Government efforts to reduce bureaucracy in further education (FE) lack clarity and the complete picture, according to a report released today.

Issued by the National Audit Office (NAO), ‘Reducing bureaucracy in further education in England’ is critical of the Department for Business, Innovation and Skills (BIS) and Skills Funding Agency (SFA) approach to reform.

It highlights a lack of indication of how much the new system should cost, the impact of the reductions proposed and of the changes made by others.

Although admitting that providers welcome changes, the NAO say they “do not have confidence the simplification of the system of administration will be sustained”.

It also reveals the cost of bureaucracy in FE is around £180 million a year to colleges – rising to £250 million including other providers – for administration of funding, qualification and assurance systems, equating to £150 per student.

BIS and SFA have the ambition to make changes to simplify the system, but they must get to grips with the issues we have raised in order to achieve value for money and prevent colleges being embroiled in red tape.”

The NAO recognises the work being undertaken by BIS and the SFA to pursue initiatives to simplify these processes, but declares they are not “well coordinated” and “they do not know the scale of the problem faced” by FE colleges and providers.

Therefore, BIS and SFA, say the NAO, should set “a clear, ambitious target for the scale of the burden reduction they are seeking” to provide more impetus to change.

Amyas Morse, head of the NAO, said: “Our estimates show that substantial savings can be made by reducing bureaucracy in FE and demonstrate the need for focused and systematic management of these costs to drive sustained improvements in efficiency.

“BIS and SFA have the ambition to make changes to simplify the system, but they must get to grips with the issues we have raised in order to achieve value for money and prevent colleges being embroiled in red tape.”

Although welcoming the report, the SFA is on the defensive, saying they “take a different view” on the approach used by the NAO.

A statement from the Agency said: “FE providers have been given almost complete freedom to respond to the demands of employers, communities and learners.

“This inevitably creates opportunities to reduce burdens, but these are a result of policy changes rather than their driver, as the NAO approach seems to presume.

“The report also has not sought to distinguish between administrative requirements essential for good stewardship of public money and those that may be unnecessary.

“Finally, while we agree we must ensure no unnecessary burdens remain as we undertake this radical change, the estimates made by the NAO of the potential burden cost savings are at best speculative as they are not grounded in sufficiently robust evidence to be reliable.”

FE and Skills Minister John Hayes said the government will “fast-track” further work to measure the impact of reforms on colleges.

He added: “This report illustrates the considerable progress the government has already made in reducing bureaucracy in FE, identifies the scale of the challenge we inherited and highlights the urgency of our task.

“We are moving at pace to cut red tape and empower the sector to respond more flexibly to the needs of learners and businesses, and many of these reforms have been effective since the NAO undertook its research earlier this year.”

Martin Doel, Association of Colleges chief executive, said there are three main causes for “excessive bureaucracy” in FE.

He described them as “multiple agencies and departments overseeing the sector’s work, rapid policy changes which have led to the layering of incremental regulation and an inherent complexity” driven by wide range of courses, providers and students.

However, Mr Doel added: “While applauding the NAO’s sentiment we must at the same time reflect the healthy scepticism of our members, who have witnessed the unveiling of a number of bureaucracy-busting initiatives since incorporation that have sadly withered on the vine.

“We should also be wary of cuts in front-line funding that are presented as efforts to reduce red tape.

“We sincerely hope that this Government’s strong emphasis on institutional autonomy will ensure that reforms of funding, qualification and assurance systems lead to sustainable cost-savings for colleges and UK plc, while at the same time continuing to support high quality college courses and ensuring the most effective and responsible stewardship of the public purse.”

(Read our interview with Chris Shapcott, National Audit Office director of regulatory reform, here)

We spoke to Chris Shapcott, National Audit Office director of regulatory reform, about the NAO report titled ‘Reducing bureaucracy in further education in England’ published today.

Q) Were these numbers what you expected?

In a way, we produced the report because we didn’t know what to expect! That in a way was the point. In the report we do mention that where was some work done a few years ago, by the Information Authority in 2008  – they had a figure of about £140  million. So in that sense the £184, or £180 million for colleges was not that surprising. But really it’s unknown territory, so any figure is interesting.

We felt that because there wasn’t a good figure out there already, it was important to have a go and make a rough estimate. We’re pleased to see that the agency is now trying to do some more accurate figures themselves. It’ll be very interesting to see what they find out.

Q) A number of key burdens were highlighted by providers in the report. Which do you think are the most significant?

It’s the amount of information they need to get. The learner record for instance has got several hundred fields on it – so there’s a lot of stuff that they need to do.

One of the complications in this area is that they will need some of this information for their own purposes. If you’re a good educational institution, you’re going to be keeping a record of whether people are going to classes, what sort of qualifications they’re getting, what learning experiences they’re getting. The really difficult part of this area is to work out what it is the college needs to be a good educational institution, and then what exactly are they adding onto that to meet these government requirements.

Which  isn’t to say these extras are unnecessary, because clearly government is funding this, and government needs assurance that the money is being used properly and being used for the purpose for which it is provided. What we’re looking for, and what we’re recommending, is a more systematic way of working out how much of this extra information which is being asked for is really pulling it’s weight,  the value you’re getting from it, and what’s it costing you to provide.

It’s important to understand it’s not just a matter of asking for less – finding an easier way for colleges to provide what you’re already asking for maybe just as welcome.

Q) What about the issue of accountability? Is there a possibility that the Government’s drive for increased for simplification and reduced bureaucracy will go too far?

We have produced reports in the past which have been critical of problems in the sector. There was some big scandals about ten years ago for instance, and more recently the Public Accounts Committee has been emphasising the importance of accountability for public money.

So I’m 100% behind that – but it’s a matter of how you do it.

What we want is more scientific, analytical management for this to achieve their objectives.

Q) How difficult will it be to create that system, where you can give out those flexibilities but also ensure there is adequate monitoring and regulation? Is it even feasible?

Yes, clearly we think it’s feasible, or we wouldn’t be reporting on this. What we recognise is that they are doing a lot already, and in fact they’re really quite ambitious. What we’re suggesting is the ways in which they can get even more out of what they’re doing. Which in particular is by getting the information on what it’s really costing people, and what they’re getting for it – which will allow them to do things more efficiently.

The other thing that I think would help, would be a more detailed and clearer picture about what the destination of the journey is. We call it I think the final operating model in the report, but where do you want to get to? They know where they are, and they know a lot of things that they want to change – but where’s it going to end you up?

Q) There isn’t a lot of talk between agencies? Should they be more unified?

There is a lot of talking going on, but as we say in the report – we think they’re not making the most of the opportunity they have to work together. It is a difficult thing, because each department has it’s own responsibilities, and one department can’t tell another department what to do in its ‘patch’. But we think there’s more that could be done there.

Q) What was the reaction from the colleges which you visited in the report?

There was a recognition that there is a lot being done and there is an ambition there. The issue is because people have often been around for quite a long time, particularly the ones in the senior positions, they’ve seen a lot of things before, and so they need a lot of convincing that things are really going to stick. I think they welcome what was being done, they welcome the wish to do more, but there’s natural caution as well.

Q) Colleges said they thought they could reduce their costs by around half. However, the NAO suggested that a 25 per cent target was much more reasonable. How would this be achieved?

It’s things like simplifying the information they have to provide, and not having to provide it quite so often. All of that sort of thing.

The 25 per cent, we’re not saying we definitely  it will be 25 per cent, but 25 per cent is something that has been sought in other areas where people have been looking to make a big reduction. Our feeling is the very act of setting an ambitious target in itself is helpful, because it starts people thinking more radically than if you set a small target. They come up with more creative and novel solutions. It may well be at the end of the day they don’t get the 25% but 18%, but that’s still better than aiming for 10% and getting it.

Q) Response to the SFA comments?

These are all things we’ve addressed in the report, and we were aware of the SFA’s thoughts on this before we published, so if you look at the relevant bits you’ll see we’ve covered the bits they’ve dealt with.

We’re very happy with what we’re saying.

Q) What do you think is the key message  of the NAO report?

The value of measurement and the importance of having a clear view about the destination you’re aiming at. In this particular area, where there are so many people to coordinate, the importance of working hard at that as well.

(Read our news piece on the report here)

A single skills market is needed to make employers invest more in apprenticeships and training, according to a report published today by the UK Commission for Employment and Skills (UKCES).

The document, titled ‘Employer Ownership of Skills’, says “more can be done to leverage additional employer investment”, and that government schemes have led to “significant dead-weight” when trying to engage businesses in training.

The report calls for a revised funding system which would give employers more responsibility and greater incentives to invest in employer-facing programmes such as apprenticeships.

Charlie Mayfield, Chairman of UKCES, said: “We need a single market for skills development into which employers and employees are prepared to make a greater contribution for higher quality training.

“For young people, this means moving from provider grants to employer incentives for apprenticeships and work experience; and for adults, shifting from provider grants to employer investments and loans.”

John Cridland, Director-General of the CBI, added: “I believe the most powerful way to achieve a world-class workforce is to change the way in which funding flows through the system, and to place responsibility and reward for investment more squarely with employers for programmes such as Apprenticeships.”

Recommendations in the report include funding more employers directly for apprenticeship programmes, either through the tax system, such as National Insurance rebates, or incentivised work experience.

The report states: “Putting purchasing power in employers’ hands would drive up quality and responsiveness among the training provider network.

“Many colleges and training providers already have excellent partnerships with employers, providing high quality apprenticeships.

“By routing funding through employers this would create a sense of ownership that, over time, would further strengthen overall employer commitment to the apprenticeship programme.”

The report adds that the government should move from a qualification-based funding system to one with an increased focus on employer based investments and loans.

“Current policy is to introduce individual income contingent loans for apprenticeships at Level 3 and above for those aged over 24 from 2013/14,” the document states.

“We propose that these loans should flow through employers to ensure greater employer ownership.”

The report suggests that funding employers directly would also help to strengthen the apprenticeship brand.

Mr Mayfield said: “This is about more than just transferring funding.

“It is about transforming our entire approach.

“Government needs to step back and review where it is encouraging greater employer ownership and, frankly, where it is getting in the way.”

The report argues that under a revised system, employers would contribute more because they “would have more at stake”, such as investments which are “hardwired” into incentive-based models.

It later adds that a revised system would allow colleges to focus on innovation and quality, rather than sheer volume or government-led priorities.

Business Secretary Vince Cable, attending the launch of the report, said: “Businesses are better placed than Government to design and deliver the skills they need to grow.

“That’s why we are creating an employer-led skills system that directly responds to employers training needs, including for higher-level skills up to degree level.”