Step-by-step guide to the new-style quango

23rd February 2001 at 00:00
April 1 2001 sees a great movement of people between different quangos. The Further Education and Funding Council and the training and enterprise councils close down. The Learning and Skills Council starts its work. The scale of the transfer is impressive and includes the rewriting of 5,000 employment contracts.

But April 2001 is only one stage in a longer-term reform. In a January speech, Education Secretary David Blunkett describes the Learning and Skills Council as being the "most significant and far-reaching reform to post-16 learning in this country". It is a reform which creates two sectors: 16 to 18 and adult education and training.

The reform of 16 to 18 education and training brings three systems under one management. Work-based training - the successor to youth training - is the first to move. A national formula and set of rules has been drawn up which outgoing TEC staff are using to draw up 2001-2 contracts. The Learning and Skills Council inherits these contracts in April and will immediately start planning for 2002-3.

These plans will determine the funds for work-based training and for the second 16 to 18 system, inherited from the FEFC: sixth-form and further education colleges. The local learning and skills councils will have a pound;2.6 billion budget to fund the systems in 2002-3 - a 10 per cent increase on the previous year.

School sixth-form funding is the third system to move under skills council control. This transfer takes place in April 2002 and does not change the management or legal status of school sixth-forms. Schools stay with local authorities. But the budget (pound;1.2bn in 2000-1) moves, giving the Learning and Skills Council an unprecedented chance to make a difference.

The December consultation paper on sixth-form funding reassures schools that change will be slow. The paper also reaffirms the guarantee that no budget will fall if pupil numbers do not. Nevertheless, the Learning and Skills Council will have an overview of a pound;4bn budget and a chance to move towards three specific objectives: 100 per cent participation in education or work-based training at age 16, 85 per cent achievement of level 2 qualifications by age 19, and 50 per cent of each year's cohort reaching university. Targets are written into the Treasury's contracts with the Department for Education and Employment. They will be one of the key tests of the council.

The move to national sixth-form funding will cause some short-term disruption because money will be taken out of local council standard spending assessmnts and given back as earmarked grants for sixth-forms. A national formula will expose wide variations in current funding. A standard spending assessment takes account of social factors to work out the local authority's budget but the money is then distributed to schools by a cruder formula based on pupil numbers. The new arrangements will benefit those schools which currently get less for their sixth-formers. Other schools would lose - schools with middle-class intakes in inner cities - but for the funding guarantee. In addition, governments invariably increase budgets to ease structural change. Expect funding increases for sixth-forms in 2002-3.

The position for adult funding is less certain. The good news for 2001-2 includes an overall budget increase and 9 per cent more money for local authority adult education. The funding of these services moves under the learning and skills councils in 20012, joining them to the new adult education and training sector. This sector accounts for pound;2.5bn in public funds and includes the 250 FE colleges as well as more than 1,000 charitable and private training providers. New calls on the budget include the basic skills strategy, demand identified by National Training Organisations and the revenue funding needs of new UK Online centres.

The task of assessing priorities falls to the local learning and skills councils. The DFEE's current intention is that funding rates will be decided nationally but allocated locally. The key allocation mechanism will be the local plan. Planning needs to start early because funding in 2002-3 will tighten. Current plans are for a 3 per cent cash increase for adult education and training for 2002-3. The plans are set out in the December grant letter and may well change. If they don't, this leaves the average local skills council with a pound;53m budget for adult provision in 2001-2 and pound;55m the following year.

In this environment, growth will be paid for from two main sources. The first is familiar: getting more for less from existing funds. The second is newer. Unlike the FEFC, the Learning and Skills Council has a duty to encourage individuals and employers to contribute to their own learning and training. Success in the new adult sector will depend on a mixed economy approach. The Learning and Skills Council will need to use public funds to get more from private spending. One of the first steps in planning the public sector should be a better understanding of why adults learn and train.

Julian Gravatt is director of finance at City Lit

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