Dear Jeremy: FE’s wishlist for 2024 budget

Sector representatives have made their case for funding for teacher pay, adult education and apprenticeships

Sector representatives have made their case for funding for teacher pay, adult education and apprenticeships

Organisations from the FE and skills sector have sent their wish lists of policy changes and requests for funding ahead of the government’s spring budget on March 6. 

At the last fiscal event, the autumn statement, the government prioritised tax cuts over government department budgets, prompting economists to warn unprotected sectors, such as FE, to brace for even more funding cuts.  

The Treasury closed its mailbox to submissions from organisations lobbying for cash on Wednesday. 

Among key asks this year are closing teacher pay gaps, increasing education budgets, and slowing down qualifications reforms. 

Here’s what the sector is asking for:

Association of Colleges (AoC)

The AoC has warned the chancellor of “growing waiting lists for adult skills in shortage subjects including construction, engineering, digital, health and social care.”

It says colleges “simply do not have the capacity” to meet employer demand. 

The body points to £586 million raised through the immigration skills charge in 2022-23 and recommends it be directed towards skills priorities set out in local skills improvement plans and priorities outlined in DfE’s employer surveys.

A plan to close the £9,000 pay gap between the average earnings of school and college teaching staff “should be a priority,” AoC said. 

The AoC also lists several obstacles to the government’s planned Advanced British Standard: “The government needs to prepare early for the ABS by investing to close the pay gap between schoolteachers and college lecturers, extend the 16-18 tuition fund and include colleges in the VAT refund scheme to start the journey to the introduction of the ABS in 2033.”

Now that colleges are back in the public sector, the government could save colleges cash by guaranteeing pension contributions to reduce costs to local pension schemes. 

AoC also calls for multi-year grant agreements and a review of the college oversight and regulatory regimes which they say treat colleges “as if they are here-today, gone-tomorrow private companies” which adds to costs. 

Association of Employment and Learning Providers (AELP)

There is a growing mismatch between what the Treasury receives in levy payments, and how much is committed to DfE to spend on apprenticeships. The Office for Budget Responsibility recently forecast the levy would raise £4 billion by 2024-25, yet the DfE apprenticeship budget will only rise to £2.7 billion.

AELP said the chancellor should increase the apprenticeship budget so more of the funding raised from employers through the apprenticeship levy makes its way to apprenticeships. 

“The government rightly encourages business to invest in skills to power the economy, but business is not getting access to the funding it is paying through the levy,” the trade body’s submission stated.

And to boost apprenticeships in small businesses, the Treasury should scrap the five per cent cash contribution they currently have to pay towards apprenticeship costs. 

AELP has also called for the rules banning child benefit payments to families of young apprentices to be scrapped.

Outside of apprenticeships, AELP has called on the Treasury to double the adult education budget “to reverse the previous decade of cuts and erosion”. 

It also called for training providers to have access to the same funding flexibility reforms as some colleges, such as longer contract periods and moving funding between funding lines.

“Such flexibility to allow providers to have the confidence to invest and offer a broader array of provision and such flexibilities should apply to all providers,” AELP said. 

Holex

The government should establish a minister for adult education and lifelong learning to promote adult education across national and local governments, according to the adult community education body Holex.

It also calls for a “government-wide levelling up lifelong learning strategy” which “underpins” employment and industrial policies. 

Holex said the strategy should prioritise adults without formal qualifications and form a plan for level 2 and below courses in skills shortage areas such as health, care, and service industries, as well as basic literacy, numeracy and English for speakers of other languages (ESOL). 

The chancellor should also introduce a ten-year budget for community-based adult education which would “break the cycle of low skills” with an inflation-linked increase to the community learning budget of £330 million, and a £5.2 billion injection to the skills budget weighted towards level 2 and below adult education.

Employers that invest in adults without level 2 qualifications should also benefit from a new “learning and skills tax rebate”, Holex said.

Learning and Work Institute

Researchers at Learning and Work Institute said the budget should offer a “step-change in thinking and action” on skills, employment, and economic growth. The chancellor should set out a plan to reverse the £1 billion cuts to adult learning since 2010, L&W said. 

It proposes a tax incentive for employers to help pay for it.

Its idea is for a “skills tax credit” which it says will encourage employers to invest in training by allowing them to deduct training costs from their corporation tax liabilities, similar to the research and development tax credit. 

Running alongside should be a “super skills tax credit” for businesses in levelling up areas or those investing in literacy, numeracy or digital skills, where 300 per cent of qualifying costs could be deducted. 

Taken together, L&W estimate this would cost the Exchequer £500 million per year, but could raise employer investment in training by over £1 billion.

The budget should also scrap the so-called 21-hour rule, which prevents young adult carers from claiming carer’s allowance if they study for more than 21 hours per week. 

Federation of Awarding Bodies (FAB)

Training providers and end-point assessment (EPA) organisations are “struggling to recruit and retain” qualified trainers and assessors, FAB said, because apprenticeship funding doesn’t cover the true costs of delivery. 

FAB called for apprenticeship funding bands to automatically increase every year by inflation, which would “improve staff recruitment and retention and enhance quality in training and assessment.”

Qualification reform should be “slowed down,” FAB have said, warning the Treasury that current plans to defund qualifications are “detrimental to learners and the wider sector in both scale and timeframe.”

Reforms to qualifications will also “significantly reduce” student choice in post-16 education, and FAB specifically highlighted the DfE’s own impact assessment which flags white males and SEND learners as groups that lose out under the government’s defunding plans. 

The reforms will lead to higher entry requirements in the future, FAB said, which, alongside more external assessment, places more young people at risk of being not in employment, education or training (NEET).

Workers’ Education Association (WEA)

One of the country’s largest adult learning organisations has called on the Treasury to commit to restoring the adult education budget to 2010 levels by 2029. 

“The sector has seen significant and persistent cuts in funding for over a decade,” the WEA said, highlighting figures from the Institute for Fiscal Studies showing adult education funding will still be 40 per cent below 2009/10 levels even with recent funding announcements.

The WEA also lists funding for a 6.5 per cent pay award for the adult education tutor workforce in its budget submission. This would match the pay deal agreed for schools, and the recommendation made for colleges. 

Last year, the DfE recycled nearly £5 million from its budgets to help colleges fund teacher pay awards. However, that funding was distributed through the 16-19 funding formula, so colleges that mostly teach adults lost out. 

“Tutors working in the post-19 adult education sector received no additional funding for a revised pay offer and are now out of step with the rest of the profession. This is despite many adult education providers being part of the same public sector classification [as colleges],” WEA said.

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One comment

  1. Jonathan James

    It is a real pity that the various organisations can’t be joined up about the priorities. If the sector is going to get more money and a bigger piece of the pie so to speak, the priorities really need to be articulated better otherwise the treasury will just ignore it against competing ‘bids’ from other areas.

    Its a bit like a tender submission, make it compelling, evidenced based and surely the sector groups could get together to produce something where there is agreement. If not, it goes to the route problems in the sector – there is no commonality of priority