Policy Outlook. First Quarter.2011

1. Policy Outlook. First Quarter.2011

2. Agenda • The changing policy context • The sharpening economic context • What it means for education and skills

3. Out Big State Red tape Targets Blanket subsidies Big capital programmes Universal support services Artificial divides Over-regulation Short-termism Benefit fraud ‘Failing’ schools Train to Gain Skills Pledge Pay rises Manifesto promises In Wiki leaks Crowd sourcing Wellbeing International benchmarking Social partnerships Private investment Pupil premium Payment by results Universal credit Freedom/autonomy Access Agreements Apprenticeships Miss Havisham Caps Gritted teeth How the policy landscape is changing

4. Out QCDA GTC TDA GOs RDAs FdF AimHigher Changing LAs Connexions Ofsted Ofqual HEFCE IfL LSIS OFFA YPLA UKCES UfI How the provider landscape is changing In • Academies • UTCs • Teach First • LEPs • Tech/Inn Centres • Mutuals • Reform/Policy Exchange • Finland, Canada, South Korea

5. How the political language is changing • ‘Choppy waters/stiff headwinds’ • ‘Doers and grafters, inventors and entrepreneurs’ • ‘Economic dynamism’ • ‘Ruthless prioritising’ • ‘Armchair auditors’ • ‘Democratic accountability’ • ‘Horizon shift’ • ‘Progressive’ • ‘Institutions will no longer be paid just for being there’

6. How the policy mechanisms are changing • The steady transition of responsibility from the state to the citizen/community • The use of the OBR to provide independent financial advice • The introduction of business ‘boards’ to support Dept planning • The concentration on measurable outcomes • The desire to sort things out in one term while planning for the long-term • The use of a new Transparency Framework to help reform the public sector • The re-balancing of the fee burden away from the state • The development of an industrial growth strategy built around strengthening the infrastructure, supporting key sectors and making it easier to do business • The opening out of the provider market to new types of provider • The generation of greater data, guidance and info to support consumer ‘intelligence’

7. What’s still under review? • National Curriculum • SATs • School Funding • 14-19 Voc Quals • 16-19 participation in education and training • UCAS Tariff • Introduction of a fee loan system in FE • Procedures for fee collection in FE • The market for new providers in FE • Skills Conditionality • Student Visas • Future strategy for HE • Ways of enhancing information for prospective HE applicants • Intellectual Property • Pensions • Adult literacy

8. What’s under legislation? Currently: • Public Bodies Bill • Localism Bill • Education Bill Intended: • Apprenticeships and Skills (Public Procurement Contracts) Bill • Further and Higher Education (Access) Bill • HE Bill

9. The new economic context • Overall framework set by Emergency Budget 2010, SR 2010, Budget 2011 • 2011 projected to be a difficult year, little light before 2012 • No sense of double dip but slower rate of recovery than in previous recessions • Main mechanisms being adopted include: Canadian recovery plan; 4:1 ratio; reduction in role of state; reform of the public sector; back office efficiencies; increase in pensionable age • Main drag factors include: VAT hike; energy prices; low skill levels; restocking; levels of debt interest; levels of confidence • Major determinants: ability of government to create conditions for growth; ability of private sector to create jobs; ability of education system to provide skilled workforce for the future; ability of everyone else to hang on in there • Key message: a focus on growth and jobs for the start of 2011

10. Current indicators • Growth • OBR forecast downgraded to 2.1%, rising to 2.6% for 2012 • BCC forecast downgraded to 1.9% • CBI forecast downgraded to 2.0%, rising to 2.4% for 2012 • Inflation • OBR forecasting remaining high (3%+) for 2011, returning to 2% in 2012 • BCC forecasting 3% for whole of 2011 • CBI forecasting ‘high’ for 2011, falling to 2% in 2012 • Unemployment • OBR forecasting slight growth in 2011, steady fall in 2012 • CBI/BCC forecasting 2.6m by autumn 2011

11. What it all means For: • Schools and young people • FE and adult skills • HE

12. Schools and young people. Current SRP priorities • Increase the number of high quality schools and introduce fair funding • Open out Academy status (Sept 2010) • Open up first Free Schools and UTCs (Sept 2011) • Begin to pay pupil premium (April 2011) • Reform the school curriculum and qualifications • Pilot new reading test (June 2011) • Consult on new Nat Curr (Dec 2010-March 2012) • Complete review of Voc Quals (spring 2011) • Reduce bureaucracy and improve accountability • Remove further burdens (April 2011) • Develop new inspection system (June 2011) • Train and develop the professionals who work with children • Develop revised teacher standards and perf management regs (Sept 2011) • Introduce new support for the Early Years • New Early Years framework in place (Sept 2012) • Improve support for children, young people and families, focusing on the most disadvantaged • SEN Green Paper (Dec 2010) • Piloting of NCS (2011/2012) • Develop proposals for introducing UTCs (March 2011) • Pilot NCS programmes (2011,2012)

13. Current reform agenda • Review and strengthen early years learning • Introduce a pupil premium to help schools target resources at the most needy • Develop a performance metric to ensure all young people have the opportunity to achieve an essential core of subjects • Review the provision of vocational learning with a view to simplifying and enhancing • Improve the training, recruitment and performance of teachers • Create a more autonomous school system • Equalise 16-19 funding costs and operate within a flat budget

14. FE etc. Current SRP priorities • Re-balance the economy across sectors • New strategies for growth in all key sectors (July 2011) • Re-balance the economy across regions • LEPs fully operative (April 2012) • Establish systems to deliver Regional Growth Fund (April 2011) • Safeguard the future of Royal Mail and PO • Build an internationally competitive skills base • Consultation of FE fee loan system (March –Aug 2011) • Remove controls from FE funding, auditing, monitoring (Nov 2011) • Develop TtG replacement for SMEs (March 2011) • Support HE, science and research in building a strong, innovative economy • White Paper on HE (March 2011) • Improve info for prospective students (March 2011-July 2012) • Establish network of Adv Tech Centres (April 2012) • Boost enterprise, make this the decade of the entrepreneur • Trial new Enterprise Allowance (Jan-April 2011) • Stimulate exports and inward investment • Create a positive business environment • Protect and empower consumers

15. FE etc. Current funding position • Nov Investment Strategy and Dec YPLA 16-19 Funding Statement first steps towards new funding policy • Context is 25% T/L budget over SR period • Emphasis is on maximising fee contribution while protecting low skilled, unemployed and SMEs • Total T/L budget for 2011/12 of £3.1bn • £605m for adult apprenticeships rising by £250m over SR period, target of 50,000 extra places • £580m for capital budget • Roll over of current ASL budget but with greater flexibilities • Institutional allocations based on lagged numbers but adjusted to reflect 2011/12 ‘cuts’ • Some adjustments to MLP

16. Key Messages • Government keen to kick start growth early in 2011 • Range of common mechanisms being applied: removing barriers; reducing bureaucracy; supporting key industries; transferring responsibility outwards; supporting innovation and enterprise; encouraging private investment; strengthening infrastructure; opening up the country for business • Provider side being freed up to provide the skilled workforce needed but threat of opening out to new providers if need be • Change in institutional structures needed to accommodate new demand/growth model • Employer contributions limited to current behaviours • Significant role for private sector • Considerable regional variations

17. HE. Current SRP priorities • Develop a White Paper on future strategy for HE (March 2011) • Introduce legislation to establish new HE arrangements (May 2012) • Reform the HEIF to support knowledge transactions (by April 2012) • Establish network of Advanced Technology Centres (by April 2012) • Develop scorecard model to inform prospective students about course quality and outcome potential initially through existing Unistats website (by Mar 2011) and for all universities (by summer 2012) • Protect funding mechanism for research (by March 2011) • Strengthen business links incorporating a updated impact assessment model (by Dec 2010)

18. HE. Current funding position • Context set in a series of announcements topped off by Browne • Emphasis on business as usual while preparing for 2012 • Total Government investment to rise over SR period but: • Teaching grant cut to £4.6bn for 2011/12, £3.8bn for 2012/13 • Capital grant slashed from £207m to £95m • Efficiencies expected from research, admin, back office functions • Additional places supported for 2011 only and penalties for over-recruitment • Continuing emphasis on access, quality of teaching and diversity of provision • Commercialisation of research and knowledge transfer through new technology and innovation centres • Clearer sense of direction expected in White Paper

19. HE. Current contextual position • Key Speeches • David Willetts’ Conference speech. Oct 2010 • David Willetts’ HEFCE Annual Conf speech. Oct 2010 • David Willetts’ Commons Statement. Nov 2010 • Speeches during Commons vote. Dec 2010 • David Cameron’s Centre Forum speech. Dec 2010 • Key Papers • Browne Review. Oct 2010 • Growth White Paper. Nov 2010 • HEPI analysis of new fee system. Nov/Dec 2010 • Consultation on reform of the student visa system. Dec 2010 • What do graduates do? Dec 2010 • Key Issues • Reviewing portfolio in advance of fees change • Being able to retain wide student base • Developing market edge in teaching excellence • Retaining global competitiveness • Developing new relationship with students • Demonstrating the continuing value of the HE experience

20. HE. 10 reasons to (try) and be cheerful • We’re all in this together • Another year when additional entrant places will be supported • The primary bulge has started • Some tiny green shoots spotted around graduate employment • The Chancellor may have some ‘goodies’ in his Budget • Digital and creative industries are in the first wave of identified growth sectors • The case for considering “arts, humanities and social sciences” within SIVs is to be looked at • The graduate earnings threshold will be up rated annually • The NSP group is looking at a student premium • There is no Plan B

21. Going forward • Spring 2011. 14-19 Review completes; National Curriculum consultation begins; latest Education Bill; social mobility strategy published; tendering process for new work programme begins • March 2011. Budget due on March 23rd. Also consultation on new fee loan system for FE. White Paper on future HE Strategy; paper on opening out the FE/training sector? • April 2011. New spending settlement kicks in; latest Dept plans published; Tech/Innovation Centres framework in place; well-being index launched • Summer 2011. Piloting of Yr 6 reading check, report on SATs • Autumn 2011. Higher Education Bill; Lifelong Learning Accounts in place; review of ACL complete • 2012/13. Implementation of new fees systems in HE; new flexible arrangements for teachers’ pay and conditions • 2013/14. Implementation of new fees system in FE; first teaching of new National Curriculum • 2014/15. Deficit eliminated, sighs of relief all round