EXCLUSIVE: SFA wins provider allocation deal with BIS to stop budget cuts hitting 32 per cent



‘Cushioning’ agreement with BIS limits worst of adult skills cuts to 24 per cent

The Skills Funding Agency (SFA) has struck an eleventh hour deal to ‘cushion’ funding cuts at 24 per cent for the non-apprenticeship part of the adults skills budget (ASB), as opposed to a maximum of 32 per cent in their initial modelling.

Peter Lauener, SFA and Education Funding Agency (EFA) chief executive (pictured), wrote to providers late last month outlining a cut of a quarter for the non-apprenticeship part of the ASB.
However, this did not account for the new allocation protections given to Traineeships and English and maths.

To afford the additional protection, providers delivering no apprenticeships, traineeships nor English and maths would face cuts to their ASB as high as 32 per cent.

It is understood that allocations for 2015/16 had been due out Tuesday (March 17), but with officials at the SFA deep in talks about how to bring the biggest possible cuts down to 24 per cent they were pushed back to today..

It remains unclear how much the cushioning will cost, although FE Week understands the deal has been agreed on the basis it will all be paid for by recycling a predicted underspend from the current year adult skills budget allocations.

Martin Doel, chief executive of the Association of Colleges, told FE Week: “Any form of relief would be welcome even at this late stage, but can’t disguise the fact that this is still a very significant cut that will have serious consequences in terms of reduced participation in the ability of colleges and providers to respond to genuine need.”

The SFA has so far declined to comment on the deal. However, a spokesperson told FE Week yesterday: “We have previously said allocations will be issued this week. We are on track to deliver that.”
Mr Lauener assured providers last month that they would be contacted to discuss their allocations.

“As in previous years, my teams in the SFA and the EFA will be reviewing the combined impact of final allocations once these are issued in March 2015 and will
be reviewing the financial forecasts returned by colleges in July 2015,” he wrote late last month.

“We will also contact those of you most affected by the reductions in the other adult skills budget to discuss the implications of this for your organisation.”
It is understood that a number of colleges have already been contacted.

Editorial: Credit where due

The funding cuts that are being issued to providers in their 2015/16 allocations are devastating. This is unquestionable and a source of shame and short-sightedness by those in government.

So it’s difficult to feel truly happy about anything that isn’t an entirely new and fair settlement that adequately credits the FE and skills sector.

However, the Skills Funding Agency has been dealt the terrible hand it has — that of a massively (and once again) reduced budget with which it must act as the middle man.

So fair play to it for doing what it could and coming up with a deal that, while still resulting in reduced funding all around, could have been a whole lot worse.

Its idea to recycle funding to cushion the impact a bit might just be the difference between survival and shutting up shop for good at colleges and independent learning providers up and down the country.

And let’s not forget this deal was formulated and thrashed out in the short time the agency had to get allocations out due to just how late the Department for Business, Innovation and Skills was in getting its grant letter out.

But to return to the more pressing story, the one that simply cannot be overlooked, it remains a huge short-sighted cut from a government that talks the talk on adult skills, but is failing to deliver on resources.

Chris Henwood



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4 Comments

  1. S Porter

    The majority of FE Colleges are not fully equipped to manage or provide for Adult Learners anymore. The Community argument is out of date. If FE Colleges were commercial interests, they would be bankrupt. Mainly because success is based on being able to read the economy and serve a purpose people will pay money for.

    Poor economic engagement and needs analysis results in some shoddily structured provision, bad appointment decision, limited resources, non existent employer engagement and the delivery of content not fit for purpose. Working Skills Programmes are a classic example. Funding is often absorbed across the College and not appropriated purposefully. In this light, Colleges are only upset abut the funding implications. They should have been creating commercial revenue streams around Adult Learning from 20 years ago. Where is the innovation? FE Culture has been too reactionary, for too long and always expecting a hand out. They have not recognised that the Clients are tax payers, not the students. Universities on the other hand are light years ahead.

    We have to look at the cuts as a wake up call and hope that a different kind of package will be put together for 25+ Learners down the line. You can’t keep throwing money at something that shows no ROI. But the money has to be freed first up and time given to plan this.

    FE continues to create a deficit in the Education Budget. Old school Principals need to be replaced by CEOs and supported by Vice Principals instead.

    Its a competitive market, employers can hire younger, cheaper through apprenticeships and traineeships which is the main revenue stream for FE. But Vocation Skills have to be complimented with commercial and business skills…this needs some careful planning and thought.

    Given that many Colleges can’t even deliver to 16-19 years olds with an eye on the local economy, can you really trust them in the broader skills economy?

    FE Colleges need to be reformed top down; vocational centres need to be commercialised by Universities or Industry for strategic impact. This set up will bolster vocational skills with academic learning, create relevant qualifications, provide access to critical employment resources, provide better facilities and community, open up contemporary thinking and commercial connectivity.

    Through University, a Vocational Student could accumulate credits towards a degree. A Carpentry student may learn about Architecture & Design, take on a new language, Business Skills and History; building a pipeline of experience and knowledge that will create better sustainability and commercial opportunity.

    The Government needs to be more visionary and brutal with the end game and work with Universities to create an American Major/Minor Subject and Credit System that grows experts from humble beginnings. The UK is innovative because its people are practical and academic…we need to build on this trend.

    FE is a Dinosaur that can’t be modernised. If we cut out the middle man, we could have a hope of delivering exceptional opportunity to all school leavers and adult learners through a more appropriate delivery model.

    I have worked in FE and have never seen a greater celebration of mediocrity and commercial mismanagement in all my years.

    What is best for students, communities and the economy is something other than FE. We need to raise aspirations, not kill them.