Helping the Government decide how to spend £3bn over the next 5 years

Bringing the National Skills Fund and Adult Education Budget Together

We have a nice problem – how to help the Government decide how to spend £3bn over the next 5 years on a programme which feels at the moment like a fairly blank sheet of paper.

The commitment was one of relatively few in the Tory party election manifesto, and shows that skills and colleges are significantly higher priorities than for a long time.

Three Risks

It is a nice problem to have, but there are 3 key risks which must be avoided. First, we will need to help officials resist the threat of ‘urgency’ which besets many new policies and programmes. I’ve seen too many sound reforms go pear-shaped when politicians ask for quick results – Train to Gain, Individual Learning Accounts and the current apprenticeship reforms come to mind.

Secondly, we should work hard to achieve as much clarity as possible about the purpose and the success measures of the programme. Let’s not accept muddled thinking, or overly ambitious, lofty aims.

Thirdly, we need to make sure that we do everything we can to make sure it fits with other existing policies and programmes and does not increase bureaucracy and complexity for colleges, employers or students.

Consult in Partnership

The promised approach of engaging and consulting on the design of the National Skills Fund is a great start, but we need to ensure that it continues into implementation, monitoring, review and the inevitable tweaking and adapting that will be needed to make it work. Co- design is important, but shared destiny is equally essential.

Seismic Changes

The seismic changes happening in our world – technology, climate crisis and demographic changes – are starting to have profound impacts. Brexit and its impact on immigration will also be an important driver for labour market pressures. Making sense of that is not easy, but three big challenges are likely to dominate for adults.

The first is the need for more adults to have good literacy, numeracy and digital skills in order to be able to learn new things to stay active in the labour market. The second is that people already in work will need to learn new things as their jobs, sectors and employers transform. And third is that employers will find it increasingly difficult to recruit skilled and semi-skilled people in many sectors where colleges provide the bulk of the current skills provision.

How will the National Skills Fund fit with Other Post-18 Programmes?

If those drivers result in those challenges, then we can start to see a world in which the emerging National Retraining Scheme could be linked closely to the Adult Education Budget to provide opportunities for people with lower level skills and education needs.

A reformed apprenticeship scheme could help people move into the semi-skilled and skilled jobs which employers will find hard to recruit to. Leaving the new National Skills Fund to be focused on people already in work who need a module or two of new skills in their profession/ craft to be able to stay current and be productive. A module or two which can also add up to full qualifications over time, delivered flexibly to help fit with people’s lives and work.

If the National Retraining Scheme, Adult Education Budget, Apprenticeships and the National Skills Fund could be properly aligned, colleges should be funded once to deliver all of them. That would cut the bureaucracy and make the system more coherent for everyone – colleges, employers and students alike.

Policy makers should also go a bit further though, because we know that one of the big barriers to productivity is that too many SMEs do not have the capacity or wherewithal to be able to adopt new technology, innovate or introduce new business processes. They are crying out for advice and support but there is often nowhere to go to find it.

A specific proposal would be for colleges to be funded to provide that service, backing up the advice with the training and skills which will help the changes happen and productivity to increase. Simple really – proper systems thinking and trusting colleges to use their resources to deliver the whole.

Recommendations

1: Focus the National Skills Fund on Level 3-5 Skills

The government should focus the National Skills Fund on higher level skills (Levels 3, 4 &5) and enable people to take modules which help them adapt to changing technology and business practices which help boost productivity, whilst allowing them to progress to full qualifications if they need or want to.

2: A Single Budget Line for Adult Training and Retraining

The government should increase the Adult Education Budget and bring together in one budget line the National Retraining Scheme, the National Skills Fund, the Shared Prosperity Fund and the Adult Education Budget rather than invent yet another funding programme to bolt onto existing programmes.

3: More Funding for Advice to SMEs

The government should provide additional funding for colleges to be able to advise SMEs in key local industrial/economic sectors to help them design business change/innovation programmes which the college can support with skills training.

David Hughes, Chief Executive, Association of Colleges