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'Reform Stalinist FE and save pound;2bn a year'

Radical changes are required to salvage the sector, argues Alison Wolf. Could university offer a simple lesson in model productivity?

Radical changes are required to salvage the sector, argues Alison Wolf. Could university offer a simple lesson in model productivity?

England's further and adult education system has been devastated by Soviet-style central planning. In research for a monograph published this week, I calculated that current policies waste about pound;2 billion a year - more than a third of the public funding directed to post-18 education outside universities, and its associated quangos. This money supports activities that are adding no value to individual learners' lives or to the growth of the gross domestic product (GDP).

At fault are the unproductive spending of Train to Gain programmes, huge administrative costs and repeated government directives, which fly in the face of market signals in determining what people should and can learn. Added to that are the costs of constantly creating and destroying quangos - at least 20 in the past four years alone.

These expenditures have been secured by reducing further education proper to a shadow of its former self. As a result, if the money were simply redirected within the sector, one could increase tenfold the amount now being spent on traditional forms of education for adults.

How has this come about? Through governments' attempts, over 30 years, to promote economic growth by micro-managing adults' education. "Skills" initiatives have been almost the only active policy for promoting productivity under both Blair and Brown.

Twelve years on, we can say, conclusively, that they have failed. There is no evidence, at macro level, of positive changes in UK productivity levels. Individual-level studies repeatedly show that the qualifications most vigorously promoted by governments have no impact on people's wages - which would normally increase if they were more skilled and contributing to growth.

We have known this for some time in the case of lower-level NVQs. Now, as reported in last week's FE Focus, we know it for the Government's favoured basic skills qualifications too.

Ministers and civil servants are convinced that employers need large amounts of public money to offset inadequate training expenditures. Using tax revenues to subsidise initial training in huge private companies is a uniquely British brainwave. It is also based on a misunderstanding of economic theory, and discriminates against new and small companies. And there is, in fact, no hard evidence that companies seriously under-spend on training.

Policies like this are bad in times of prosperity; in recession, they are outrageous. In a world of under-funded colleges, redundant workers often find that, because they were signed up to Train to Gain, they have used up their educational entitlement and face high fees.

The Government, meanwhile, decides priority funding areas for college- based training, irrespective of the local labour market. Regulatory overload makes it increasingly difficult, slow and expensive to develop new qualifications. The whole system militates against anyone who wants to acquire new skills. It also serves more than a million fewer learners than it did a few years ago.

Our current system is uniquely complex, and Stalinist in its level of central planning. It is also simply unreformable in anything approaching its current form. Yet most proposals for change simply tinker at the edges. The UK Commission for Employment and Skills (UKCES), the "lead adviser to UK governments for skills and jobs", has just published its own report on "simplifying the skills system".

Its purportedly comprehensive set of proposals involves 14 new compulsory activities for governments, providers and awarding organisations, plus more powers for key quangos, in return for the promise of "light-touch regulation" and the abolition of a few marginal bodies.

The UKCES consultation started with the assertion that simplification wasn't simple, but it is wrong. The basic principle of reform is very simple. FE and adult education should not be subject to a system in which the only important demands come from Whitehall, nor to one that involves employers deciding how the taxpayer should subsidise them. Theory and evidence agree: effective FE systems respond to what individuals want and choose to study.

People are highly rational about what makes sense for their own lives, which is why huge proportions of young people, of all classes, now aspire to university. And our own higher education system provides a model for change. It responds to individual choices. It also spends a tenth as much on administration, in relative terms, as FE and "skills". It has been entrenching its position as a world leader - hardly the case for our endlessly reorganised, government-directed FE system.

Successful reform starts from fundamental arguments about subsidies, fees, institutional autonomy and individual choice, not mind-numbing details about publication of development timeframes and credit-weighted modules. Such arguments point clearly towards a model based on our no doubt imperfect but definitely world-class university sector. Whoever wins the next election will inherit a wasteland. One consolation is that there is plenty of scope to improve.

Alison Wolf is the Sir Roy Griffiths professor of public sector management at King's College London. Her book, `An Adult Approach to Further Education', is published by the Institute of Economic Affairs and is downloadable from: http:tiny.cc9IA4c

Show FE the money

  • pound;1bn: Scrap Train to Gain and workplace programmes
  • pound;83m: Scrap UK Commission for Employment and Skills
  • pound;154m: Scrap Department for Business, Innovation and Skills' (BIS) FE `Improvement' schemes
  • pound;132m: Scrap miscellaneous BIS projects
  • pound;83m: Scrap quality reform within the Learning and Skills Council budget
  • pound;40m: Save on quango budgets for vocational courses
  • pound;150m: Save through LSC administrative reforms
  • pound;100m: Exam fee savings on "worthless" qualifications
  • pound;100m: FE admin savings
  • pound;146m: Redirect funding for 450,000 national vocational qualifications of limited value.

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