Leaked BIS memo raises questions about SFA future – again

The future of the Skills Funding Agency (SFA) is once again in question, with a leaked Department for Business, Innovation and Skills (BIS) memo suggesting it plans to more than halve the number of its partner organisations by 2020.

Details of the leaked document were revealed in the Guardian, and include proposals to reduce the number of its partner organisations — of which the SFA is one – to 20, cut operating costs by 30 to 40 per cent and consolidate the “BIS family” from around 80 sites into seven or eight “centres of excellence”.

The proposals are based on recommendations from consultancy firm McKinsey, after Business Secretary Sajid Javid reportedly called them in to carry out an “efficiency and effectiveness review” of BIS in late July.

According to the Guardian article, by James Wilsdon, professor of science and democracy in the Science Policy Research Unit (SPRU) at the University of Sussex, BIS staff are now being consulted on the proposals, with a detailed implementation plan expected to follow in January.

Mr Wilsdon writes: “The case for radical change is set out in stark terms. Despite ‘huge strides in the last five years’, BIS is ‘too complex’, with ‘45 partner organisations and 80+ locations’, such that ‘those who deal with us find us hard to understand and navigate’.

“BIS ‘currently costs too much to run’, and its users ‘need a better service’ with ‘faster and more efficient access to advice and funding’.”

It’s not the first time that doubts have been raised over the future of the SFA. In 2012 a report by Lord Heseltine, one time deputy prime minister, questioned the role of the SFA and called for apprenticeship and post-19 education funding to be devolved to local areas, via a single funding pot.

Further questions were raised in November, when Peter Lauener was appointed chief executive of the SFA in addition to his existing role heading up the Education Funding Agency. Rumours of a planned merger of the two bodies were later met with denial by the government and by Mr Lauener himself.

A BIS spokesperson said it did not comment on leaks.

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  1. This isn’t something you can address simply by handing over funds to the LEPs. Some skills areas need a national perspective, and national provision run through a small number of centres of excellence – which is exactly what we have now in the maritime sector. (Indeed, for us, an England-only view is too parochial: we’re an international sector working with international labour markets and international – worldwide – regulation of standards). The push for devolution of skills funding is on the right lines, but it won’t work for every sector. We need a bit more subtlety in the thinking.

  2. Mike Farmer

    LEPs are hugely variable in size and geographical coverage (and, I suspect, in quality) so handing over funding to them is a big risk. There will be multiple boundary issues of the sort that were eliminated in 1992. And then there will be issues of conflict of interest in funding allocations related to who is a member of the LEP. And what about the costs of all that
    local administration of the funding? Madness!!

  3. Mike Motley

    We are a national training provider and currently only have to deal with one funding body, the SFA. The thought of skills funding being devolved to LEPs and then having to deal with 39 of them fills me with horror, not least due to the cost involved. It will be like going back to dealing with the regional TECs before “lead and feed” arrangements, but then there were only 27 of those. I also feel that LEPs are not setting their skills priorities in an informed way. For example, the number of LEPs in the Midlands who do not have construction as a priority.