Transcript Slide 1

Further Education
and Skills Radical Reform Story
November 2010
Further Education and the gaining of new skills is central to
delivering the Governments goals of balanced and sustainable
growth and creating the Big Society
Skills is one of the factors that drives
productivity and employment both of which
support growth.
The FE and skills system supports social
mobility and well being by providing
opportunities for those who need additional
help in order to progress, such as:
-
Innovation
Skills
Enterprise
Productivity
Competition
Investment
Employment
Sustainable
GROWTH
-
young people with limited
employability;
disengaged with education and the
labour market;
people with disabilities or severe mental
health problems, offenders,
people with limited English.
• The FE Sector delivers training from basic skills
to higher education – contributing to increased
employment and productivity.
• It also delivers for groups at risk of social
exclusion
• Can support “Big Society” agenda- give
communities more powers and encourage
people to take an active role in their community
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PROBLEM
1) Capability
OCED statistics show that despite recent progress, the UK remains a middle
ranking country in terms country in terms of qualifications, compared to
other OECD member states:•
•
17th out of 30 in terms of the proportion qualified to upper secondary level and
above (level 2)
12th out of 31 in the proportion qualified to degree level and above
2) Poor Choice
• Student choice is hampered by lack of information on the value of qualifications
including what salary and benefits qualifications brings
3) Complicated and misunderstood skills system
• Qualifications not valued or understood
• Funding System over regulated and bureaucratic
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Human Side of this Problem
Those with poor skills are [1]:
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More likely to be in prison
More likely to be in debt
More likely to be unemployed
More likely to be unwell and have mental
health problems
More likely to have a child who can’t read at 9
More likely to be involved with or have to be
supported by the State
Are less likely to vote
Are less likely to own their own homes
Are less likely to take up a community role
such as school governor
Are less likely to hear their child read
Will never normally earn more £14,000
No quals
1993
2008
Other quals
1993
2008
GCSE
1993
2008
A Level or Eq.
1993
2008
HE
1993
2008
Degree or Eq.
1993
2008
[1] Centre for Research on the Wider Benefits of Learning, Research Brief, October 2006
0%
20%
40%
Employment
60%
Unemployment
80%
100%
Inactivity
Those with no qualifications
are on average 37ppt less
likely to be in employment
than those with HE
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Fairness, Shared Responsibility and Freedom
Reform programme:
1
Confirm, restate and communicate the need for a skilled nation
2
Work with employers over the need to train and where appropriate introduce levies and
licences to practice
3
Empower the prospective student by providing a career service that gives impartial advice
4
Provide a prestigious suite of qualifications that are well regarded by employers and
portable
5
Through the development of Life Long Learning Accounts financially support the most
vulnerable in society by fully subsidising programmes.
6
Rebalance Government investment by introducing co-funding and loans for full time adults
(24 and over) programmes leading to a recognised Level 3 and 4 QCF qualification.
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Deregulating the sector, simplifying the funding system and reducing the number of
organisations involved in the skills delivery landscape
For those with poor basic skills, Young adults (19 up to 24) who didn’t complete their secondary education (level 2
qualification) and who could progress and gain level 3.
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Confirm, restate and communicate the need for
a skilled nation
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RATIONALE
100
• The UKCES report ‘Ambition 2020’ suggests
we may fall further behind in the proportion
with Level 2 or above, perhaps slipping from
18th to 23rd in the proportion with Level 2 or
above.
80
70
60
%
• Most OECD countries are experiencing
faster growth of high-skilled jobs than the UK.
This poses an important challenge to
employers in the UK and to business policy.
90
50
40
Growth in high skilled jobs in OECD countries 1998-2006
30
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12
20
10
10
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Turkey
Portugal
Mexico
Italy
Spain
Iceland
Greece
Chile
Luxembourg
Ireland
Belgium
France
Australia
Netherlands
New Zealand
Korea
Denmark
Austria
Hungary
Finland
Norway
Sweden
Germany
Switzerland
Poland
Canada
United Kingdom
-2
United States
Ita
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Sl
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Ki nd
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N
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N rela
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rla
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s
0
Czech Republic
2
Slovak Republic
0
4
D
%
8
Tertiary
Upper secondary
Below upper secondary
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2
Work with employers over the need to train
and where appropriate introduce levies and licence to
practice
RATIONALE
• A productive workforce is key to economic growth
and to closing the productivity gap with other
leading nations.
• Dearden et al (2005) show from a robust study
based on 17 years worth of data that an increase
in the amount of training in an industry leads to an
increase in productivity in the sector that is about
double the wage gain of the individuals who are
trained [1]
• Around a third of employers do not provide
any training at all for their staff with another
12% only providing training for Health and
Safety purposes, this suggests a relatively low
level of demand for skills from employers [2]
POLICY DIRECTION
• statutory industry levies currently exist in three
sectors: construction, engineering construction
and the film industry. We will consider options for
other industries and introduce a statutory levy
scheme if employers want this
•introduce a new framework to support employers
in developing a productive and committed
workforce
• continued support for Unionlearn to encourage
the take up of learning
• encourage a small number of targeted sectors
and occupational areas to adopt collective
professional standards for the skills and
capabilities expected of people working in that
sector or occupation.
• Skills Pledge promoted to employers as a public
commitment to training. Currently involves
substantial monitoring
[1] Dearden, Reed and Van Reenen (2005) “The Impact of Training on Productivity and Wages: Evidence from British Panel Data”, CEP discussion paper no.674. [2] CBI (2007)
Understanding modern manufacturing; CBI (2008) Taking stock: CBI education and skills survey
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3
Empower the prospective student by providing a career
service that gives impartial advice
RATIONALE
POLICY DIRECTION
• High quality information will empower
employers and learners to access the best
training for them.
Barriers to Learning, NALS 2005
• Individuals can access information, advice and
guidance through the Nextstep Careers service (the
new All Age Careers Service in England will be fully
operational by April 2012).
%
30
25
Do not know about local
learning opportunities
20
Does not know where to find
out about course
• Life Long Learning Accounts are also being
developed as a source of information on funding for
learning based on individual circumstances
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10
5
0
No quals
Level 1
Level 2
Level 3
Level 4
Level 5
Highest qualification
• Survey evidence suggests that information
problems are a major barrier to investment in
skills, both in terms of information on the
benefits of skills, and information on the
training opportunities available.
• Clear and comparable information will also be made
available on the quality of colleges and training
providers, to help learners and employers choose where
and what to learn. The Framework for Excellence will
publish college and provider level performance
results for the first time this December as a platform for
a wider range of public information through the
development of a quality labelling system in 2011
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4
Provide a prestigious suite of qualifications that are well
regarded by employers and portable
RATIONALE
• Qualifications are a good proxy for skills, are
measurable, improve the labour market and
motivate individuals by rewarding their effort.
• 89% of employers agree that VQs lead to
an increase of skills and knowledge [1]
• 83% of employers agree that VQs
increase and develop new skills.[1]
• 71% of employers believe that VQs
increase overall business performance [1]
POLICY DIRECTION
• Develop qualification titles that mean
something to individuals and employers and
which are a marker of quality
• develop a qualifications framework that
promotes the take-up of credible, high value
qualifications by employers and learners
• prioritise rigorously on the training and
qualifications that add greatest value for learners
and employers
• Promote Vocational qualifications and the crafts
through new Craft Awards
[1] Skills for the Workplace: Employer Perspectives, UKCES Evidence Report, November 2008
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5
Financially support the most vulnerable in
society by fully subsidising programmes
RATIONALE
• Evidence shows that information failure
and credit constraints are most likely to
affect those with low skills.
• The National Adult Learning Survey
reports up to 23% as citing finance as a
barrier to learning
• Social benefits are also more likely to
outweigh private benefits at lower levels
giving individuals little incentive to invest
even if they were able to overcome the
information and credit failures.
POLICY DIRECTION
• retain a funding entitlement for literacy and numeracy
qualifications at functional levels, and a first full
qualification at Level 2 and Level 3 for 19 up to 24 year
olds.
• reform Learner Support to provide financial support for
learners on low-incomes to access learning.
Key commitments
Expand Adult Apprenticeships - 75,000 increase by 14/15
Full fee remission for those without basic skills
New Growth and Innovation Fund – up to £50m annually
Fee remission for the unemployed on active benefits (JSA
and ESA WRAG) and incentives for providers to support
their transition into employment
Teaching and learning in SMEs - at least £100m annually
• Being outside of employment, education
or training during early adulthood makes it
less likely that someone will be employed
later in life
Those needing support to become active citizens and
support Bigger Society - protected but reform £210m ASL
Full fee remission for young adults (19-23 inclusive) at
levels 2 and 3
Loans for those 24 and over on level 3 and 4
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6
Rebalance Government investment by introducing co-funding
and loans for full time adults (24 and over) and programmes
leading to a recognised Level 3 and 4 QCF qualification
RATIONALE
In a constrained fiscal environment, we need to
re-balance investment in skills by Government,
individuals and employers to reflect the benefit
each receives.
•
•
replacing grant subsidy from Government with
income-contingent loans for this group. As this
group currently receive co-funding or full-funding
for their training at Level 3 and 4, this policy
change would represent a significant culture
change for this group.
•
Published the underpinning principles for loans in
further education in Investing in Skills for
Sustainable Growth. Over the next few months
we will engage with colleges, training
organisations and others on implementation.
•
To feed in your views now email
[email protected] by 31 March 2011.
This means that individuals should meet the
costs of investment where they capture the
returns through increased wages.
• Although people with Level 3 and above
can still be adversely affected by information
failure and credit constraints, they tend to
have greater earnings potential and the
private returns often outweigh the social
benefits.
POLICY DIRECTION
co-fund tuition for people aged 24 and over
taking a first, full level 2 qualification
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7
Reducing number of intermediary bodies,
simplifying systems such as the funding process
and removing regulation
RATIONALE
• To move to a more demand-led
system, we need to free up the system
to be more responsive to what
individuals and employers want.
• Within this system the relationship
between further education and its direct
customers (individuals and employers)
takes primacy and is the key to
securing high quality and relevant
training.
“…providers need to be responsive to
ongoing developments in the labour
market ....this raises questions about the
forces driving the system, whether it is
too complex and sufficiently empowers
customers,the pattern of future demand,
its performance and scope for quality
improvement [1]
[1] UKCES, Ambition 2020, July 2010
POLICY DIRECTION
• Reducing the number of bodies in the FE and skills
landscape and streamlining the remainder – this is
being achieved through the abolition of some bodies,
the merger of others and the streamlining of all public
bodies in receipt of public funds
• Simplifying systems and processes – simplifying the
funding system; aligning pre and post 19 systems
where possible; extending peer review; reviewing data
requirements; and encouraging collaboration and
shared services across the sector
• Removing regulation and introducing new
freedoms and flexibilities for the sector – first set
announced in June 2010 and further freedoms to be
announced shortly. These include a number requiring
legislative change being introduced in the next session
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Funding and Investment
(£000s)
SR baseline
Budget
Indicative Budget
2010-11
2011-12
2012-13
2,835
2,795
2,685
360
605
648
OLASS
Adult Safeguarded Learning
134
133
131
210
210
210,
Learner Support
144
151
163
Information Advice and Guidance
82
81
84
Skills Infrastructure (including LSIS)
137
56
51
305
278
3,734
3,607
179
172
Adult Skills Budget
of which Apprenticeships
Capital Grants
Total Skills Funding Agency
Funding not routed through the Skills Funding Agency
337
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Illustrative forecast learner numbers
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Illustrative in the context of increased freedoms and flexibilities for FE colleges and training
organisations to meet the needs of employers, learners and communities.
The Skills Funding Agency will continue to update these illustrative forecasts based on actual
delivery data.
Skills Funding Agency Learners 2010/11 to 2012/13 (AY)
Illustrative participation (learners)
Adult Skills
…….of which
Apprenticeships total
Adult Safeguarded Learning
Total learners
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2010/11
2,659,402
388,490
2011/12
2,347,616
437,068
2012/13
2,114,670
497,044
780,000
787,800
795,678
3,439,402
3,135,416
2,910,348
Illustrative forecast reduction in training places is mainly as a result of redeploying funding
previously allocated to Train to Gain to support more Apprenticeship places which provide
longer and more comprehensive programmes with higher economic returns.
Going forward, loans will support the capacity to sustain learner participation.
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In Summary by 2014:-
•Better choice for prospective learners through an all age career service
•Lifelong learning accounts for all
•New set of licences to practice
•New simplified funding system that provides full subsidies for basic skills and 19-24
•Co funds post 24 level 2 and apprenticeships
•New funding route via student loans for level 3 post 24
•Reviewed and reformed Basic skills
•Adult learning underpinning the growth and the Big Society agenda.
•New freedoms for colleges to determine their own portfolio of provision
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