With NAW Wrapped Up, What’s Next for FE Policy?

As we reflect on this Government’s first six months in power, one fact is becoming ever more abundantly clear: closing skills gaps through further education will be essential to making its missions a reality. From building 1.5 million new homes, to unlocking billions in infrastructure investment, to attaining net zero, the need for strong, domestic talent pipelines across sectors that will dominate the future jobs market has never been more pressing.   

So it was encouraging to see substantial Department for Education announcements form part of this month’s National Apprenticeships Week (NAW), including the immediate removal of requirements for adult apprentices to complete functional skills qualifications in English and maths.  

This is a no brainer, resolving an issue we’ve heard raised time and again by employers through BusinessLDN’s leadership of the London Local Skills Improvement Plan (LSIP) – for some, it even dissuaded participants from completing courses entirely. Why, to give just one example, hold back a chef’s career progression by insisting on a certain level of competence in an area which isn’t core to their role? especially when the development of soft skills is too often overlooked. It’s high time to empower employers to make the appropriate calls in this area.   

Next up was a move away from the rigid 12-month course length requirement for apprenticeships – which has prevented employers from customising programmes according to individual business need – with the establishment of eight-month options for selected sectors from August. Those in the green energy, healthcare and film industries will especially welcome the flexibility this new route offers.  

Whilst these interventions mark a step in the right direction, more is needed to put the rockets under our skills system needed to land this administration’s wide-ranging missions. With NAW now wrapped up for another year, this marks the ideal moment to ask: what next for FE policy?   

The current Spending Review will be pivotal in shaping the future of FE funding. It marks the Government’s chance to lay out a long-term skills plan which chimes with priorities for its industrial strategy.  

As part of this, businesses across London and beyond are seeking a clear roadmap which will ensure the transition from the apprenticeship levy to the new Growth & Skills Levy increases the flow of funds spent on training, crowds-in additional investment and embeds the flexibility needed to channel support to where it’s most needed.  

UK investment in training has stagnated over the last decade, falling behind European competitors, with a lack of transparency around Levy spend not helping matters (experts estimate that up to £800 million raised through the levy will be left unspent in the current financial year, with no clarity on where this money will go once handed back to the Treasury).  

With ‘skills for life’ rightly being the theme of this month’s NAW as the economy rapidly evolves, the Government should also commit to implementing the long-promised Lifelong Learning Entitlement (LLE) from January 2027.  

By offering access to student loans for courses at higher technical qualification levels (4 to 6), the LLE will stimulate the market for modular training and help workers upskill in areas such as digital, green, and transferable skills. Securing funding for this programme is crucial to meet the 2027 launch date, avoiding further delays to a rollout which has already been kicked back several times. 

More widely, policymakers should address the challenges faced by FE in attracting the teaching talent it requires to upskill the next generation, especially when it comes to the discrepancy in pay between FE staff and their counterparts in schools and industry. The recent decision to award a 5.5% pay increase to school teachers for 2024-25 without extending similar funding to colleges risks exacerbating an issue which urgently needs addressing.   

Elsewhere, the aforementioned LSIP initiative has been a vital convener of businesses, training providers and politicians, enabling different voices to come together to detail routes to resolving skills shortages around the country. The recent announcement of a co-ownership LSIP model between business groups and Mayoral Combined Authorities marks a positive development on this front, and should be backed up by long-term funding.  

And finally, central government should make good on its commitment to remove ringfences for adult skills funding from 2026-27, as outlined in the English devolution white paper. The Greater London Authority’s positive record on utilising this funding speaks for itself, and removing ringfences around the Adult Skills Fund, skills bootcamps and Free Courses for Jobs (FCFJ) programmes will give regions the flexibility they need to build on existing successes.  

When we look back in another six months’ time, we hope to reflect on a Spending Review which was the moment that government gave FE the resource and support it needs to make the UK’s growth targets possible.  

Policymakers have set out ambitious aims for this parliament and beyond. They can only be achieved via a revamped further education system – one which works for businesses and individuals alike, and that truly delivers “skills for life”.  

By Ed Richardson, Programme Director for People & Skills at BusinessLDN