The chances of the Skills Funding Agency (SFA) agreeing to 50 per cent flexibility in adult skills budgets were very low — but if you don’t ask you don’t get, says Lady Sharp.

The idea of the Innovation Code put forward in our report The Dynamic Nucleus – Colleges at the Heart of Local Communities, was that it would give colleges a degree of flexibility in allocating  resources to meet local needs that did not fit neatly into budget headings.

Perhaps, above all, we had in mind the ability to use funds to seed initiatives that would not necessarily yield returns in the short period but would lay the groundwork for longer-term returns.

An example here might be the development of a partnership with the local police and/or youth offending team to set up a series of workshops — in bicycle and motorcycle maintenance, perhaps — that could develop into a set of apprenticeships but, in the short term, would provide activities to help to keep young men aged 16 to 21 off the streets.

In the report we suggested that colleges graded good or outstanding by Ofsted should be able to allocate up to 25 per cent of their adult skills budget to address local priorities.

This was carried forward into a recommendation to the government that they should “establish an Innovation Code to fund responsive provision that meets locally assessed priority needs. This should total up to 25 per cent of the college’s annual adult skills budget (by September 2012) rising to 50 per cent (by September 2013)”.

We were deliberately flying a kite. We knew that the chances of the Skills Funding Agency (SFA) agreeing to 50 per cent flexibility were very low — but if you don’t ask you don’t get. We were delighted that the White Paper, New Challenges, New Chances, published soon after our report, picked up the idea.

What is particularly disappointing about the SFA’s take is that it quotes the idea for the code as coming from our report and then misinterprets it”

However, had we read the paper more carefully, we would have seen that the idea was translated into something narrower than we intended; it was to be “for funders to draw down funding for programmes that meet a particular employer skills need while they are simultaneously developed for QCF”.

The SFA has refined this further in the guidance issued in August this year (The Innovation Code: A Guide), which suggests that the code may be used where “a provider, liaising with local employers…identifies a particular skills gap for which there is not an appropriate accredited qualification available in the QCF” and “may identify either existing provision or propose entirely new provision” that “will need to be developed to move into the QCF”.

It then goes on to make it clear that any proposal must respond to employer/business needs and must be broadly suitable for developing within the QCF.

What is particularly disappointing about the SFA’s take is that it quotes the idea for the code as coming from our report and then misinterprets it, wrapping it up in precisely the sort of restrictions that we were trying to get away from.

We were looking for a funding methodology which, together with the new Foundation Code of Governance emphasising accountability to local stakeholders, encouraged colleges to be creative and entrepreneurial in identifying and meeting local needs. As it is, there seems still to remain a substantial disconnect between the new freedoms being introduced to determine priorities locally and flexibilities necessary to deliver those priorities.

Lady Sharp is the Liberal Democrat education spokesperson in the House of Lords