Tory reforms promise a fairer deal on training
The last 12 months have seen unprecedented turbulence in the skills sector. Unravelling promises of capital funding have left colleges facing hefty bills for projects they were forced to abandon.
Sector Skills Councils are being emasculated in favour of regional development agencies, while the Learning and Skills Council has morphed into a hydra with three heads: the Skills Funding Agency, the Young People's Learning Agency and the National Apprenticeship Service. As the number of young "Neets" rose past a million last week, leaked documents revealed ministers plan cuts of pound;350 million to next year's training budget.
After years of divisive and often ineffective reforms, the sector craves stability. But the skills landscape currently resembles something between a bomb site and a building site. Whoever wins the next election will face the same empty coffers and will have to do more for less. We have concluded reluctantly that further reform of the system is necessary.
It is for this reason that I have published a consultation paper on a new funding arrangement between the Government and training providers. The paper begins by noting that the current tariff-based funding formula, while imperfect, has been impressively resilient. Given our desire to minimise unnecessary upheaval, we would therefore keep it as the foundation for an improved system of decentralised, demand-led FE funding.
Each training provider would be awarded funding for a set number of students at a set price per student, based on past provision. Providers will be able to trade unused student places online, at a marginal rate, so downsizing colleges will have a financial cushion and expanding colleges can meet rising demand. The following year's allocation will reflect any changes.
A new Further Education Funding Council (FEFC) will oversee the process - but purely as a funding agency, not another planning body. Each institution will produce a clear, public statement from its governing body explaining the people, commercial sectors and special interests that it aims to serve, and how it intends to do so. The FEFC will also be able to contract with private training providers on a similar basis to colleges, with new competitive pressures an essential quid pro quo for new freedoms.
On the thorny issue of capital funding, we want to look afresh at ways we can help institutions fund their own projects - for example, by overhauling the rules that prevent colleges borrowing money to the same extent as universities.
More college autonomy, less red tape and less Whitehall interference can set the sector free. Under our proposals, the numerous quangos struggling to match provision with local need could be streamlined. Inspections and bureaucracy could be cut. Our ultimate goal is one funding body, one audit regime and one improvement body.
We believe our proposals offer skills providers a radical improvement on the way they have been treated and can help them recover from the hammer blow of the capital crisis and tackle the national emergency of youth unemployment. We are placing the ball at your feet because we know you have the ability to use it wisely. We want your views.