Delivering Diverse Tech Talent at Scale While Delivering the Quality and Outcomes Employers Need

Today’s business landscape makes the need for diversity more urgent than ever. Employers have been warning for years that a lack of digital talent is holding back growth and putting the UK and other European economies on the backfoot compared to North America and Asia. McKinsey estimated a shortfall in the EU of between 1.4 million and 3.9 million “career-ready” people by 2027.

As any Google search for “software jobs” will tell you – the opportunities are there, whether you live in Lincoln or London. So why has it been so challenging to close the digital gap and equip people with skills to kickstart a career in tech?

There are two main reasons. For decades, the path to delivering those skills has been a degree in computer science, which is costly, involves travelling to campus, and takes three years to complete (by which time a lot you have been taught is outdated). The second barrier to closing the digital skills gap is the prejudice that tech is a profession for young, able-bodied, white men – and that women, ethnic minorities, or disabled groups have no place in the industry.

It certainly looks that way. In the UK, just a quarter of tech workers belong to an ethnic minority group, while gender minorities represent only 28%, less than a third. While we lack specific figures for disabled groups in tech, we know they are poorly represented in the workforce and a third less likely to move into work than non-disabled people.

This is not what employers want. 

Employers’ Perspective

As part of this white paper, we talked to a handful of UK&I tech employers—SMEs and global organisations, including diversity leaders from the BBC, AXA, and tech giant Red Hat. They tell us with one voice that they are desperate to hire talent from these under-represented groups because it is morally right and builds more rounded and innovative teams.

How to Deliver Diverse Tech Talent at Scale

The courses supported by Code Institute are inherently more diverse than the traditional BSc in Computer Science. They are shorter–usually no more than a year–and are taught online, making them accessible to a large number of people excluded by the face-to-face, timetabled model of traditional Further and Higher Education.

The Government is urging institutions of Further and Higher Education to pave the way for a more diverse pool of talent in technology and other areas by moving from the rigidity of the classroom to a more flexible delivery model.

Most FE and HE colleges lack the resources to develop, teach, or scale courses in software development that combines a rigorous and relevant syllabus with a well-organised support framework that has safety nets built in for students who may be struggling.

The colleges in England that have started offering courses supported by Code Institute find they can hardly keep up with demand and are hiring additional staff to launch more or larger cohorts. 

Code Institute, Gateway Qualifications and four colleges of Further and Higher Education – Westminster Adult Education Service, University Centre Peterborough, City of Bristol College and South Staffordshire College have collaborated on this white paper. Join us as we take a forensic look at how they used technology in the shape of platform, curriculum content and support to deliver diverse tech talent at scale while delivering the quality and outcomes employers need.

Learn from FE & HE Colleges Leading the Way

Westminster Adult Education Service (WAES) is currently the only Further Education provider in England to use three Code Institute products to support their delivery of three courses: the two Gateway Qualifications Diplomas at Level 3 and Level 5, and a Full-Stack Software Developer: Skills Bootcamp.

Alison Muggridge, Assistant Principal Curriculum and Quality at WAES partnered with Code Institute to create a 16-week bootcamp as a response to GLA’s [Greater London Authority] bootcamp funding for software developers. The Bootcamp enables WAES to attract local or at least regional students from black and ethnic minorities, females, single parents, carers, anyone with a disability and/or the under-24s and over-50s. Alison says that “all our Bootcamp learners have at least one, and mostly two of those characteristics.” 

Her colleague Waqas Ahmed, Head of English, Maths, Digital, and Inclusion, is tasked directly with the delivery of the Code Institute products and speaks of the ways they are scaling up across the board. “The second Bootcamp cohort started at the beginning of October with 23 students. It was heavily over-subscribed. We also started another Level 5 cohort in March; a further two are planned between now and the end of the academic year. We launched our first Level 3 cohort in April with 17 learners. A larger group of 22 started at the end of October, and another cohort is scheduled for spring 2024. So this is really taking off”, he says.

In January 2023, University Centre Peterborough (UCP) added a new qualification to its mix of tech courses—the Gateway Qualifications Level 5 Diploma in Web Application Development as a way to get people skilled or re-skilled for a future in tech relatively quickly.

Peter Wright, HE Manager of Science, Technology and Resources at UCP, shares that “the course seems to be hitting parts of the workforce that traditional computer science degrees cannot reach – as was our intention. The gender balance in UCP’s cohorts is better than the average in tech. At the moment, around 35% of our students are female, and in the next cohort, that percentage is higher, but of course, we want to get closer to that 50:50 split,” he adds.

With the success of the Level 5 Diploma, Liz Knight, UCP Academic Director, says “adding Bootcamp and the Level 3 Diploma in Software Development to the mix would create a diverse and inclusive pathway within the Inspire Education Group. Definitely a great plan for the future.”

Pasquale Fasulo, Director of Further and Higher Education at City of Bristol College, has offered the Gateway Qualifications Level 5 Diploma in Web Application Development since October 2021. He has since hired a graduate of the course to help run it. In tandem with scaling up Level 5 delivery, City of Bristol College intends to launch its first cohort for the Gateway Qualifications Level 3 Diploma in Software Development and pave the way to a new career and a new future for an even wider group of people.

Chris Hopkins, Faculty Director (Creative Arts, Digital & IT) at South Staffordshire College (SSC), “we wanted SSC to build a portfolio of qualifications for 19+ learners looking for a change in direction. The Gateway Qualifications Level 5 Diploma in Web Application Development gives that opportunity to people from diverse backgrounds with different skill sets.”

His colleague Adam Cross, Curriculum manager for Computing and Digital, is delighted with the 50:50 gender split in the latest cohort that started in September 2023. “Code Institute has stepped into the breach to fill that skills gap, and so people are switching over to do this. This is why SSC and other colleges are getting the numbers,” he says.

Funding 

Both qualifications allow learners to access funding via the Advanced Learner Loan for Level 5 learners and the Adult Education Budget/ National Skills Fund for Level 3 learners. The Level 3 qualification is also funded via Free Courses for Jobs. On the other hand, the Full-Stack Software Developer: Skills Bootcamp funding varies depending on the opportunity.

Software is about much more than code; it’s about how we do our finances, how we travel, how we communicate, how we entertain ourselves. This is a future that belongs to all of us – and must be as diverse as we are.

Read the whitepaper now

Funding officials unconcerned over training providers’ financial health

Top Education and Skills Funding Agency officials have suggested they are not concerned about the financial health of the independent training provider sector, despite several high-profile closures and market exits.

Senior agency directors told the Association of Employment and Learning Providers (AELP) autumn conference this week that data they have gathered shows the sector’s finances are looking positive.

The comments followed multiple interventions from provider leaders attending the conference highlighting significant financial challenges, specifically around poor apprenticeship funding rates and increasing costs.

AELP’s director of policy, Simon Ashworth, said ITP financial health “has never been as bad as it is now, from what I see”.

However, Andrew Thomas, director of finance and provider market oversight at the ESFA, said this didn’t tally with the financial data he was getting from providers themselves. “It does feel like the tone of the conversation this morning hasn’t quite been in line with what you’re saying to us in terms of financial health,” Thomas said.

He explained that the agency uses a “rolling programme” of monitoring financial statements and an annual review of “around 60” training providers’ financial forecasts to determine the financial health of the sector. 

Both are returning positive results, Thomas said. 

According to the agency’s review of financial statements for the most recent financial year, 60 per cent of ITPs are rated good or outstanding for their financial health, down from 66 per cent six months ago.

The number of ITPs scoring inadequate for their financial health remains “very low” Thomas said, with seven per cent currently judged inadequate, up from 6.5 per cent six months ago.

Early analysis of the “around 60” sampled training provider financial forecasts painted an even more positive picture.

Thomas said that, of those sampled, 61 per cent of training providers were forecasting good or outstanding financial health this year, rising to 65 per cent next and 91 per cent the year after.

Provider bosses were left aghast at the remarks and were critical of the agency’s methodology for forecasting the financial health of the training sector.

Paul Warner

Ashworth pointed out that financial forecasts will always be “optimistic” because providers want to avoid agency intervention.

One provider boss, whose company was sampled this year, described that the financial information he was asked to provide was “very basic” and didn’t look at the finances of groups that providers could be subsidiaries of.

And Paul Warner, AELP’s director of strategy, said he was “shocked” that sudden policy changes, like the abolition of traineeships, and procurement outcomes, which can cause ITPs to “suddenly go bust”, didn’t factor in the agency’s evaluations.

Kirsty Evans, director of post-16 regions and FE provider oversight at the Department for Education, encouraged training providers to be “as open as they can be” about their financial challenges in strategic conversations with officials.  

Why colleges should train more to become mental health first aiders  

The worst accident I ever had at work was when I bent down too quickly and ripped my suit trousers from waistline to gusset. My dignity was severely bruised. That was my lowest work moment. And yet, over the past two years I have become a first aider and a mental health first aider at work.

I started the process post-lockdowns. It seemed timely. We were all still wearing masks, so nobody could attempt the give the dummy the kiss of life, but otherwise I’m pretty confident that I’m prepared for whatever comes. So far, the worst disaster I have been called on to attend was a student who had a very slight nosebleed.

But the thing I remember most vividly from that first aid course is the story of the mannequin affectionately known as Resusci-Anne. Its face, we are told, is based on the death mask of a real young woman who was found drowned in the Seine in the 1880s at the age of about 16. Now the most kissed mouth in the world, nobody knows for sure who she was, but the most repeated of the thousands of backstories imagined for her is that she died by suicide.

This cast my second course run by the Mental Health First Aid charity (MHFA) in a very different light. MHFA’s aim is to have as many mental health first aiders in the country as there are physical first aiders. The courses began in Australia in 2000 and have now been delivered in 24 countries to over 5 million people. The two-day course I attended at work was of a type launched only in September 2022.  

One golden rule ran like a thread through that course: listen. Listening is not something we always find easy. More often than not, we do not listen so much as wait to get our words out. But when someone is in crisis, sometimes you simply need to say less and listen more. Create space and give time. Don’t judge. Don’t advise. Empathise. Just let the person know they are safe and heard. They are the centre of their world, as we all are, but their world is not always so secure. Your presence can be scaffolding until the expert has a chance to help them rebuild. So listen to them.  

Swingeing cuts to CAMHS have left scars on my students’s arms

No physical first aider is expected to act as a trauma doctor or surgeon. They only need to fill the gap until an expert arrives. The same is true with mental health first aid. Do not worry about your lack of expertise. You don’t need to be a counsellor, psychologist or psychiatrist. You’re simply called on to be a person helping a person who is finding being a person hard. Anyone can do that. Anyone can listen.  

And yet, in January it was reported that 20 per cent of calls to national NHS suicide crisis helplines went unanswered due to understaffing. This, after a decade of swingeing cuts to CAMHS funding that have left scars on the arms of my students.

Bluntly, I sometimes think we are not the caring nation we like to think we are, at least when it comes to our children. We make them wait for a referral. We make them wait again for an appointment. And we let the phone ring out when they call for desperate help. We are not listening.  

Colleges are often doing the best they can to cling on to the slipping grip of teenagers who are starting to sink. But we must do better. And an easy way we can do that is to make sure we are all equipped to help any young person who feels the cloud descending over their lives.

Resusci-Anne didn’t get the help she needed. Her story carries on nonetheless, speaking to us as much about the 21st Century as the 19th. How many Annes and Andrews, Anans and Anjus are in our classrooms today? And what difference might it make to them, their current and future families, and to us as a society if more of us were simply equipped to listen?

Mental health first aid courses are available from MHFA and St John Ambulance for individuals and organisations. Some provision is available for free or subsidised.

Integrating digital skills into qualifications is no longer a ‘nice to have’

As technology continues to reshape industries and job requirements, a workforce equipped with digital skills is essential for economic and individual career success.

Since the pandemic, the speed of digital adoption has increased but so has the divide between those with and those without access to and understanding of digital technologies. This divide only worsens existing socio-economic inequalities. However, by embedding digital skills into all education and training routes we can ensure individuals from every background can gain these essential competencies – reducing disparities and increasing access to opportunities.

Our recent Digital Sector Spotlight report highlighted this as an area of opportunity, as those who lack digital literacy face significant barriers in accessing job opportunities.

Today’s employers increasingly require a diverse and integrated skillset, including digital skills as a truly functional skill, no matter the sector or industry. With this, there will also be an increased demand to show the demonstrable benefit of these underpinning skills for learners.

In simple terms, integration democratises the digital world, fosters inclusivity, and broadens career horizons for everyone.

The changing landscape of work is undeniable and digital skills are at its core. With the fourth industrial revolution in full swing, technology is now integral to nearly every profession.

From social care and travel to retail and finance, the ability to navigate digital tools and platforms has become a prerequisite for success. Integrating digital skills acknowledges the realities of the modern workplace, giving individuals the tools they need to stay competitive and relevant in their chosen fields.

As the world becomes increasingly interconnected and technology-driven, traditional qualifications alone are insufficient. By infusing digital skills into educational programs, we empower students to tackle real-world challenges more effectively.

These skills not only enhance learning but also allow learners to apply them in different situations throughout their lives. This practical knowledge broadens the scope of education, making it an enriching experience that equips students with a lifelong advantage.

In simple terms, integration democratises the digital world

As we nurture a tech-savvy workforce, we encourage creative thinking and problem-solving – uniquely human skills. Outlined in NCFE’s Transforming Skills report, every person deserves the opportunity to develop these skills but being born in the wrong postcode means you might not have the same opportunities as others.

That’s why mainstream education should place both right at the core. With essential, human skills working alongside digital proficiency, we can empower individuals to develop innovative solutions, experiment with new ideas and contribute to economic growth. We want learners to be able to create, build, and shape their own futures and careers.

Separating digital skills from qualifications can reinforce the misconception that they are an optional add-on when, in reality, they are integral to modern living and working. Integrating digital know-how into qualifications provides context, relevance, and immediate application for these skills. It enables learners to recognise the value of digital literacy across all aspects of their lives.

Addressing the rapid pace of technological change is another concern. In an environment where today’s innovation is often replaced by tomorrow’s, teaching specific tools is less effective than cultivating adaptable skills. It’s not about software proficiency; it’s about teaching individuals how to learn, adapt, and thrive in the ever-evolving digital landscape.

For the successful integration of digital skills, education and training institutions need to be flexible and responsive. Collaboration with industry leaders, continuous monitoring of emerging technologies and the willingness to update curriculum are essential. Keeping pace with technology ensures the skills we teach remain relevant and aligned with the demands of the job market.

Integration should not merely be seen as an option; it’s a vital step to empower individuals and societies for the challenges and opportunities of the digital age. It promotes inclusivity, relevance, innovation, and adaptability while addressing the digital divide.

In a world where technology is embedded into every facet of life, education and training should prepare individuals to thrive and get the most out of the digital tools at their disposal. By integrating digital skills into qualifications, we can foster a workforce that’s not only equipped for the needs of their industry, but that drives technological innovation as well.

MOVERS AND SHAKERS: EDITION 440

Airam Neesa

Finance Director, Woodspeen Training

Start date: October 2023

Previous Job: Head of Finance UK, Cognition Education UK Limited

Interesting fact: Airam is passionate about the power of education and her career in education, spanning over 15 years, has taken her around the world


Susanne Davies

Director, Black Country and Marches Institute of Technology & Partnerships, Dudley College of Technology

Start date: September 2023

Previous Job: Director of Engagement, National College for Advanced Transport & Infrastructure

Interesting fact: Susanne is now a keen open water swimmer, having recently faced her fears of fish and the cold!

Combined authority ponders double college build to tackle FE ‘cold spots’

A combined authority has set aside almost £5 million to explore whether two new college campuses need to be built to tackle further education “cold spots”.

The lack of FE provision could otherwise force youngsters out of St Neots and East Cambridgeshire with the population set to swell, the Cambridgeshire and Peterborough Combined Authority warned.

The authority is searching for a consultant to deliver a feasibility study, which it hopes will show if the plans are “financially viable [and whether] the educational case is robust”. It earmarked £4.8 million for the project over the next three years, subject to approval by the board.

“Initial conversations” have also taken place with multiple FE colleges over whether they would consider opening new campuses in the areas – but with mixed reception.

The authority said it started analysing its FE provision after adult education was devolved in 2019. It receives around £11.9 million of adult education budget funding to spend in its area each year.

It classed St Neots and East Cambridgeshire as FE “cold spots”, meaning the proportion of the local population in further education is lower than the authority average. Neither area has their own FE college, and there are “no adult education and skills providers” in East Cambridgeshire at all.

Cambridgeshire and Peterborough Combined Authority warned there is not enough provision to meet the population increases. In St Neots, a council’s “masterplan” includes four new schools and more than 4,200 homes and will see the population surge – but without colleges to meet the demand for FE.

“An aspirational local further education offer” is also needed in East Cambridgeshire to keep more of its young people in the area, the combined authority said, adding this is a “strategic priority”. Currently, young people travel miles to Cambridge or Bury St Edmunds for FE.

An authority spokesperson said the planned feasibility study will establish the “evidence base and potential range of strategic options”. 

“This could include the expansion of FE provision in the market towns, to bring provision closer to learners, but only if it is financially viable to do so and the educational case is robust.”

Authority documents suggest each campus would cost between £25 million and £40 million – though the spokesperson stressed those are “very outline estimates”.

“Initial conversations” have also taken place with multiple FE colleges over their support for the project, plus one secondary school and a group representing manufacturers.

The authority has discussed expanding FE in St Neots with: Cambridge Regional College, Bedford College Group, North Hertfordshire College and MAKE UK. It has also consulted with the College of West Anglia, Ely College and West Suffolk College over FE in East Cambridgeshire.

Ian Pryce, chief executive of Bedford College Group, said the college “agrees that these high growth areas are an FE cold spot”. He said students from St Neots currently travel to Bedford College or Cambridge Regional College for FE. 

While he acknowledged the population of St Neots “would not [currently] support a major FE presence” he said this would “change over time”.

“We would obviously want to avoid creating anything that is not sustainable or viable, so we would like to work with Cambridge Regional College to agree a strategy for how best to serve the community and the extent to which new FE facilities could advance that aim.”

Not all local principals were as enthusiastic. David Pomfret, principal at the College of West Anglia, said “evidence of need has yet to be established” with only one meeting so far on the plans, back in November 2022.

“Alternative solutions such as improved transport access should be fully assessed by any feasibility study,” he said.

A spokesperson for Cambridge Regional College acknowledged that it is “part of the consultation group for both sites”. But they added that it is too “early in the consultation process” to comment further.

A spokesperson for the Eastern Education Group, to which West Suffolk College belongs, said it is “committed to growing our educational offer and supporting the [authority] in line with the findings of their study”.

The combined authority spokesperson said it will “continue to seek [colleges’] insights on the project” and will reconvene the advisory groups once it has appointed consultants.

SEND apprenticeship pilot proving a hit

Apprenticeship leaders have hailed the early success of a “game-changing” pilot that aims to make apprenticeships more accessible to people with learning difficulties.

Hundreds of people who found themselves blocked from apprenticeship opportunities under government requirements are now enrolling on programmes thanks to a new English and maths exemption.

The “LDD apprenticeships English and maths flexibilities pilot” was launched by the government in May to allow, for the first time, those without a pre-existing education health and care plan (EHCP) or statement of learning difficulties assessment (LDA) to work towards a lower level of functional skills.

Under current rules, apprentices must achieve level 1 English and maths functional skills qualifications if they’re on a level 2 apprenticeship and did not pass the qualifications at GCSE. And if a similar learner is on a level 3 or higher apprenticeship, they must achieve functional skills at level 2.

The rule is often cited as a common reason why there is a near-50 per cent drop-out rate in apprenticeships nationally.

Those with an EHCP or LDA can, however, work towards and pass the lower level of functional skills English and maths at entry level 3.

Around 20 providers have been trialling a change to the rules that allows special educational needs and/or disabilities coordinators (SENDCOs) to conduct additional assessments and judge whether a learner without an EHCP or LDA – but with equivalent needs – can be approved for this flexibility.

HIT Training had fewer than 20 apprentices eligible to work towards lower levels of functional skills last year, but since the EHCP requirement has been removed they’ve referred over 100 learners to their SENDCO for assessment of their eligibility, according to chief executive Jill Whittaker.

She told FE Week the relaxing of the Department for Education’s “really restrictive rules” is making a “huge difference” to the 67 people her national hospitality and care provider currently has on the trial.

A further 21 are awaiting the outcome of their assessment to join the pilot.

“A lot of people who didn’t pass English and maths at GCSE were often hiding a learning difficulty,” Whittaker told FE Week. “There are certain apprenticeships where you don’t really need the government’s prescribed level of English or maths to become occupationally competent.

“Instead of continuing to make them a failure, this pilot allows them to participate, occupationally, in a skills programme that is going to be of benefit to employers and UK plc, as well as for that individual. It provides social justice.”

Providers involved in the pilot have no set target number of apprentices to test out this new approach, and no extra funding has been handed over. Every provider that spoke to FE Week called for it to be rolled out nationally once it concludes in April 2024.

Dynamic Training, based in the southeast, has eight apprentices on the trial with another six pending their screening process.

Head of operations Vanessa Cole said the pilot has enabled employers to “widen the scope of applicants to pathways and programmes, benefitting NHS workforce development”.

English and maths has been a barrier

Ali Khan, managing director of ELA Training Services in London, has 14 apprentices on the pilot with another 18 in the six-week, one-to-one screening process. His provider is receiving up to 15 new referrals a month for the pilot of which he expects at least 50 per cent to be accepted.

He told FE Week: “Whether functional skills are fit for purpose or not, providers have had to set challenging benchmarks for applicants to achieve during their initial assessment so that we are not setting up apprentices to fail. This is also necessary to protect achievement rates and maintain viability amid rising costs and low functional skills funding.

“There are learners of all ages who are fantastic at their job, passionate to progress, however English and maths has been a barrier to them accessing learning opportunities to enhance their career progression. Many of us are neurodivergent, and this should not be a barrier anymore. We sincerely hope the success of this pilot will support a change in the current policy, and widen participation on to apprenticeships.”

Daniel Redland, director of Tempdent, said maths is often a “real blocker” to a lot of aspiring apprentices in the dental sector who have “struggled through school due to a variety of learning difficulties that have not been fully identified or recognised through an EHCP”.

This pilot has enabled Tempdent to “eradicate barriers to entry” for 11 learners so far.

Exeter College has 16 apprentices on the pilot on programmes including light vehicle, bricklaying, dental nursing, hospitality, data analyst, hairdressing, and carpentry.

The flexibility has “motivated them to approach their studies without fear and they are energised to succeed” as it has “removed the stress of what can be multiple failures associated with maths and English”, according to apprenticeship success coach, Helen Baker.

While all providers were wholly positive about the pilot, they did stress that it is essential for providers to have a dedicated SENDCO to ensure it is not misused and for accurate assessments to be made.

Skills and apprenticeships minister Robert Halfon told FE Week it is “incredibly encouraging that the pilot has been a success so far”.

“A learning difficulty or disability should never be a barrier to embarking on a rewarding career. That’s why we are conducting this pilot – to understand how we can remove the barriers that stop disabled people applying for apprenticeships, which are the best way for people of all ages and backgrounds to kickstart their career, earning a wage while learning the skills employers are looking for.”

Lauener steps down as NCG chair early for ‘personal reasons’

Peter Lauener has stepped away from his position as chair of college giant NCG three years earlier than planned for “personal reasons”.

The ex-chief executive of the government’s Education and Skills Funding Agency has led the group’s board since 2018 and was supposed to end his term in 2026. However, he took a leave of absence from the role in March following a family bereavement and officially stood down in July.

He’s been replaced by John Widdowson following a “competitive process”, NCG said. Widdowson is a former college principal and president of the Association of Colleges. He joined the NCG board in 2020 and was its vice chair prior to this new role. His term as chair will be for an initial four-year period.

Lauener is also chair of the Student Loans Company and the Construction Industry Training Board – both of which are non-departmental public bodies of the Department for Education. Lauener said he will see out his term of office at both organisations, which runs until 2026.

He will also stay on as chair of Orchard Hill College, an independent special education college for 16- to- 25-year-olds in outer London.

He joined NCG five years ago at a tumultuous time for the group amid low achievement rates, staff strikes, the closure of its two troubled training providers that led to hundreds of redundancies, huge deficits and Ofsted downgrading the group to ‘requires improvement’.

Lauener told FE Week he was “pleased to have seen sustained progress” since then with the appointment of a “great” chief executive – Liz Bromley – in 2019, a ‘good’ Ofsted judgement in 2022, and restored to “sound” financial health.

He also celebrated NCG’s success in securing indefinite degree-awarding powers this year – the first college in the country to do so.

The group is, however, currently locked in an £8 million clawback dispute with the ESFA due to alleged funding claim errors between 2018/19 and 2020/21 – the first three years of Lauener’s term as chair.

NCG said the dispute, which is still ongoing, had nothing to do with Lauener’s departure.

Lauener is also currently involved in a lawsuit with former apprenticeship giant 3aaa’s co-founder Peter Marples, in his capacity as the former head of the then Skills Funding Agency.

Commenting on his exit from NCG, Lauener said: “For personal reasons related to a family bereavement I needed to free up some of my time and initially I took a few months leave of absence to deal with matters. But I then decided that it would be better to step back fully and was delighted that John Widdowson, who was already vice chair, was able to take on the role of chair.

“I will continue to support the NCG model but now as a former chair and I expect to see NCG go from strength to strength in coming years.”

£1.5bn immigration skills charge ‘blackhole’ revealed

Ministers have been slammed for offering “zero transparency” over how £1.5 billion generated through taxing employers for hiring migrants has been reinvested into skills training programmes.

An FE Week investigation found the government cannot provide evidence of whether it is meeting its pledge to reduce Britain’s reliance on overseas workers and upskill domestic workers with funding from the immigration skills charge (ISC).

The tax was introduced in April 2017 and an explanatory memorandum published by the Department for Education alongside the legislation specifically stated that income raised will be put towards programmes that “address skills gaps in the UK workforce”.

Receipts from the charge have grown exponentially (see table), starting at £91 million in its first year before ballooning to £586 million in 2022/23 alone. It has generated a total of £1.465 billion in total over the last six years.

The Home Office collects the funding as part of its visa sponsorship process and transfers the income to the Treasury’s consolidated fund. The funding is then apparently spent by the Department of Education and the UK’s devolved administrations. But the charge is not ringfenced for skills training.

A 2022 report by the Migration Advisory Committee laid bare that the revenue generated from the ISC is “not ring-fenced or linked directly to any fund for training to reduce the reliance on migrant workers and is simply a tax on the use of migrant labour which goes to the Treasury”.

Skills minister Robert Halfon admitted in a parliamentary question in September that the ISC revenue does not give additional funding for skills but “maintains the existing level of skills invested in England”.

“It is unclear exactly what this means in practice,” said Jonathan Thomas, senior fellow at the Social Market Foundation, who criticised the use of ISC income in a recent blog.

“There is zero transparency or accountability for how the proceeds of the ISC are applied and used; they seem to disappear into a general all-purpose blackhole,” he added.

FE Week submitted freedom of information requests asking how much ISC revenue has been allocated to the DfE skills budget for the last six years.

But DfE, the Home Office and the Treasury refused to answer.

The DfE confirmed in its response that it does not receive a ring-fenced budget for the ISC and therefore does not hold the information requested, and suggested FE Week asks the Home Office.

The Home Office said it did not hold the information and advised us to contact the Treasury.

The Treasury directed FE Week to speak to the DfE.

Former skills minister Anne Milton publicly claimed in 2019 that revenue from the first year of the ISC implementation contributed £75 million to the department’s skills budget.

But Stephen Evans, chief executive of Learning and Work Institute, questioned how Milton was able to publish the figure because the ISC is not a hypothecated tax.

He added the rise in ISC revenue has not “fully fed through” into increased skills funding.

“The adult skills budget in England, excluding apprenticeships which are largely funded through the apprenticeship levy, has risen by less than the ISC since 2016/17,” he said.

Evans called on ministers to increase the ISC revenue being put into an increased skills budget.

“Ultimately this is not a hypothecated tax – the government decides how much it wants to raise in tax and how, and how much it wants to spend on skills. To boost our economy and widen opportunity, we need to reverse the £1 billion real terms cut in skills budgets in England since 2010, however this is funded.”

The ISC is set at two levels depending on the size of the business. For large businesses (more than 50 employees), they must pay £1,000 per sponsored worker per year and an additional £500 for each six months the worker is sponsored. Smaller businesses and charities are charged £364 per worker for the first 12 months, and an additional £182 for subsequent six-month periods of employment.

Business representatives have also raised eyebrows over a lack of transparency when it comes to how the skills charge is being reinvested.

Martin McTague, national chair of the Federation of Small Businesses, said: “Our research shows that 86 per cent of small businesses say it is difficult to find individuals with relevant qualifications, skills and experience, raising questions as to whether the ISC is serving its purpose of helping to train domestic workers, as set out in 2017.”

A government spokesperson said: “The ISC helps encourage employers to invest in training so that UK workers have the right skills needed to fill jobs. The income raised by the charge helps to support programmes aimed at addressing skills gaps in the UK workforce, and further reduce reliance on foreign workers.”