Chancellor George Osborne’s Budget last month was widely expected to be disastrous for FE. But while many are still awaiting the finer details, the sector appeared at least safe for now. Neil Carmichael outlines his view of the sector settlement.

The mood of the Association of Colleges conference when I attended on the closing day could be best summarised by the headline in the conference edition of FE Week — ‘Staring into the funding abyss’, following warnings from Skills Minister Nick Boles that “FE will not be insulated from further spending cuts”.

The reaction therefore when the spending review announced that the core adult skills budget would be protected in cash terms at £1.5bn was one of relief at a better than expected settlement.

Coupled with the announcement of the apprenticeship levy and increased availability of loans for students who wish to pursue higher levels of vocational education, the overall settlement in my view represents a clear recognition by this government that the FE sector will have an increasingly important role to play in delivering its policy outcomes around apprenticeships, workforce skills and productivity.

I am very alert to the challenges that still exist for the FE sector

The government wants strong local areas and for employers to take a leading role in establishing a post-16 skills system. The series of area-based reviews is already being carried out to establish how local areas can set up institutions that do this.

Colleges will be invited to specialise according to local economic priorities, and to provide better targeted basic skills alongside professional and technical education. Some of these will be invited to become Institutes of Technology which will be sponsored by employers, registered with professional bodies and aligned with apprenticeship standards.

In my own constituency the South Gloucestershire and Stroud College (SGS) has already made itself well poised to develop even more exciting opportunities for young people, building a new training centre at the now decommissioned Berkley Green power station focussing on energy renewables, advanced manufacturing and cyber security which is already proving to be highly popular, judging by the success of the recent open day.

The FE sector is not just in need of reform. For too long, it has been seen as Cinderella in contrast to higher education so parity between technical and professional training with academic outcomes is long overdue.

One way to achieve this is to introduce a properly valued and recognised National Apprenticeship Award — guaranteeing the quality of the training and saluting the achievement of recipients, which should be part of the government’s early proposals for an Institute for Apprenticeships.

Another useful change made in the Spending Review was to allow sixth form colleges to become academies. This will simplify the post-16 arena and, by extension, help to define more clearly the role of the FE sector.

The FE sector is currently charged with the task of dealing with the huge number of GCSE maths retakes — and I congratulate the way many colleges have risen to this challenge — but this policy needs to be reviewed.

While it is absolutely right for young people — wherever possible — to have a qualification in maths (and English), a numeracy qualification could suffice. Furthermore, maths should, in my view, be part of a post-16 curriculum through learning for a National Baccalaureate, formed through maths and English components plus traditional A-levels or technical qualifications.

I am very alert to the challenges that still exist for the FE sector — for example, between them the Department for Education and Department for Business, Innovation and Skills both still need to secure potentially £500m of savings outside the adult skills budget, and managing this will create challenges.

But both myself and the Labour chair of the Business and Skills Select Committee have long recognised the importance of the FE sector in addressing UK skills and this will be a focus of our joint inquiry into UK productivity over 2016.

The challenges of the spending review now present a real opportunity to create more resilient colleges taking the opportunities now available to them through greater employer engagement and an ability to embrace new innovative structures to meet students, and employer demands.