Apprenticeship funding to the tune of £250 million was handed back to the Treasury in 2020-21, FE Week can reveal.

The Department for Education said it had to surrender the money as demand for apprenticeships from employers was “lower than expected” partly due to the impact of Covid-19.

Government statistics show that apprenticeship starts were down 18 per cent in the 2019/20 academic year compared to the previous year, falling from 393,400 to 322,600.

AELP chief executive Jane Hickie said with workplaces closed, the pandemic was “always going to have an impact on starts and spend” but she sees no reason why “every penny” of the apprenticeships budget should not go to levy- and non-levy payers in future years as the economy recovers.

As per levy rules, businesses with a payroll of £3 million or more pay each month into the pot and have a rolling 24-month deadline to spend the funds.

The levy policy was designed so that large employers wouldn’t use all of their funds. The unspent money is meant to be recycled and made available to small businesses who do not pay the levy to use to train their apprentices. Unspent funds are also used to top up levy funds by ten per cent as well as pay for English and maths teaching for relevant apprentices, among other things.

But because government refuses to share annual spending data, there are many misconceptions in the sector and national media that all apprenticeship funding that expires from levy accounts goes back to the Treasury.

The actual sum of apprenticeship funding surrendered to Treasury each is year is published in the DfE’s annual “estimates memorandum”.

The memorandum for 2021/22 was published this week and states: “Unspent funding of £250 million was surrendered at the 2020/21 Supplementary Estimate (as the demand for apprenticeships from employers was lower than expected during 2020/21, partly due to the impact that Covid-19 had on employers’ recruitment plans).”

A DfE spokesperson confirmed the funding was returned to the Treasury, which is “usual practice” for “any underspends in overall departmental budgets by the end of the financial year”.

This isn’t the first time the DfE has handed back lumps of apprenticeship funding to the Treasury. In 2017/18 – the first year of the levy – around £300 million was surrendered.

The DfE claimed it did not surrender an apprenticeships underspend in 2018/19.

But £330 million was sent back to Treasury in 2019/20, despite concerns at the time that small employers had struggled to find providers with sufficient non-levy funds to train their apprentices, with some being turned away.

There have been numerous calls over the past year for unspent levy funding to be redistributed to other parts of the skills system or reinvested into apprenticeships.

The Labour Party, for example, wants any unspent levy funding to be used to subsidise the wages of apprentices as a way of boosting the number of people taking up the programmes.

Hickie said making use of the full apprenticeship budget in future can be “easily done if the government steadily lifts the limit on each small employers’ starts but more likely we can anticipate levy-payers spending their entitlements again so that we end up with a repeat of the ‘hard choices’ planning”.

“It is a major reason why AELP agrees with FE Week that there should be much more transparency surrounding levy funding,” she added.

A new campaign that argues for a lifelong statutory right to fully funded learning for every adult is holding its first conference tonight.

Former education secretary Lord David Blunkett will be the opening speaker for the Right2Learn campaign, which was founded in December 20202 by a steering group including ex-shadow skills minister Gordon Marsden (pictured).

Blunkett’s lecture will be given in honour of Bob Fryer – a well-known champion of lifelong learning who worked with Blunkett on The Learning Age green paper at the turn of the millennium – who died in December.

Other speakers leading the conference include director for education and skills at the OECD Andreas Schleicher, City & Guilds chief executive Kirstie Donnelly, founder of the Helena Kennedy Foundation Ann Limb, President of the Further Education Trust for Leadership Ruth Silver, and WEA general secretary Simon Parkinson.

The Right2Learn campaign took its inspiration from Labour’s 2019 Lifelong Learning Commission which called for everyone to have a statutory right to learn whatever their age or background.

Their aim is to “show how important properly funded lifelong learning is to the life chances of millions”.

Since its launch, the campaign has created an online platform which features regular blogs, discussion and comment.

It also published a manifesto following a consultation in January, which produced five principles they believe should underpin government policy: break down barriers; integrate and coordinate; devolve and empower; tackle inequality and meet community needs; invest and promote.

 

‘Tonight’s conference comes at a crucial time’

Right 2 Learn’s steering group founders – Graeme Atherton, VIcky Duckworth, Gordon Marsden and Matt Waddup – said tonight’s conference comes at a “crucial time as we try to emerge from lockdown and the pandemic but with a sobering legacy of thousands of lost jobs, stalled careers and life chances across all ages and sectors, and the disruption right across the UK in further and higher education, skills and employment.”

The conference will also identify key issues and areas to focus on in the next 12 months.

These include “maximising initiatives to learn, both formally and informally, to up skill and reskill across all ages, especially for disadvantaged groups and areas; and the roles of government, local government, mayors and combined authorities, plus businesses, unions, third, public and private sectors, in delivering those goals”.

Titled ‘Right2Learn is Right for Now’, the conference will be held from 6pm to 8.30 pm virtually on zoom.

You can register for free here https://www.educationopportunities.co.uk/events/right2learn-conference/.

WorldSkills UK is signing up to a host of partnerships with overseas counterparts which will mean greater sharing of skills expertise and more pressure testing for our competitors.

Today will see the UK formally sign its first partnership with Chinese Taipei, which will lead to representatives from Taipei speaking at the WorldSkills UK International Skills Summits, the latest of which was held this week, as well as other events.

There will also be more opportunities for pressure testing the UK’s competitors; such as when Isaac George represented the UK against 23 competitors from 15 other nations at an IT test this month.

The UK’s experts, who train our competitors, will also receive professional development as a result of the international partnership with Chinese Taipei which will feed into the WorldSkills UK Centres of Excellence programme.

WorldSkills UK chief executive Neil Bentley-Gockmann said the new partnerships “harness our global network and sharing international best practice, and will enable us to build on our work to boost standards in higher technical education, supporting young people to develop the high-quality skills needed by employers and investors in key sectors”.

WorldSkills UK is set to sign more partnerships in the coming weeks with countries including South Korea, Japan, Russia, India and France. 

It is expected a total of 11 partnerships with WorldSkills members will be agreed by the end of the year.

WorldSkills Chinese Taipei’s official delegate Chen-Yang Shih called the partnership a “win-win situation,” adding: “The agreement symbolizes a great step towards closer collaboration and stronger partnership.

“It provides a fantastic opportunity to work closely to mainstream innovation and excellence in skills development to help the youth build and strengthen their capacity and explore their potential.”

WorldSkills UK says the partnerships will have a “key role” in shaping the work of its new, independent Skills Taskforce for Global Britain, announced earlier this week.

Chaired by former Confederation of British Industry director-general John Cridland, and supported by accountancy firm EY, the taskforce will put together a ‘Roadmap to 2030’ to drive the use of skills in “levelling up” and attracting investment to the UK economy.

It will be answering questions such as how our skills compare with competitor countries, what are international investors looking for in terms of skills in the UK, and are all parts of the UK able to attract inward investment.

In the absence of international skills competitions, owing to the pandemic, WorldSkills UK has launched the pressure tests with other nations – several of which have ran already – and its International Skills Summits.

This week’s summit featured a keynote speech by Labour’s shadow education secretary Kate Green, while the previous one in November heard from Commons Education Select Committee chair Robert Halfon and former skills minister Anne Milton.

The UK will next compete in person at WorldSkills Shanghai next year.

Pictured: Neil Bentley-Gockmann and Chen-Yang Shih signing the partnership documents.

A cross-party group of MPs has called on the education secretary to reverse his adult education budget clawback plans to give colleges “financial security” amid the pandemic.

The All-Party Parliamentary Group on FE has also urged ministers to give students leaving college a fully funded extra year of study and introduce a new fund to support disadvantaged 16 to 19-year-olds to help make up for lost learning.

The members state that these shorter-term decisions are crucial to support the government’s overarching goals on skills reform as outlined in the Skills Bill this week.

Led by chair and Conservative MP Peter Aldous, the group has penned a letter to education secretary Gavin Williamson with the demands and urging him to announce his Covid catch-up plan.

It comes after Education Policy Institute research claimed it will take £13.5 billion to make up for lost learning.

The MPs’ letter states that colleges are currently facing “a number of challenges” in delivering the catch-up support needed, which is “in no small part due to the fact that college finances have been hit hard as a consequence of the significant disruption caused by the pandemic, and compounded by the recent decision by the EFSA to clawback adult skills funding from colleges”.

Announced in March and forced by the Treasury, the clawback decision means that any college that delivers less than 90 per cent of their national adult education allocation must repay the difference between that threshold and their actual delivery.

The Education and Skills Funding Agency has also ruled out a business case process whereby colleges could put forward reasons as to why they should cling on to the money if they did not reach the threshold.

Research by the Association of Colleges suggests that this decision will be in effect nearly a £60 million cut to adult funding, announced eight months into the academic year it applies to, giving colleges little time to reduce costs.

The APPG is calling on Williamson to revise the approach for the ESFA to take a business case approach.

Last month, colleges called on the prime minister to intervene in the “devastating” clawback plans, warning that they risk courses being scrapped and redundancies.

To go with this, the APPG has said a new “simple, flexible” fund should be introduced to give students a free extra year of college. The fund would allow colleges to “design programmes lasting between six months to one year to meet needs and outcomes, with a bursary to support some of the most disadvantaged learners to participate”.

A school and college leavers scheme was introduced last year by government, which gives 18 and 19 year olds who are struggling to find work due to Covid-19 the opportunity to study “targeted” level 2 and 3 courses for a third year free of charge. The fund was only available for the 2020/21 academic year.

Lastly, the APPG wants Williamson to provide colleges with “targeted support for the most disadvantaged learners through a 16 to 19 student premium”, just like the pupil premium in schools.

“We ask that the student premium be paid to 16-, 17-and 18-year-olds to reflect the government’s commitment to supporting the needs of young people, the skills agenda, and the wider governments social mobility goals.”

This student premium would cost around £100 million using the secondary school eligibility criteria and funding level, the group added.

The letter is undersigned by Peter Aldous MP other members of the group including Lord Blunkett, Baroness Garden of Frognal, Stephen Farry MP, and Emma Hardy MP.

The first draft of the Skills and Post-16 Education Bill has officially been laid before parliament.

It outlines the legislation behind the government’s planned reforms for FE, including local skills improvements plans, strengthened intervention powers for the education secretary, and a flexible lifelong loans system.

There are also new regulations for independent training providers, FE teacher training, and an expanded role for the Institute for Apprenticeships and Technical Education.

You can read the 38-page document here and explanatory notes here.

FE Week has the pulled out the key things you need to know.

 

‘Duty’ to have ‘regard’ for local skills improvement plans

A statutory underpinning has been placed on local skills improvement plans, introducing a power for the Secretary of State for Education to designate employer representative bodies to lead the development of the plans.

A “duty” has been placed on all colleges and training providers to co-operate in the development of and then “have regard” to the plans.

There will also be a duty introduced for all FE providers to review how well the education or training they provider meets local needs, and assess what action the institution might take to ensure it is best placed to meet local needs.

Each college and provider will be required to publish their review on their website.

 

New powers to force mergers

Government plans to extend the statutory intervention powers currently applicable to colleges under the Further and Higher Education Act 1992.

This measure will enable the Secretary of State for Education to intervene where there has been a failure to “meet local needs”, and to direct structural change such as mergers in order to secure improvement.

It is not clear at this stage how the government will determine when a college is not meeting local needs.

Read FE Week’s full story on these powers here.

 

New list of private providers which can restrict subcontracting

A new list of independent training providers will be launched to “indicate which providers have met conditions that are considered to prevent or mitigate risks associated with the disorderly exit of a provider”.

It will be separate from the register of apprenticeship training providers and require ITPs to register.

Any provider not on the list will not be granted funding agreements or be allowed to subcontract with another provider who is on the list.

Conditions to get on the list may relate to whether a provider has a student support plan; insurance cover; willingness to give access to information about the owners; and those relating to the relevant provider taking action specified in directions given by the Secretary of State.

The government said there were 64 unplanned provider exits in the academic year 2019/20, and there are delays in the current system finding a new provider which affects learner experiences.

This legislation is hoped to address gaps in these requirements.

 

 

Additional functions for IfATE

A new job is being given to the Institute for Apprenticeships and Technical Education to define and approve new categories of technical qualifications that relate to employer-led standards and occupations in different ways.

The quango will be required to cooperate with Ofqual to create a “single approval gateway” for technical qualifications.

The institute’s new powers will allow it to charge a fee as part of the qualification approval process and introduce a moratorium on the approval of further qualifications where there is evidence of proliferation.

It will also have a requirement to review approved qualifications, withdrawing their approval where they are no longer performing as expected.

 

Introduce a ‘lifelong loan entitlement’

The government plans to introduce a new loans system that allows people to study more flexibly and space out their studies across their lifetime.

Named the “lifelong loan entitlement”, learners will be given four years’ worth of loan funding and be able to transfer credits between FE and HE providers. The goal is to encourage more modular provision and part-time study.

A full consulation on this new entitlement is expected to run this year.

 

Regulations to improve FE teacher training

The government describes the quality of initial teacher training (ITT) as an essential ingredient in the FE sector.

An “enabling clause” to bring about required changes and improvements to the current system if they cannot be achieved through non-legislative means has been handed to the education secretary in the Bill.

Regulations may include making provision for accrediting an institution as a provider of specified ITT of FE courses; accrediting specified courses; prohibiting the provision of specified ITT FE courses by an institution.

 

New powers are set to be handed to the education secretary to force college mergers, an impact assessment of the Skills Bill has revealed.

The document has been published ahead of the actual Skill and Post-16 Education Bill, which has been laid in the House of Lords today.

It lists off 12 measures included in the Bill, which are predicted to cost around £112 million over the next decade.

In terms of intervention, the impact assessment explains that the education secretary can currently issue a direction to a college’s governing body and remove or appoint members of the governing body in certain circumstances.

But those powers “cannot be exercised in circumstances where there has been a failure to meet local needs, and cannot be used to direct structural change including mergers”.

Government proposes to “extend the existing intervention powers, enabling the Secretary of State to: exercise their statutory intervention powers in circumstances where there has been a failure by a college to adequately meet local needs; and direct structural changes (such as mergers) where use of the powers has been triggered under any of the thresholds in the legislation”.

The legislation will also “exempt any structural changes directed by the Secretary of State from the statutory merger control regime provided for in the Enterprise Act 2002”.

The impact assessment also reveals plans for a new “list of post-16 education or training providers who meet certain conditions”, as well as “the power for the Institute for Apprenticeships and Technical Education to charge fees to awarding organisations for qualification approval”.

And for the insolvency regime, the Bill says it will give “power for the Secretary of State to amend legislation to expressly provide for Company Voluntary Arrangements to be available in education administration”.

The breakdown of the £112 million cost is as follows: “Cost of producing local skills improvement plans to employer-representative bodies  (£25 million), FE providers (£11 million), and local stakeholders (£1 million). Cost to FE providers of having due regard to local skills improvement plans (£0.5 million).

“Statutory FE colleges to comply with duty to review provision in line with local needs (£5 million). Cost to employers of familiarising with new qualifications (£17 million). Awarding Organisations of new Institute qualification approval fee (£5 million) and additional qualification development to meet approval criteria (£46 million). Cost to employers of familiarisation with a new student finance system and the processing of new loans under the lifelong loan entitlement (£5 million).”

 

List of Skills Bill measures in the report’s own words:

The wider set of powers in the Bill and their relevant measure are as follows:

1. The Lifelong Loan Entitlement: Modifying existing regulation-making powers in primary legislation to make specific provision for student finance in respect of modules of courses.
2. Statutory Further Education intervention: Powers for the Secretary of State to intervene in the statutory FE sector in circumstances where there is failure to meet local needs, and for the Secretary of State to direct structural change (such as mergers) where use of statutory powers has been triggered.
3. Technical Education qualification regulation: The power for the Institute to charge fees to Awarding Organisations (AOs) for qualification approval is an enabling power for regulations to be made by the Secretary of State.
4. Insolvency regime: The power for the Secretary of State to amend legislation to expressly provide for Company Voluntary Arrangements (CVAs) to be available in education administration. 
5. Teacher training quality: The enabling clause will allow the Secretary of State to make secondary legislation to regulate initial teacher training courses in the FE sector as deemed necessary.
6. List of post-16 education or training providers: The power for Secretary of State to make regulations to set up a list of providers who meet certain conditions.

 

However, there are some changes that will be directly introduced by the passing of the Bill. These include the following parts of the listed measures:

1. Local skills improvement plans: The duty on providers to co-operate with ERBs, and the duty placed on providers to have due regard to local skills improvement plans when making decisions about the provision of post-16 technical education and training.
2. The duty placed on colleges and designated institutions to keep provision under review and consider what actions they might take to align provision with local needs.
3. Measure improving the FE insolvency regime brings minimal direct change to the process of education administration, cementing existing policy on transfer schemes into legislation for those providers which enter education administration. 
4. The Institute and new categories of technical qualification: The Institute will be given the power to define new qualification categories, approve qualifications in these categories, review the efficacy of approved qualifications and where appropriate withdraw their approval.
5. Institute and Ofqual: This measure will require these two bodies to cooperate with one another when exercising their functions with respect to technical qualifications and will create a single approval gateway for technical qualifications. 
6. OfS quality assessments: The clarification of the OfS’s methods of assessing quality as part of its regulation of higher education providers in England.

 

 

A team of education and business leaders have been assembled to drive the use of skills in “levelling up” and attracting investment to the UK economy.

The Skills Taskforce for Global Britain, commissioned and supported by but independent of WorldSkills UK and accountancy firm EY, is being launched at the former organisation’s virtual International Skills Summit today.

Chaired by former Confederation of British Industry director general John Cridland, the 11-strong taskforce will also include EY’s lead partner for learning and skills in the UK Josie Cluer, DfE non-executive director Ruby MacGregor-Smith, and skills sector leader Ann Limb. WorldSkills UK chief executive Neil Bentley-Gockmann will oversee the committee. (The full list of members is below.)

 

Taskforce will highlight ‘crucial role’ of high-quality skills

At the summit, hosted by Dudley College of Technology and sponsored by NCFE, Bentley-Gockmann is expected to say the taskforce will “highlight the crucial role of high-quality skills for employers in internationally traded sectors to attract inward investment to all parts of the UK – and help level up our economy.

“Bolstering our ability to attract international investment will bring huge benefits in terms of jobs, technology and innovation – not just in big multi-national firms, but in clusters of smaller firms and supply chains across the towns, cities, regions and nations.”

The taskforce will be preparing a ‘Roadmap to 2030’ which will set out how, by the end of this decade, the skills of the UK’s young people will be recognised as attracting investment in the UK.

Questions the roadmap will seek to answer include how our skills compares with competitor countries, what are international investors looking for in terms of skills in the UK, and are all parts of the UK able to attract inward investment.

Cridland said the taskforce “has much work to do,” as: “With global competition for inward investment getting fiercer every year, the UK must be able to add world-class skills to its international calling card.”

The taskforce will build on the work of the WorldSkills UK Centre of Excellence, a three-year pilot project using WorldSkills UK skills coaches to train up teaching staff. Applications for the centre’s second wave opened on Monday.

 

What’s happening at the International Skills Summit?

Today’s summit will also feature speeches by shadow education secretary Kate Green, director of The Social Market Foundation James Kirkup, and Dudley College’s principal Neil Thomas.

To register for the event, visit https://www.worldskillsuk.org/insights/international-skills-summit-skills-for-growth/

 

The full list of taskforce members is as follows:

• John Cridland CBE (Chair)
• Josie Cluer (Partner EY),
• Baroness Ruby MacGregor-Smith CBE (President British Chambers of Commerce, non-exec Board Member Department of Education)
• Neil Rami (Chief Executive West Midlands Growth Company)
• Chris Sutton (Welsh Government’s Ministerial Advisory Board for the Economy, former Chair CBI Wales)
• Linda Urquhart OBE (Non-executive Director Coutts and Edinburgh Airport)
• Stephen Burgin (Board Director, Offshore Wind Growth Partnership, Chair of Governors, South Staffordshire College, Former Vice President GE Power Europe, Pro Chancellor Staffordshire University)
• Andrew Hodgson OBE (Former Chair of North East Local Enterprise Partnership, Airbus and BAE Systems)
• Dr Ann Limb CBE (Independent Business Chair of the UK Innovation Corridor
• Marie-Therese McGivern (Strategic Investment Board Northern Ireland, Skills Advisory Board Belfast Region City Deal, Chair Belfast Maritime Board)
• Dr Adam Marshall (Adviser, CMI and Flint Global, former DG British Chambers of Commerce)