Welcome Skills Funding Agency : Policy and Funding Update By Liz Searle, Skills Director – East Midlands

Contents Adult Skills : a new approach Government policy: CSR, Skills Strategy and Skills Investment Strategy Investing in Skills for Sustainable Growth : Future FE funding What does this all mean?

Adult skills : a new approach Colleges and Training Providers –Responding to the demands and needs expressed by employers and learners (who in turn will have access to better information support their choices – eg. All Age Careers, LLAs) –Respond to partners JCP LEP’s –funded by commercial (fee) income as well as provision which is fully and co-funded by the taxpayer –Able to direct public funding within and across programme areas –Rewarded for performance and meeting priorities

Adult skills : a new approach Stakeholders (eg. LEPs, JCP) Expressing the needs of their area/sector and attempting to “nudge” FE Provision – directly - by using intelligence and engaging customers Skills Funding Agency – A slimline funding body –Not a planning body and rarely intervening – Contracting with far fewer FE providers than previously (MCLs)

Four things on the “to do” list 1. Install a simple and flexible system that embeds accountabilities and incentives so that without interference, the FE sector will itself deliver the outcomes learners, businesses and communities need. 2. Trust that this approach will work. 3. Disseminate intelligence and information, advice and guidance to help providers and customers make good decisions, but also gather intelligence so we can publish what is being delivered, and monitor the system as a whole. 4. Be prepared to intervene in the hopefully rare instances when bits of the system look like they might need help.

Government Policy Consultation on Skills Strategy and FE Funding Methodology – October 2010 CSR – published 20 th October “Skills for Sustainable Growth” and “Investing in Skills for Sustainable Growth” – published 16 th November Skills Conditionality Consultation – Published 9 th December 2010 on DWP Website

Investing in Skills for Sustainable Growth Context : wider strategy “Skills for Sustainable Growth” Three underpinning principles: –Fairness: focussing public funding on those who need it most –Shared responsibility: shared investment –Greater freedom: trusting Colleges, training providers and key stakeholders (eg. LEPs, JCP) to do their jobs FE budget: £3.7bn in 2011/12 falling to £3.3bn by 2014/15 (learner numbers 3.4m 10/11….expected to fall to 2.9m by 12/13)

Investing in Skills for Sustainable Growth Savings through: –Efficiencies –Policy changes –Unit cost reductions –Changes to statutory entitlements –Re-balancing who pays –More freedoms for colleges

Future FE funding – the headlines: 75,000 more adult apprenticeships – with a focus on Level 3 Fully funded first Level 2 or first Level 3 for people aged 19 up to 24 Fully funded Skills for Life (basic skills) provision From 2013/14 Government-backed, income-contingent loans for people aged 24 and over undertaking Level 3 or higher qualifications Units and Qualifications fully funded for JSA and ESA (WRAG) claimants

Future FE funding – the headlines: Replacing Train to Gain with an SME-focussed programme to help small employers to train low- skilled staff Helping people who are on active job-seeking benefits to secure work through training which is relevant to the labour-market Further reductions in bureaucracy, Minimum Contract Levels and a single Adult Skills Budget from 2011/12 academic year

“Through the CSR we have protected funding of £210m for informal adult and community learning, with increased flexibility across the four components” Investing in Skills for Sustainable Growth (page 12, Adult Safeguarded Learning (ASL) paragraphs 31 to 33)

Adult Safeguarded Learning (ASL) “During the coming months we will work with the sector to develop a new model…” (which) “will support the development of the Big Society, focusing public funding on people who face barriers to learning…..” “We plan to build more effective progression routes for those people who want to progress to formal learning” “To enable providers to be more responsive to their communities in the 2011/12 AY we will combine the four elements of ASL into a single budget line”. Investing in Skills for Sustainable Growth – page 12

European Social Fund Objectives of ESF Operational Programme (OP) align with Skills Strategy, albeit narrower emphasis Combination of CFOs aligning provision, eg DWP’s ESF will support workless households, moving them towards actively seeking employment, Skills Funding Agency ESF will provide employment related skills support to help secure sustainable jobs.

European Social Fund Using streamlined approach to procurement using ACTOR – national exercise for first half of PfU, R2R and element of support grant to employers to take on Apprentices from those supported through this provision – 16 months to start in April Will ensure geographical coverage Will still need niche and specialist provision best delivered through voluntary and community organisations, but contracting arrangements may be different to previously:

European Social Fund Minimum Contract Levels – but: Removal of 51% rule will allow greater subcontracting; successful prime contractors will be published to facilitate new arrangements Capability to deliver, not to write good bids

What does this all mean? 1.Customer power - A greater expectation of financial contributions from customers (co-funding, no funding, loans) –….and in turn, that they will have higher expectations of the FE and provider system –Better information/more transparency –More freedom for providers to respond to local needs –Potential to use QCF for credit accumulation –Less central priority setting

What does this all mean? 2. Stakeholder power - College and providers need to contribute to local communities and economies –Expect direct engagement with a range of stakeholders (LEPs, Local authorities, JC+, employers, SSCs, learners….) –Consult on business plans and set out how public money will be used –Publish information on how their plans have been delivered

What does this all mean? 3. More responsibilities for colleges/providers –Local planning by Colleges and providers, no central planning –Engagement with / responsiveness to stakeholders and customers –Tougher decisions taken locally on the use of scarce resources –Tighter rules on eligibility – Colleges and training providers have to work much harder to earn their financial allocations –……and sell (full cost) to people who will pay more –Need to deliver chunks of learning, using QCF for accumulation of credits –All providers need to be on ACTOR!

What does this all mean? 4.Skills Funding Agency –Simpler system – streamlined structure. TBC March/April 2011 –We assume the system will work – ie don’t default to micro- management –Step back from local relationships: responsibility of colleges and providers to engage with local partners – not ours –Continue to monitor the data – eg make sure Apprenticeships are delivered in line with Govt ambition –But where there are issues that local partners can’t resolve….we reserve the right to intervene

Thank you Skills Funding Agency : Policy and Funding Update By Liz Searle, Skills Director – East Midlands