Transcript Slide 1

Funding and what the policy
documents won’t tell you
Marriot County Hall, London
23rd March 2011
Twitter
#Lsect
The policies, and the maths
Budget announcements today
+
Apprenticeship growth
+
Fee eligibility changes
+
Single line budget and MCLs
=
The return of franchising
under another name
=
?
£400m extra in
budget to support
youth training
£40m for 80k work experience places
(£500 average each)
£160m
£210m or £180m for 50k
Apprenticeship places : 40k for
unemployed youth and 10k (£75m)
for Higher Level Apprenticeships
£140m
£120m
£100m
£150m to increase University
Techinical Colleges from 12 to 24
Nothing on EMA replacement nor
how to stimulate Apprenticeship
demand or fees (19+) from employers
£80m
£60m
£40m
£20m
£0
2011-12
2012-13
2013-14
Financial year
2014-15
Note: youth unemployment (18-24) currently running at 760k (18.3%)
Source: Page 42 of budget: http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf
Slide by www.lsect.com
2015-16
Is even more growth in funded
Apprenticeships achieveable?
Are current provider targets being met?
47% (36 out of 77) providers I surveyed said they are not
Will the new specifications help?
93% (80 out of 86) providers I surveyed said they are a little
or very concerned SASE will make it more difficult to deliver
apprenticeships
“The government cannot create apprenticeships. It funds at most
half the costs of training adult (19+) appretices. So what are they
going to do to encourage employers to contribute, as well as
incentivise them to train new and not just current staff?
Nick Linford (me), Financial Times, 21/03/11
Changes to inactive benefits
part 1
Based on the changes to Government fee eligibility policy next year (such as
for those on 'inactive benefits') what percentage of all your adult learners
do you think will no longer be able to attend because they cannot afford to
pay the fee? – Collected in one day on SurveyMonkey
70%
60%
50%
40%
30%
Average from the 26 responses was 24% of learners
~ For England, 24% is 269k learners*
~ For England, 24% is £323m**
Average
20%
10%
0%
* Source: 2010/11 BIS Skills Investment Strategy planned for 1.12m ALR learners
** Source: SFA spreadsheet show 2010/11 ALR allocations currently total £1,346,807,291
with average contract £2.8m (largest £21m excluding £110m for UFI and smallest £3k).
24% of average contract is £645k
Changes to inactive benefits
part 2
I sent out a free tool, into which colleges imported their current ILR data
and it tells them what percentage of their adult funding is for learners
recorded as being on, or dependents of those on, inactive benefits.
70%
60%
50%
40%
30%
Average from the 35 returned reports was 26% of funding
~ For England, 26% is 291k learners*
~ For England, 26% is £350m**
Average
20%
10%
0%
* Source: 2010/11 BIS Skills Investment Strategy planned for 1.12m ALR learners
** Source: SFA spreadsheet show 2010/11 ALR allocations currently total £1,346,807,291
with average contract £2.8m (largest £21m excluding £110m for UFI and smallest £3k).
24% of average contract is £645k
On that basis it feels safe to say that approximately 25% of
learners (300k) and funding (£350m) are currently coded
as being on, dependents of those on, inactive benefits
Top five report returns (by funding volume)
College
Inactive benefit funding
Percantage of 19+ funding
A
£1,979,658
29%
B
£2,672,663
26%
C
£3,243,720
31%
D
£5,333,347
58%
E
£5,795,779
45%
And if funding is halved, twice as much of same delivery
would be needed to achieve same allocation!
Single line budgets
~ 19+ Learner-responsive
~ 19+ Apprenticeships
~ Train to Gain
Underperformance in one area can be
off-set by overperformance in another
But….
~ Minimum Contract Level policy means no budget for some
~ We can’t afford to miss Apprenticeship targets
~ There will be lots of things that can no longer
be fully-funded or funded at all
How much Adult Skills Budget will go unspent???
Risky consequeces to achieve targets?
Pressure
Introduction of
Sub-contracting
to quickly + Minimum
= (‘franchise’) now
expand into Contract Levels
back in fashion
new areas
81% (57 out of 70) providers surveyed for the Lsect
Apprenticeship Funding Summit said they were entering
into new sub-contracting arrangements at present
http://www.lsect.co.uk/updates/15-03-11-appren.asp
63% (17 out of 27) providers surveyed for the Lsect
Adult Funding Summit said they were entering into new
sub-contracting arrangements at present
http://www.lsect.co.uk/updates/22-03-11-ALR.asp
The history of franchise provision not a good one
Is everyone doing pre-nups (contracts)?
As I am sure you do, protect yourself and
your governors from sub-contracting risks.
Unless policies change maybe
some of the funding will just
have to go unspent?
For 16-18 and 19+ what
can you do to achieve
more for less?
Can you reducing costs via:
~ Staff contracts (e.g. increasing the contracted teaching hours and making
redundancies) – a non-starter?
~ Decreasing the permanent to temporary teaching staff ratio?
~ Merging groups and improving room utilisation?
~ Stop running courses with relatively low (or negative) contribution rates?
~ Trimming delivery hours on listed courses without compromising quality?
~ Eradicating unfunded hours (defined as delivery hours exceeding listed hours)?
~ Using support or voluntary staff when double staffing large class sizes
~ Innovative uses of the Additional Learner Support funding?
~ Negotiating hard (or tendering) with the awarding bodies for reduced fees etc?
~ Think of sickness and absense as cost, so how can you reduce it?
What else?
Can you increase supply and
contribution rates (margins) via:
~ Larger class sizes where possible (without compromising quality)?
~ Increasing the SLN per learner ratio (e.g. incl. employability and/or enterprise
qualifications)?
~ Collecting greater fees from learners and employers?
~ Improving retention beyond mimimum attendance (e.g. six weeks)?
~ Improving success rates, and therefore improving the success factor?
~ Identify where there are large waiting lists for courses (with high contribution
rates) that can be satisfied?
~ Identifying demand and curriculum gaps in the local offer that would have high
contribution rates?
~ Improve the progression rates into sustainable jobs
~ Growth in other areas such as pre-employment provision and Apprenticeships?
What else?
Thank you
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