Investing in Skills: taking forward the Skills Strategy
TUC submission to the LSC consultation document on fees, funding and learner support in further education
Introduction
This document sets out the TUC’s response to the LSC consultation on the priorities for future public investment in skills in line with the key recommendations of the Skills Strategy White Paper - 21st Century Skills: Realising our Potential - published in July 2003. A number of individual affiliate unions, especially within the education sector, are making substantive submissions in their own right as well as contributing to the TUC response and these submissions will include detailed recommendations on technical funding issues that are not within the remit of the TUC submission.
The background to the consultation document issued by the Learning and Skills Council (LSC) is the new entitlement set out in the White Paper enabling any adult without a full level 2 qualification to have access to free learning to achieve such a qualification. In addition to this, the consultation paper also looks at the implications of the commitment in the White Paper to target more public funding on the delivery of level 3 qualifications that are meeting particular sectoral or regional skill priorities.
The proposals set out in the LSC consultation document do not change the overall level of public funding for the FE sector, but as highlighted in the White Paper, the implementation of the new Level 2 entitlement in particular will require an increased contribution by employers and also individuals who are outside existing and forthcoming priority groups.
At present FE colleges are required to remit the fees for the following three groups: students aged 16-18; adult learners following a basic skills course; and, learners in receipt of a relevant income-related benefit. In future FE colleges will have to remit the fees of all adults eligible for the ‘Level 2 entitlement’ and this will have a major impact on the FE funding system. This ‘Level 2 entitlement’ is currently being trialled in the North East and South East regions and the intention is to extend the entitlement across England in 2005/06.
The Secretary of State for Education and Skills set out the scale of the challenge in ‘achieving a new balance of responsibilities in funding between government, employers and learners’ along these lines in a major speech earlier this year (Keynote Address to LSDA summer conference, 15 June 2004). In this speech the Secretary of State said that the contribution that employers and learners make towards the cost of training in the UK compares poorly with other countries and that the prioritising of more public funding on adults without a full level 2 qualification meant that ‘the only way through this is to generate resource from other areas, and particularly employers’.
While the impact of the proposals set out in the consultation paper will have a significant impact on work-based learning delivered by FE colleges, it should be noted that the consultation document also states that the LSC will be ‘considering separately how these principles might apply in work based learning and adult and community learning’. In particular, the LSC will be consulting later this year on the future funding arrangements for work-based learning which is not externally accredited and it will be directly drawing on the lessons that are coming out of the Employer Training Pilots and related skills initiatives.
The policy background
In its response to the White Paper the TUC positively welcomed the targeting of more public funding on upskilling employees without level 2 qualifications (Skills Strategy White Paper, TUC Executive document, October 2003). Support for the general thrust of the government’s Skills Strategy was also endorsed at Congress 2003 and in particular ‘its support for adults in achieving level 2 and 3 qualifications’ while ‘safeguarding a wide range of adult learning programmes for culture, leisure and personal fulfilment’ (Composite 19, Congress 2003).
It was also made explicit in the White Paper that targeting a greater proportion of state funding towards priority groups meant that ‘over time, colleges and other providers [would] need to better focus their resources to support this aim (Skills Strategy White Paper, paragraph 4.25). The LSC consultation paper is the first stage in phasing in a new system for fees, funding and learner support in the FE sector in order to support directing more resources to those individuals without a Level 2 qualification.
The latest statistics also highlight the scale of the challenge. Around 29 per cent of the workforce (or 6.7 million adult employees) are currently not qualified to Level 2. Admittedly, there has been some progress in recent years, e.g., five years ago 32 per cent of the workforce (or 7.1 million adult employees) lacked a level 2 qualification (Skills Alliance: Skills Strategy Progress Report, DfES, 2004). However, this rate of progress needs to accelerate rapidly if the government’s PSA target of reducing the number of adult employees without a level 2 qualification by 40 per cent by 2010 is going to be achieved.
Supporting adult learners
However, a key concern is that the proposed fee reforms will have a detrimental impact on the participation rates of many adult learners who do not fall within the Skills Strategy priority groups and who would be discouraged from learning by the imposition of fees. For example, women returners who may be qualified up to Level 2 (e.g. on the basis of school qualifications from a long time ago) and who need to undertake courses to re-skill themselves in preparation for returning to the labour market. There is also the case of FE students who are studying on courses below Level 2 which don’t fall within the basic skills category - many of these individuals do not currently pay fees but are likely to do so in the future.
The LSC consultation paper acknowledges that ‘it is important to sustain a wide range of first step and return to learn opportunities’ but argues that this ‘is best handled through the exercise of local discretion by colleges and providers, making judgements as now about the use of available learner support funds which can be used to help meet those needs’ (paragraph 3.35). While this approach will enable colleges to tackle some of the barriers to learning that imposing fees will create for many adult learners outwith the priority groups, there is evidence from recent research (see below) that this particular impact of fee reform needs to be considered in more detail.
The position of many adult learners that may be disincentivised by the changes to fees is highlighted in a study jointly commissioned by the DfES and LSC in support of the consultation process (Adrian Perry, Talking About Fees: provider policy and practice on course fees, LSC, 2004). For example, this study highlights the case of full-time adult students on Access courses, concluding that ‘even colleges that broadly held a tough fee policy feel that this group will simply disappear if charged full fees’ (paragraph 4.14). The study also cites the case of many post-school students, especially in inner city areas, who take more than three years to get up to Level 3 ‘either due to unsuccessful study at school or social factors like early pregnancy or family dislocation’ and who could in principle be outwith all the priority groups under the new fee system (paragraph 5.8).
One of Perry’s key recommendations is that a study should be undertaken to look at adult learners in the FE sector, what they currently pay and ‘whether alternative provision might meet their needs as well as current programmes and what would be the cost of any concessions to this particular group’ (paragraph 6.1). The TUC thinks that this is a sensible proposal that would help policy makers to plan changes to fees, funding and learner support that would both meet the requirements of the Skills Strategy and the need to avoid unnecessary disincentives being generated for many adult learners.
Intermediate and higher level skills
While the new system will take into account the commitment in the White Paper to prioritise Level 3 qualifications which meet regional and sectoral priorities, it is also imperative that it will not discourage adults following level 3 courses that do not fall into these priority areas. For example, the case cited above of young people who may take a number of years to achieve a Level 3 qualification could fall into this category if the qualification they are studying for is not a regional/sectoral skills priority. However, it would be ridiculous if the reformed system discouraged such individuals from attaining intermediate and higher level qualifications.
There is also little research on how learners studying for qualifications at Level 3 and above will react to an increase in fees. The Perry study cited above quite rightly argues that there is a ‘lack of evidence about the sensitiveness of enrolments to fees’ and that the government should therefore ‘seek to uncover real evidence of price elasticities, rather than collecting unsupported views’ on how learners and employers will react to the proposed changes.
On this note, it is important that there is a willingness on the government’s part to review the new system at an early stage and to consider major policy changes if significant numbers of individuals are clearly being discouraged from learning in the FE sector as a result of these reforms.
Employer obligations
The consultation document highlights that the new system will require employers and certain individual learners to make a greater financial contribution when accessing the FE system for learning than at present. However, there are concerns that because there are very few obligations on employers to provide training to their employees, that the brunt of the need for extra revenue will fall on individual learners in the FE system.
While the consultation document does highlight various initiatives to encourage more employers to use FE colleges for work-based training, it is clearly not within its remit to look at how to strengthen employer obligations to train. However, as the Secretary of State said in his recent speech to the LSDA Conference (see above), there needs to be a significant increase in the contribution that employers make to the funding of the FE sector.
While FE colleges have a part to play by meeting the particular training requirements of employers and employees, the wider policy context needs to support this by strengthening employer obligations and employee rights in relation to work-based learning. The TUC is currently campaigning for a number of policy changes, including the following:
- strengthening collective rights on training by (i) extending collective bargaining to cover training under the union recognition legislation (ii) using the Information and Consultation Regulations to make consultation on training compulsory, and (iii) developing Sector Skills Agreements that would give unions a genuine collective voice at the sector level; and
- strengthening individual rights on training by (i) introducing a statutory entitlement to paid time off, especially for employees without a Level 2 qualification, and (ii) extending the Employer Training Pilots across the whole of England.
There is a real danger that the proposals set out in the consultation document will be completely undermined by employers failing to increase their spending on learning delivered by the FE sector. It is therefore imperative that the government looks at a wide range of measures to drive up employer engagement, including the policy changes set out above.
Other issues
There is a range of other significant issues which the government needs to take into account when drawing up its plans for reform of fees, funding and learner support in the FE sector and these are as follows:
The equality agenda - there is a real danger that the learners that will lose out under the new system will be disproportionately those that are already discriminated against in the labour market. For example, the Perry report has highlighted the extent to which people enrolled on Access courses may be adversely affected and it is crucial that the government ensures that the reforms will not have a discriminatory impact.
Timescale - the FE sector is already having to implement a wide range of government initiatives and for this reason, and to ensure that the planed reforms can be assessed and implemented effectively, the longer implementation timescale should be the preferred option.
Consultation with trade unions - the government needs to consult closely with the trade unions when planning and implementing the new system. This needs to involve consultation at the national level with the appropriate trade unions and also through the Skills Alliance. In addition, there should also be an obligation on LSCs to consult with trade unions at the regional and local level on this and other issues, as there have been concerns that this has not been the case under the Strategic Area Reviews process.
Penalties and incentives - the TUC already has serious concerns about the introduction of differential funding, based on performance, for FE colleges and it is highly regrettable that the consultation document is recommending a similar model for the new system envisaged for the reform of fees and funding. This will simply exacerbate the situation of FE colleges whose performance may be strongly influenced by socio-economic factors in the local area beyond their control.
Discretion of individual colleges - individual colleges will need to have discretionary powers to ensure that the new system can be implemented in a way that meets the need of the learners in its locality and that perverse incentives are not generated.
Financial support for adult learners - moves to extend financial support for adult learners in the FE sector is very welcome but there is a danger that too much emphasis is being put on means-tested grants and also encouraging individuals to take out loans (e.g. Career Development Loans). There is also a strong case for aiming for a financial support system that provides an adequate level of financial support for all FE students.
Conclusion
The TUC is strongly supportive of the aim of the Skills Strategy to prioritise those adults who are working towards Skills for Life and/or Level 2 qualifications and accepts that there needs to be changes to the FE sector to implement these changes. However, it is crucial that the planning and implementation of these changes do not have an adverse impact on the ability of the FE sector to deliver a diverse range of learning opportunities and qualifications and that barriers to learning are not unintentionally generated for certain groups of learners as a result.
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