1. Funding and what the policy documents won’t tell you Marriot County Hall, London 23rd March 2011 Twitter#Lsect

2. Budget announcements today The policies, and the maths The return of franchising under another name = Apprenticeship growth + Fee eligibility changes + Single line budget and MCLs + ? =

3. £400m extra in budget to support youth training Source: Page 42 of budget: http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf Slide by www.lsect.comhttp://cdn.hm-treasury.gov.uk/2011budget_complete.pdfwww.lsect.com £0 £20m £40m £60m £80m £100m £120m £140m £160m 2011-122012-132013-142014-152015-16 Financial year £40m for 80k work experience places (£500 average each) £150m to increase University Techinical Colleges from 12 to 24 £210m or £180m for 50k Apprenticeship places : 40k for unemployed youth and 10k (£75m) for Higher Level Apprenticeships Nothing on EMA replacement nor how to stimulate Apprenticeship demand or fees (19+) from employers Note: youth unemployment (18-24) currently running at 760k (18.3%)

4. 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

5. 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 * Source: 2010/11 BIS Skills Investment Strategy planned for 1.12m ALR learners 0% 10% 20% 30% 40% 50% 60% 70% Average from the 26 responses was 24% of learners ~ For England, 24% is 269k learners* Average ~ For England, 24% is £323m** ** 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

6. * Source: 2010/11 BIS Skills Investment Strategy planned for 1.12m ALR learners 0% 10% 20% 30% 40% 50% 60% 70% Average from the 35 returned reports was 26% of funding ~ For England, 26% is 291k learners* Average ~ For England, 26% is £350m** ** 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 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. Changes to inactive benefits part 2

7. 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) CollegeInactive benefit fundingPercantage of 19+ funding A£1,979,65829% B£2,672,66326% C£3,243,72031% D£5,333,34758% E£5,795,77945% And if funding is halved, twice as much of same delivery would be needed to achieve same allocation!

8. Single line budgets ~ 19+ Learner-responsive ~ 19+ Apprenticeships ~ Train to Gain Underperformance in one area can be off-set by overperformance in another But…. ~ 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??? ~ Minimum Contract Level policy means no budget for some

9. Risky consequeces to achieve targets? Pressure to quickly expand into new areas Introduction of Minimum Contract Levels + = Sub-contracting (‘franchise’) now back in fashion 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 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 http://www.lsect.co.uk/updates/22-03-11-ALR.asp Is everyone doing pre-nups (contracts)? The history of franchise provision not a good one

10. 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?

11. ~ 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? Can you reducing costs via: What else?

12. ~ 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? Can you increase supply and contribution rates (margins) via: What else?

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