What can FE expect from a Truss premiership?

Tom Bewick provides his expert analysis on what a change in prime minister could mean for the sector.

You have to go back to 1885, the last time a British monarch summoned an in-coming prime minister to Balmoral. The Conservative leader, Lord Salisbury, abolished fees for primary education and introduced measures to improve working-class housing.

As the last prime minister to govern from the House of Lords, Salisbury inherited a blueprint from the Liberal MP, Bernhard Samuelson, to invest in the first technical colleges, including a boost for City and Guilds of London Institute.

He also had to contend with the Serbo-Hungarian war raging on the continent at the time.

Our 56^th Prime Minister

Britain’s 56^th prime minister, Liz Truss, has an equally challenging legacy to deal with.

The country’s national debt has doubled in a decade to more than £2 trillion. Dealing with the pandemic and the war in Ukraine has left the country brutally exposed to the biggest energy price shock since OPEC’s oil embargo in 1973.  

Then, as now, inflation is leading to industrial strife. Our labour productivity growth is the second lowest in the G7 – a club of comparable advanced economies which includes France, Germany and the USA.

A daunting in-tray

From every angle, including in skills policy, Truss’s in-tray looks daunting. Compared to the period 1997-2009, where average growth in output per hour worked was 1.9 per cent, the corresponding average annual growth since then has been just 0.7 per cent.

In practical terms, we are a country that has been getting poorer. Investment in skills – from government and the private sector – has collapsed.

The rot set in long before the Brexit referendum in 2016. So be wary of false prophets who try to convince you otherwise.

Despite a modest cash uplift in 2019, spending on FE in real terms is still below what it was in 2010. In any case, the gains for providers have been wiped out by inflation.

Employers have slashed investment in workforce training by 11 per cent since 2011, according to the National Audit Office.

All this really matters. Because increased productivity is a nation’s only sustainable path to higher wages and shared prosperity over the long-term.

More effective skills policies – implemented by government and employers – are the means of equipping workers and businesses with the tools to succeed. The stark reality is that despite over a decade of hyperactive Whitehall driven reforms, the skills and productivity dashboard is flashing red.

Skills dashboard flashing red

Adult skills and community education participation has plummeted. Apprenticeships in England have lost their way. Achievement rates on government funded programmes are in the doldrums. And the investment FE vitally needs has stalled, as FE colleges appear to drift towards operating more like local delivery arms of an over-centralised state.

In truth, the new prime minister faces a massive strategic inflection point in skills and qualifications policy right across the United Kingdom. Truss describes herself as a “child of the union” having attended primary school in Scotland. Yet, policies to improve workforce skills have never been more divisive or divergent. Devolution settlements have produced parallel skills bureaucracies and new regulators, not only in the home nations, but in devolved parts of England too.

Taxpayers probably wouldn’t mind if they could demonstrably see the impact of these interventions on higher wages and better skilled jobs in their local communities. Instead what they are observing is a growing army of public sector ‘skills advisers’ recruited on top-whack salaries. A number of Awarding Organisations have told me recently that this is causing a brain drain and adding to the wage inflation nightmare already gripping the sector.

Oddly, a British citizen can take a digital skills boot-camp in Birmingham, but not in Dundee. The Welsh government is contemplating barring qualifications that are not ‘made in Wales’. At key stage five, T Levels are only available in England. All this in a country – the United Kingdom –  that is still technically a unitary state. It has led the Times Education Commission to call for a British Baccalaureate.

Liz Truss now has the political choice of whether to continue with the failed top-down, statist approach to FE and qualifications reform, or to redesign the state around more traditional communitarian values: i.e. trusting individuals more; ensuring business takes responsibility for training their own workforce; championing market choice; and removing burdensome regulatory and bureaucratic barriers that hold people and organisations back.  

To govern as a small state conservative?

Truss says she will govern as a conservative. The fact she has to even make the point so explicit (after her party’s 12 years in power) perhaps demonstrates just how much she disapproves of the big state technocrats that have taken charge.

The Thatcherite inspired Institute for Economic Affairs director general, Mark Littlewood, says Truss will put some noses out of joint. She is already on record lambasting the “defeatism and declinism of Treasury orthodoxy”.

In many ways, beating former chancellor Rishi Sunak to the post of PM, is also a repudiation of what Whitehall has been advocating pretty much since the time of Blair and Brown.

Efforts are well meaning. Policies sound good in government press releases. Ministers take to the airwaves wearing lapel badges and sloganising. Meanwhile, UK plc fails to shift the dial on the only metric that really matters: the long-term trend rate of economic growth.

The policy model the prime minister inherits is fundamentally one of low-trust. People have to be told what to do. The centre knows best. Bureaucracies have been empowered, while individuals are deprived of any meaningful agency.

What does this mean for skills policy?

The big question is what does this mean for skills policy? What should a Truss premiership do about the dashboard flashing red?

Like all governments, it is not only the guiding political philosophy but the early actions that really helps set the tone. Truss has only 26 months until she must ask the Queen to dissolve Parliament and call a general election. She says her government will “deliver, deliver, deliver,” for the British people.

It will quickly become apparent the extent to which the Department for Education based in Sanctuary buildings SW1, carries on business as usual. If they do, it will be a really missed opportunity for the whole of FE.

Alongside Truss’s three priorities for office (infrastructure, energy and the NHS), she needs to add a fourth mantra: productivity, people and skills.

Three quick wins

There are three bold announcements that Truss or her new education secretary, Kit Malthouse, could make immediately.

If enacted, these measures would save huge amounts of taxpayers’ money; and put future skills policy on a more inclusive and agile footing. For example:

• The bureaucracy associated with implementation of the Skills and Post-16 Education Act (2022) should be massively scaled back. A good place to start would be to halt the planned “dual regulation” of qualifications that is currently proposed by Ofqual and IfATE. Instead, Ofqual should be allowed to continue as a single statutory qualifications regulator, solely accountable to Parliament. This can be achieved by reforming the general conditions of recognition that all regulated awarding organisations and exam boards are subjected to. If there are concerns about the ‘employer voice’ approving vocational qualifications, these processes can be integrated within existing provider structures. Leviathan is not required.

• There is a strong case for Westminster, using its reserved powers, to legislate for a new single UK-wide qualifications, apprenticeships and employment authority; helping to secure labour market portability and occupational standards right across the UK for all residents, regardless of the post code in which people live. Rolling out the Lifetime Skills Guarantee on the basis of giving every 18-year-old in the UK access to an individual learning account would help transcend many of the difficulties that are posed by increasing divergence and devolution in the nations; including the duplication and waste associated with parallel skills bureaucracies in England.

• Reform of the Apprenticeship Levy is widely supported. We need employers, the state and individuals to co-invest in a workforce investment fund model, similar to the way we already contribute to occupational pensions provision. The main aim of Levy reform should be to reduce bureaucracy for firms and drive up levels of the programme’s transparency. An apprenticeship quality revolution, based on better performance accountability measures, could really help drive up more apprenticeship starts, achievements and completion rates. As could the re-introduction of the highly successful apprentice incentives that were scrapped by the Treasury earlier this year. The key aim of apprenticeship policy in future should be to increase opportunities for young people below the age of 24; as well as massively scale up degree level apprenticeships – the gold standard ‘earn while you learn’ route to career success, except without the graduate debt. It’s the one bright area of skills policy where Britain already leads the rest of the world.

Liz Truss says she stands for an “aspiration nation”. In the next period we’ll find out if the new prime minister and her government can also deliver a skills and apprenticeship nation as well.

As ever, it’s the duty of everyone working in the FE and skills sector to rise to the challenge.

Tom’s award winning podcast, Skills World Live Radio Show, is back on FE News, Friday 16 September 2022. He will be asking politicians and sector leaders what they want to see from the new PM. www.skillsworldlive.com