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The sun's out but the piggy bank's still empty

Well, it is all over, and it's just beginning. In the first week of May the sun came out; students returned Labour to power in the mock elections for the first time in my recollection; the real results amazed some victors as much as some of the vanquished, and the United Kingdom won the European Song Contest.

So it is back to work again. The new Government is anxious that the country should meet the national training and education targets. But how can this be achieved? It is vital that the unemployed, and especially those who are all but unemployable because of their lack of general education and generic skills, should be educated and trained so that by gaining work they can move from being a burden on the welfare budget to being contributors to the national wealth.

What are the implications to be drawn from this promise? The most important is that colleges should be encouraged to help shift the unemployed and the unemployable from the dole and into the labour market. The creation of new jobs will not be successful if there is no one suitable to take them up. This task is a priority both for colleges dealing mainly with 16-19 students and those dealing with the over-19s. A youngster who leaves full-time education able to enter employment will be an adult who does not need emergency attention.

How will the Government persuade colleges that this should be their priority? Naturally, through the way in which they fund them. However, they have a problem here. They do not have an infinite well of new money to throw at the problem. What matters is the present situation, in which we have a government that has promised not to increase public spending, but to spread it about a bit instead.

If this were solely an education and employment funding issue, it would not be possible to suggest ways of solving it that did not involve new money. The new Secretary of State, according to the newspapers, sees the abolition of growth cash (known as the demand-led element) as a shortfall in further education funding. This is a user-friendly view, certainly, but does not get us any nearer to seeing how he is going to find the shortfall.

The only ways in which public money for education and employment can be increased are through the private finance initiative route or through reducing another department's spend. It was widely rumoured that our shortfall was occasioned by reducing our budget to fund the BSE expenditure. But couldn't it be argued, rather more logically, that the Department for Education and Employment should now be looking for assistance to the social security department, since success in meeting the training targets should reduce the social security spend?

It was good to see Harriet Harman arm in arm with David Blunkett outside Number 10 so early in their official partnership, since their working together may well help to reduce difficulties for both of them. The barriers that inhibit people from seeking either full or part-time education and training must be lowered. The highest barrier is for those who cannot survive if pursuing their chosen educational programme will mean that their benefits will be reduced or disappear. And for those who have never worked and do not really want to, motivation may have to come from the rewards given to those who do.

The abolition of demand-led funding will prevent colleges from investing in growth. For the outgoing government, this was not an insuperable difficulty, since it believed that value for money and growth could be achieved simultaneously through competition.

In fact, the results are often perverse. Colleges that could expand are no longer motivated to do so because of the lack of financial incentive. In any case, and however public-spirited they may be, many of them are operating at the outer edge of achievable business efficiency. Colleges that are not hitting their targets are nobbled in their attempts to do so in any way that meets the country's needs.

Even if it is correct that value for money gains can still be made on the current funding, it is still true to say that there is no mechanism for transferring money into education and training from social security expenditure.

In 1996, at the North of England conference, Sir Geoffrey Holland asked whether Labour would perpetuate the practice that money from the Department for Education and Employment was calculated on what was left over after the social security bill had been met.

If education and training are the bridge to employment, will Harriet Harman and David Blunkett be able to work together to create a new budget balance? If they are not able to do so, how large will the FE share of the windfall tax be, and how long will that last if, once spent, we return to where we are now?

What with the sun and the election and Eurovision, it seemed at the beginning of the month as if fin de si cle had given way to the millennium. I hope we can sustain that feeling at least until 2000.

Anne Smith is principal of John Ruskin College, Croydon

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