Two new announcements bring the potential for significant change to the post-16 and skills sector, says Anne Murdoch. Here, she shares the details. 

All change?  

The Skills and Post-16 Education Act 2022 highlights the importance of technical skills for growth of the country. Following the Act’s Royal Assent in April, two announcements bring potential for significant change to the post-16 and skills landscape. First, the Office for National Statistics (ONS) announced its review of the classification of further education (FE) institutions, both because of changes brought about by the Act and updated international statistical guidance. Second, the government announced a consultation on funding and accountability that sought to implement a range of changes for skills and post-16 education. 

Sector classification 

On the first point, previous sector classifications undertaken by the ONS have taken FE in and out of the public and private sectors several times, ensuring the UK’s economic statistics on skills are internationally comparable, internally coherent and reflect economic reality. 

Whatever happens with the classification of FE (at the time of writing, a decision was expected at the end of October), the government appears to be pressing on with implementation of the Skills and Post-16 Education Act, introducing changes to the post-16, further and higher education systems, including the introduction of the lifelong learning loan entitlement; universal credit flexibilities; access to careers advice on technical education; changes to initial teacher training (ITT) in FE; the application of an insolvency and transfer scheme; and other miscellaneous provisions. 

Specifically, implementation of the Act requires action to identify and meet employers’ needs for longer-term workforce skills outlined in local skills improvement plans. Employers have been placed at the centre of the local skills system and the role and function of accountable bodies, such as the Institute for Apprenticeships and Technical Education (IfATE), have been changed to ensure employers have a system that works for them. Changes are also proposed to the Higher Education and Research Act 2017. 

The centrality of employers in the Act could mean that FE remains in the private sector, but equally it could mean a return to the public sector. The implications of a change in classification of FE include changes to contracts, capital transactions, borrowing, leases, indemnities, value-added tax (VAT) and provisions for setting up companies. 

FE, like all education institutions, is suffering from cost increases and any changes to funding and accountability measures could bring instability if not implemented cautiously. 

Funding and accountability 

The DfE consultation on further education funding and accountability, which reiterates a previous pledge of £1.6 billion investment in skills, including T levels, is specific about what will and will not be funded and how funding allocations will be controlled. The proposals for new funding bands for adult education courses, one single skills fund and a lagged funding model starting in 2023/24, is intended to be simpler but some funding streams, such as bootcamps and the shared prosperity funds, will remain separate for the time being, highlighting the fact that the proposed single skills fund does not include all current funding streams. 

The proposal to stipulate national priorities and ringfence funding for innovation does not necessarily help providers to meet local needs. All provision must achieve at least one of three sets of objectives and providers must set ‘outcome targets’ adapting provision to meet local needs. Courses will be organised into sector categories in one of five funding bands: the strategic development fund, college collaboration fund, workforce industry exchange programme, higher technical education growth fund and the FE professional development grant will come into a single ‘development fund’. 

A new data collection system and a dashboard of key performance indicators are also proposed. 

What next? 

Decisions following the ONS review and consultation on FE funding and accountability rest with very new ministers. This may lead to delays in implementation, although some changes for colleges such as new accountability agreements and a financial dashboard are likely to be introduced next year. 

What the sector needs more than ever is certainty about its ONS classification and future funding and accountability, while colleges press on doing their utmost to give all their students a good further education experience. ASCL will be pressing for certainty on those issues as a priority.  

Dr Anne Murdoch OBE 
ASCL Senior Advisor, College Leadership 
@ASCL_UK

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