Revealed – Furloughed workers far less likely to have basic qualifications

@IPPR calls for spending review to include a long-term funding settlement for further education, to help drive economic recovery 

Furloughed workers who lose their jobs are far less likely to have higher level qualifications than the general population, hampering their search for new opportunities, according to new research by IPPR.

Of the one million people the think tank estimates to be on furlough and in jobs that could be lost permanently due to disruption by the pandemic, 130,000 do not have equivalent to a level 2 qualification (GCSE) and a further 250,000 lack a level 3 qualification (A Level).

The think tank calls for the creation of a new Job Training Scheme (JTS) alongside the Job Retention Scheme (JRS) to help people move out of sectors struggling in the current economic climate. Those on furlough who are likely to be made unemployed would be given the right to a grant to pay for training worth £4,000 each. The report suggests this could cost government up to £1 billion.

IPPR proposes that this measure should form part of a new long-term funding settlement for the further education (FE) sector to “overcome a legacy of underinvestment”. It finds that had FE funding kept pace with demographic pressures and inflation over the last decade, spending in England would be £2.1bn higher on adult skills and £2.7bn higher on 16-19 education.

The impact of these cuts has been significant, the report says:

• There are now one million fewer adult learners than in 2010
• Contact hours for students in the FE sector have fallen, whilst class sizes have increased
• Around a third of colleges and sixth forms have experienced financial deficits
• Colleges face significant recruitment challenges with average pay for lecturers still well below that of teachers.

These challenges are contributing to significant skills gaps in England which help explain low wages, a lack of progression for many workers and stagnant productivity, IPPR says.

Its research found that people living in parliamentary constituencies newly won by the Conservatives from Labour in 2019 – part of the so-called ‘red wall’ – suffer disproportionately from these challenges. Only 27 per cent of economically active 16-64 year-olds in these areas have a degree or equivalent qualification, compared to 34 per cent among the general population.

In response, the report calls for further education to be exempted from the government’s recent decision to postpone a three-year spending review settlement. It argues for a long-term funding settlement in which the government should:

• Commit to increasing per pupil spend for 16-19 years in colleges and sixth forms from £5,200 today to £8,300 by the end of the parliament. This would help increase contact hours, raise staff pay, reduce college deficits and introduce a new ‘disadvantage premium’ for low-income students.
• Immediately suspend conditionality on people on Universal Credit who want to or are retraining as this currently discourages people by pushing them back into the labour market regardless of skill level. 
• Build on the recent announcement of a level 3 entitlement for adults by introducing a maintenance loan on higher education terms for this group. Over time this should extended to all people studying for their first level 3, 4 or 5 qualification.

It argues that these measures would fully reverse the impact of austerity and could see an increase in spending on FE of up to £6bn per year by the end of parliament. 

Its findings have been welcomed by the Association of Colleges, which represents more than 200 FE colleges across the UK. David Hughes, AoC Chief Executive, said:

“This IPPR report gets to the heart of both the dire funding reductions that colleges have had to cope with, and the vital role colleges play in our labour markets, economy and communities.

“With the spending review a few weeks away, the Chancellor has the opportunity boost funding to enable colleges to be central to the recovery and to the government’s levelling up ambitions.

No other institutions have as much potential to deliver on this and with a white paper on the horizon, there is even more potential for the government to release colleges from the shackles of unhelpful policies and clunky regulation. If they get this right, colleges can deliver so much more for people, productivity and places.”   

Dean Hochlaf, IPPR Researcher and lead author of the report, said:

“The Covid-19 pandemic has left us on the brink of the worst unemployment crisis in a generation. A protracted, painful recovery can only be averted if the government steps up its offer to help those at risk of losing their jobs, so they can find new opportunities in emerging sectors. Further education is central to this ambition, and it is welcome the government has already committed to expanding access and funding.

“However, after a decade of harsh austerity, we need to go further. Warm rhetoric around technical education has failed to materialise into action. An enhanced funding settlement for the sector is essential, so that every young person and adult has an educational path that’s right for them, and so that the UK can develop the skills it needs – not only to recover from Covid-19, but to take on future challenges such as climate change and automation.”