Regional mayors have allocated more of their adult education budgets than the government, figures obtained by FE Week show.
Between 2019 and 2023, England’s mayoral combined authorities (MCAs) spent 97 per cent of the £2.85 billion handed to them to fund adult courses, leaving a total underspend of £87 million.
Meanwhile, the Department for Education spent 91.5 per cent of its £2.98 billion budget for non-MCA areas in the same period, leaving £254 million untouched.
Experts suggest the figures show regional mayors are more effective at administering the AEB than Whitehall – and better at focusing investment on local needs.
Underspends decrease
AEB devolution began in 2019 and is continuing to grow. In this academic year, about £839 million of the adult education budget has been handed to the Greater London Authority and nine combined authorities, accounting for 60 per cent of the £1.4 billion AEB now known as the adult skills fund.
Annual underspends appear to have improved since local leaders established themselves as skills commissioning bodies.
In 2019 they underspent a combined £15 million, or 4 per cent of their budgets.
But by 2022-23, 99 per cent of the £789 million of the AEB available to regional mayors was spent, with some overspending due to high demand.
Jamie Driscoll, former mayor of the North of Tyne, which has now become part of a larger North East Combined Authority, said spending was “pretty much bang-on” during his tenure, with an underspend of just £1 million on a £70 million budget over three years.
He added: “That’s no mean feat considering we took control of the AEB budget during Covid. It was crazy.
“What AEB devolution let us do was plan, build relationships with training providers, and basically do a good job.
“We increased AEB enrolments from 22,000 to 35,000 on the same real-terms budget.”
‘Devolution journey’
Money left over from the AEB is kept in MCAs’ reserves and carried forward into future years, with many using it to make free adult education more accessible to disadvantaged people.
Exactly how much MCAs have in their adult skills reserves is unclear but authorities for South Yorkshire and Tees Valley told FE Week they had £12 million and £7 million respectively.
Some, such as the West Midlands, use left-over funds to increase the threshold for free level 3 courses to include people earning up to £32,000 per year.
Cambridgeshire and Peterborough targeted spending for the most deprived areas and introduced a £1,200 bursary for care leavers in further education.
South Yorkshire, which took control of skills in 2021-22, said it had “significantly” improved its spending from 80 per cent of its £31 million budget in the first year to 98 per cent in 2023-24.
“Devolution is a journey”, they told FE Week.
‘Effective outcomes’
Experts said the figures reflect positively on devolution.
Simon Ashworth, deputy chief executive officer of the Association of Learning Providers, said mayors with devolved skills powers take a “more progressive approach” to commissioning, which leads to “more effective spending outcomes”.
He added: “Given Treasury’s expected drive to extract more effective spending throughout government at all levels, this represents an opportunity to continue to do things differently.”
Gareth Thomas, a skills policy adviser and former director at the Learning and Skills Council, said mayoral adult education spending appears to “get better year on year”.
This is likely because authorities can “leverage” skills with other activities in their remit, such as housing, planning and business growth.
However, he added that 10 devolved skills bodies create a larger administrative cost than when the DfE managed all adult education contracts with independent training providers.
“The key thing for MCAs is getting the balance right between knowing what’s going on and assuring value for money, versus not putting too much burden on providers through admin costs and getting as much as possible out to learners on the front line,” Thomas said.
Transparency call
FE Week obtained the spending figures through a series of freedom of information requests to the 10 English mayors with control of skills budgets.
Most MCAs fail to routinely publish headline figures such as how much of their budgets are spent each year.
Others publish spending figures in different formats which makes comparison difficult.
Thomas said: “This is taxpayers’ money, and taxpayers have a right to understand how much is being spent and the impact of it. Some consistency of reporting would be helpful.”
Since being contacted for comment, MCAs including South Yorkshire have committed to publishing their spending performance “for all future years”.
Alex Stevenson, deputy director at the Learning and Work Institute, said: “As more devolution areas take on responsibility for adult skills it’s important to have transparency and accountability in how skills funding is spent.
“DfE should work to ensure a consistent approach to the reporting and publication of data at MCA level.”
The DfE, which agrees the terms of skills devolution with mayors, declined to comment.
Flexibility of outcomes and the ‘looseness’ of the contract management approach may be factors to consider when evaluating allocation and underspend.
While I believe MCAs are likely better at aligning their allocation to local provision in their plans, many MCA-funded providers adopt a softer contract management approach due to local political influences and the need to stabilize local FE provision.
The rigidity of the DfE’s approach to contract management and the lack of in-year contract management is probably the root cause. Where does the unspent DfE allocation go?
Perhaps it should be redistributed to the MCAs in a timely manner, or there should be an enhanced opportunity for all funded providers to access regional pots of underspend. Too many providers struggle to access direct or indirect funding, which is reducing the richness (breadth, depth, and niche areas) of the curriculum offer at a time when this is more required to meet our skills shortages……….
The word ‘better’ in the headline should not conflated with ‘effective’ or ‘efficient’.
If I went out shopping with my weekly grocery budget (which I’d like to be bigger, but FE wages…) and returned with a single loaf of bread, proclaiming how much better I was at shopping than my partner, I’d think there would be a fair chance I’d be both hungry and lonely.
How about these for KPI’s:
Funding per learner hour (efficiency)
outcomes per learner (effectiveness)
spending (only to be gauged in light of efficiency and effectiveness)
(for starters, bring back the learner hours figure in the aim record of the learning delivery ILR entity – removing that arguably paved the way for underfunding…)