From education to employment

The Cost-of-Living Crisis and Independent Training Providers

The cost-of-living crisis cannot be tackled without recognising the double whammy of tight labour market conditions and stagnant economic growth. Poor productivity and low attainment combined with tepid growth means wages have stagnated. There are currently 1.2 million unfilled vacancies with more and more employers struggling to find the right people with the right expertise.

A strong economy relies on a strong skills sector. Tackling the nation’s skills gap will be paramount. A renewed focus on lifelong learning is necessary, as well as making sure accessible and affordable training is available for people at all ages and levels. Independent Ttraining Providers (ITPs) are ready to play a central role in any strategy to close the nation’s skills gap – but they will need support to see them through a particularly tough set of circumstances.

Support for ITPs as Businesses

Training providers, like other businesses, are dealing with inflation rates not seen for a generation. Being able to cope with those rising costs is a major concern for ITPs and this is compounded by problems in recruiting and retaining staff. Support will be needed to ensure providers can weather the storm and continue to provide a wide range of high- quality skills provision.

The global energy crisis is threatening to jeopardise the significant progress the country has made in building a skills system that’s fit for the 21st century – at a time we need to be doing even more to fill the skills gap. The decision by the new Chancellor, Jeremy Hunt, to stick with reversing the increase in employers’ National Insurance contributions towards the Health and Social Care Levy and to continue the Energy Bill Relief Scheme will help ITPs at this time.

However, ITPs will need longer-term assurances that support will be in place while the energy crisis continues to result in rising costs. Failure to do so will mean employer and learner choice is significantly impacted.

Review Funding Rates for Post-16 Provision

Currently, funding rates for many qualifications are not reviewed on a regular basis – again threatening availability and learner choice. For example, funding for delivering English and maths Functional Skills qualifications as part of an apprenticeship has remained the same since 2014. Earlier this summer, research from the Learning and Work Institute set out the impact of this – with high inflation rates threatening to wipe out £850m of skills funding. This is very much in line with the experiences of many AELP members.

The amount providers receive for each qualification must reflect the real cost of delivery and all skills programme funding rates should be reviewed and adjusted at least every two years. Priority should be given to expedite decision making for qualifications in sectors that are under the most immediate pressure. However, this needs government departments and public bodies to have the resources and powers to do this. With the Government seeking to reduce civil service headcount by 91,000, this could lead to decisions on funding bands taking even longer than they do now.

Help Employers Take on Apprentices

There are also actions government could take to reduce the costs of delivering high- quality work-based learning. Bureaucracy is a huge barrier for small and medium-sized businesses taking on apprentices. The Department for Education (DfE) clearly recognise the scale of the problem and have committed to undertaking a simplification project, which is welcome.

The Government could boost the number of employers engaged in skills without committing significant new money, just by making the existing system much more accessible.

For example, having an auto enrolment apprenticeship system for employers who could activate their account when needed would save time and money. The apprenticeship funding rules also need addressing too, as they have become overly bureaucratic. Although we clearly need the right measures in place to ensure accountability, providers must be allowed to get on with what they do best – delivering high-quality skills provision.

Comprehensive Support Soon

While these are challenging times for our economy, ITPs are ready to meet the needs of employers and help fill our country’s skills gaps. That will increase productivity and boost our economy – something that’s desperately needed. However, providers need support to help them through the cost-of-living crisis and will be hoping that support comes soon.

Recommendation 1

The Government must extend the Energy Bill Relief Scheme and make it more generous if gas prices in world markets remain volatile and elevated. If ITPs are to continue to support the growth of the economy by tackling skill shortages, they will need certainty regarding future energy bills.

Recommendation 2

Funding councils in England should be given the resources and powers necessary to allow regular reviews of funding rates.

Recommendation 3

DfE, ESFA and IFATE must simplify further the rules around funding and assessment of work- based learning to reduce the costs of doing business for skills providers.

By Jane Hickie, Chief Executive, AELP

This article is part of Campaign for Learning’s series: Learning in the cold: The Cost-of-Living Crisis and Post-16 Education and Skills

Order of series

Day 1

Friday 21st October

  1. Louise Murphy, Economist, Resolution Foundation: The Cost-of-Living and the Energy Crisis for Households 
  2. James Kewin, Deputy Chief Executive, Sixth Form Colleges Association: The Cost-of-Living Crisis and 16-19 Year-Olds in Full-Time Further Education 

Day 2

Saturday 22nd October

  1. Becci Newton, Public Policy Research Director, Institute for Employment Studies: The Cost-of-Living Crisis and 16-18 Year-Olds in Jobs with Apprenticeships 
  2. Zach Wilson, Senior Analysis Officer and Andrea Barry, Analysis Manager, Youth Futures Foundation: The Cost-of-Living Crisis and 16-24 Year-Olds ‘Not in Full-Time Education’ 

Day 3

Monday 24th October

  1. Nick Hillman, Director, Higher Education Policy Institute: The Cost-of-Living Crisis and Full-Time and Postgraduate Higher Education 
  2. Liz Marr, Pro-Vice Chancellor – Students, The Open University: The Cost-of-Living Crisis and Part-Time Higher Education in England 

Day 4

Tuesday 25th October

  1. Steve Hewitt, Further Education Consultant: The Cost-of-Living Crisis: Access to HE and Foundation Year Programmes 
  2. Sophia Warren, Senior Policy Analyst, Policy in Practice: The Cost-of-Living Crisis, Universal Credit, Jobs and Skills Training 

Day 5

Wednesday 26th October

  1. Paul Bivand, Independent Labour Market Analyst: Economic Inactivity by the Over 50s, the Cost-of-Living Crisis and Adult Training 
  2. Aidan Relf, Skills Consultant: The Cost-of-Living Crisis and Employer Demand for Level 2-7 Apprenticeships 

Day 6

Thursday 27th October

  1. Mandy Crawford-Lee, Chief Executive, UVAC: The Cost-of-Living Crisis and Employer Demand for Level 4+ Apprenticeships and Part-Time Technical Education 
  2. Simon Parkinson, Chief Executive, WEA: The Cost-of-Living Crisis and Adult Community Learning 

Day 7

Friday 28th October

  1. David Hughes, Chief Executive, AoC: The Cost-of-Living Crisis and FE Colleges 
  2. Jane Hickie, Chief Executive, AELP: The Cost-of-Living Crisis and Independent Training Providers 

Day 8

Saturday 29th October

  1. Susan Pember, Policy Director, HOLEX: The Cost-of-Living Crisis and Adult Education Providers 
  2. Martin Jones, Vice-Chancellor and David Etherington, Professor of Local and Regional Economic Development, Staffordshire University: The Cost-of-Living Crisis – The Response of Staffordshire University 
  3. Chris Hale, Policy Director, Universities UK: The Cost-of-Living Crisis and Universities 

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