Skills for Sustainable Growth
Skills for Sustainable Growth
The Government's Skills Strategy
January 2010
Introduction
The government published its adult skills strategy (Skills for Sustainable Growth) and its future funding plans for adult FE and skills (Investing in Skills for Sustainable Growth) last November. Both documents are available for download from the BIS website at: http://www.bis.gov.uk/policies/further-education-skills. The government held a consultation on its skills policy over the summer of last year and the new skills strategy is a response to this. In addition, the government has also used the skills strategy and funding document to flesh out the impact of the Comprehensive Spending Review (CSR) published on 20 October which indicated that the adult FE and skills budget would be reduced by 25 per cent over the CSR period (i.e. 2011-12, 2012-13 and 2013-14).
Summary of main measures in the skills strategy
Funding and entitlements - Existing entitlements for young adults and also those with Skills for Life needs will be safeguarded but entitlements for those aged 24+ will be scaled back dramatically, including abolishing the 'Level 2 entitlement'. HE-style tuition loans will also be introduced in 2013-14 for all adults aged 24+ wishing to pursue courses at Level 3 and above.
Apprenticeships - Expanding adult apprenticeships (i.e. people aged 19+) is the centrepiece of the skills strategy with a commitment to increase the numbers by 75,000 by 2014/15 at an extra cost of £250M (compared with the plans of the previous government) and to focus more on attainment at Level 3. There is also a welcome commitment to instigate 'diversity pilots' to tackle gender segregation and barriers faced by other groups. Building the union role in support of Apprenticeships is also highlighted.
Other workplace training (including Skills for Life) - Train to Gain will be abolished and non-apprenticeship training subsidies for adults will largely be confined to SMEs. While Skills for Life provision will still be fully funded for all employees, there will be reductions in funding levels. Public funding will not be available for ESOL in the workplace.
Co-investment strategies and the role of sectors - The strategy includes a commitment to try and extend the use of regulatory levers to influence employer investment at the sector level - albeit on a voluntary basis - through occupational licensing and training levy schemes. Other initiatives include a new Growth and Innovation Fund of £50M per annum with match funding from employers. The UK Commission will be reshaped and slimmed down and it will also be expected to develop a 'social partnership, with employers, trade unions and others'.
Right to Request Time to Train - The strategy simply confirms that the government will be announcing the results of its consultation on the future of the right in the near future (latest indications are that there may be an announcement at the end of January 2011.)
Low carbon skills - The strategy makes reference to low carbon skills in the context of the new co-investment approach at the sector level and it also gives a commitment that the government will be prepared to co-fund training in priority areas, 'for example to meet skills needs arising from the transition to a low-carbon economy.' Since the strategy was published the government has published a more detailed response to the consultation on a low carbon skills strategy initiated by the previous government.
Lifelong Learning Accounts & All-age Careers Service - The skills strategy confirms the proposals to introduce Lifelong Learning Accounts and a new all-age careers service. The government is looking for union learning representatives (ULRs) to play a proactive role in supporting the take-up of the new accounts and unionlearn will be considering how they can be used to best effect to support more learning at work, including their potential collectivisation.
Trade unions and unionlearn - The skills strategy makes a number of positive references to the overall role of unions, especially in relation to the role of ULRs in supporting apprentices and guiding learners using the new careers/accounts service. However, the wider union role in the context of social partnership is also referred to positively in the section of the strategy that focuses on the potential for new co-investment strategies and sectors to drive up investment in skills. Part of this agenda is a commitment to convince employers of the need for better skills utilisation, including looking at skills as part of a wider approach to modernising the workplace, for which close discussion with employees is essential.
Funding and entitlements
The skills strategy sets out a new framework of funding as regards individual entitlements (e.g. funding for college courses etc.) and government subsidies for the funding of workplace training (previously channelled through apprenticeships and Train to Gain). While total funding for apprenticeships is set to increase, Train to Gain will be replaced by a much smaller programme aimed at SMEs. In addition, individual entitlements will be scaled back and largely focused on those aged 19-23 and also those in all age groups that are eligible for Skills for Life provision.
The table below sets out how (and when) the changes to individual entitlements and government subsidies will kick in, which will not be until 2012-13 due to the need to legislate to 'reform [existing] statutory entitlements'. However, things will change again significantly from 2013-14 onwards when new 'student loans' will be introduced for those aged 24 and over who take up courses at Level 3 and above. It is assumed that the term 'co-funded' refers, in the majority of cases, to individuals paying fees based on the 50% fee assumption which is currently imposed on a much smaller proportion of students/trainees due to the more extensive entitlement framework (e.g. the 'Level 2 entitlement') that is currently in place.
As can be seen from the table, there is generally no change in the position of young people aged 19-23 in line with the commitment by the government to continue fully funding their attainment of Skills for Life and first Level 2 and Level 3 qualifications. The strategy says that Apprenticeships for those aged 19+ 'will continue to be co-funded at 50% by government and employers' but that this will change for older apprentices from 2013-14 (see below).
New Skills Entitlement/Funding Framework for 2012-13 & 2013-14 onwards
| Learning Level | Priority population groups and government subsidy for learning they can expect | ||||
| Individuals aged 19 up to 24
(2012-13 & 2013-14 onwards) | Individuals aged 24+ | Individuals who are unemployed and on active benefits | |||
For all those aged 24+ the major change is the removal of the 'Level 2 entitlement' which currently provides full funding to achieve a Level 2 qualification. In the future this will change to a co-funding arrangement and in the case of workplace training the situation will be even more restrictive. The skills strategy states that 'co-funding at Level 2 for workplace learning outside Apprenticeships will only apply to SMEs' which suggests that other employers will be expected to fully fund all Level 2 training and/or to come to some agreement on a co-investment approach with the workforce and trade unions.
From 2013-14 all individuals aged 24+ will be offered the opportunity to take out HE-style student loans to pay the fees for any training at Level 3 and above and there will be no more government funding for this age group to pursue learning at this level. This will even apply to Apprenticeships with the document stating that 'loans will apply equally to Apprenticeships, replacing the contribution formerly provided by Government'. The table also clarifies that the new loan system will apply to unemployed individuals aged 24+ who wish to pursue courses at Level 3 and above.
Apprenticeships
Expanding adult apprenticeships (i.e. people aged 19+) is the centrepiece of the skills strategy with a commitment to increase the numbers by 75,000 by 2014-15 at an extra cost of £250M (compared with the plans of the previous government) and to focus more on attainment at Level 3. It is anticipated that, as in the past, most of the government funding for adult apprenticeships (50% of the cost which is match funded by employers) will continue to be targeted on those aged 19-24. And as highlighted above it has been confirmed that in the future employees aged 24+ engaged in Apprenticeships at Level 3 will be required to take out a loan to pay an individual contribution.
As well as focusing more on achievement at Level 3, the government will continue to support the policy of the previous government to enable more apprentices to progress to HE and also to Level 4 Apprenticeships.
The Skills Strategy also emphasises that it expects trade unions (and unionlearn) to play a much bigger role in this area, as follows: 'We will also continue to support unionlearn to enable trade unions and Union Learning Representatives to work more effectively with employers to increase the number of high quality Apprenticeship places available; in particular by promoting the benefits of Apprenticeships to disadvantaged groups in the workforce and to employers who have not previously trained apprentices.' (page 20).
It is also welcome that the issue of widening access to apprenticeships is addressed in the skills strategy, especially in light of the evidence around gender segregation and barriers faced by other groups in the labour market (e.g. BME and disabled workers). The document says that:
- 'To ensure that the increased Apprenticeship opportunities are open to all, the National Apprenticeship Service will fund 18 'Apprenticeship Diversity' pilots over the next 12 months designed to test out different methods for improving access to Apprenticeships for under-represented sections of society. These projects will directly lead to approximately 5,000 opportunities and provide valuable evidence to influence the wider programme.'
- 'In addition, we will work with key partners to increase the diversity of people starting Apprenticeships and encourage men and women to take up atypical courses. The provision of flexible Apprenticeships will be encouraged' (page 21).
Apprenticeships for young people aged 16-19 come within the remit and budget of the Department for Education. In December the Young People's Learning Agency published its 16-19 Funding Statement and this provides data on apprenticeships for this age group. This states that the total number of these apprentices is planned to increase by 12,000 over the next year (up from 218,000 in the current academic year to 230,000 in the 2011/12 academic year). Within these figures, new apprenticeship starts for young people will comprise 131,200 in 2010/11 and 133,500 in 2011/12.
Other workplace training (including Skills for Life)
In contrast to the expansion of the Apprenticeships programme, there will be a huge scaling back of government subsidy for other forms of workplace training, especially for adult employees, which is currently largely channelled through Train to Gain. According to the BIS Business Plan 2014-15 (published immediately before the skills strategy), over the coming months government officials will be developing 'proposals to introduce a new workplace programme that will replace Train to Gain, targeted at SMEs'.
According to the skills strategy this new SME programme will receive £100M of government funding each year which is just around a tenth of the Train to Gain budget at its peak. It is also clear that this new programme will not be offering SME employers the equivalent of the Level 2 entitlement that is currently the core offer in Train to Gain. The skills strategy document states that the new programme will 'provide some co-funding for Level 2 qualifications delivered in these enterprises' which means that employers will be expected to make a significant contribution.
While Skills for Life provision will still be fully funded for all eligible employees, the skills strategy and funding document indicate that there will be a new focus on individuals with the most 'substantial' learning needs. Linked to this the funding paper cites a number of things that will impact on future delivery of Skills for Life provision, as follows:
- 'With the exception of Skills for Life Entry Level numeracy provision, the programme uplift in funding for Skills for Life provision will be removed for the 2011/12 academic year';
- 'It is right to give adults who lack these skills a second chance to acquire them. Literacy and numeracy provision from entry level up to and including Level 2 will continue to be fully funded'; and
- The government will 'review the way basic skills are delivered .... and the reformed programme will move away from targets to focus on equipping individuals with the the skills and qualifications they need to get a job, progress in work and play a full part in society.'
The strategy also clarifies that government funding for supporting ESOL in the workplace will cease - the funding document states that 'public funding will not be available for ESOL in the workplace' but that 'subject to conditions it will be co-funded for those who are settled here.' This will effectively bar any government funding for ESOL training for migrant workers with the expectation being that these individuals and/or their employers should fund this training. The strategy also says that the government will 'reduce the reliance of some sectors of [the] economy on migration to fill jobs.'
Co-investment strategies and the role of sectors
A major theme of the strategy is the need to compensate for the reduction in government funding by incentivising more employers and individuals to invest in skills and also by encouraging greater co-investment strategies. To some degree this will be driven by the significant changes to the funding and entitlements framework which will require more employers and individuals to pay for training that was previously subsidised by the government.
However, the government also announced a number of new initiatives designed to incentivise co-investment with a focus on a sectoral approach. It announced the establishment of a 'new Growth and Innovation Fund to support employers to be more ambitious about raising skills in their sector and to promote workplace practices that will lead to better development and deployment of workplace knowledge and skills.' The government will contribute £50M with an expectation that 'businesses will co-fund the training costs covered by the Fund.'
The skills strategy is also explicit in supporting the use of regulatory levers to influence employer investment, albeit on a voluntary basis (i.e. with the agreement of employers in specific sectors). Both occupational licensing (also known as Licence to Practice) and training levies are referred to specifically, as follows:
- 'We believe that in some sectors there is a continuing role for formal licensing or standards-based requirements in industries and occupations where there is a clear consumer protection or other public interest. We also want to encourage a wider set of industries and professional bodies to consider where the introduction of clear professional standards will benefit an industry and its competitiveness.'
- 'We also believe there is also a role for statutory and voluntary training levies or other collective arrangements, where employers have identified the need for collective action on skills and consensus can be secured within an industry. Levy schemes in the construction and engineering construction sectors, supported by a majority of employers, have had a positive effect on skills investment in those industries.'
The UK Commission for Employment and Skills (UKCES) is to be slimmed down and reshaped to focus more on supporting greater investment in economic growth and skills by employers. It is welcome that the new role for UKCES is underpinned by a 'social partnership' model involving a key role for unions. The strategy says that the UKCES should 'become a true vehicle for economic growth and social partnership, with employers, trade unions and others coming together to give effective leadership to business on skills'. Sector Skills Councils (SSCs) will also play a key role in this new approach though it is anticipated that they will also suffer budget reductions as part of the ongoing review of UKCES operations.
Industrial strategy and low carbon skills
Industrial strategy, and the complementary skills priorities and funding that should flow from this, is one policy area that is notable in its absence in the document. In reality this is hardly surprising considering that the coalition government abandoned the 'industrial activism' approach of the previous government. However, there is some reference to sectors supporting the development of the low-carbon economy via the new approach on co-investment, including the possible use of occupational licensing, levies and other measures. The document also says that the government will 'be prepared to co-fund training programmes in new or rapidly changing parts of the economy, for example to meet skills needs arising from the transition to a low-carbon economy.' Since the strategy was published the government has published a more detailed response to the consultation on a low carbon skills strategy initiated by the previous government (a separate briefing on this is available on the unionlearn website).
Lifelong Learning Accounts & All-age Careers Service
As previously announced, the coalition government intends to establish an all-age careers service which ultimately will involve bringing together Connexions and Next Step. In general this is a positive policy move which has the potential to address the existing deficiencies in the system that unions had previously highlighted, such as the limited careers guidance offered to the vast majority of young people because the service was focused on the most disadvantaged.
The skills strategy confirms that Lifelong Learning Accounts will be launched and the government is keen that union learning representatives play a proactive role in helping individual employees to use them to best effect. To what extent they will be different to the previous government's Skills Accounts is difficult to judge at this stage, but unionlearn will be considering their potential for supporting more learners at work, including whether they can be collectivised and tied in with the Collective Learning Funds approach that has been trialled in the North West and Midlands.
Trade unions and unionlearn
As well as highlighting a commitment to 'social partnership' and the role of trade unions in helping to boost economic growth and skills, the strategy praises the union learning agenda and the role of unionlearn in supporting this. The main passage of the strategy relating to union learning and unionlearn is as follows:
'We will continue to support unionlearn, the TUC's learning and skills organisation, in building on the impressive track record of unions and Union Learning Representatives. Unionlearn has played a major role in promoting formal and informal learning in workplaces and wider communities, especially in reaching out to those who are poorly qualified and most in need of support. We would like unionlearn to play a greater role in promoting Apprenticeships to disadvantaged groups in the workplace and to employers that have not trained apprentices before and will support Union Learning representatives to play a more active role in helping individuals in the workplace to access careers information and advice. For example, they might help individuals use the tools available through the Next Step online channel, including the skills health checks, course directory, relevant market information and funding support available, or open a Lifelong Learning Account.' (p46).
The funding document also confirms that the existing annual spend by BIS on the Union Learning Fund and unionlearn (£21.5M) will be maintained into 2010/11, as follows:
'Unionlearn has been a success. It exemplifies the best of co-operation between Government, business and unions. Which is why we will continue to support Unionlearn and the Union Learning Fund by investing £21.5m in the 2011-12 financial year. This will enable Unionlearn to build on the impressive track record of Union Learning Representatives and the Union Learning Fund in promoting and supporting learning in the workplace, especially in reaching out to those who are poorly-qualified and most in need of support.' (page 13).
However, it is evident that the government will be looking at some new priorities (or new ways of tackling previous priorities) including drawing on the experience of unionlearn as regards a proposal to develop learning reps in the wider community, possibly including non-unionised workplaces. The strategy states that government will:
'work with other relevant bodies to explore how we can promote the development of workplace learning champions in non-unionised workplaces drawing in particular on the experience and success of Union Learning Representatives and Community Learning Champions. Subject to these discussions we aim to promote this through the new 'workforce pledge' and in other ways from April 2011.'
Detailed negotiations with the government on future priorities for ULF and unionlearn are ongoing, but it is clear that there will be an expectation that union learning reps in particular should play an even bigger role in supporting Apprenticeships and offering information, advice and guidance to learners (including helping them take out the new Lifelong Learning Accounts). In addition, the strategy document offers a potentially positive vision of the strategic role of unions at the sector level and how they can work in partnership with employers to drive up skills investment and economic growth. The focus on co-investment is a cross-cutting theme in the skills strategy and it is anticipated that government will be looking to unions to facilitate co-investment in individual workplaces and also at a more strategic sector level with possible linkages to occupational licensing, training levies and other measures.
Other areas
The skills strategy includes a number of important announcements in other areas, including commitments on adult and community learning, such as retaining the safeguard for £210M for this form of provision. Another key theme in the document is the need to prioritise support to help the unemployed back to work, especially young people, by providing 'labour-market relevant training'. There is also a commitment to reduce bureaucracy in the FE and skills sector, especially as it affects colleges and training providers.
Notes
Adult FE and skills refers to provision for people aged 19 years and over and is part of the budget of the Department for Business, Innovation and Skills (BIS). Education and skills provision for young people falls within the remit and budget of the Department for Education.
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