for funding? • From 2011/12: • More flexible delivery for unemployed / offenders through funding units and full qualifications • Greater focus on those on active benefits • Consequent narrowing of fee remission category • Continued full funding for literacy and numeracy (uplift removed)‏ • ESOL fully-funded for unemployed / offenders (as above); co-funded for those settled here. • ESOL in the workplace will no longer be eligible for funding • Skills for Life uplift (1.2) removed from literacy and ESOL • Rates reduce by 4.3% - new and existing learners

9. Reform of Funding • What is eligible for funding? • From 2011/12: • Growth in Adult Apprenticeships • Adult Apprenticeships continue to be co-funded; expectation that employer contributions will increase • Co-funding at Level 2 for workplace learning outside of Apprenticeships will only be available to SMEs (fewer than 250 employees) • Level 3 and above delivery in the workplace (outside of Apprenticeships and current entitlement) will no longer be eligible for funding • Adult Safeguarded Learning protected

10. Reform of Funding (2) • From 2012/13, proposed changes to statutory entitlement: • Full funding for first full Level 2 and 3 focused on young people (19 to up to 24, ie 23)‏ • From 2013/14 • FE Fee Loans introduced for Level 3 or higher qualifications where public funding is no longer available (24 and over)

11. Simplification of funding system • For 2011/12 • Single Adult Skills Budget • Rationalisation of Adult Safeguard lines • Minimum Contract Level (£500k)‏ • Introduction of Outcome Payments • For jobs from 2011/12 • Wider consultation on approach for 2012/13 • From 2012/13 • Simplified rates system • Removal of provider factor (except area costs)‏ • Simplification of data returns • Simplification of learner support / hardship fund • Disadvantage uplift incorporated into Learning Support

12. 2011/12 Allocations • Single Adult Skills Budget • Indicative for 12/13…. • Need to ensure growth of Apprenticeships…. • ….and reflect end of Train to Gain / reduced work-based learning offer • Transparent methodology will be set out in Skills Funding Agency Guidance Note • Expect to get indicative Adult Skills allocations out before Christmas • Additional Learning Support Budget (ALS) to be aligned • Offender Learning and Skills Service (OLASS); European Social Fund (ESF) and Adult Safeguard will be separate • Final Allocations in March 2011 • Reflect impact of MLP • Update for mid-year estimates/Quarter 2 changes • Reflect outcome of discussions for those providers falling below MCL

13. Alignment with YPLA • Joint briefings for sector – with AOC, ALP and UKCES – in January 2011 • Agreement over LLDD • Entitlement funding for 16–18 year olds turning 19 (sixth form colleges especially)‏ • 16-18 funding for colleges and providers routed through Agency • 16-18 Apprenticeship budget available in December?

14. Questions?