It will come as no surprise to you when I say funding agencies embark on a complete reworking of their funding rules only with trepidation.

Introducing a new funding system for the further education sector was never going to be an easy task. As I take up my new job as Interim Chief Executive of Skills Funding it feels, more than ever, that the time is right to move on from a complex system that’s creaking from the multiple patches we’ve applied to accommodate new policy over the years.

My ambition is clear: to reduce unnecessary funding complexity and allow colleges and training organisations flexibility so that they can respond to the needs of learners, employers and communities. I want to remove bureaucratic burdens and central control so the sector can maximise its contribution to economic recovery. For without doubt, it is colleges and training organisations that are in the best possible place to identify, interpret and respond to the needs of learners when resources are at a premium. It’s about value, but it’s also about quality, getting the best possible outcome for the learner with the resources available.

So a new single streamlined funding system will replace the previous multiple systems. Simplified funding rates will reduce the number from thousands to around 60; a single earnings methodology will eliminate the risks and complexities of differences between colleges and other training organisations; and a switch from guided learning hours to credits will reduce audit complexity.

For the first time, in response to your comments about our guidance documents, we have produced a single document that sets out the Funding Rules and evidence requirements for the 2012/13 funding year. You will see we have – quite deliberately – exchanged funding guidance for funding rules. Because we want to be really clear, remove ambiguity and eradicate unhelpful phrases such as ‘providers might’ or ‘providers will decide’ and exchange these for ‘providers must’.

We have done away with the additional guidance notes during the year and the ‘forest’ of supporting documents. I hope that you can see a new language and approach that are designed to save time in interpreting guidance at the point of delivery and at audit.

So, really important changes for colleges and training organisations which we hope will be welcomed. But more important than the facts of a new funding system to me is the way we have worked together over the last year to develop the new system. The Agency has been supported, challenged and advised by a sector-led Technical Advisory Group, chaired by David Lawrence from Easton College. I am determined that we will work more closely with the sector, ask the right questions, listen better and respond to what you tell us. And when the time for talking is over, we will act with clarity and confidence because we will have a position the sector believes in.

I am determined that we will work more closely with the sector, ask the right questions, listen better and respond to what you tell us.”

Shadow working of the funding system has already begun and colleges and training organisations are putting in a great deal of time and effort testing and trialling the new arrangements. Their feedback will be invaluable in helping us refine the system and in checking it is operating smoothly. It is this engagement that will ensure that the final system is fit for purpose. We are road-testing something new and one aspect of the system is the rates that we have set for testing purposes. At the end of the summer we will take stock of the feedback and issues raised before finalising the number and value of rates in January 2013.

We have now put out our second Provider Survey, building on last year’s exercise, and we need feedback through this channel on how well you think the Agency is performing. You can also post comment on Twitter using the hash tag #fedebate.

I cannot promise we will always do exactly what you would like but what I will say is that through our dialogue we will foster a mutual understanding that gives us all a stronger voice and tells the story of the difference further education and skills makes to economic and social renewal.

I believe FE is truly remarkable and our reputation goes before us. Let’s use the freedom and flexibility of a new funding era to make skills work for everyone.

By Kim Thorneywork

The publication of the recent LGA report on a so-called ‘Skills Mismatch’ in further education is deeply disappointing. It represents a backward step to outdated and discredited approaches to labour market planning and threatens to undermine moves towards a more fruitful strategic co-operation between colleges and local authorities which we in the 157 group have been seeking to encourage.  If local authorities seriously think that it is practicable to manage the supply of courses on the basis of incomplete and imperfect statistics about jobs and vacancies they will find themselves seriously out of step with current thinking in vocational education.

The links between education and employment are complex and the public debate is not well served by oversimplifying them.  In relation to jobs for example one needs to take into account opportunities for self employment as well as advertised vacancies; one has to take account of informal as well as formal channels of recruitment and reflect the fact that when employers recruit they do not always select using those qualifications that observers think they should.  Occupations differ in the extent to which they train and promote in house, and the extent to which they recruit young people rather than adults.

it is sad that the LGA report continues to churn out tired stereotypes on the basis of highly imperfect data”

In relation to vocational education for young people we need to remember that it is more than training in a narrow set of skills for current jobs.  It is concerned to prepare them for a lifetime as citizens as well as employees; for a world in which they are likely to change jobs several times and where they will need regularly to update their skills: and as countless opinion surveys repeat ‘soft skills’ such as attitude to work, adaptability and the willingness to learn are far more important to employers than specific skills or knowledge.

In the light of these complexities it is sad that the LGA report continues to churn out tired stereotypes on the basis of highly imperfect data – by their own admission around two thirds of their qualifications data cannot be neatly fitted into a sectoral analysis of occupations.  Those in further education know for example that hairdressing offers lots of opportunities for self employment and part time work; and furthermore it provides transferable skills that are valued in many other contexts such as reception and call centre businesses.  It is no surprise to anyone who knows more than just statistics that industry doesn’t recruit health and safety officers from 17 year olds with shiny new certificates; and it doesn’t need much research to find out that there are more vacancies per qualified individual in London than in the North East.

Local authorities have much to offer the learning and skills system if they step back from attempting to micro-manage provision.  They have important roles in promoting economic development, in leading social regeneration and in helping shape and support communities.  Working with employers and others in LEPs they have the potential to catalyse growth in their locality.   If they act as strategic partners to colleges sharing their aspirations and knowledge, and aligning their resources with those of the sector they will find that colleges are only too ready to respond; but if they hark back to the days when town halls tried to dictate course planning they will condemn themselves to sitting on the sidelines as decisions are taken elsewhere.

Lynne Sedgmore is Executive Director of the 157 Group