Magazine article Times Educational Supplement

Government Rejects Call to Localise Entire Skills Budget: Fe Focus

Magazine article Times Educational Supplement

Government Rejects Call to Localise Entire Skills Budget: Fe Focus

Article excerpt

But it will devolve control to employers and trainees.

A radical proposal to transfer control of the entire skills budget to a local level, made by Lord Heseltine, has been rejected by the government in order to protect national funding of apprenticeships.

Some of the remaining Pounds 2.2 billion of adult FE funding could still be transferred to local enterprise partnerships (LEPs), which were created in 2011 to bring local authorities and business together for economic development and job creation across the country.

But the government's response to the Heseltine review said that it will continue to hand control of funding to employers and individuals, using direct employer funding and the loans system currently available for over- 24s on level 3 courses.

"The government is reforming the skills system, looking at ways to put more control in the hands of employers and trainees rather than providers, such as through the Employer Ownership (of Skills) Pilot, Advanced Learning Loans and the response to the Richard review," the report said, referring to entrepreneur Doug Richard's recommendation that apprenticeships should be funded through employer tax credits. "It is important to continue the focus on transferring control to employers and maintain a nationally funded apprenticeship system."

Ministers had originally proposed that the Employer Ownership of Skills programme, which will direct Pounds 340 million to business bidders, would move from the control of the UK Commission for Employment and Skills to LEPs. But the response to the review by Lord Heseltine (pictured, left) suggests that the government now sees direct employer funding as separate from local funding.

However, it said LEPs should be given "an element" of skills funding, which is likely to include Pounds 173 million of European Social Fund money, to help them influence provision, particularly for small and medium businesses.

From 2015, the money would go into a single local growth fund to be spent as each partnership required, and it would not be ring-fenced for skills.

The future of the Skills Funding Agency will be determined in the spending review this summer, when the Treasury announces how much of its budget is to be devolved.

Julian Gravatt, assistant chief executive of the Association of Colleges, said colleges and training providers will still be able to benefit from all the funding that is being devolved to LEPs, employers and individuals through loans. …

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