Has the Treasury failed our skills system?

It is time to place evidence-based policymaking at the heart of England’s skills system, argues Tom Bewick

Without evidence-based policies, constant change will continue to disrupt the success of the sector

As the sector continues to digest the Augar review, it seems appropriate to look back at the last time government set out a big vision for the post-compulsory education and training system in England. For FE to be successful in the upcoming Spending Review, it will need to convince Her Majesty’s Treasury of the case for more investment. As Mark Twain allegedly once quipped: “History does not repeat itself but it often rhymes.”

In 2004, then chancellor Gordon Brown asked Lord Sandy Leitch to undertake a major review of what was holding the country back in terms of sluggish productivity growth and skills.


Read more: 'Undervalued and underfunded': Theresa May on FE

Background: Augar review: Give colleges £1bn and freeze HE funding

More from this author: Could colleges end up as 'delivery arms of the state'?


Relevant reading

The Leitch Review of Skills final report, published in 2006, still makes relevant reading today. Not least because nearly every single one of the ambitious attainment targets that he set out for delivery by the year 2020 have not been met. The global financial crisis of 2008 and austerity cuts in post-16 education funding since 2010 have not helped.

For example, we are nowhere near meeting the Leitch goal of 95 per cent of adults with basic skills of functional literacy and numeracy. The 90 per cent target of adults in the workforce qualified to at least level 2 has been effectively derailed by an employer-driven funding model in England that favours higher-level apprenticeships. The only target met by the Treasury in all this time is 40 per cent of adults qualified to level 4 and above. And if it wasn’t for the lifting of the government’s cap on university recruitment numbers, it is doubtful even that particular attainment goal would have been reached.

As Leitch noted at the time, we were in danger of "running to stand still". Which is precisely what has happened. As the next decade fast approaches and Brexit looms, the UK has failed to climb out of the relegation zone of international productivity league tables. Take the G7 – the world’s premiership of rich countries: the Office for National Statistics (ONS) comparisons show that UK labour productivity (per hour worked) is below that of the USA (by 22.6 per cent), France (by 22.8 per cent) and Germany (by 26.2 per cent). In other words, we have the worst record of improving living standards than of some of our major industrial competitors.

Stagnating wages

Employment may be at historically high levels, but jobs growth has largely come at the expense of stagnating wages for existing workers. Instead of investing in productivity-enhancing technology and training, some British firms have opted instead to hire more workers. Economists call this the "productivity puzzle" – one that can hardly be solved without some fundamental realignment between better workforce skills on the one hand and how people apply these skills in the workplace to produce more efficient goods and services on the other.

Of course, this is a shared challenge that is as much the responsibility of private industry and public-sector employers to resolve as it is the role of government to get the skills policy framework right.

The burning question in England still, as it was during Leitch’s time, is whether the skills system is fit for purpose. Interestingly, Leitch took the view that lasting reform was best achieved by building on existing structures, arguing: "Don’t always chop and change. Instead, improve performance of current structures through simplification and rationalisation, stronger performance management and clearer remits. Continuity is important."

Structural reforms

Such sage advice was subsequently ignored by successive governments. Instead, ministers have embarked upon a major round of structural reforms since 2010. To illustrate the point, not a single statutory body that was involved in post-16 skills and qualifications regulation a decade ago is still in existence today. Leading systems like Germany and Switzerland have had the same vocational skills organisations in place since the early 1970s. These countries implement reform from within, rather than the wholesale tearing up of existing structures.

Yet, we do now have a set of institutions in England that is capable of delivering, provided they are underpinned by stronger performance management, outcomes-based models of delivery and ensuring difficult political decisions are made on the basis of what the evidence base is saying. Two leading members of the Federation of Awarding Bodies – Pearson and City & Guilds – have reached similar conclusions in recently published groundbreaking reports.

The analysis from the Commission on Sustainable Learning, supported by Pearson, makes the point that a 17.5 per cent cut in funding to 16-19 study programmes, has restricted opportunities for young adults and risks undermining the quality of the technical education reforms now under way. Of course, the government would point out that it is making record investment in new T levels with the Treasury committed to pumping in around half a billion pounds per annum when all the new T levels are available for delivery from 2023 onwards.

Pearson argues that to make T levels more accessible to a wider range of learners, the Department for Education should consider developing a T-level offer at level 2. Crucially, Applied General Qualifications, like BTECs, should continue to be available. If such a system is not broken, why on earth would the government now seem bent on potentially destroying it with such an oversimplistic approach to its post-16 review of qualifications below level 3?

Success measures

These sentiments are echoed in the latest in a series of reports from City & Guilds. Sense & Instability 2019 examines the extent to which over a decade of skills reforms have been embedded with a clear set of "success measures". The researchers catalogue a number of schemes, from Train to Gain in the early 2000s to the current government’s T level programme, as examples of where they found very little evidence of what outcomes or socioeconomic impact they were actually trying to achieve.

The government says that T levels will be a new gold standard qualification leading from a level 3 study programme directly into skilled employment. If this is indeed the main goal, then where are the quantitative targets for direct entry to employment from T levels? Moreover, if the ultimate aim of all the current technical education reforms, including reforms to apprenticeship, is to impact on firm-specific productivity levels – then why has the Department for Education not sought to develop a published framework of metrics from the start?

When policy programmes lack clear measurements and transparency, they ultimately fail in attracting the public’s support. The sector now finds itself, 15 years on from the Leitch review, essentially still groping around in the dark, trying to figure out what really works. There is perhaps one glimmer of light. In the Institute for Apprenticeships and Technical Education (IfATE), the country now has a body that is equivalent to the federal institutes of leading vocational training systems, like those set up in Germany and Switzerland in the early 1970s.

One really important task for the Institute for Apprenticeships and Technical Education must be to put in place a more transparent value for money framework, including a clearer set of measurable performance and productivity outcomes for both T levels and apprenticeships. Because if the Treasury and the institute can’t demonstrate, via a published evidence base and transparent decisionmaking, how the skills system is actually improving – then don’t be surprised if the instability caused by the constant chopping and changing of training and funding quangos simply continues.

Tom Bewick is the chief executive of the Federation of Awarding Bodies

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