Magazine article Public Finance

No Train, No Gain

Magazine article Public Finance

No Train, No Gain

Article excerpt

For those who leam and work in the UK's further education and skills sector, this is a momentous time of change. There is the threat of upheaval, as employers consider whether to respond to recession by cutting training budgets. To counter this, on October 21, Skills Secretary John Denham announced a £350m training package for small businesses. He said: 'Small businesses are an important engine of our economy and we must make sure that we support them during tough economic times. We know that firms that invest in skills do better than those that don't, which is why we will be urging small businesses to take up this offer.'

In the Education and Skills Bill currently going through Parliament, the government seeks to raise the age of compulsory education or training in England to 17 by 2013, and to 18 by 2015. This means that those who started secondary school in year seven in September must continue their education to at least age 17.

The government is proposing another Bill in the 2008/09 legislative programme to transfer funding and responsibility for delivering 16-18 education and training in England to local authorities. If the Bill is successful, then in two years' time, the Learning and Skills Council - which currently has an annual budget of more than £1 lbn - will be abolished. In its place, the streamlined' Young Peoples Learning Agency will be set up to 'support' town halls as they take up the reins for £7bn of funding for young people. Another public body, the Skills Funding Agency, will take over responsibility for funding for learners aged 19 and over who are not in higher education.

A September report of colleges' responses to a government consultation showed that more were opposed to transferring funding to local authorities than supported the move. One respondent said: Of real concern is the varying quality of local authorities and thencapacity to undertake planning for an area of work for which they have had no real responsibility for over the past 15 years.' Colleges were under town hall control until 1993.

In schools and colleges in England, the fledgling diplomas have barely left the nest. These new qualifications, designed to bridge academic and vocational education, began this autumn and are set to play a major role in the government's reform of education for 14-19 year olds. In addition, revamped ?-levels, including an A* grade designed to stretch the top candidates, are being introduced this year. Also, it is now possible for further education colleges to obtain the power to award their own two-year foundation degrees, as colleges increasingly provide higher education, often in partnership with universities.

The government's ambitions for the sector have, in recent years, been shown in significant levels of capital investment - shiny new high-tech buildings, in other words. More than £4bn has been pumped into infrastructure projects in England, but these have added to financial risks in the sector because of a sharp increase in college debts, according to a recent report by the National Audit Office.

Denham and Schools Secretary Ed Balls reaffirmed the commitment to demand-led education and skills in a letter to college principals. It said: 'We are continuing with our development of a demand-led system that frees up colleges and providers to respond to the needs of individuals and employers'. For principals, the implications of this are major.

The Train to Gain employment training programme, which was designed to be employer -led and began national roll-out in 2006, is being further extended. The scheme encourages and subsidises employers to put on training programmes for their workforces up to the first full level 2 qualification (equivalent to grades A*-C at GCSE), through independent brokers. Over the next two years, its funding will increase to £lbn.

This could cost colleges a significant part of their core business, because Train to Gain funding is open to competition between colleges and private providers. …

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