An in-depth look at the Skills Funding Statement as 19 pc ASB cut attacked

Plans to cut almost a fifth of the Adult Skills Budget have been savaged by organisations across the FE sector, with one leader saying the cut “flies in the face of economic good sense”.

The proposal to cut the budget by 19 per cent from around £2.4bn to £2bn was unveiled in the Skills Funding Statement (SFS), which came out yesterday — more than two months after Chancellor George Osborne’s Autumn Statement.

Serious concerns have been raised across the sector about the cut and the impact it will have on colleges and independent learning providers, although some elements of the SFS have been welcomed.

Stephan Jungnitz
Stephan Jungnitz, ASCL

Stephan Jungnitz, colleges specialist at the Association of School and College Leaders (ASCL), said: “Report after report has highlighted the economic benefits of FE both to individuals and society as a whole.

“Cutting the Adult Skills Budget flies in the face of economic good sense. With unemployment among 19 to 24-year-olds stubbornly high and the economy just teetering towards growth, we need to invest in skills. The recently-announced swingeing reductions in the budget can only bring a short-lived cash bonus.”

University and Colleges Union (UCU) general secretary Sally Hunt said: “We welcome the government’s continued recognition of the importance of FE in meeting the nation’s skills needs, but are deeply concerned by the downward funding trend outlined in the SFS.

“The government’s intention to expand apprenticeships is commendable, but the Adult Skills Budget is reducing dramatically while ostensibly providing support for more learners.

Sally Hunt
Sally Hunt, UCU

“By narrowing the focus onto apprenticeships and traineeships, support for other vital skills provision will come under increasing pressure. The government needs to devise a long-term strategy for funding skills provision which won’t compromise on the quality of learning opportunities.”

Institute for Learning chief executive Toni Fazaeli said: “We know from research recently published by the UK Commission for Employment and Skills [UKCES] that a sharp rise in skills shortages could be holding back the UK’s economic recovery, so a significant a reduction in the Adult Skills Budget makes little sense.

“And when teachers and trainers in FE and skills are rightly being called upon to upskill and be at the top of their game, to deliver what the economy needs, how can the reductions UKCES found in the investment in their training help? Government schemes to support maths and English professional development programmes and bursaries are welcome, of course, but do not go far enough.

“We are also concerned about the potential far-reaching impact of the budget cuts on the range and quality of teaching and on the sector’s ability to attract the best from business and industry to teach and train in the sector.

“On top of the funding cuts for 18-year-olds, the net reductions in the Adult Skills Budget, after taking into account income from loans, are set to have unfair and undesirable consequences for a substantial group of adults and young people.”

Other organisations said they were in two minds about the statement’s contents.

David Hughes
David Hughes, Niace

David Hughes, chief executive of the National Institute of Adult Continuing Education (Niace), said: “I am pleased that they have paid heed to our desire for a complete system and offer from the very lowest levels right up to higher education.

“Across HEFCE and the SFS they want to maintain a system in which adults progress to higher levels of education.

“The difficulty is that they are asking for cuts and reductions to be applied at institution level, so colleges are going to have to make very difficult decisions about which learners to fund.”

And Association of Employment and Learning Providers chief executive Stewart Segal said: “These budget reductions mean that providers have to focus on delivering high quality programmes that deliver the most benefit for employers, learners and the local economies.

“The cuts come after a number of years of overall budget reductions and real term rate cuts.  Providers have responded positively and continue to deliver higher quality provision.”

But he also raised concerns about the future funding of apprenticeships.

“The statement confirms that the government will launch another funding consultation in the spring although we have yet to see the results of the previous consultation,” said Mr Segal.

“We have expressed concern over some of these proposals in relation to compulsory contributions and employers managing the funding. This will have a significant impact on small and medium-sized enterprise employers taking on apprentices.

“Many of these employers only have one or two apprentices so these employers will not want to manage the funding directly.

“We have always believed in giving employers the choice of funding route and most would prefer to work through an experienced training provider although clearly the choice as it is now is with the employer.”


Association of Colleges (AoC) chief executive Martin Doel said: “We are pleased that the government has taken the decision after prolonged discussions at Cabinet level not to reduce the skills budget beyond the cuts announced in the comprehensive spending review last year.

Martin Doel
Martin Doel, AoC

“The pre-existing planned cuts will leave colleges with a sizeable reduction in the 2014/15 academic year and the level of funding will not fully be known until next month. A 20 per cent cut in the Adult Skills Budget comes at a time when colleges are coping with increasing numbers of apprentices, adult learners and unemployed in training.

“We called for an increase in the 2014-15 capital spending budget in autumn 2013 and it is good news that government has listened and added £58m to the total available which will allow more colleges to make much needed improvements to their buildings and respond to employer demand.

“The statement provides clarity in some areas but we are still waiting for clearer information on the new HMRC-led apprenticeship funding model and the LEP-led capital funding system. Uncertainty is a disincentive to investment.”

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  1. Mike Farmer

    FE funding does not happen in isolation: within BIS FE has to compete with HE, and within government it has to compete with such things as flood defences (money now no object it would appear!). The key question is how the reported battle between BIS between FE and HE which went all the way to the top, has been settled. And for that you need to look at the HEFCE statement yesterday as well as the SFA. It’s all smoke and mirrors, of course, but the headline figure for HE Teaching goes down from £2861m to £1915m, which looks like a pretty substantial cut to me. it’s balanced by other figures (Research etc) so the overall effect is less severe. However, I’ll leave it to the management accountants out there to do the heavy lifting on the numbers to determine whether FE or HE is the bigger loser.