Ministers ponder carrots and sticks to curb NEET crisis

Docking benefits and subsidising wages are among ideas being considered by ministers to get jobless young people into work, reports suggest.

According to The Sunday Times, the government is considering “major reforms” such as benefit sanctions if people reject education or training under Labour’s promised “youth guarantee”.

And Sky News this week reported claims that wage subsidy programmes are being mooted following concerns that tax rises introduced in last month’s Budget will dent job creation.

Getting Britain working

Labour is expected to publish a white paper entitled ‘Get Britain Working’ next month that sets out how the Work and Pensions, Education and Health and Social Care departments will raise the country’s employment rate from 74.8 to 80 per cent.

Quarterly statistics released yesterday reveal the number of young people who are not in education, employment or training (NEET) hit 946,000, up 8 per cent on the previous quarter.

This accounts for an estimated 13.2 per cent of 16 to 24 year olds in the UK from July to September.

Ahead of the white paper, the only policy announcement designed to address NEET rates has been a £240 million package for metro mayors and several unidentified English ‘trailblazer’ areas.

That cash will reportedly “streamline” local skills, work and health services and test “early interventions” that target specific barriers to work faced by the long-term unemployed of all ages – such as the estimated 2.8 million out of work due to long-term sickness.

NEETs soar by a fifth

Stephen Evans, chief executive of the Learning and Work Institute, said: “The number of NEETs has risen by 150,000 since the pandemic, a 20 per cent rise.

“The government’s upcoming ‘youth guarantee’ needs to include a step change in apprenticeships, education and help to find work.”

Barriers to economic activity are understood to be a combination of economic challenges, mental health struggles, lack of regional opportunities and access to education.

Disabilities and ill health are some of the “longest-running” factors, alongside being a lone parent and from a minority ethnic group, according to Naomi Clayton, director of policy and research at the Learning and Work Institute.

She told FE Week: “We know that rates of inactivity are far higher in some areas compared to others.”

A survey by Youth Employment UK said NEET rates are driven by a range of “interlinked factors” including high levels of anxiety when people leave education, a lack of belonging in communities, disruption from events such as the pandemic and regional inequalities.

There is also concern chancellor Rachel Reeves’ decision to hike national insurance contributions from April will worsen the NEET problem as it could hinder employers’ ability to recruit more staff.

Been here before?

Previous governments have already tried benefits sanctions and subsidised work programmes to boost youth employment rates.

For a couple of years during the pandemic the government ran the Kickstart scheme, which offered six-month paid work placements to those aged 16 to 24 who were on universal credit and deemed to be at risk of long-term unemployment – with the government picking up their wage bill.

Several other schemes are ongoing, including Restart and the Work and Health Programme, while others, such as Job Entry Targeted Support – aimed at the recently unemployed – ended last year.

Clayton said: “The system itself has been affected by the amount of policy churn, the different funding streams, and the short-termism.”

The evidence

Ben Gadsby, head of policy and research at Impetus, which funds organisations that support employment and education for disadvantaged groups, said there was already evidence about what works.

He revealed subsidised job programmes were ideal for young people who needed an employer to take a risk on them.

But he added: “Success will depend on how many non-subsidised jobs there are – one of the reasons there were fewer Kickstart places than planned is there were lots of non-subsidised jobs available.”

Gadsby said young people responded positively to supportive environments such as youth hubs, while benefit sanctions could “get in the way” of support on offer.

Minister for Employment Alison McGovern said the latest NEET figures were“yet more evidence of the significant challenges facing young people, particularly the pandemic generation who have not received the support they need to reach their full potential”.

She added: “Bold measures in our Get Britain Working white paper will turn this around. We will introduce a Youth Guarantee so every 18-21 year old in England is earning or learning while we transform job centres and introduce new health, work and skill plans to give everyone – including our young people – the support they need to build a better life.”

Apprentice assessment alternatives shelved by DfE

Plans to test alternative ways of assessing apprentices have been kicked into the long grass.

Officials put forward multiple options to modify the current end-point assessment (EPA) model earlier this year, including one that would allow training providers and employers to assess their own apprentices rather than use an external organisation.

But FE Week understands the Department for Education decided the proposals didn’t have legs after exploring them with awarding bodies and providers. Any potential pilot has now been grounded.

End-point assessment organisations (EPAOs) are hopeful a wider review of EPAs could be launched next year as officials continue to seek to reduce admin and costs.

Trial adjourned

Since 2017, apprentices have had to pass an EPA to fully achieve their apprenticeship.

EPAs are carried out by regulated EPAOs with reference to the assessment plans for each apprenticeship designed by employers and approved by the Institute for Apprenticeships and Technical Education.

FE Week understands officials are concerned the cost, complexity and limited capacity of EPAOs is hampering apprenticeship completion and achievement rates.

Alternative proposals included allowing training providers to carry out part of the EPA themselves, rather than the whole process being done by an independent EPAO. 

It was hoped this would relieve some of the assessor shortages reported by EPAOs. But there was concern about providers’ own assessment capacity, and that losing fully independent assessments would compromise standards.

Other suggestions involved transferring the assessment of “behaviours” from EPAOs to employers, and cutting the size of EPAs by removing the need for all knowledge, skills and behaviours to be assessed.

FE Week understands officials quickly found the proposals wouldn’t save any time or money and would just add confusion to the system.

The DfE declined to comment, but did confirm that officials “reviewed the apprenticeship assessment system over summer 2024, gathering evidence and suggestions for change from across a wide range of stakeholders including regulators, assessment organisations, training providers and external quality assurance providers”. 

Rob Nitsch, chief executive of the Federation of Awarding Bodies, said his organisation was “pleased to contribute to discussions about the future of the EPA pilots and the optimisation of EPA”, adding that his team had “advocated for a wider review and are hopeful that this will come to fruition when resources allow”.

‘Expert’ apprenticeship pilot a damp squib?

The DfE caused controversy last year when it outlined plans to recruit a team of “expert” apprenticeship providers.

According to government guidance, those selected would receive a “mark of excellence” on the Find Apprenticeship Training website in a bid to drive up starts, especially with small and medium-sized employers, young people, and improve resource efficiencies and quality of delivery.

The providers would also be given “more access” to DfE systems to reduce the time and resources they commit to coaching non-levy paying employers through the apprenticeship system.

Entry criteria was strict and eliminated many of the largest apprenticeship providers from participating. Thirteen providers were selected in October 2023 and began the pilot at the end of that month.

But a year later the DfE has refused to say exactly what flexibilities, if any, the expert group had been testing. The promised quality mark also does not appear on Find Apprenticeship Training for the 13 expert providers.

The providers appear to have been used instead as a trusted group for suggesting potential policy developments.

DfE told FE Week the providers did, however, contribute to a new tool called One Login, which brings the digital apprenticeship service into one system.

Launched last week, One Login is said to remove the need for multiple logins to different elements of the apprenticeship service. It means apprentices can now track their progress, view available apprenticeships and apply for opportunities within one secure system without the hassle of multiple accounts.

Employers can also manage recruitment, track the progress of apprentices and ensure that all documentation and compliance requirements are met. 

The service’s integration with training providers allows for “seamless access” to final assessments, ensuring apprentices meet all necessary standards in a simple, joined-up process.

The DfE declined to comment on the outcomes or future of the expert apprenticeship provider pilot, other than to say it will “update the sector in due course”.

Simon Ashworth, deputy chief executive and director of policy at the Association of Employment and Learning Providers, said: “AELP did have some concerns that the wider rollout of an expert provider kitemark scheme could lead to a two-tier system. 

“Employers can already be confident that any provider directly accessing funding needs to be on the government’s approved apprenticeship register, with Ofsted passing judgement on the quality of provision each provider delivers.”

He added that AELP was “pleased” the new government had made improving flexibility of the apprenticeship programme a key priority, and believes a more “streamlined, less burdensome but still independent EPA needs to be part of this”.

Degree apprenticeship policy must be driven by evidence

Degree apprenticeships have been transformative for the UK, yet the misconceptions around them continue to circulate. People repeat received wisdom of ‘fat-cat executives on apprenticeships’ or warnings of a ‘middle-class land grab’.

But this perception couldn’t be further from the truth. At Manchester Metropolitan University, a leading provider of degree apprenticeships in partnership with over 600 employers, the reality is starkly different.

Our newest report, Force for Impact, highlights the role degree apprenticeships play in tackling social inequity, closing skills gaps and boosting productivity, particularly in critical areas such as nursing, social work, science, digital and technology.

Social mobility impact

A key myth we need to dispel is the idea that degree apprenticeships are exclusive to the privileged. In fact, degree apprenticeships are powerful tools for social mobility.

Twenty-three per cent of our apprentices were eligible for free school meals (FSM) when growing up. Today, these same individuals are earning an average of just over £53,000 per year.

This is remarkable when considered alongside national data which reports that only half of former FSM pupils earn more than £17,000 by the age of 30.  What other pathways in education provide levelling up opportunities and hope for the future like this?

What employers say

The value of degree apprenticeships extends beyond the apprentices themselves. Our employer partners, from global giants like AstraZeneca, Barclays, and IBM to local SMEs and public-sector organisations, report significant benefits.

In a recent survey, over 90 per cent of employers said that degree apprentices bring essential expertise to their teams, boost productivity and contribute to closing skills gaps.

This feedback underscores the importance of investing in degree apprenticeships as a strategic workforce solution that delivers real impact for companies in need of skilled talent, especially in high-demand sectors.

The rapid progression of our alumni is also a testament to the success of these programmes. We found that within one to four years after completing their programme, our undergraduate degree apprentices earn an average of £49,784, and postgraduate alumni £60,028. These figures significantly outstrip national averages.

Policy decisions

With the recent policy shifts under the new government, there is a focus on foundation apprenticeships and shorter programmes. While these have a place, we must not lose sight of the vital role that higher-level apprenticeships play, especially in key areas such as nursing and digital.

Higher-level apprenticeships equip people with advanced skills that make a lasting impact, particularly in industries facing critical shortages.

Now more than ever, we must champion these programmes to ensure that individuals, employers, and the economy continue to benefit from this higher-level skills development.

Driving diversity

One area where degree apprenticeships are making a particularly notable impact is in the representation of women in science, technology, engineering, and mathematics (STEM). At Manchester Met, 42 per cent of our degree apprentices in STEM fields are women, compared to the national average of just 27 per cent.

Through a combination of tailored support, flexible learning and industry collaboration, degree apprenticeships create opportunities for people from diverse backgrounds to enter sectors that have historically been difficult to access.

Pathway to lifelong learning

One of the greatest strengths of degree apprenticeships is their ability to cater for learners at various stages of their careers. While more than half of our apprentices are under 24, a significant portion are adults pivoting to new roles or upskilling mid-career.

This flexibility makes degree apprenticeships uniquely positioned to support lifelong learning, providing both early career starts and career transitions.

The commitment required by apprentices—balancing work, study and a clear career focus—makes the success of these programmes even more impressive. Approximately 38 per cent of our apprentices come from disadvantaged backgrounds, and their success stories illustrate how apprenticeships can transform lives, creating economic stability and personal empowerment.

With the right support and collaboration between educators, industry and government, degree apprenticeships can continue to be a driving force for positive change.

By debunking the myths and recognising the true potential of these programmes, we can unlock opportunities for individuals, employers, and the broader economy.

Read the full ‘Force for Impact’ report here

Skills policy should be informed by social return on investment

In today’s rapidly evolving economic landscape, education and workforce development are pivotal drivers of social and economic growth. Yet, as governments and organisations invest in skills and training, it is crucial to understand the broader impact of these initiatives.

Social Return on Investment (SROI) offers a holistic approach to measuring not only the financial returns of skills investment but also the wider benefits to communities, individuals and the environment.

SROI reporting has the potential to transform public policy and investment decisions, ensuring that funding in education and skills generates meaningful social impact across the country.

The future of workforce development

SROI goes beyond traditional metrics of success by capturing the wider societal benefits of apprenticeships. From addressing regional inequalities to empowering underrepresented groups, this holistic framework reveals how skills training delivers returns far beyond what is captured by financial metrics alone.

The broader impact, including improved employment outcomes, increased productivity and enhanced community cohesion, is not just a bonus but the foundation for a more resilient economy.

The value of such reports lies in their ability to provide clear, data-driven insights to guide policy.

Historically, discussions around apprenticeship programmes have often been limited to completion rates and direct financial outcomes. But as recent industry reports demonstrate, apprenticeships contribute meaningfully to a range of broader strategic objectives, including closing the digital skills gap, fostering social mobility and enhancing local economies.

Data-driven foundations

The accuracy and credibility of SROI reporting hinge on a robust and transparent methodology. Using models like GIST Impact’s Skills Drivers and Outcome Impact (DOI), organisations can establish a reliable framework to quantify social value.

By using insights from people directly participating in programmes, as well as incorporating reliable sources, such as government statistics, organisations can ensure calculations are grounded in comprehensive, real-world information.

Additionally, SROI filters account for key factors such as attribution (the likelihood that benefits would occur without the programme) and deadweight (the probability that the investment would yield benefits even without the programme), which help avoid inflated valuations.

This rigorous data-backed approach ensures that SROI calculations accurately reflect both immediate and long-term impacts, from productivity gains to improved social equity.

The inclusion of data on regional, gender and ethnic diversity allows organisations to understand the specific benefits for diverse groups within society, further reinforcing the alignment of workforce programmes with national priorities.

A tool for policy transformation

Employer investment in training has declined sharply, with Skills England’s recent report noting that training expenditure is now at its lowest since 2011, and investment per employee down 19 per cent in real terms.

This trend risks undermining workforce readiness for a shifting economy, highlighting the need for targeted government intervention.

SROI offers a strategic solution by helping the treasury identify skills programmes that yield the greatest social impact, avoiding inefficiencies like deadweight loss. Using SROI metrics, the treasury could optimise the apprenticeship levy and other funding initiatives, transforming apprenticeship schemes into engines of equitable, sustainable growth.

Shifting to an SROI-focused approach would allow policymakers to align funding decisions with initiatives that support levelling up, net-zero goals and regional equality, ensuring maximum returns for both the workforce and society.

This would encourage both public and private sectors to prioritise initiatives that contribute to levelling up, achieving net-zero targets and reducing inequalities across regions, genders and ethnicities.

Call to action

With the recent budget and an upcoming multi-year spending review in the spring, there is a timely opportunity for the treasury to adopt SROI metrics more broadly. This shift could ensure a more balanced approach to public funding, recognising the social dividends generated by skills programmes and positioning apprenticeships as critical investments for social cohesion and regional development.

SROI has already gained traction through the Public Services (Social Value) Act 2012, which requires public bodies to consider social value in service contracts. Extending this principle to skills funding would help maximise the social impact of public investments.

Embedding SROI into education and skills policies could build a future-ready workforce and provide strategic direction for reversing declines in private training investment, supporting growth and resilience across the UK.

Reconnecting learners with English as a language art

Benjamin Franklin thought there were two certainties in this world: death and taxes. GCSE English language resit teachers can add a third. In every class, we know we will have at least one student who will beg not to have to do poetry.

All of our learners in these classes have achieved a grade 3 or lower in GCSE English, so it’s perhaps unsurprising that the idea of studying literature again is a challenge to them. This is especially true if they have a learning difference like dyslexia.

But in my experience, poetry is one of the keys that can not only unlock a greater appreciation of English and language arts, but also help students become more effective communicators. In turn, this leads to greater academic success far beyond the English syllabus.

Sadly, having worked in FE for four years, I see very little promotion of English and language arts. Courses are generally vocational and the GCSE English language course has to be covered in under a year, instead of twice that when studied at secondary school.

For all that, some of my students tell me they are writing – poetry, short stories, song lyrics, and even comic strips. Some do it for personal pleasure, and many do it because it gives a voice to the anxieties which so many of us, students and staff, find hard to express in other ways. 

Yet their talents and explorations in language are going unnoticed because they are not being expressed within the context of a more creative English class. Furthermore, opportunities for public expression and celebration are few and far between.

I left school with a distinct dislike of formal education. It was poetry and the performing arts that led me back to college and eventually even to becoming a teacher.

So this year at Reading College, I am determined that we are going to increase awareness of English as a language art.  For the first time, we are going to enter the national Poetry by Heart competition, where participants choose and learn a poem by heart and perform it out loud.

Those who have been put off poetry will see it in a new way

Participation is free and the Poetry By Heart website is also a superb resource for teaching poetry. It features hundreds of poems, grouped by theme and interest level, including all the poems studied for GCSE. In addition, there’s lots of support and guidance for teachers to help students memorise their poems.

And it’s fun. They encourage you to run internal competitions to celebrate the best performances, and there’s even a staff category.

I got involved last year and was invited to perform a favourite Shakespeare sonnet at the launch event, live on stage at the Sam Wanamaker Playhouse, Shakespeare’s Globe. The experience was unforgettable and I will certainly be encouraging my colleagues to give it a go.

Taking part in the competition is additionally exciting for us as the college has students from many cultures with their own poetic traditions. The competition will enable them to share these and means we can open them up for all our students to experience.

I’m pleased too that there is also the opportunity for students to perform their own poetry within a special ‘freestyle’ category that values creativity, diversity and inclusivity.

The most important thing is, however, that poetry will be learned, read and above all celebrated and respected.  Those who have been put off poetry will see and hear it in a way they haven’t before, and others will have the opportunity to find their voices, taking their ability to express themselves to a new level.

When our learners see English again as a language art – not just an exam skill – I’m betting they will fall in love with the subject again, just like I did!

Going back to Benjamin Franklin, he implored us all to “write something worth reading, or do something worth writing”. Here’s to our learners doing both!

To find out more about free participation in Poetry by Heart, click here

Government must unleash ITPs to beat the population bulge

Since the general election, debates on the future of post-16 education have focused on the growth and skills levy, the review of level 3 qualifications and the creation of Skills England.

But there’s another issue, big on the horizon: a population bulge in those reaching the age of 16.

The number of 16- and 17-year-olds in England will grow by 110,000 by 2028. Without action, AELP’s Local and Regional Partner Networks are already warning us that more young people will head into a clogged and under-funded system at a time when we already have 900,000 NEETs.

A negative experience at a young and formative age has a profoundly damaging impact that is hard to fix. Making sure there is provision for this cohort now will pay dividends for the next 60 years.

The chancellor allocated £300 million for ‘further education’ in the budget. We understand this funding may well be for 16-19 provision, so it appears government is aware of the problem. 

But how this money is spent is as important as how much, particularly as this is a temporary five-year bulge, not a permanent increase.

The risk is that building new premises to serve the population bulge will create expensive white elephants (once that bulge recedes) while diverting resources from delivery for tens of thousands of young people.

But there is another way. A model is emerging that proves that you do not need to build additional physical capacity to deliver additional quality provision.

Independent training providers such as SCL, Access, Learning Curve and Juniper Training are stepping into these rapidly emerging gaps in provision by utilising existing space and responding rapidly to local need.

As they don’t need to build, they can do this quickly and without access to capital funding. Scarce funding goes on learning and engagement rather than bricks and mortar.

It appears government is aware of the problem

For example, in Leeds, an extra £3.5 million has been allocated to support specific, targeted hot-spots where colleges have run out of room and where more flexible provision is needed. Juniper Training, one of the ITPs helping to fill the gap, took just two months to go from initial exploration with Leeds City Council to starting their first cohort.

“We are not tied to a campus-first way of thinking,” explains Juniper MD, Lesley Holland. “We are used to taking on and managing commercial leases of premises from which we deliver.”

Stuart Allen Chief Education Officer of SCL adds: “We think differently and integrate ‘hooks’ in our programmes such as sport, creative arts and other enrichment activities that enthuse and engage young people where traditional ways of learning sometimes do not work.”  

Colleges point out that there is a financial logic that pushes them to build provision around a settled status of full classrooms, on-campus and for learners on longer study programmes where there is a good chance of completion.

ITPs, on the other hand, with access to immediate working capital, expertise in commercial property and rapid decision-making cycles (together with the longer-term incentives to develop and prove new models of provision) are better-equipped to respond to the bulge.

In addition, this flexibility means they can address the needs of the most disadvantaged students on shorter, more intensive programmes.

There is a quadruple win here: the Department for Education avoids funding capital projects that take time to come to fruition and could quickly become obsolete; tens of thousands of 16-19 year olds, often the most vulnerable, get the provision they need; local business premises are used; and colleges can focus on their existing provision.

And when the bulge is over, it is ITPs who will be responsible for scaling back their provision, not government.

To make this happen, government needs to make some rapid administrative changes to the rules, especially around the way growth caps are applied. At the moment, that restriction alone is directly stopping thousands of disadvantaged learners getting vital support – ironic given the incoming youth guarantee.

The 16-19 bulge is a looming, major challenge. But we have a proven way of meeting it, as the Leeds example shows. We now need government to remove the barriers that prevent ITPs from spinning up the provision the country so desperately needs. 

AELP and our members stand ready to help make this happen.

What would-be assessment reformers can learn from Just Dance

Like many trainee teachers in the latter 2000s, I was forced to watch Sir Ken Robinson’s ‘Do Schools Kill Creativity?’ clickbait TED Talk.

“Of course schools kill creativity,” we are expected to chorus with gleeful anti-intellectualism. “Aren’t maths and English dreadful?”

He tells the story of choreographer Gillian Lynne, who in the 1930s was taken to a doctor due to fidgeting at school. The doctor observed this little girl dancing to the radio and declared: “She is a dancer! Take her to a dance school.”

When I hear that now, I am horrified. The doctor figure, and Sir Ken, and all of us who credulously bought into that story, are complicit in limiting children to one thing: the thing they can already do.

There are clear echoes in attitudes that disadvantaged students aren’t worth supporting with GCSE resits. As though a sixteen year old’s fate is sealed.

In my youth, nobody ever declared that I was a dancer. Teachers looked at the bespectacled asthmatic with the weird hair, reading about dragons and said, “He is a nerd!”

Uncoordinated, clumsy and weak, it wasn’t worth teaching me to be better at PE. But all these years later I am making time for dance almost every day, and I’m very slowly improving.

How that happened is completely applicable to those we might otherwise write off from ever enjoying or being good at English and maths.

When I traded the 20,000 steps per day of teaching for the vegetative existence of a civil servant, I invested in Just Dance – a video game that tracks your movement, awarding points for matching the routine on screen.

Even though I was very, very bad at it, it was still fun. I kept at it.

GCSE resits can learn a lot from Just Dance.

When I first loaded it up, Just Dance didn’t force me into an initial assessment and then limit me to ‘Baby Shark’, it encouraged ambition.

The game is a master of modelling and aspiration. As you play, you mimic the professional dancer on screen, and imagine that your skill, rhythm and athleticism are a mirror of what you’re seeing, which they almost certainly are not.

It is exactly how students should see resit teachers: exemplifying confident, joyful expertise in English and maths and inspiring them to follow.

The game is a master of modelling and aspiration

Just Dance uses praise at every opportunity and refines marginal gains into an addictive motivator. Every day I find myself chasing new high scores on tracks I’ve been dancing to for years. There’s always something to celebrate.

We need to capture that unrelenting focus on praise and progress in resits classrooms. It might not be practical to set off actual pyrotechnics every time a student stretches themselves, but authentic praise from an enthusiastic teacher will feel like fireworks to them.

Over time in Just Dance, you progress through something approximating attainment grades for each song, from ‘one star’ through to ‘Megastar’. I didn’t see the glittery pink of Megastar in my whole first year with the game. Now I’m disappointed when I don’t see it.

Which isn’t to say it’s suddenly easy. I’ve still only scored a grade 3 (stars) on C’mon by Ke$ha, despite probably sweating more than the pro in the panda suit on screen. What’s worse is that in my absolute favourite, I wanna dance with somebody, I fail one of the special moves every single time.

Let me admit something else. At a work social not long ago, that song came on. I did not leap onto the empty dance floor. This is not a movie.

We don’t need to expect that of resits either. Getting a student to boogie their way from a grade U to a 1 and have a good time is sometimes what resits is. So too is the student two-stepping their way from a low 3 to a high 3 with an attitude that says “I’ll get ’em next time”.

So I’ll keep returning to Whitney Houston, day after day. I don’t see it as “torture”, or even as “demoralising”.

It keeps me engaged, it builds my confidence, and I’ll keep making progress until I smash it. That is what resits should be.

Labour must release capital funding from its political stranglehold

Like many colleges, one of our strategic objectives is to provide a physical and digital estate that are fit for learning now and into the future. Sadly, the sector is being stifled in achieving this necessary goal, not least by the ongoing ban on borrowing.

Of course, excellent learning can happen anywhere. But overcrowding, disrepair, archaic facilities and resources that don’t meet the demands of a modern curriculum hamper learning. They also lead to disrespect, a generalised feeling of a lack of care and erode reputation.

Halesowen College is coming to the end of an ambitious estates strategy. We’ve opened a new campus (funded wholly from reserves), reconfigured several aspects of our existing estate to accommodate T levels and a re-vamped curriculum offer, and we are in the process of refurbishing another campus with some financial support from the Transformation Fund.

Building inflation has made the budgets for these projects challenging, and reserves are finite. Meanwhile, the demographic trend continues to see increases in the number of 16-year-olds seeking college places.

Like us, many colleges are full and operate waiting lists for places on certain courses. They need to build additional facilities or refurbish existing estates.

The £950 million for capital announced in the budget is welcome, but the truth is that much of this will be directed to projects that are already in progress. In short, it will not meet the sector’s needs.

But every other path to financing the costs of capital is blocked by insurmountable barriers. Those colleges who had amassed reserves have long since sold off the family silver, there are currently no options for capital funding, and getting a loan is ultras vires (beyond colleges’ legal power).

This makes absolutely no sense. Borrowing can be costly, but skillfully tendered and negotiated commercial loans can represent good value. When the sector was previously in the public sector, commercial borrowing was allowable and colleges were accountable for value for money.

Every path is blocked by insurmountable barriers

There is also the option of government loans, so this all-encompassing total ban on borrowing seems short-sighted. It is all the more difficult to explain when resources are so scarce.

Absent this solution, it is surely timely to look to the private sector for affordable arrangements. If the reasoning for the ban on commercial borrowing is money leaking from the public purse, then this is not going to help. In fact, it could have the opposite effect.

Colleges may not have the millions required to purchase new premises, but there is a genuine commitment and expectation that we address the growing NEET issue and reduce the 16-24 claimant count.

Delivering this strategy will only further augment the need for additional space, even if there is an effective hybrid style of delivery.

Faced with an increasing difficult conundrum in balancing necessary estates development against acceptable levels of liquidity and earnings before interest, taxes, depreciation, and amortization (EBITDA) , rental will become an increasingly inescapable option.

A college may not be able to access say £5 million for a capital project, but may be able to finance £250,000 per annum in rent. However, the most basic of calculations will show that the costs of a loan are much more modest than a rental arrangement.

The latter inevitably places pressure on revenue budgets, feathers the private sector rental nest with public money, and leaves a college with no corresponding asset on its balance sheet.

No college wishes to move into ‘Requires Improvement’ for financial health, but neither do they wish to compromise education. The treasury’s ‘Managing Public Money’ has much to be applauded for. However, the stranglehold on capital flies in the face of the Nolan Principles.

Colleges cannot exercise excellent leadership without resources. Lack of capital investment will unquestionably hamper our sector from developing the skills and talents needed to drive growth and opportunity.

Our ambition, vision and success should not be choked by inability to realise the capital plans that underpin our strategic objectives. Unlocking borrowing would be a lifeline for many and keep more of our public money serving the public interest.

Skills England ‘doomed to fail’, says former education secretary

Skills England is “doomed to fail” if the government presses ahead with plans to establish it as an in-house agency without the independence of its predecessor, a former education secretary has claimed.

Damian Hinds, who headed up the Department for Education from 2018 to 2019, urged the government to amend legislation to guarantee the new skills “quango” independence from ministers.

Speaking in a Westminster Hall debate on T Levels and apprenticeships this afternoon, Hinds slammed Labour’s plans to introduce Skills England as an executive agency within the Department for Education, arguing its close proximity to ministers risks “eroding” public confidence in technical education standards. 

It comes as members of the House of Lords prepare to gather for the first committee stage debate of the Institute for Apprenticeships and Technical Education (Transfer of Functions, etc) Bill tomorrow afternoon. The bill abolishes IfATE and hands its standards-setting powers to the education secretary. 

Hinds warned: “There is no guarantee of business continuing to be involved in setting those standards. I’m afraid public and business confidence is set to be eroded … Everybody knows that if you are in government and you are trying to increase the numbers of people doing anything in education, the easiest way is to erode those standards to get more people through.” 

Put it in the Treasury

Hinds also accused the government of undermining its own claims that Skills England will be a cross-government body with influence over other government departments.

“The instinct, I know, in difficult circumstances is to break glass and reach for a new quango. But Skills England isn’t even a quango, it is nada. It is not quasi-autonomous, it is a non-accountable department agency.

“If the government was really serious about creating something new to join together the Home Office, the business department, the DfE and everybody else, you’d put it in the Treasury, or you might put it in the Cabinet Office, but you wouldn’t just make it part of the DfE management structure.”

Defending the government, education minister Janet Daby repeated skills minister Jacqui Smith’s message to this month’s AELP conference: “I have heard worries that Skills England will not have the independence or authority that it needs, and I would like to dispel those concerns today. Skills England will have an independent board which will provide leadership and direction as well as scrutiny to ensure that it is operating effectively and within the agreed framework.”

However, the job description for Skills England’s chief executive, which has a salary of £130,000, doesn’t mention the board and states that the post reports to a more senior DfE civil servant.

Lords shadow education minister Baroness Barran has filed amendments to the bill that would require the Skills England chief executive to report to its board and establish the new organisation as an arms-length with IfATE’s powers.

From IfATE to Skills England via DfE: What you need to know

Smith previously addressed concerns that employers would be left out of setting technical education and apprenticeship standards. She told the House of Lords second reading of the bill that employer involvement in designing standards and assessment plans will “remain the default position”.

The minister explained that the use of the secretary of state’s powers in the bill to approve standards themselves “will allow greater flexibility in scenarios where preparation by a group can be unnecessary or restrictive”.

Smith also committed to publishing any government-led changes to standards “in draft for stakeholder comment before they are finalised”.

However, the opposition is likely to continue to push for commitments in law.

Hinds said today: “So now the secretary of stater is going to have responsibility for standards for T Levels, can you imagine if that was for A-levels? If it’s not alright for A-levels, why should it be alright for T Levels?”

“I’d ask the minister to build into the design of Skills England proper, full independence from her department and a proper, full guiding role for business. And not just for ministers to say it, but for them to write that into the legislation.”