What should be the skills agenda for 2016?

Now that 2016 is well and truly underway what’s this year’s agenda? The CSR was not as bad a story as some had feared and the FE sector has a degree of certainty over the next five years vis-à-vis funding. It’s not unalloyed joy but nor is it the woe and misery that had been feared. As a minimum, certainty over likely revenue per student should enable better planning and prioritising. The additional potential funding available via loans for 19 plus learning at level 3 and above, and via the apprenticeship levy on larger companies, could mean real revenue growth. But how to manage such growth and who will benefit from it most remain largely unanswered questions.

Skills Minister Nick Boles has laid down the gauntlet to colleges over apprenticeship funding. ‘Why are you letting private training providers eat your lunch?’ he demanded to know at November’s AoC conference. The question is well put. With real levels of apprenticeship funding that colleges actually deliver being perhaps as low as 15% of the total current spend, it would appear there is a major gap in colleges’ rhetoric on apprenticeship and how well they are geared to grow apprenticeship delivery themselves.

Of course there is time to adjust. The new levy won’t come into force until 2017 but 2017 is only next year and adopting a genuinely entrepreneurial focus for the organisation may well prove difficult for many colleges. Then there is the skills challenge itself. The country desperately needs more technical and associate technical skills in digital, creative and cultural, engineering, bio science and related industries and many other sectors. The government wants to make sure that through the local area review process this challenge is met. It has so far agreed to five new national colleges and it wants to see new Institutes of Technology spring up in most Local Enterprise Partnership areas. Sensibly it is not being prescriptive about what these new Institutes should look like, preferring to let them emerge from the area review and other processes and see what works.

However the government can offer some practical help in two areas. First it can send out a clear steer around the role of governance. Most FE Colleges are a form of coalition that, post incorporation over 20 years ago, created representation around the Board table of individuals from the community, staff, students, education professionals and business. Often this has led to stasis in decision making and overt protection of a wide range of sacred cows. As a former colleague of mine (who shall remain nameless) remarked, ‘As soon as everyone declared they personally had no sacred cows at our strategy day, within minutes of discussion beginning, a herd of them could be seen charging across the table.’

If the government wants FE Colleges to become more adaptive and flexible social enterprises, able to work more closely with business, then they need governance processes and Board members who understand complexity and change and understand the minds of business as a first order priority. That would suggest that boards need to shrink in terms of numbers, stop trying to ‘represent’ sectional interests and become focused on driving business decisions that can ensure skills needs are met and businesses fully engaged. Too many boards are not structured in this way. They can typically have any number of members, endless sub committees and processes, that drive away talented busy people who would otherwise serve but do not have the time to commit to endless meetings – particularly if they are senior practitioners in the private sector used to making decisions. Would paying Board members make sense in this regard? Could the government offer guidance on the ideal board size and representation? Will the local area review process enable LEP chairs to insist on governance changes in merged bodies?

The other area where government can help is removing the incentive for schools to keep anyone with a pulse they believe could do A levels, especially when many young people post 16 would be better following a more vocational pathway. Too many 16 and 17 year olds start an A level course and then drop out, meaning colleges, who usually will pick them up, get financially penalised in the second year of the new two year level 3 vocational course these young people begin. How can this financial incentive for schools to keep students for A level study come-what-may be turned into a financial penalty if they persuade young people to start courses they are disinclined to finish? We need more able students following vocational pathways, including apprenticeship, not less.

On the whole then 2016 should be a year of fewer policy surprises. The local area reviews will trundle on and we should begin to see an FE sector with fewer independent institutions, gearing up for apprenticeship growth and seriously addressing the UK’s productivity challenge and skills needs. I stress should. Whether we will only time will tell.

Nick Isles is chief executive of advice consultancy Corporate Agenda