Setting the skills sector stage for the next twenty years

In this exclusive article to mark FE News’ 20th anniversary, AELP’s Paul Warner warns of the serious situation the skills sector finds itself in right now and outlines the urgent need for action to ensure we have the sustainable skills system the country needs.

A huge congratulations must go to FE News on their 20^th anniversary. It’s a considerable feat to have lasted 20 years in a media environment where many bigger organisations have ceased trading over that period, and it is well worthy of celebration!

AELP Urges Immediate Government Action to Preserve the Skills Sector

AELP and our members are certainly extremely grateful for the vital role FE News has played over the last two decades in shining a light on the skills sector. It’s true to say the skills system, like FE News itself, has developed significantly over the last 20 years. Countless people have benefited from training that has seen them launch or relaunch their careers, and many of the jobs people train for today simply didn’t exist twenty years ago. With the rise of AI, it’s safe to say that in two decades’ time there will be a whole swathe of jobs we can’t even imagine today. Many of these new roles will provide real opportunities for the skills sector to develop. However, we’re now at a vital crossroads and we’ll need significant government action if we’re to see the skills system survive as we know it.

Across society we are seeing the impact high inflation rates are having and, earlier this summer, we launched the AELP “Save Our Skills System” campaign highlighting the serious situation the skills sector finds itself in right now. This came on the back of yet another major training provider announcing in July that it was facing significant financial difficulties. Driving this dire situation is those rising costs that all businesses are impacted by, but given the large proportion of funding that training providers receive comes directly from government sources, without uplifts the skills sector is extremely vulnerable to high inflation rates – and, quite frankly, the government have been far too slow to act.

Analysis carried out by AELP over the summer shows that over the past three years the skills sector has been short-changed by over £1 billion, caused not least through HM Treasury not allocating the increased Apprenticeship Levy take to the apprenticeship programme budget. This is obviously a huge figure and is expected to continue over the next two years. On top of that there have been a number of issues affecting the sector that have made life difficult for providers including the removal of 16-18 Traineeship contracts from July 2023; delays to the non-devolved ESFA adult education budget (AEB) procurement process; whilst all the time vital suppliers in the sector (such as end point assessment organisations and awarding organisations) are experiencing their own cost increases which are passed on to providers to absorb.

All these issues are mounting up and means the need for intervention is urgent.

That’s why to save our skills system, AELP is calling for:

• Immediate support for apprenticeship providers with an across-the-board uplift of 10% in funding for all apprenticeship standards; raising the maximum government contribution above the current £27,000 cap and introducing a minimum government contribution of £5,000 per year across all apprenticeships.
• A long-term plan to stabilise the skills sector, through a sustainable and integrated National Skills Strategy that identifies and properly funds the country’s skills needs.

On the back of this call, AELP has launched a survey to gain further insight into the supply of apprenticeship standards and how this is being impacted by providers’ financial health – we’ll be publishing the results of this shortly.

Furthermore, our open letter to the Secretary of State, the Rt Hon Gillian Keegan MP, has attracted significant support across the skills sector. We’ve also encouraged AELP members to get in touch with their own Members of Parliament to explain the severity of the situation, and I know they’ve had a sympathetic hearing in many cases. We are also continuing to meet regularly with politicians, officials and civil servants to impress on them the serious and adverse context that providers find themselves in.

AELP’s Determination to Secure a Bright Future for the Skills Sector

Our campaign has gained significant traction over the last six weeks and it’s certainly having an impact, but persuading decision-makers of the need for urgent action is tough. Governments are always reluctant to commit to more public spending at the best of times and we’re not the only sector knocking on their door. Nevertheless, we will continue to provide a strong voice for the sector and refuse to take no for an answer, because our sector is now quite simply at a tipping point that we have to row back from.

We are entering a new era and the crucial role of skills policy in shaping the future cannot be overstated. Over the autumn and as we gear up for a possible general election, we’ll be launching our vision for how we can build a skills system for the next twenty years. Our vision will set out how we can embrace this new era by unlocking economic growth through skills development and we hope to share it with FE News readers very soon.

These are tough times for the skills sector and, although we’ve been through tough times together before, there are huge challenges ahead. Let’s hope government answers our calls and we ensure there’s a healthy skills system for FE News to report on for the next twenty years.

By Paul Warner, AELP’s Director of Strategy and Business Development.

FE News on the go…

Welcome to FE News on the go, the podcast that delivers exclusive articles from the world of further education straight to your ears.

We are experimenting with Artificial Intelligence to make our exclusive articles even more accessible while also automating the process for our team of project managers.

In each episode, our thought leaders and sector influencers will delve into the most pressing issues facing the FE sector, offering their insights and analysis on the latest news, trends, and developments.