AEB devolution plan to link job outcomes with funding will require more robust learner destination data

Sadiq Khan is demanding London’s training providers collect more robust learner destination data as he ploughs ahead with plans to switch their adult education funding model to payment by results.

But in recognising this action could impact on the resources available in colleges and other providers, the mayor is looking at establishing an “outcomes development fund” to offset the costs.

It would be a pot of cash that providers can bid into to help them develop the systems to collect data “more effectively”.

City Hall will not rush into introducing payment by results models

Mr Khan (pictured) revealed the plan in the “Skills for Londoners Framework” that was put out for consultation two weeks ago, which supplements his skills strategy unveiled in June ahead of the takeover of the AEB for the capital in 2019/20.

It confirmed that London will eventually shift its AEB payment model away towards wider outcomes such as progression into work – something that the Greater London Authority has been researching since as far back as 2014.

But the move is likely to be controversial amongst training providers that for decades have simply been paid for delivering qualifications.

The Association for Colleges certainly isn’t a fan of the “clumsy” system, warning that it “generally requires more data collection, delays payment for training and can result in less money being spent on those furthest away from the labour market”.

“There are other interesting models like Outcome Agreements and Sector Skill Deals that might be more effective in delivering outcome-focused solutions than clumsy payment by results systems for which there is little evidence of successful large scale implementation,” said Mary Vine-Morris, the AoC’s area director for London.

“National adult education funding rates haven’t increased for nine years and we cannot afford for bureaucratic or burdensome systems to be introduced.”

Mary Vine-Morris

City Hall recognises that destinations data collected by training providers is often “incomplete”, so it will look to improve this.

“Ideally, this would include drawing upon HMRC Real Time Information as used by the Department for Work and Pensions within the work and health Programme,” GLA’s framework said, before admitting access to this data is “unlikely” to be made available in the short term.

In the meantime, the authority will request that providers collect destinations data “more completely, and managers will work with providers who are unable to provide sufficient data,” it said.

The framework recognised that the resources required to collect destination data “could have an impact on the resources available for delivery”, so an “outcomes development fund” is being considered for providers to bid into to help them develop data collection systems.

Ms Vine-Morris said it is “good that the GLA paper recognises the need to first improve data collection and access to national data like HMRC”.

The GLA notes that without appropriate data on which to base payments by results models, there is a “significant risk they could damage provision through a range of unintended consequences”.

For example, if the payment model is “not generous enough for a certain type of training, it could lead to less investment in that training, or heavy investment in provision where the payment model is relatively more generous.

“Moreover, there are risks around some providers ‘cherry picking’ learners who they think are likely to achieve outcomes, and neglecting the most disadvantaged who may struggle to achieve them”.

Given this, City Hall said it will not “rush” the introduction of an outcomes-based funding model.

We cannot afford for bureaucratic or burdensome systems to be introduced

It will only be introduced when there is “confidence that there is sufficient data to allow robust payment models to be developed”.

This is likely to be possible only after City Hall gains access to Longitudinal Educational Outcomes data from the Department for Education or after running “robust, smaller scale trials”.

In the short term from 2019, the mayor expects to continue paying providers on a similar basis as that laid out in the current AEB funding rules.

The move to outcome-based funding will also look to include a focus on “social” outcomes.

GLA doesn’t yet know the full detail of how this will be measured, so consultants will be commissioned to work with providers to develop a “set of metrics”.

Ms Vine-Morris said the AoC “welcomes” the GLA’s “acknowledgment that outcomes are not just about supporting learners into work but include progression and the wider social benefits of adult education”.

She added: “We are pleased the GLA is taking a consultative and considered approach and will continue to encourage them to trial any of the changes they propose.”

The consultation closes on August 15.