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Outstanding BTec learners honoured at plush Royal Horticultural Halls event

The country’s most outstanding BTec learners and providers were celebrated in the plush setting of London’s Royal Horticultural Halls.

Comedian Rob Beckett hosted Pearson’s national BTec Awards 2015 on Tuesday with an audience of around 150 guests.

Attendees included the winners and their nominees, family members, lecturers, college principals and other stakeholders including Lady Garden of Frognal, and Stewart Segal, chief executive of Association of Employment and Learning Providers.

They were treated to dance performances from Miskins — dance students from North West Kent College — before a keynote address from Zoe Jackson MBE, award-winning entrepreneur and founder of talent agency Living the Dream, got proceedings under way.

One of the stand-out winners was 20-year-old Stephanie Trembath from Penwith College.

She was awarded outstanding BTec student and outstanding BTec child and social care student for her role in many local voluntary projects to help individuals in her community who are isolated and alone.

The level three diploma in health and social care learner is on track to receive a triple-distinction and is described by her tutors as “dedicated, mature and completely committed” to her studies.

Stephanie said: “I am so very thrilled to win this award. My BTec has helped me understand so much about working within community care and health and social care related employment.

“It has also given me so much more self-confidence as well as the determination, motivation and the desire to accomplish my ambition of becoming an adult nurse in the future.”

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Now in its fifth year, the Pearson National BTec Awards 2015 received more than 800 nominations across the 20 award categories to celebrate vocational excellence among the nearly one million BTec learners across the UK.

The judging panel, which included FE Week publisher Lsect managing director Shane Mann, was said to be “blown away” by the quality of the individuals.

The nominees were longlisted and then the judging panel agreed the winners of each category. During the ceremony each winner was presented their award by the previous winner.

Father-of-five Nathan Headington, who returned to education at Leeds College as a mature student with no academic qualifications, won outstanding BTec adult learner of the year.

The 36-year-old began his journey back into education with a BTec subsidiary diploma in civil engineering at Leeds College of Building, gaining distinctions in all units before progressing onto an HND in civil engineering and a full time site management role.

Nathan said: “Having caught the education bug a bit later in life, I simply can’t get enough of it and I just love all the opportunities that studying at Leeds College of Building has given me.

“To be named Outstanding Adult Learner of the Year at these awards is very special and it makes all the hard work even more worthwhile.”

Pearson UK managing director Mark Anderson said the awards was an opportunity for “us to shout from the rooftops” not just about the winners, but also about the achievements of BTec students, apprentices, teachers, schools, colleges and training providers up and down the country.

“It is vital to support and celebrate the hard work and achievements of outstanding BTec students and their teachers. This year’s judges were impressed by the quality and number of nominations we received, but these 20 really stood out as a truly exceptional candidates,” he said.

Funding agency unable to approve growth requests after Budget — despite assurances

The Skills Funding Agency was today unable to say when providers would learn if their quarter three growth requests had been approved — despite assurances there would be news after the Budget.

Providers had originally been told the deadline for them to find out from the SFA if they would be paid for apprenticeships, and other programmes, they had already started delivering was the week commencing June 1.

But, as FE Week revealed on June 8, the SFA wrote to providers warning that the announcement would instead take place following the government’s emergency budget, which was unveiled by Chancellor George Osborne yesterday (Wednesday).

And FE Week has learned that — even after the Budget — SFA officials were still in talks with colleagues at the Department for Business, Innovation and Skills.

An SFA spokesperson said: “We are working with BIS on the outcomes of the Chancellor’s budget and will be communicating to the sector shortly on the outcome of growth requests for 2014/15 and 2015/16 financial position.”

When asked to define what “shortly” meant in this context, she added: “I can’t give you anything more specific than that at the moment.”

News last month that the delay would be taking place caused the Association of Employment and Learning Providers (AELP) and Association of Colleges (AoC) to issue warnings that resulting uncertainty over funding would “make it more difficult” for providers affected to help the government deliver on its target of creating 3m new apprenticeships by 2020.

A number of providers even put their recruitment of apprentices on hold in light of the uncertainty over whether they would be paid for provision they had already delivered.

An AELP spokesperson said that they “would certainly normally expect providers to have learned of quarter three growth requests by early June” and the ongoing delay was making it “very difficult” for them to plan provision.

Stewart Segal, AELP chief executive, said: “We need to get answers quickly to growth requests so that providers can respond to employers and apprentices.

“To drive the growth, we need a contracting system that gives providers a long term commitment to increasing apprenticeship starts.

“We heard at the recent AELP conference that the freeze decision has already affected planned volumes for next year, so unless the agency moves fast, the 3m aspiration will become harder to achieve.”

David Corke, AoC director of education and skills policy, said: “The over-delivery of apprenticeships affects colleges and other providers and they must be paid for the work they’ve done in order to meet the needs of both employers and apprentices.

“We hope there is no further delay in communicating with colleges and other providers about the outcome of growth requests.

“If colleges and other providers cannot train apprentices because they have not got the funding, this will be frustrating for employers who want their staff up to speed and ready to work.

“It will also make it more difficult for the government to meet its target to provide 3m new apprenticeships by 2020.”

BIS declined to comment.

Lords social mobility committee looks at apprenticeships

Careers advice, the government’s 3m apprenticeship target and impact of the FE funding cuts were at the top of list for the House of Lords social mobility committee in inaugural hearing.

The committee, chaired by Lady Corston (pictured above), was set up to investigate the transition between school and work, and what happens to young people who do not go on to university but are not included in the statistics for young people not in employment, education or training (Neet).

In its first evidence session on Wednesday (July 8) for a report due in March, the committee heard from Peter Clark, joint head of the Department for Education (DfE) participation and careers unit, and Juliet Chua, DfE director for post-16 and disadvantage.

It also heard from Oliver Newton, head of apprenticeship growth, strategy and legislation at DFE and the Department for Business, Innovation and Skills (BIS) and Andrew Battarbee, BIS deputy director, vocational education strategy.

The committee had dubbed the young people they were interested in as “the missing middle”, however, Ms Chua said the government did not recognise the term.

She outlined the options available to a 16-year-old, pointing to A-levels, apprenticeships and vocational courses.

She added: “We wouldn’t recognise that missing middle as a homogenous group, we would say there is different programme available depending on a young person’s employment and interests.”

When asked by committee member Lady Sharp what the government was doing to promote the apprenticeship option, to allow people to progress through to top level careers, Ms Chua replied: “Our strategy for meeting the 3m is to essentially grow provision across a number of strands — firstly, we want to continue the reforms we’ve started.

“We know that giving employers greater control over the development of apprenticeships and the standards means that they’ll be relevant to their needs, and we know that we want to encourage existing employers to keep offering apprenticeships and to draw new employers into the programme and we know that a having the right product is the core building block of that.

“Secondly, the public sector needs to pull its weight so we’re bringing forward new legislation that will place a duty on public bodies to create new targets and do more to offer apprenticeships.”

She added the third strand would be to expand higher level apprenticeships and continue to address quality.

There was a heated exchange between members of the panel and Lord Patel over the effect of the cuts to the adult skills budget.

Mr Battarbee said: “It is very much on colleges to respond to these funding changes.

“What we have done is reduced the funding in ways which reflect the priorities that government has set, so over the past years we’ve more than doubled the funding that we’ve put into apprenticeships.”

However, Lord Patel accused him of not answering the question, again asking what the impact would be on colleges, learners and potential learners — and whether it would limit their social mobility.

Ms Chua said: “In tackling the deficit the government has had to take some difficult decisions.

“This has clearly been very tough for colleges and we’ve seen some very good examples of colleges really grappling with some difficult financial decisions but that is because we’re prioritising apprenticeships in the way that the budget is being used and given what we know about the return from apprenticeships we want to see the programme grow.”

A key concern for committee members Lady Howells and Lady Sharp was careers advice.

Lady Howells asked whether information, detailing clearly and simply the progression and earning expectations for individual careers, was available to young people.

Mr Clark said: “There is that sort of information available from the National Careers Service and individual professions will often make that information available through national websites of professional bodies.”

Ms Chua said: “We know Ofsted has highlighted that for careers guidance in schools, the pattern of provision is variable across the country and there’s more to do to strengthen it and this is an area we have seen as a priority for us as a department.”

She also pointed to the careers and enterprise company launched by the Education Secretary Nicky Morgan in December.

Lady Sharp asked how the company would “fill the gaps” in careers advice provision.

She added: “Will it provide advice across the whole age group? — Because it is as important that a 12-year-old knows about careers education as that the 15 or 16-year-old does and sometimes it’s the 18-year-old who needs it.”

Ms Chua agreed. She said: “The company’s remit is to cover the age range from 13 to 18.”

Lady Sharp also asked whether those working for the careers company would be “appropriately qualified”, however, Mr Clark said that would not be relevant.

“It will be a championing and facilitating body involved in linking up schools and employers and good practice and so we don’t envisage a role in providing careers advice directly to young people so that question about the standards for providing guidance won’t apply directly.”

Afternoon session of the House of Lords social mobility committee on social mobility — #HLSMC

Evidence came from Dr Claire Crawford, research fellow at the Institute of Fiscal Studies, Dr Abigail McKnight, senior research fellow at the Centre for Analysis of Social Exclusion, London School of Economics and Moira McKerracher, deputy director of the UK Commission for Employment and Skills (UKCES).

Lady Tyler asked what the three panel members thought were the key things the government should bear in mind when trying to improve social mobility in the transition from work to school.

Ms McKerracher said: “Streamlining and improving the vocational pathway for young people. We have about 50 per cent going through the traditional university route but for the other 50 per cent, the progression routes are not clear, they’re not easy to navigate and you can’t always guarantee this will lead to a really good outcome.

“Yes that means apprenticeships but … the others are going to college or school to do vocational qualifications so we must make sure these other qualifications count as much as apprenticeships do — they should be based on a similar occupational standard.”

Dr McKnight said: “I think we shouldn’t think that there’s a magic bullet to this, small incremental gains are going to be the way to go. There isn’t one policy change, otherwise we would know what it was and we could do it. As an economist, we need to improve numeracy — the UK is particularly bad in terms of the gap in numeracy skills between rich and poor children.

Dr Crawford said: “We need to watch out for what’s happening in the FE sector.

“FE has seen very big [funding] falls and that is the sector which is going to be the one catering to the people your committee is most interested in.

“And I’m sure the FE sector is doing its utmost to ensure the quality of provision doesn’t fall but when you’re seeing cuts of 30 per cent to date and expect to see more, it’s inevitable that that’s going to have some impact on education being offered.”

The committee is next expected to meet on Wednesday, July 15, when it will hear from former Deputy Prime Minister Nick Clegg, who had responsibility for social mobility in the last government. Click here to view the first two evidence sessions.

Outline of a 50-year-old apprenticeship levy from the CITB

If anybody knows what the future might look like for FE and skills with an apprenticeship levy on the horizon it would be the CITB, which has been operating such a system for half a century, as Steve Radley explains.

Chancellor George Osborne’s Budget yesterday launched a flurry of policy initiatives.

Of course, the headline-grabber was the new living wage.

But for those of us in construction, perhaps the most important policy announcement was the introduction of a new apprenticeships levy on large firms.

At present, the announcement is understandably lacking detail on how it will work.

What we do know is that its scope will be more modest than the levy and grant scheme operated by CITB for the past 50 years.

For example, it will only apply to larger firms and we know that these companies will keep the money in-house, which will then contribute to the forthcoming ‘electronic voucher’ system.

Promoting understanding and buy-in is vital. Few people are happy to give up more money, whether it is their own or their firms’

However, our experience of operating a levy illustrates some key principles which will be critical for ensuring that the policy meets its intended outcomes of supporting more high quality apprenticeships.

These are achieving understanding and buy-in to what the levy is seeking to achieve; complementing other actions to address the barriers to participation in training; and supporting training that is high quality and relevant to employers.

Promoting understanding and buy-in is vital. Few people are happy to give up more money, whether it is their own or their firms’.

But, having recently achieved 100 per cent support across the industry to continue with the levy, we can point to the importance of involving employers in how it is designed and used.

It must also support high quality, relevant training. In operating the construction levy, we have developed a range of forecasting tools to ensure that funding is diverted to where it is needed.

Without good quality forecasting, we run the risk of training people for the wrong jobs — which would be a terrible waste of talent.

The harder nut to crack is ensuring that employers feel that their money funds training by providers who understand their needs.

We know in construction that there is some way to go on this front and across the economy this will be a key issue on which employers and government will need to work together.

Alongside forecasting we need to address one of the biggest barriers to young people participating in training, such as apprenticeships, that will lay the foundations for rewarding careers.

To address this, we have worked with employers and the education sector to develop new ways for young people, and others considering working in the industry, to find out more about the opportunities available.

It will show how to join the industry and also how to progress and build lifelong careers. It is only through showing talented young people that construction can match their ambition that they will be drawn towards choosing apprenticeships.

Our experience with the levy also demonstrates that employers that are being asked to take more ownership of the funding of apprenticeships must also take a corresponding increased role in how they are delivered.

We have heard a lot about the government’s target of 3m new apprenticeship starts over this parliament. We don’t want to see those targets met through low quality apprenticeships, or training that doesn’t match market demand.

They must be suited to the key skill needs of employers — whether they are small and medium-sized enterprises or those paying the proposed new levy. We will only achieve this by involving employers in developing new approaches to deliver these outcomes.

The new Trailblazer apprenticeships are a step in the right direction in building standards based on employer need. The new levy has to take that further in the drive towards ensuring that apprenticeships are truly world-class.

There is much to do to shape this new policy. The experience of construction can provide crucial know-how in ensuring that it will be a success — both for learners and for industry.

Fifth apprenticeship consultation in four years to launch as government seeks views on levy

The government is set to embark on its fifth review of apprenticeships in just four years after plans for a levy on large businesses to fund growth were announced in the summer Budget.

The Department for Business, Innovation and Skills (BIS) confirmed it would run a consultation on its plans for the levy before announcing further details — such as how it will decide which businesses must pay and how much — in the Spending Review this autumn.

It follows four apprenticeship-related consultations in the last Parliament, with businesses and training providers consulted during a 2012 review by Holts Gems chief executive Jason Holt and a consultation sparked by Dragons’ Den investor Doug Richard’s review the same year, and then two further consultations on funding reform in 2013 and 2014.

A BIS spokesperson told FE Week it would be engaging with stakeholders about the levy plans, but said there was no more detail yet on the format or timings of the consultation.

An apprenticeship levy, but for all employers rather than just “large” firms, was put forward just a week ago by Professor Lady Alison Wolf, who authored a 2011 government review of vocational education.

Another proponent has been Association of Colleges president Richard Atkins, who said Chancellor George Osborne “deserves credit for introducing an employer’s contribution to the costs of apprenticeships which I and others have long argued for”.

“As someone who was trained and achieved vocational qualifications 40 years ago because my employer worked hard to ‘earn back’ the levy they paid, I know how effective a levy system can be in encouraging employers to train their staff,” said Mr Atkins.

“When implementing this new policy government needs to take care to minimise bureaucracy for employers, whilst doing all they can to persuade the 48 per cent of employers who say they do not train, to change their approach quickly.”

Association of Employment and Learning Providers chief executive Stewart Segal said: “Our view is that the levy proposals will need time to develop and implement effectively. In the short term, we should focus on growing the programme and work towards a new way of funding Apprenticeships once that growth is embedded over a period of the next three or four years.”

Professor Ewart Keep, director of the centre for skills, knowledge and organisational performance at the University of Oxford, said the levy was “unexpected” and a “radical” departure.

He said: “Many large employers, especially those in sectors like retailing will be very unhappy, but the government faces three problems, all of which it thinks might be solved by a levy.

“First, as Alison Wolf’s proposals suggested, there isn’t enough public money to fund an expanded and upgraded apprenticeship system. Second, employers were being expected to pay a third of the costs of new apprenticeships up front on a voluntary basis, and it was clear that many were not willing to do this.

“Finally, a levy provides a financial incentive (using employers’ own money) for firms to get the cash back by offering apprenticeship places and thereby allowing government to meet its target of 3 million new apprenticeship starts by 2020.

“The devil will be in the detail of designing the levy system, in a potential backlash by employers, and in the ‘gaming’ of any new funding system by consultants and training providers, who might try to help employers re-badge existing initial training as new apprenticeship places.”

The Social Market Foundation (SMF), which produced the Fixing a Broken Training System report in which Professor Wolf put the levy idea forward, has argued that under current funding arrangements, 3m new apprenticeships would leave funding of only £2,567 available per apprentice.

Only two apprenticeship frameworks, out of more than 200, receive government support below £3,000 at the moment, it said, meaning that, without a change to funding, increasing apprenticeship numbers would reduce the quality of what is on offer.

It has estimated that a levy set at 0.5 per cent of payroll for large companies would raise around £2bn per year.

Emran Mian, SMF director, said: “The funding available per apprenticeship was about to nosedive with the Government determined to grow the number of apprenticeships very significantly.

“By contrast, the new levy will mean that the funding available per apprenticeship can potentially be increased beyond current levels. This will support higher quality training and productivity improvements.

“There may however be winners and losers among employers with those in manufacturing and engineering sectors potentially standing to gain a lot more funding for training while those in service industries see less of the money from the levy coming back to them.”

Click here to read an expert piece by CITB on the apprenticeship levy system it has beeen operating for 50 years

Will loans and the levy save adult FE?

Mick Fletcher takes a close look at the July 2015 Budget and considers what it might mean for FE and skills.

Yesterday’s emergency budget said little directly about FE.

We’ll need to wait for further announcements expected imminently; perhaps the promised paper on productivity, or the government response to the dual mandate consultation?

Nevertheless there’s much in the budget that affects FE indirectly though not in a consistent direction.

The most significant element is perhaps the announcement of a levy on large firms intended to support employer investment in apprenticeships.

The proposal, which appears to reflect the arrangements advocated by Professor Lady Alison Wolf in her recent paper Fixing a Broken Training System is a first and welcome sign that government is serious about putting pressure on employers to increase financial contributions to the programme.

It offers a realistic way of putting employers in charge of managing key aspects of apprenticeship funding without the need for the bureaucratic controls necessarily associated with public money.

Drawing in extra money from employers is one way the Department for Business, Innovation and Skills (BIS) can help fund increases in the number and quality of apprenticeships without necessarily having to cut further into the adult skills budget.

This is not to say that there won’t be such transfers, but it takes some of the heat off colleges who have been feeling increasingly beleaguered, trapped between the higher priorities of the research and apprenticeship budgets. It could however be less good news for many training providers.

Many actual and potential adult FE students will be badly hit by changes to the benefit regime and particularly the withdrawal of tax credits

Training providers provide two main services for employers. They offer skills in designing, supporting and assessing work based learning as well as providing off the job training; and if they do this well should have nothing to fear from monies being routed through employers rather than Skills Funding Agency.

They have also however played an important role in enabling employers to navigate the byzantine rules surrounding skills funding in order to secure public subsidy for training. It seems clear that a major objective of the funding reforms is to eliminate the need for such brokerage.

Perhaps the second most significant announcement is the transfer of higher education maintenance grants into loans which at a stroke delivers large savings to the BIS budget.

Once again this change takes some of the heat off FE colleges who feared that higher education teaching was untouchable as it is mainly funded by students and research was protected as central to growth strategy.

It is even possible that making higher education less attractive to students might offset the growth likely to result from removing the cap on full time numbers — growth that was likely to come at the expense of less prestigious institutions like FE colleges.

There are however other indirect effects which might be almost as powerful. The budget clearly has impacts on the major customers of colleges — individuals and employers — and their reactions, if hard to predict, are important.

There is no doubt that many actual and potential adult FE students will be badly hit by changes to the benefit regime and particularly the withdrawal of tax credits.

The loss of income will make it harder for people to afford the fees now being charged or to contemplate taking out a loan. In theory, the loss of income might make people more ready to invest in learning to improve their job prospects; in practice they are more likely to take on extra low paid work to pay the bills and have even less time to spend on study.

The incentives on employers, apart from the levy, are also mixed. The extension of the investment allowance might encourage firms to train staff in operating new equipment but that apart there is little in the budget to drive growth or encourage the adoption of high value product strategies.

There is little to encourage science, technology, engineering and maths (Stem) and the ‘Northern Powerhouse’ seems to be suffering the fate of the ‘March of the Makers’ — a great soundbite but little real action. It is unclear how demand for FE will be boosted by the Chancellor’s efforts.

The Budget — a quick checklist for colleges

A new apprenticeship levy for large employers stole the Budget show yesterday as far as FE is concerned, but Julian Gravatt gives a wider view — while also looking at that levy issue.

There is a vast amount of official information about the summer budget.

Here are the key points — Chancellor George Osborne presented the budget to Parliament in a 75-minute speech; The Treasury published the summer budget on July 8; the government has selected 22 announcements considered most important, including those relating to personal tax and benefits; and the Office of Budget Responsibility (OBR) has updated its economic and fiscal outlook.

Here are 10 key points for colleges. Firstly, in-year savings. There is still no detail from the Treasury, the Department for Education (DfE), the Department for Business, Innovation and Skills (BIS), the Education Funding Agency (EFA), the Skills Funding Agency or the Higher Education Funding Council for England (HEFCE) on whether the £900m of in-year savings announced on June 4 will affect colleges via changes to previously notified allocations for 2015/16.

Skills Minister Nick Boles confirmed a couple of weeks ago that EFA’s 16 to 18 education allocations issued in March would not be varied. We expect announcements in the next couple of days.

Secondly, the 2015 spending review. There will be a spending review running into this autumn which will set budgets for 2016-17 and beyond but there is currently no firm timetable.

The budget brings a major revision to public spending plans. Back in March, the Chancellor anticipated the need for £13bn in departmental spending cuts in the next two years (2016-17 and 2017-18). This target was included in the Conservative Party manifesto.

The plan is now for £20bn in departmental spending cuts but over a four-year period (up until the next election). The plan is to bring the budget into balance by 2019-20, which will require a package of significant cuts and savings in tax credits and benefits plus some tax increases.

As much as £188bn (59 per cent) of revenue departmental spending is formally protected because of promises made on the NHS, schools, international aid and defence, some of whose budgets will increase.

In addition, a further £49bn (15 per cent) allocated to Scotland, Wales and Northern Ireland is largely ringfenced by the operation of the devolution settlement. The unprotected budgets account for just under £80bn, of which £25bn is spent within BIS or the non-schools part of DfE.

Even though the spending cut target has been reduced, it will be very challenging.

Thirdly, an apprenticeship levy. The Chancellor promised there would be a levy paid by all large employers to pay for apprenticeships. There is not much detail on the levy in the budget book beyond a note on page 60, but there is a promise that the rate and information on implementation will be announced in the spending review. Funding will be controlled by employers using the digital apprenticeship vouchers which the government plans to introduce in future (probably not until 2017).

The AoC produced a short briefing for policymakers on apprenticeship levies in June, which summarises the case for a universal levy and some of the lessons from home and overseas on other levy schemes.

The new voucher scheme will be quite a challenge to implement. There is an AoC note on the major issues.

Fourthly, student loans to cover living costs rather than student grants. Student grants (higher education maintenance grants) will no longer be available for those starting university or a higher education course after September 2016. This will affect Year 12 students currently in college and school sixth forms.

The implications of the decision for students are summarised in an article by Nick Hillman from the Higher Education Policy Institute. The decision will affect full-time higher education students in college but the biggest implication for colleges may be that the move secures a £620m saving in the BIS revenue budget in 2016-17, possibly reducing the pressure for other savings.

By 2020, the saving is forecast to be more than £2.5bn but this is more than offset by an additional £3bn in student loan outlays without any change to forecast repayments because these depend on graduate incomes.

There is currently a 45 per cent impairment charge in the government accounts for new student loans (the Resource and Accounting Budget charge). There will be a consultation on freezing the threshold at which repayments start at £21,000 — a measure to increase repayments and cut the impairment charge.

Fifthly, the national living wage. The plan for a national living wage will have an impact on colleges in their role as employers. Colleges employ around 200,000 people, 70,000 of whom are in support roles. For the average college this is 660 employees in all.

Colleges set their own pay scales and, in recent years, many have taken steps to increase the pay of the lowest paid even when they have been forced to offer below inflation pay rises. In many colleges the lowest pay band is at the current living wage rate but the government’s plan to increase the national living wage from £7.20 per hour in April 2016 to £9 by 2020 will be a challenge at a time of public spending restraint.

Sixthly, housing benefit for young adults under the age of 21. Housing benefit will no longer be available to 18, 19 or 20-year-olds from April 2017, which will have implications for some college students who no longer live at home. The Chancellor talked about an ‘earn or learn’ obligation on young people but there is currently little detail on these plans.

The budget book sets a fairly modest £25m saving from this reform which implies that Department for Work and Pensions (DWP) may redirect some of the benefit saving into training support.

Seventh, devolution. The budget contains more devolution plans including a promise of further powers for the combined authorities based on Leeds, Sheffield and Liverpool on the basis that they introduce elected mayors.

The budget offers support for the Midlands skills strategy which is being drawn up by three local enterprise partnerships and notes the plans for a West Midlands Combined Authority (which, as yet, make no mention of an elected mayor). There is also the promise of a devolution deal for Cornwall (which is a single tier county) and a note that two areas in the East Midlands have combined authority proposals.

For once, there is not much in a Treasury document about skills in London or Manchester though it is worth noting that the Greater Manchester Combined Authority will take on yet more powers in the areas of fire, planning and children’s services.

Eighth, pensions. The Treasury will be moving ahead with plans to restrict the annual tax allowance on pension savings for those earning more than £150k which involves some complicated arrangements for anyone earning more than £110k (a category that includes many college principals).

This tax change is expected to affect 30,000 people and bring in £260m in 2016-17. The Treasury has also published a wider ranging consultation on changing pension tax relief which raises questions about whether the £34bn foregone is good value given than 2/3rds of the beneficiaries are higher rate taxpayers (a category that includes many college managers). The consultation is very wide ranging and is unlikely to lead to any changes until 2018 at the earliest.

More immediate changes are planned for the Local Government Pension Scheme (LGPS) including legislation to require pooling of investment funds. Colleges employ 4 per cent of active LGPS members and are saddled with a £2bn share of the LGPS deficit (measured by FRS17) so have an interest in the future of the scheme.

Ninth, tax. Colleges are relatively unaffected by any new measures to increase tax but already pay around £750m a-year in employer’s national insurance, VAT and business rates so the plan to freeze headline rates on the main taxes is helpful (less so if it means cuts to government education spending).

Colleges also pay substantial sums in employers’ pension contributions to the Teachers’ Pension Scheme and LGPS where they have no choice on membership. Decisions made by the Treaury in previous budgets and over public sector pension reform will land colleges with an additional £150m in costs in 2015-16.

National insurance contracting out ends. TPS employer contributions rise to 16.48 per cnet rather than the 12 per cent promised by DFE in 2011. The cost of employing a teacher in colleges rises by 5 per cent in 2015-16 regardless of any pay rise or change.

And finally, number 10 — the economy. The OBR has updated official forecasts about the economy. The economy is expected to grow by around 2.4 per cent a-year. Consumer price inflation is expected to stay low and not reach 2 per cent until 2020.

Average house prices are expected to rise by at least 4 per cent a-year. Interest rates are expected to stay low but rise slowly over the next few years. Unemployment is expected to remain at about 5 per cent of the workforce but there is a rising population so the forecasts assume an extra 1m workers. The Chancellor hopes there will be 2m more jobs by 2020 along with 3m more apprentices.

This article was first published on the AoC website.

LIVE: Summer budget reaction

George’s Osborne’s budget today included plans for an apprenticeship levy, a living wage which could reach £9 per hour by 2020, and further details on previously-announced policies such as the ‘youth obligation’. Here, we bring you reaction from FE sector leaders as it happens…

Professor Alison Wolf, King’s College academic, life peer and author of SMF report which called for a levy last week

“I am very surprised, but I am also delighted. I punched the air when I saw it on the screen.

“Did I know it was something people at BIS had been considering? Yes, I did. Did I know it was going to be in this budget? I had no idea.

“I am absolutely delighted to get a hypothecated tax in there, something which is actually institutionalised as opposed to lots of little bits here and there.

“I have no idea why it’s only for large businesses, I don’t know how well it’s worked out or whether the numbers add up, and I will be watching it very closely.”

David Hughes, chief executive of the National Institute of Adult Continuing Education (Niace)

“The Chancellor made a great start to his speech today when he admitted that as a country, ‘we do not train enough’.

“However, despite all the emphasis and rhetoric on a low tax, higher wage and low welfare economy, he is clearly leaving the detail on skills and learning until the publication of his productivity plan on Friday.

“This will, we hope, recognise the invaluable contribution the FE sector must play in transforming our economy.

“Securing investment from employers through the apprenticeship levy is a great move if it leads to increased employer investment in skills and more employers taking on apprentices but quality of, and access to, apprenticeships have to improve at the same time.

“Apprenticeships are not enough though to fill skills gaps and drive productivity. People already at work need training and for those in low pay many need basic and digital skills.

“We need to address low-level productivity in retail and care as much as we do in engineering and manufacturing. For the 5m people in low pay the productivity plan will need to a new offer of training and support because an apprenticeship will not be available to them.”

Martin Doel, chief executive of the Association of Colleges (AoC)

“In today’s budget, the Chancellor of the Exchequer set out plans for a national training levy to be paid by large employers which will be used to support apprenticeships. This is a brave decision and an important step in ensuring the quality of apprenticeships is maintained at the same time as the quantity is increased.

“It is right that employers make a contribution to the costs of training the national workforce as they benefit from apprenticeships in terms of increased productivity among their employees and from access to a more skilled labour market. Levies are one way in which this can be achieved and they are already in use in many other countries.

“It will be important however that any levy system is not unduly bureaucratic and we believe a universal payroll charge is the best approach.

“The key announcement for colleges in today’s budget is the plan to implement spending cuts over a longer period but a slower rate than indicated in the March budget. We will continue to emphasise the need for the government to invest in education and skills.”

Chris Jones, chief executive of City & Guilds

“We welcome the Chancellor’s support for apprenticeships in today’s budget statement. Sustainable long-term funding solutions, such as the proposed apprenticeship levy for large firms, will be critical to not only meeting the 3m apprenticeship target, but making sure each and every apprenticeship is high quality.

“With the annual productivity gains from training an apprentice at £10,280 per year, the investment is well worth it. However, if this new levy is implemented, it must be done in a way that does not impose additional bureaucracy on businesses, and does not discourage employers from supporting on-the-job training in their companies.

“It is also important that support for would-be apprentices does not overshadow the need to help people up the ladder at every stage of their careers, including later in life.

“Today we are disappointed that the Chancellor was silent on the need to boost provision for over-19s in areas such as vocational qualifications and employability support. We also need alternatives to a purely academic curriculum at 14 or 15 – again, something that wasn’t covered.”

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL)

“George Osborne is right in his assessment that skills need a radical overhaul, so an apprenticeship levy on large employers is a good first step. One third of employers offered their workers no training, of any sort, last year so radical measures are needed. However, the levy needs to ensure apprenticeships are of high quality, not just increase the quantity.

“We fear scrapping maintenance grants will stop some young people from going to university.

“The Chancellor cannot continue to hold teachers’ pay behind private sector pay and expect teaching to remain an attractive profession. It would be a recipe for disaster to have fewer teachers when it’s expected that there will be thousands more pupils in schools.”

Jonathan Cridland, director-general of the Confederation of British Industry (CBI)

“Firms want to play their part in training up more apprentices but an apprentice levy is a blunt tool.

“A volunteer army is always better than conscription but the CBI will work with the government to make the best effect of this measure.

“The CBI supports a higher skilled, higher wage economy, but legislating for a living wage does not reflect businesses’ ability to pay.

“This is taking a big gamble that the labour market can absorb year-on-year increases of an average of 6 per cent.”

John Allen, national chairman of the Federation of Small Businesses (FSB)

“We agree with the focus on productivity but need to see the details to raise skills through the apprenticeship levy on large firms.

“Planning reforms are also critical to raising productivity and again we look forward to seeing the proposals on Friday.

“However, even though offset by a welcome increase in the employment allowance, some will find the new national living wage challenging.

“Changes to the treatment of dividends will also affect many of our members.”

What to expect from FE’s most feared Budget

It’s less than 24 hours to go before what is possibly the FE and skills sector’s most feared Budget ever — but should we really be expecting the worst, or even much at all, asks FE Week reporter Paul Offord.

Chancellor George Osborne announces his Budget in the House of Commons from around 12.30pm tomorrow (follow the FE Week Twitter account for live updates) and there are numerous downcast predictions as to the outlook for FE and skills.

Chief executive of the National Institute of Adult Continuing Education David Hughes (pictured right), for example, warned providers could be pushed “over the edge” if sector budgets were further hit with the Department for Business, Innovation and Skills (BIS) and the Department for Education (DfE) already under orders to serve up in-year cuts of £450m each to The Treasury.

“Good news from this Budget for FE seems unlikely given the cuts which BIS and the DfE have been asked to implement,” he said.

“I am worried that the chancellor’s in-year funding cuts will reduce further the opportunities for people over the age of 19 to learn.

“The FE sector is in dire financial straits and more cuts will push many organisations over the edge.”

Another comes from Charlotte Bosworth (pictured left), director of skills and employment at OCR, who said: “Given the large cuts seen on non-apprenticeship programmes this year, we could be seeing [through tomorrow’s Budget] the start of an inevitable decline or disappearance of the adult skills budget.”

However, she added: “Considering the government’s focus on promoting higher level skills and the need to fill the skills gap particularly in technical occupations, there could be good news for [funding of] these types of programmes.”

Indeed, along with the potential for FE funding cuts coming tomorrow is the possibility that the Chancellor may give more of an outline of how government will fund the Conservative manifesto pledge of creating 3m apprenticeships by 2020.

Such an outline would come in addition to Conservative manifesto commitments to fund the extra starts by switching classroom-based FE funding and recycling savings from the welfare budget and more government plans have put forward paying for apprenticeships with revenue from visa charges and bank fines.

A spokesperson for the Association of Employment and Learning Providers (AELP) said: “We’re told that a major theme of this Budget will be addressing Britain’s productivity challenge and the link between skills and productivity is now clear.

“Therefore, as signalled by [Skills Minister] Nick Boles at the recent AELP conference, we expect to see continued investment in apprenticeships.”

And Patrick Craven (pictured right), City & Guilds director of policy, research & compliance, agreed it was “realistic” to expect “further support for apprenticeships”.

However, he said: “As we have raised with the Chancellor, it’s all well and good having big targets to aim for, but it won’t have the long-lasting impact on skills gaps and productivity unless the quality is there. If we get the quality right, the numbers will come.”

Apprehension over the race for apprenticeship numbers was echoed by Shakira Martin (below left), National Union of Students vice president of FE.

She said: “Tomorrow’s Budget promises little hope for an FE sector already standing at the edge of a precipice.

“The government’s dubious promise to deliver 3m apprenticeship starts looks set to further decimate adult learning budgets and may signal the death knell for adult education as we know it.”

It was a concern further aired by Niace chief executive Mr Hughes.

“The focus on apprenticeships as the only solution is unhelpful even though we want to see more people launch their careers through that route,” he said.

“I would urge the Chancellor to prioritise actions which support better access to and higher quality apprenticeships.

“Access issues include black and minority ethnic and people with disabilities, as well as young adult carers and people over 25 who are moving into new roles.

“I would also urge him to accept that our ageing population, advances in technology, skills shortages and falling productivity all require a vibrant, innovative FE sector and for that we need more, targeted investment, rather than cuts.”

Meanwhile, Sally Hunt (pictured right), general secretary of the University and College Union, raised concern about the possibility of adult learning loans being rolled out further.

She said: “We’ve yet to hear the government’s decision on [extending advanced learning] loans to level two and those aged 19+.

“We’re deeply concerned about the impact this would have on student numbers, particularly among those who are hardest to reach, but it seems likely that we’ll see these extended in this Budget.”

However, the prospect of little news for FE and skills was raised by Julian Gravatt (pictured left), assistant chief executive of the Association of Colleges.

He told FE Week that he did not expect FE to loom large in tomorrow’s Budget.

He said: “The Conservative government’s first Budget is likely to focus on tax measures, both cuts and increases, as well as the benefit savings.

“However, it’s unlikely that there will be clarity on any future budgets until the 2015 spending review has been completed later in the year.

“We hope the FE sector will get quick confirmation of any last minute changes to funding allocations for 2015/16 and we wait to see what the government’s new productivity plan will bring in terms of a framework for improvements to education and skills.”

The government said it would not be commenting ahead of the Budget.