Impact of the Comprehensive Spending Review (Part 1) How the CSR will change the way providers work and deliver training Ainsley Cheetham Thursday 25 th November 2010

The information on the following two slides is taken from the BIS business plan published in November 2010:

Coalition Priorities for Post-19 Training and Skills Delivered by FE Providers The Coalition will no longer: Impose central bureaucracy on providers Fund skills training that employers would help to pay for anyway Fund entitlement for adult skills courses to full fee remission for Level 2 aged 25 and over and first full Level 3 aged 24 and over (instead the department will offer loans to learners at Levels 3 and 4 aged 24 and over) The Coalition will re-balance the economy by introducing: Local Enterprise Councils (LEPs) A Regional Growth Fund, with the first round in January 2011 (funding to invest in sustainable private-sector growth)

Building an Internationally Competitive Skills Base This will be achieved by: 75,000 extra Adult Apprenticeships by 2014/15 Introducing a Specification of Apprenticeships for England (SASE) A new system of loans for FE learners similar to HE loans by 2013/14 Providing a new round of growth-initiative funds for employers to co-fund projects that invest in training and skills development Launching a new careers service to help learners make informed choices Scaling back of FE quangos Ensuring public funding is fair and follows learner choice Reforming informal adult and community learning to support communities and the big society Developing proposals to replace Train to Gain with a new programme targeted at SMEs For job seekers - all agencies to collaborate to introduce service academies

Further Clarifications Given in the Publication Reform of the Skills System to Support Growth In addition to the business plan: Further Education and Skills budget for 2011/12 will be £3.7 billion to support over 3 million post-19 learners. £605 million invested in Adult Apprenticeships with over 200,000 starts Fully funded training for young adults aged from 19 up to 24 undertaking their first full Level 2 or 3 qualification when they do not already have one Fully funding basic skills courses for individuals who left school without basic reading, writing or mathematics Protect investment of £210 million in adult and community learning to support personal development, inclusive communities and a route to formal learning from the disengaged

Controls Which Will be in Place to Judge the Success of These Changes Funding per student in Further Education and Training Administrative cost of the FE system as a percentage of the total funding to FE colleges Proportion of graduates and college leavers that go into employment or further training and are still there after six months The amount of funds the Government has provided, guaranteed or leveraged to deliver finance to SMEs Employability of FE graduates from specific courses Number of apprenticeship new starts and achievers Destination of leavers from FE providers

Coalition Priorities for Year Olds Increase the number of Academies Introduction of new University Technical Colleges from 2011 Introduce a new pupil premium for disadvantaged pupils Reform funding systems Reduce the regulatory and other burdens on schools and sixth form colleges

Introduction of Reforms Will Include The unit funding of post-16 education Funding per disadvantaged pupil Spending by maintained schools on back office functions Allocation of funding at age 16 Allocation of funding at age 19 Number of apprentices in training nationally Number of new schools by type (eg academies, university technical college etc) Number of NEETs Participation in education, training and employment by year olds in England by local authority

Summary of Proposed Changes (Part 1) Removal of EMA payment for new starts from 1st January 2011 Removal of automatic fee remission for Level 2 learners for adults over 25 (possible by 1st April 2011) Removal of the need for the four pathways of learning for year olds Introduction of learning loans for adult learners. Introduction of competitive funding for specific training and skills courses Reduction in bureaucracy which will lead to more internal controls for providers Additional focus on apprenticeships for adults New programmes and funding arrangements for employers and those looking to break into the labour market.

Summary of Proposed Changes (Part 2) For the 2011/12 academic year the following changes to funding will apply for all new and existing learners: We will focus fully-funded provision on people who are unemployed, on Jobseekers Allowance and Employment Support Allowance (Work Related Activity Group) to help them obtain work (such training could include units and awards as well as full qualifications) We will fully fund ESOL for individuals on the benefits listed above with co-funding for those who are settled here (ESOL delivered in the workplace is no longer eligible for funding) We will co-fund Level 2 provision in SMEs of up to 250 employees only We will reduce funding rates by 4.3% compared with 2010/11 We will remove the Skills for Life uplift for literacy and ESOL Total budget for Teaching and Learning will be £3.1 billion with £605 million ring fenced for adult apprenticeships A single Adult Skills Budget will be in place but with fewer direct contracts

How will the Changes Affect Providers? The impact of the changes will include: Changes in the structure of the organisation Staffing - including pay and conditions of service Learner type and expectations Commitment to the local agenda for communities and employers, with colleges taking a leading role in the ‘big society’ agenda Changing curriculum and training programmes Implementing payments to learners - including administering payments to disadvantaged learners Providing services which learners, employers and the community value Dealing with competition and new learning provider types, including academies and university technical colleges

Follow-Up Sessions Next week we will explore each of the challenges mentioned in addition to a few more. This follow-up session will include some of the key pointers and information to assist providers in making the ‘right’ choices to ensure that their organisation remains sustainable within the sector.