The Education and Skills Funding Agency will be stripped of all post-16 policy and delivery duties following a major independent review of its effectiveness, FE Week can reveal.
Responsibility for those areas will be absorbed by the Department for Education from April.
The review, led by University of Sunderland vice chancellor Sir David Bell, will conclude that while there continues to be a need for the ESFA, its focus should be solely on funding. The agency will essentially become a contracts manager for post-16 FE funding, according to FE Week sources.
The Association of Employment and Learning Providers warned there is a “real risk” that leaving all policy decisions to the DfE will “fail to recognise” the operational challenges providers face, while the Association of Colleges said the move “makes a lot of sense”.
The DfE shared preliminary findings of the review, which was commissioned by the Cabinet Office in August, with FE Week ahead of the full report’s publication next week.
A DfE spokesperson said the review found the ESFA had too much post-16 policy and delivery within its remit.
Policy areas the ESFA currently controls which will switch to the DfE include T Levels, higher technical qualifications, apprenticeship off-the-job training, flexi-job job apprenticeships, the adult education budget and traineeships.
It is unclear whether the provider market oversight team, led by top civil servant Matt Atkinson, will remain in the ESFA or move to the DfE.
FE Week understands that the new consolidated unit will put school sixth-form policy with the wider post-16 sector.
Sector leaders hope that a more united post-16 unit within the department will result in more coherence and consistency in, for example, the opening of new elite sixth forms proposed in the government’s levelling up white paper.
Hopes could be dashed for those wishing for even bigger changes, however. Sue Pember, a former senior civil servant of skills funding in the DfE and now policy director at adult education body HOLEX, said it would be a “lost opportunity to not do something more radical”.
The full review should, in Pember’s view, recommend a “joint further and higher education funding body, or a separate body to oversee academy funding”.
‘A joined-up approach will be vital’
David Hughes, the chief executive of the Association of Colleges, welcomed the review’s policy decision. “It looks like the move we have wanted, with DfE taking more of a systems-approach to working with colleges, schools, independent training providers and universities and thinking about how those institutions can work collaboratively to meet learner, community and employer needs,” he said.
The ESFA has faced criticism in recent years from parts of the FE sector due to its handling of various procurement exercises, including the apprenticeship non-levy tender, multiple adult education budget competitions for independent training providers, and the European Social Fund.
Hughes continued: “It [the independent review’s decision] will allow the ESFA to focus completely on the work it does to ensure vast sums of public money get to colleges and others effectively and efficiently. That is a highly complex job and ESFA has a strong track record of doing it with relatively few errors and problems, something that should never be taken for granted.”
Jane Hickie, the AELP’s chief executive, wasn’t as enthusiastic. “With the DfE taking on all post-16 policy, there is a real risk that policy design and implementation fails to recognise the operational challenges providers face,” she told FE Week.
“A joined-up approach between the DfE and the ESFA will be vital in ensuring providers are able to successfully deliver a high-quality set of programmes for learners.”
A DfE spokesperson said: “Consolidating all post-16 policy and delivery within one group [will] enable a high-quality, outcomes-focused post-16 system that gives learners the skills and knowledge they need to succeed in their working lives and meet the needs of the economy.
“This will allow the ESFA to continue to focus on making sure that public funds are properly spent, and that value for money for the taxpayer is achieved.”