Spending review 2021: What the chancellor announced for FE and skills

Chancellor Rishi Sunak delivered his spending review and autumn budget today and confirmed a number of investments for the FE and skills sector.

He promised that “total spending on skills will increase over the parliament by £3.8 billion by 2024-25, equivalent to a cash increase of 42 per cent (26 per cent in real terms) compared to 2019-20”.

However, the accompanying red book fails to provide clarity about how much of this funding is brand new money. Much of it appears to be a rehash of funding that was already allocated.

FE Week is seeking clarity from the Treasury. In the meantime, here is what the spending review documents commit for FE and skills:

16-19 funding rates to be ‘maintained in real terms’

The current base rate for 16- to 19-year-olds sits at £4,188 per student.

Today’s red book states that an “additional” £1.6 billion will be invested by 2024-25 to “maintain funding rates in real terms per student, and provide a 28 per cent real terms increase in 16 to 19 funding from 2019-20”.

FE Week has asked the Treasury to confirm whether this means the £4,188 rate will increase annually in line inflation.

The red book goes on to say the £1.6 billion provides “additional hours in the classroom for up to 100,000 T Levels students by 2024-25” and also funds “40 additional hours learning per student per year for 16- to 19-year-olds”.

Apprenticeship funding ‘increase’

The red book says the government is “increasing apprenticeships funding to £2.7 billion by 2024-25 – the first increase since 2019-20”.

It goes on to show this is a £200 million increase on what was predicted in March 2021.

However, it is not clear whether this is natural growth in the apprenticeship levy on large employers’ payrolls as employment and earnings rise. FE Week is seeking clarity.

The red book says the government is continuing to meet 95 per cent of the apprenticeship training cost for employers who do not pay the apprenticeship levy and “delivering apprenticeship system improvements for all employers”.

Improvements include an “enhanced recruitment service” by May 2022 for small and medium-sized enterprises (SMEs), helping them hire new apprentices.

By April 2022, the government promises to also “consider” changes to the “provider payment profiles aimed at giving employers more choice over how the apprenticeship training is delivered, and explore the streamlining of existing additional employer support payments so that they go directly to employers”.

Government also plans to introduce a “return on investment tool” in October 2022 to ensure employers can “see the benefits apprentices create in their business”.

The red book confirms that £3,000 cash incentives for each apprentice an employer hires will end on 31 January 2022.

£2.8bn skills capital investment

The red book states that government will be “providing £2.8 billion in capital investment in skills”.

This funding will include: “Improvements to the condition of post-16 estate, new places in post-16 education; more specialist equipment and facilities for T Levels; and delivery of the commitment to 20 Institutes of Technology across England. It will also help to provide the skills that local areas need in key sectors like biosciences, through industry-standard equipment and facilities.”

It is not clear how much for the £2.8 billion, if any, is new.

Capital funding for T Level equipment and facilities, £1.5 billion for college estate projects and almost £300 million for Institutes of Technology has already been announced.

£554m from the national skills fund to boost bootcamps and the level 3 offer

The government already committed to a £2.5 billion national skills fund in the 2019 Conservative party manifesto and subsequent budgets.

Today’s spending review document states that the government will provide “a total investment of £554 million by 2024-25 to substantially increase retraining and upskilling opportunities for adults”.

It continues: “This provides a 29 per cent real terms uplift in adult skills funding compared to 2019-20 and meets the government’s commitment to a national skills fund. This includes giving more adults access to courses at level 3 in in-demand areas such as engineering and digital skills, scales up skills bootcamps, supports reforms to the adult skills funding system, and invests in the skills local employers need.”

£1.8bn more for education recovery

Also included in the spending review is an additional £1.8 billion for education recovery. This is on top of the £3.1 billion already announced.

The new commitment includes a £1 billion “recovery premium” for the next two academic years “to help schools to deliver evidence-based approaches to support the most disadvantaged pupils”. It seems to be an extension of the current school-led tutoring fund.

Also coming out of the £1.8 billion is £324 million in 2024-25 for “additional learning hours” for 16- to 19-year-olds.

But that leaves over £400 million of the funding unaccounted for, and it’s not clear from the documents what this will be spent on.

The Department for Education later confirmed that £800 million will be allocated for 16 to 19 catch-up in total.

A spokesperson said: “Students in 16 to 19 settings who have the least time left to recover learning lost will benefit from an additional 40 hours of education across the academic year, equivalent to an additional hour per week.

“This time will be used for extra teaching and learning – including in English, maths and other subjects – depending on students’ individual needs. This, alongside the 16 to 19 tuition fund, will help to prepare these students for their future.”

UK Shared Prosperity Fund to pay for £560m Multiply project

The government has announced a £560 million Multiply scheme, aimed at improving half a million adults’ numeracy (click here for full story).

Documents show the shared prosperity fund, which is set to launch in April and succeeds EU structural funds, will be used for this scheme. The prosperity fund will be worth £2.6 billion in total over the next three years.

Spending review: £560m for new Multiply adult numeracy scheme confirmed

The government has revealed details of its new £560 million Multiply scheme, aimed at improving half a million adults’ numeracy, following the spending review earlier today.

All “local areas” are set to be allocated funding for providers to run the free courses from the UK Shared Prosperity Fund, rather than the adult education budget or national skills fund.

Sunak told MPs this afternoon the Multiply scheme “will improve basic maths skills and help to change people’s lives across the whole United Kingdom”.

Multiply scheme will be free for learners and employers

spending review
Rishi Sunak

The scheme was trailed by the government earlier this week, with officials predicting 500,000 people will benefit from Multiply after it launches in the spring.

Up to eight million people in England alone have numeracy skills lower than that expected of nine-year-olds, with the north east, west midlands and Yorkshire and the Humber the worst affected, the Treasury explained.

Following Sunak’s statement, the Department for Education published a blog setting out how people aged over 19 without at least a GCSE grade four, equivalent to a C, in maths will be able to access the free courses.

These will be available in person or online, at work or in the evenings, part-time or “intensive,” with the DfE promising to next year launch a new digital platform for free, online tutorials.

Employers will also be able to team up with the local authorities to deliver “bespoke” programmes to train their staff in a maths GCSE or functional skills qualification at no cost to them.

‘Good news’ about Multiply but ‘consistent’ adult skills strategy would be better

The scheme has received a cautious welcome from sector leaders, with Learning and Work Institute chief executive Stephen Evans tweeting earlier this week: “Good to see a focus on basic skills and possibly an increase in resource.

“It would be better to have a consistent adult basic skills strategy,” he added.

Research by the institute published this month found participation in adult basic maths skills provision fell by over 60 per cent between 2012 and 2020.

That Multiply will be funded from the UK Shared Prosperity Fund, the UK’s replacement for European Union structural funds such as the European Social Fund, has received criticism, however.

Sue Pember, policy director for adult education network HOLEX and formerly a top DfE civil servant, was “pleased the ESF replacement UKSPF is going to be used for numeracy”.

But, she added, “new initiatives should not duplicate current activity but complement” AEB programmes.

The shared prosperity fund is set to launch next April and as part of the spending review the Treasury announced its funding will climb by £1.5 billion a year by 2024/25, so it will be worth £2.6 billion over the next three years.

Pember called for councils and mayoral combined authorities to locally manage the prosperity fund, with a new responsibility for level 2 and below provision, as “they already deliver adult and community education and are trusted leaders.

“This will complement current FE reforms and enable councils to work with employer representative bodies,” which will develop the government’s new local skills improvement plans, “to plan progression routes for people to progress from community, basic and functional level skills through to technical and higher-level skills”.

More details on Multiply will be published in the spring, according to the DfE.

Prison educators end long-running health and safety dispute

A bitter dispute between a union and a prison education provider has finally ended after new health and safety measures were agreed.

Around 600 staff at 49 prisons took four days of strike action between April and June 2021 after Covid-19 safety concerns were allegedly not addressed.

The employer in question, Novus, had also launched investigations into University and College Union members who raised health and safety concerns. These cases have now been dropped, the union said today.

New measures to be implemented, following talks at the Advisory, Conciliation and Arbitration Service (Acas), includes “improved risk assessment processes and systems of work to protect the health, safety, and wellbeing of prison education staff”.

A UCU spokesperson said: “Regular meetings over safety concerns are taking place with meaningful engagement from Novus. Staff are already seeing practical benefits, such as the roll-out of CO2 monitors to assess ventilation.”

The co-chair of the Justice Unions Parliamentary Group Liz Saville Roberts MP wrote to Novus’ parent company, the LTE Group, over the summer request they address the UCU’s concerns and withdraw any action against the representatives.

Saville Roberts, MP for Dwyfor Meirionnydd, said the 100 cross-parliamentary members of her group had been “shocked to learn about this increasingly bitter dispute”.

Novus previously said its relationship with the UCU had declined after it refused to implement health and safety procedure changes without the agreement of Her Majesty’s Prison and Probation Service and after it claimed it was given less than 24 hours to assess the impact of the changes.

The prison education provider also claimed UCU’s representatives had used bullying and intimidating behaviour during the dispute, and also made “false allegations” about Novus and the LTE board.

UCU general secretary Jo Grady said today that Covid had “brutally exposed the many health and safety failings within the prison estate” and through “unprecedented strike action our members have made prisons safer for both learners and teachers”.

A Novus spokesperson said: “Following constructive discussions between the Novus and LTE Group senior team and UCU representatives via ACAS, we are pleased that this dispute has been resolved.

“Our priority continues to be the health, safety and wellbeing of our colleagues, and we will continue to work closely with UCU and all our union representatives.”

Spending review: Minimum wage for apprentices to rise to £4.81 an hour

The national minimum wage for apprentices will increase next April from £4.30 to £4.81 per hour, the Treasury has confirmed today.

The 51p increase equates to an 11.9 per cent rise and is in line with a recommendation from the Low Pay Commission.

It will take effect from April 1, 2022.

Meanwhile, the National Living Wage for those aged 23 and older will increase from £8.91 to £9.50 an hour.

The the rate for 16 to 17-year-olds will rise from £4.62 to £4.81. For 18 to 20 year olds, the rate will shoot up from £6.56 to £6.83 per hour. And for 21 to 22 year olds, minimum salaries will increase from £8.36 to £9.18 per hour.

Chancellor Rishi Sunak is expected to confirm the wage rises during Wednesday’s spending review and budget.

He said today: “This is a government that is on the side of working people. This wage boost ensures we’re making work pay and keeps us on track to meet our target to end low pay by the end of this parliament.”

The Treasury trailed a £3 billion skills funding announcement over the weekend. Details of how much of this is new money are expected to be revealed on Wednesday.

Minimum wage increases:

GroupCurrent rate (£/hr)2022 rate (£/hour)Cash increase% cash increase
NLW (23+)£8.91£9.5059p6.6%
21-22 year olds£8.36£9.1882p9.8%
18-20 year olds£6.56£6.8327p4.1%
16-17 year olds£4.62£4.8119p4.1%
Apprentices£4.30£4.8151p11.9%

Changing EPAO can be an exciting and rewarding step for you and your learners

Last month, I came across an informative and insightful article by Sallyann Baldry titled Considering Changing EPAO? A guide to ensuring a smooth transition. A positive and constructive discussion on the topic, Sally provided an interesting perspective for customers to consider when choosing to work with an end-point assessment organisation (EPAO).

The information shared highlighted the value of factoring in all elements when changing EPAO, outlining to providers and employers what should be considered important to their organisational requirements.

Following this article’s publication, our team here at NCFE took the opportunity to review the information listed in Sallyann’s comparison grid and decided to use this as a framework to carry out an internal quality check against our own offering.

We performed this check to assess whether we’re meeting the current needs of the sector and, most importantly, to ensure that we’re providing the best service we can – one that continues to keep the apprentice, employer and independent training provider (ITP) at the heart of everything we do.

Evaluating our own offering

As an experienced and Ofqual-recognised EPAO, we hold ourselves to a high standard. We’re therefore delighted to confirm that our offer exceeds the expectations of our current and potential customers, including what is widely recognised as a top-rated end-point assessment (EPA) provision with specialisms in health, care, education and business.

To demonstrate NCFE’s EPA offer and its various elements, we’ve created our own comparison table, allowing providers and employers to see at a glance the service that we provide.

We’re proud to share that our offer surpasses many of the comparison grid’s requirements, such as the provision of a named contact within the relationship team to work in partnership with; customer support available across multiple levels; a system that is easy to use with no integration required; and access to a range of resources and guidance materials covering the end-to-end EPA journey via our customer resource library.

Our advice when changing your EPAO

As stated by Sallyann, there are many considerations when thinking about switching your EPAO. Here are the key requirements that we recommend being aware of:

  • Customer service: access to support and guidance across multiple levels throughout the EPA journey will be essential.
  • Collaborative working: it’s important to work with an EPAO that is forward-thinking, proactive and keen to work in partnership with customers.
  • Communication: the importance of the apprentice, employer and ITP having visibility and an open line of communication throughout the EPA journey can’t be understated. In my experience, support, guidance and feedback are imperative to successful outcomes.

Changing EPAO can be a smooth and stress-free transition when the right organisation is chosen, as well as being a decision that can deliver many benefits for you as a provider of apprenticeships to the next generation.

By Sacha Finkle, Head of EPA Operations at NCFE

Find out more about our end-point assessment offer:

Email : EPARelationshipTeam@ncfe.org.uk

Phone : 0191 2408950

Spending review: funding boosts for 16-19 and adult training

Boosts to college funding and T Level teaching hours are to be part of a £3 billion package for post 16 education and skills in next week’s autumn budget and spending review. 

The autumn budget and spending review will be taking place on Wednesday October 27. On the day, chancellor Rishi Sunak will release details of government spending for government departments for years 2022/23, 2023/24 and 2024/25. This will be the first multi-year spending review since 2015. 

Part of the spending increase on skills will include £550 million for the national skills fund and has been earmarked to quadruple the number of places on the government’s flagship skills bootcamps, expand the level 3 adult offer and pay for 24,000 more traineeships per year.

Skills bootcamps were launched in Autumn 2020 and provide adults with a 16 week programme and job interview in a priority sector. They have quickly become a go-to skills intervention for the government, with an expansion announced earlier this year to help tackle the shortage of HGV drivers. 

The first evaluation of the rapid skills programmes was published last week but was unable to say how effective they were at supporting learners into jobs.

The spending review will also see more capital funding, with £830 million set to be allocated to “revitalising colleges in England” plus increases to the T Level capital programme. 

By the end of the spending review period, 2024/25, the apprenticeships budget will have increased to £2.7 billion, a £170 million increase. The Treasury says this will pay for “new improvements to support more small businesses to hire new apprentices”. More details are expected on Wednesday.

“Our future economic success depends not just on the education we give to our children but the lifelong learning we offer to adults.

“This £3 billion skills revolution builds on our Plan for Jobs and will spread opportunity across the UK by transforming post-16 education – giving people the skills they need to earn more and get on in life.”

Rishi Sunak, Chancellor of the Exchequer

16 to 19 education will see the biggest jump in funding with a £1.6 billion increase by the end of the spending review period. Part of that will fund additional hours for “up to 100,000 young people taking T Levels”, the Treasury says. It’s unclear at this point what the rest of the 16-19 spending rise will be allocated to. 

A Treasury spokesperson told FE Week: “The £1.6bn is the increase to 16 to 19 year old’s funding in 2024-25. This is double the investment the government has made over the last two spending reviews (£691million in total). Further details will be announced in due course.”

In their spending review submission, the Association of Colleges called for extra 16 to 19 spending to fund places for more young people, increasing the per-student base rate and removing the rate cut for 18 year-olds.

Though today’s announcement falls short of the £2.3 billion extra 16 to 19 spending the AoC called for, its chief executive David Hughes said it is “encouraging to see increased investment in skills and education” adding “we always expected the increased funding wouldn’t go far enough, but in the circumstances we view this as a good start in a tough spending round”.

The absence of specifics on education catch-up funding did not pass Hughes by, commenting “as an optimist, I am hopeful that the lack of mention of education recovery is because of a significant announcement on Wednesday at the dispatch box”.

The autumn budget and spending review will take place in the House of Commons at approximately 12.30pm on Wednesday October 27. 

Five urgent tips for the DfE on adult education

There are far too many barriers for the unemployed and low paid to get into learning, writes Chris Morgan

There is a critical need to help the 3.7 million adults in the UK in low-paid and insecure work. Sixteen per cent of adults have poor literacy skills, and one in three have no qualifications. 

One in three adults who have no qualifications live in poverty.

This week the WEA launched our 2021 Impact Report, which reveals the extent to which community learning helps adults improve their employability and life chances.  

The research highlights the importance of learning for both boosting career prospects and its physical and mental transformative effects. 

We have identified five areas for minimising these disparities ̶ and have written to the Treasury in advance of its spending review. We must:

1. Maintain the current level of funding for the adult education budget  


This comprehensive spending review is long overdue and is the first realistic opportunity for Treasury to set budgets for three years ahead. A budget maintained at current levels for three years would offer providers a level of stability that has been lacking from the funding system for some time.

As well as setting out its very ambitious plans for the funding & accountability framework, the Department for Education (DfE) has also consulted recently on the national skills fund.

 This all adds up to a period of considerable change for further education, including community learning.

  

2. Create a distinct fund for adults who need essential employability skills 

The DfE is proposing to create a single skills fund that combines the adult education budget and national skills fund. The thinking behind this is to give providers more flexibility and autonomy.

However, in adult community learning we already have quite a lot of flexibility and autonomy. What we lack is visibility.

Our concern is that the single fund will see level 3 provision eclipsing community provision at lower levels. This could result in a very top-heavy model that does not serve those furthest from the job market.

Rather than a single pot, we would prefer to see two distinct, but inter-linked funds, including an essential skills fund supporting those who need most help. 



3. Remove the economic skills trap that creates barriers to study

There are so many barriers to the unemployed and low paid. For example, many learners miss out because they are earning just above the threshold to qualify for financial support. If you need more than one level 3 qualification to enter a career, the national skills fund will not fund the second one.  

And to gain access to level 3 study funded by the national skills fund, you need to meet entry criteria that many do not have, such as level 2 English, a 4 in GCSE maths, subject knowledge and work placement experience.

We are encouraging the government to break these barriers down. Some devolved mayoral authorities, such as Liverpool and Cambridgeshire & Peterborough Combined Authority, are already starting to lift them, opening doors to opportunities for thousands of adults. 

4. Launch a national awareness campaign highlighting adult learning financial support

 
Visibility is one of the sector’s biggest concerns. Multiple studies have shown adults are unaware of the education provision available, or the funding support to cover fees and childcare.

A national awareness campaign would be especially effective in the most disadvantaged areas.

5.      Legislate for specialist designated institutions to have equal rights to grant funding

 
Since 1992, the WEA and other community learning providers have been classed as specialist designated institutions (SDIs). This status means that SDIs are eligible for grant funding in exactly the same way as general further education colleges.

With such root and branch reform of the funding system taking place, it would be easy to overlook the complexities.

So we ask that that the government legislates for SDIs to have equal rights to grant funding, or at least confirms on record that the current status still stands.

Then we can keep advocating for adults, arguing that it is critical they are not forgotten. 

The FE Week Podcast: Reaching net zero, careers guidance and research in FE

This week Shane is joined by college principal Ian Pryce and the chief operating officer of an independent training provider, Nicki Hay, to discuss the biggest stories.

How should providers respond to climate change in the run up to COP26?

Is anything actually going to be done about careers guidance, even with a Skills Bill amendment?

And what FE research projects badly need funding?

Listen to episode four below, and hit subscribe to follow the podcast!

Skills Bill: More government defeats as Lords debate careers, universal credit and apprenticeships

The Skills and Post-16 Education Bill is one step closer to becoming law having completed its “report stage” in the House of Lords. 

Amendments, including a beefed-up Baker clause and focussing a proportion of apprenticeship levy funding on young people at lower levels, were passed into the bill against the government’s wishes.   

Lord Baker beat the government by 50 votes to make legislation requiring secondary pupils to experience “mandatory encounters” with technical training providers legally enforceable and prescribed within law.   

Baker once again commanded support from government and opposition peers for his amendment.   

Baroness Wilcox, speaking for Labour, said the government’s aim to use secondary legislation, i.e., regulations, to determine the frequency and content of technical education careers guidance wasn’t acceptable because it would mean that the government’s plans couldn’t be scrutinised. 

 The Lord Bishop of Durham, with the Green Party’s Baroness Bennett of Manor Castle, won another vote to prevent benefit rules causing problems for adults seeking education and training opportunities if they are unemployed and/or in receipt of Universal Credit.  

Despite a defence from a government minister, who highlighted various ways in which Universal Credit claimants could be supported through learning loans, bursaries and various exemptions within Universal Credit regulations, a cross-party coalition of peers generated a government defeat of 16 votes. 

Commenting on the Universal Credit amendment, Association of Colleges chief executive David Hughes said: “Cutting Universal Credit whilst blocking people’s ability to train and upskill their way into good jobs is just plain wrong at any time, but when employers are crying out for people with skills, then it is even more baffling. 

“This is an important moment as the House of Lords rejects the government’s muddled approach and forces them to think again. We need an urgent review into the system to make sure that the welfare and skills systems are working in tandem.” 

Liberal Democrat peer Lord Addington successfully passed an amendment that would require special educational needs training within FE teacher training programmes.  

Former MP Ken Clarke (pictured), now Lord Clarke of Nottingham, passed an amendment that would require employers to spend two-thirds of “apprenticeship funding” on level 2 and 3 apprenticeships for under-25s.   

Government amendments to outlaw essay mills and allow for the conversion of 16-to-19 sixth-forms with religious character to academies were passed without opposition.   

The House of Lords began proceedings at 12.30pm yesterday afternoon and were still debating at the time of going to press.   

The Lords will have a final opportunity to amend the bill on October 25. It will then begin its journey through the House of Commons. With a Conservative Party majority in the Commons, it is unlikely that all of the amendments passed by the Lords will be passed in to final legislation.