Post-16 reform: Why all eyes are on the Treasury

The post-16 proposals published this week are all missing one key element - financial commitment, writes Andy Westwood

Andy Westwood

Coronavirus schools

Like buses, they’ve all arrived at once. A long-awaited Skills White Paper, closely followed by an “interim” response to the Augar Review. There is also the Pearce Review of the TEF, the government’s initial response and a consultation on university admissions and the introduction of post-qualifications admissions. 

That will keep many in FE and HE busy – at least until the autumn when the real decisions will be made. That’s when we’ll find out how much funding will come with the “radical” vision for FE and whether the Treasury can be bothered to reopen the complex and costly arrangements for student finance across all post-18 routes.

We’ve been here before. But in skills policy we’ve been everywhere before. Putting employers at the heart of the system and committing to high-quality education and training are not new. These have been objectives for most ministers and in most Green and White Papers for the past three decades. The challenge, then, for skills policy in England is not setting out ambitious reform plans – it is sticking to them. 


Augar review: Government plans ‘modular’ approach to HE

Post-16 reform: The announcements at a glance

Gillian Keegan: Skills White Paper is FE's 'day in the sun'


We have heard most of the proposals in the White Paper before this week. The promises of £1.5 billion of capital investment, the Lifetime Skills Guarantee, expanding Institutes of Technology and rolling out T levels. Likewise the push for developing higher technical qualifications – Augar’s "missing middle" – and expanding progression and participation on levels 4 and 5. 

Few financial commitments for the FE White Paper

But like the very short “interim” Augar response, the Department for Education is seeking major system change with few upfront financial commitments from the Treasury. That may come – as it might for a rethinking of the entire tertiary system – in a spending review in the autumn. But it might not. After all, the Treasury has other things on its mind. It is also pretty suspicious of the DfE's ability to run things and its tendency to keep chopping and changing policy in this area.

Last week chancellor Rishi Sunak voiced frustration at the slow rollout of traineeships.

Before Christmas, in evidence to the House of Lords Economic Affairs Committee, former Treasury permanent secretary Lord Macpherson said: "In the last 100 years, every government have noted that the skills system in this country is hopeless. They claim that they will do a radical reform of it. They rearrange the deckchairs, and skills remain precisely the same problem as they have always been. If the government were to do anything in this period, creating a skills system that really makes a difference would be truly revolutionary. Sadly, I am not holding my breath.’

This is not an uncommon view amongst officials and ministers at the Treasury today.

Perhaps the one major new commitment for adult learning – a flexible four-year entitlement to loan funding post-18 – isn’t due to be implemented until 2025 and that’s almost certainly two spending reviews away. These are very big decisions that require Treasury consent.

Over the past year, the Treasury has chosen not to build them into the spending review or to make very much of them in its initial responses to Covid. So far that’s cost over £280 billion but very little has been yet earmarked for what we still hope will be a "skills-led recovery".

But for now, at least, we know that the transformative decisions about FE sector or the broader post-18 system envisaged by Augar haven’t been made. 

Little mention of ‘levelling up’

There are three other big problems in the FE White Paper – called Skills for Jobs – that might worry us and other parts of government. The first is that it isn’t terribly clear what it means when it talks about employers. Neither employers nor employer groups are homogenous. They come in different sizes, sectors and with widely varying interests in training. Starting at the bottom, there are growing concentrations of low pay and low productivity sectors in the economy – targets for increased training but not necessarily for designing qualifications or driving the system as a whole?

There is little understanding of employers in better performing, more productive sectors either. These are employers that are likely to do more training, have more expertise and capacity but also with multiple relationships with other, often competing institutions such as private and bespoke training providers and universities.

This takes us to the second problem of limited joining up to other agendas in government. Employees in low-paid jobs are likely to face periods in and out of work – or, in the past year, in and out of furlough. Yet there is little mention of either the Department for Work and Pensions or Universal Credit. Likewise research and development (R&D) or industrial strategy or working closely with the Department for Business, Energy and Industrial Strategy. When they and UK Research and Innovation are doubling investment in R&D and bringing forward a "place-based R&D strategy", this makes little sense. Surely someone from the DfE has been to the University of Sheffield Advanced Manufacturing Research Centre?

Following on is the third problem and little mention of "levelling up" or trying to tackle the clear differences between local economies. The drive to tackle spatial inequality recognises the importance of FE in improving local skills. This misses key political and economic objectives and makes little sense. There will be fewer big employers to drive the system or to develop local skills improvement plans when these are likely to be the places that need them the most. 

Local skills panels were first set out in the 2017 Conservative manifesto, but the updated model in the White Paper is distinctly lukewarm in suggested links to local and combined authorities or LEPs, preferring chambers of commerce as lead organisations. Although important local institutions, they aren’t as powerful or with as much capacity as in countries like Germany and they don’t always follow the same boundaries. It’s hard not to conclude that the DfE might prefer to go it alone with local arrangements or to retain control where it possibly can, just as with bidding for business centre or other strategic funds. 

But perhaps the most worrying thing about both the Augar response and the FE White Paper, when taken together, is the lack of any significant financial commitment from the chancellor. This is what will concern the sector most – and perhaps behind the scenes, ministers, too. The DfE is taking a big gamble that this will change come the autumn. 

But the lack of commitment to "levelling up" isn’t the best way of securing political support from No 10. Neither is the DfE’s disinterest in connecting the skills system to the broader economic priorities of other departments, including the Treasury.

Like Lord Macpherson, I’m not holding my breath.

Andy Westwood is a professor of government practice at the University of Manchester

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