FE Week investigates: The great SFA giveaway
We take an in-depth look at the Skills Funding Agency (SFA) and five of its latest moves and policy decisions, including redundancy packages for hundreds of jobs, money offered for NEETs and the re-opening of a core growth fund.
Millions spent on SFA redundancy packages
More than £17 million will be spent on voluntary redundancy packages for hundreds of staff as the Skills Funding Agency (SFA) bids to cut long-term costs.
The agency is offering 430 workers exit packages, with increased payments costing a total of £17.4 million.
They say the move is to reduce its administration budget by nearly a quarter over the next four years.
A spokesperson for the SFA said: “We are satisfied that the payments represent good value for money, given the longer-term savings.”
However, the agency is determined the reduction in staff numbers will not affect its day-to-day objectives.
The spokesperson added: “We are confident the reduced staffing numbers and functions will allow us to fulfil our role as the funderand promoter of the further education sector and, critically, will help us to meet our commitment of reducing our administration budget by 24 per cent over the next four years.”
The severance pay of each employee will include the time they spent working in Training and Enterprise Councils (TECs).
The spokesperson said: “The agency sought to secure terms within the guidelines set out by the civil service compensation scheme and to offer an incentive to staff wishing to leave.
“The Cabinet Office approved a proposal to include TEC service when calculating severance to ensure that we could treat all staff equally and on the basis of their total continuous service period.”
The spokesperson added the SFA was becoming “more streamlined and efficient” in response to the greater freedoms being given to colleges and training organisations.
Unspent millions quietly offered for 19-24 NEETs
FE Week has learnt that additional funding is being offered to colleges to provide better support to people who are not in employment, education or training (NEET).
It is understood that only colleges that met or exceeded their 2010/11 adult funding allocation have been offered these additional funds*, and for some colleges well over a million pounds is on offer.
This additional funding is similar to that also being offered to the Third Sector. SFA Update issue 83 states: “This funding is designed to enable Third Sector training organisations to widen their engagement with NEET individuals aged 19-24 and support their entry to the labour market or progress to an apprenticeship or training.”
The allocation increases will be confirmed by the SFA in December.
A spokesperson for the SFA said: “The funding forms part of the existing Adult Skills Budget that is being redeployed as part of our normal quarterly performance review. The first quarterly review for the 2011/12 academic year is currently underway.”
FE Week is led to believe colleges have been already been offered the additional funding, but have not yet received any confirmed amounts.
The spokesperson added: “The first quarter review gives the agency an indication of how the money in the system is being utilised and if there is additional capacity.
“Colleges and providers have had discussions with their relationship managers about their proposed delivery for the 2011/12 and what additional demand they have in the 2011/12 contracting year.
“This is part of our published quarterly performance management process and intended to assist in the efforts to reduce the numbers of people not in education, employment or training.”
(*Update: The SFA has been in touch with FE Week to clarify that providers who “believe they could deliver more provision for this group in 2011/12” could also be eligible for additional NEET funding.)
Ministers re-open £60m fund to boost growth
Money is also being handed out to businesses as part of the second phase of the Growth and Innovation Fund (GIF).
Launched last week by Business Secretary Vince Cable and Skills Minister John Hayes, the fund will see BIS provide £34 million for 2012-13.
There is still £29 million available to bid for, with matched funding from businesses there will be around £60 million available under GIF this year.
Leadership for the Fund rests with the UK Commission for Employment and Skills (UKCES) and the Skills Funding Agency.
Geoff Russell, chief executive of the SFA, said: “We look forward to working with employers and their representative organisations to find innovative and sustainable solutions to tackle skills gaps in their sectors.
“The GIF will secure a greater commitment from employers to invest in the skills they need, so creating jobs and apprenticeships, driving enterprise and increasing their overall productivity in support of the growth agenda.”
GIF is now open all year, meaning proposals can be submitted whenever they arise and ready to be considered for investment.
Mr Cable said: “The government understands we need to tackle the skills shortages that are holding companies back.
“Through this fund, we will support employers that take collective action to overcome these barriers, helping to rebalance and grow our economy.
“By putting the employer’s voice at the heart of the process, we will reward inventive approaches to training that deliver real help to get business moving.”
£250m given to employers for their skills training
The government has announced that £250 million of Skills Funding Agency funding will go directly to employers over roughly two years, and completely bypass colleges and traditional training providers.
The Prime Minister said: “Times are tough, especially for young people who are trying to get their foot in the door and launch their career.
“I am determined to do all we can to give people the very best skills, training and opportunities to succeed, and why despite tough spending decisions we are investing in record numbers of apprenticeships.
Mr Cameron added: “We are seeing an incredible take up of these apprenticeship places.
“I want that to continue, which is why we are taking action to make it easier to take on apprentices, and now we are giving employers the power to take control of the training so that it best meets the skills they need.”
Business Secretary Vince Cable said the government wasn’t trying to damage the relationships colleges have with employerss.
“The introduction of this pilot might sound threatening to some providers, and perhaps to some of you, it actually represents an opportunity for the best to expand,” Mr Cable said during the Association of Colleges (AoC) Annual Conference.
“We therefore intend, as the Prime Minister has announced today, to try out a new and radical approach to promoting business engagement and investment in skills and apprenticeships – one where public money is channelled through employers.”
Underpeforming colleges to keep all the SFA funding
The SFA have announced that they will waive the clawback from a number of providers who deliver at least 97 per cent of their funding targets.
Issue 81 of the SFA’s weekly bulletin states: “A tolerance of three per cent will be applied to the final out turn for 2010/11, so clawback will be waived for providers who have delivered 97 per cent or more.”
The approach is intended to ensure that past and current performance is reflected in future funding allocations.
The proposals are subject to the final data return for 2010/11 due later this month, according to the SFA.
The update adds: “Where a provider has delivered more than 100 per cent of the allocation for 2010/11, the assumption will be this year that the Agency will fund over-performance, subject to a normal maximum of 10 per cent of the total allocation of £1m, whichever is lower.”
The SFA will notify providers who are having their clawback changed next month.