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Lifetime Skills Guarantee – Long-term aim should be routing all adult funding through Individual Skills Accounts

Jane Hickie
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In response to @BorisJohnson’s speech today (29 Sept), introducing the “Lifetime Skill Guarantee“, training providers say now is the time for the government to get radical on its approach to adults retraining and gaining new skills.

The Association of Employment and Learning Providers, which represents training providers who train 7 out of 10 apprentices in England, has welcomed the PM’s pledge to expand apprenticeships and to invest more in adult retraining, but argues that the impact of the pandemic means that the entire system of government funded adult education should be overhauled and simplified. CBI and City & Guilds are among other bodies who support the introduction of individual skills accounts.

Association of Employment and Learning Providers managing director Jane Hickie said:

“It’s good to see National Skills Fund being invested in extra and much needed funding for adult education alongside the adult education budget and we have recommended that the comprehensive spending review should integrate these two budgets and the National Retraining Scheme into a single pot which providers of all types can access. 

“The next step after that is that adult learners should access the pot instead via properly regulated individual skills accounts, so we end up with a fully demand-led system like we now have for employers with apprenticeships.”

Senior government officials have made it clear that the new adult learning entitlement in today’s announcements can be delivered by providers of all types, e.g. adult community learning institutions and independent training providers, as well as colleges.

Achieving Social Justice through Apprenticeships and Adult Education – #Post16RevolutionaryReforms

We should start on a very positive note. Not since Gordon Brown asked Lord Leitch in 2004 to undertake a review of skills have we seen government at the most senior levels embrace the importance of skills to the economy in the way that Boris Johnson and Rishi Sunak have done in the last few months.

Before Covid-19

It is important to remind ourselves of the circumstances in which the white paper is being published. The paper’s scope is expected to be much broader than the role of colleges and this is being driven from the top.

Even before Covid-19 arrived, senior ministers had made it clear that they wanted an education system which was more responsive to the skills needs of the economy. We are now seeing this thinking applied to the debate about universities as well as FE colleges. Official data shows that only 41% of university graduates were securing full-time jobs before the pandemic and so a holistic approach to HE and FE reform is required.

The Covid-19 Response

Of course, Covid-19 has had a dramatic impact on our economy, employment and unemployment. The Association of Employment and Learning Providers (AELP) has been encouraged by the employment and skills response to the pandemic, with the £111m boost for traineeships and the financial incentives for employers to take on new apprentices.

We also expect the Kickstart Jobs Scheme for 16-24-year olds to make a difference in helping young people keep in contact with the labour market. Even so, because of the continuing rise in unemployment, including apprentices made redundant following the end of furlough, more short-term action is needed.

The White Paper and Longer-Term Reform

A significant challenge, however, is the link between the employment and skills response to Covid-19 and the longer-term reform for further education to be announced in the white paper. We do not know how long the pandemic will last and the short term can very quickly become the long term.

The government, however, will be on track if it is producing a white paper that is looking well beyond the role and financial sustainability of colleges.  Whether it is   for young people or adults, we need a vision and plan for work-based learning and technical education which really does create a ladder of opportunity that embraces diversity and is inclusive. Funding should follow the choice of either the employer or the learner.

With a digital account operating for each employer accessing apprenticeship funding, the biggest step which ministers should take is reintroducing individual skills accounts for adults.

Apprenticeship Funding Reform

Further reforms to apprenticeships are likely to feature strongly in the white paper. AELP will be interested to see whether they are the culmination of a review of the apprenticeship levy which was originally announced by the former chancellor Philip Hammond in October 2018.

Policymakers should be resisting siren voices about unused levy. Instead the white paper must address the budget overspend issues which were obvious before the virus struck. The pressure on levy funding with the spending on higher level apprenticeships has only gone away temporarily. As soon as the economy recovers, it will be back.

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AELP wants to retain the principle that employers should be able to choose how they spend their levy and a separate SME apprenticeship budget (of at least £1bn a year) should solve the problem. Otherwise we need to find a way to rebalance the system to stop the huge falls in apprenticeship opportunities for young people and at the lower levels since April 2017 (House of Commons Library Briefing, Jan 2020). Just like other forms of education for under 19s, apprenticeships for 16-18-year olds should be funded from the 16-19 education participation budget and not from the levy.

Bringing back individual skills accounts

The sector needs to generate better value for money from the Adult Education Budget (AEB). The impact of Covid-19 and rising unemployment make more effective use of the £1.5bn budget absolutely essential whether it is for upskilling adults in work   or giving new skills to those who have sadly lost their jobs. AELP has supported the devolving of half of the budget to the combined authorities but how the money is allocated nationally and in the regions needs to be reviewed.

In the shorter term, we certainly believe a great deal more and open procurement is required instead of many of the current ineffectual grant allocations which have led to years of annual budget underspends. The recession might require a big increase in the AEB because of the rise in unemployment but it needs to be procured to the colleges and providers who can fully utilise it directly without the need for wholesale subcontracting and unjustifiable management fees.

In the longer-term, the solution should be the return of properly regulated Adult Individual Skills Accounts to access all AEB funding instead of relying on grants and procurements. Just like employers have a choice of provider with apprenticeships, each adult learner should be allowed to take their entitlement to where they like as long as quality assurance is in place.

The government should also integrate the National Retraining Scheme, the National Skills Fund and the UK Shared Prosperity Fund into the Adult Education Budget to ensure a more responsive system to support learner demand. In turn, they should be routed through Adult Individual Skills Accounts.

More Recognition for Level 2 Provision

Over 40% of the school population at 16 has not achieved a full Level 2. For a large proportion of young people, a single leap to Level 3 is impossible and recognition of achievement at Level 2 is vital for motivation and progression.

We need to see this acknowledged in the white paper, especially in the context of apprenticeships and technical education with the government having chosen to start T levels at Level 3.

If we are serious about social justice, the current IfATE review of apprenticeship funding bands should produce a set of outcomes that make some Level 2 apprenticeships more viable – the adult care worker standards being a very pertinent example in present circumstances. Similarly, ministers should finally be doing something about the poor funding of English and maths functional skills teaching when delivered as part of an apprenticeship.

And we must not forget that the AEB also has a key role to play here for adults. The focus has been often been on improving literacy and numeracy but increasingly it is on teaching basic digital skills as well.

Three Reforms for the White Paper

  1. First, 16-18 apprenticeships should be funded out of the 16-18 education participation budget, thus releasing more funding for 18+ apprenticeships at all levels.
  2. Second, the white paper should signal significant extra resources for the Adult Education Budget which is brigaded together with funding from the National Retraining Scheme, the National Skills Fund and the Shared Prosperity Fund. The long-term aim should be routing of all adult funding through Individual Skills Accounts.
  3. And third, the white paper should restate the importance of Level 2 for 16-18-year olds, 19-24-year olds and 25 year olds and over to achieve social justice and retraining for others.

Jane Hickie, Association of Employment and Learning Providers

‘Revolutionary Forces’

In the immediate aftermath of the Covid-19 pandemic, it is easy to forget that there were wider revolutionary forces at work on the UK’s economy before the virus outbreak.

Issues such as Brexit, the rise of automation in the workplace, longer working lives, and poor UK productivity have brought into even sharper focus, education and skills. NCFE and Campaign for Learning (CfL), published the first in the series of ‘Revolutionary Forces’ discussion papers on 6 July 2020.

In this Revolutionary Forces series different perspectives and proposed reforms for the post-16 education and training system have been brought together in one pamphlet, from expert stakeholders, think-tanks and educational professionals.

Building on the recommendations outlined in the first paper for flexible reforms that support economic and social renewal, this new paper, “Reforms for a Revolutionary Post-16 White Paper“, takes a deeper look at which areas need to be addressed.

The authors are:

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