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EDEXCEL FUNDING NETWORK

EDEXCEL FUNDING NETWORK. Adult Funding – Policy Update Mark Corney, MC Consultancy. 25th JULY 2006. INTRODUCTION. Current and Future Policy Current Adult Learning & Skills Policy Policy Context New Developments Things to Look Out For. 25th JULY 2006. CURRENT AND FUTURE POLICY.

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EDEXCEL FUNDING NETWORK

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  1. EDEXCEL FUNDING NETWORK Adult Funding – Policy Update Mark Corney, MC Consultancy 25th JULY 2006

  2. INTRODUCTION • Current and Future Policy • Current Adult Learning & Skills Policy • Policy Context • New Developments • Things to Look Out For 25th JULY 2006

  3. CURRENT AND FUTURE POLICY • current policies including the FE white paper but excluding legislative change • new policies before the next general election including FE white paper legislation welfare to work bill Communities and Local Government white paper Queen’s Speech – Learning & Skills Bill Pre-Budget Report 2006 – Leitch Review Budget 2007 Comprehensive Spending Review 2007 25th JULY 2006

  4. CURRENT ADULT LEARNING & SKILLS POLICY • 19+ Provision • 19-25 Provision • 25+ Adult Learning & Skills 25th JULY 2006

  5. Levels of Revenue Spending – State: 16-19 (England) 2006/07m 2007/08m Tuition/Training School Sixth Forms 1,871 1,910 16-19 FE 2,863 3,026 16-18 WBL 877 879 Total £5,611 £5,815 Financial Support Child Benefit 1,100? 1,100? Child Tax Credit ? ? EMAs 566 597 Learner Support etc 76 79 Total £1,742 £1,776 TOTAL £7,353m £7,591m MC Consultancy

  6. Revenue Spending - State Higher Education (England) 2006/07m 2007/08m Higher Education Tuition HEFCE & TTA 4,817 5,039 Fee Loan (cash) 423 1,050 Total 5,240 6,089 Learner Support ICLs (cash) 2,867 3,000 Grants 937 1,031 Total 3,804 4,031 Total £9,044 £10,120 MC Consultancy

  7. Levels of Revenue Spending: State - Adult LSC Provision Tuition/Training 2005/06 2006/07 2007/08 19+ FE 2,009 1,928 1,894 (includes 19-25) 19+ WBL 269 202 229 PCDL 210 215 215 NETP 161 269 448 (excludes skills brokers) UfI 201 176 175 Prisons 98? 125? Disabilities 138 157 181 ULF 12 12 12 WtW Adult Basic Skills/ESOL 23? 23? Total 3,000 3,080 3,302 Learner Support Adults 127 133 133 Wage Compensation 19 19 Total 127 152 152 TOTAL £3,127 £3,232 £3,454 MC Consultancy

  8. Levels of Revenue Spending: Other Public Sources European Social Fund up to £1bn New Deals and Pathways to Work no estimate £30m FTET Option in NDYP Regeneration New Deal for Communities £20m

  9. CURRENT ADULT LEARNING & SKILLS POLICY By Age 25 up to first Level 3 - Individuals Free Provision for: Foundation Tier Learning Entitlement First Full L2 Entitlement - 19+ FE/Train to Gain/19-24 WBL First Full Level 3 - 19+ FE/Train to Gain/19-24 WBL Financial support to adults takes the form of grants • Employers Free Provision for: adult basic skills & first full L2 via 19+ FE/Train to Gain but not 19-24 Apprenticeships Fees for: first full Level 3 Apprenticeships and NVQ3 via Train to Gain Employers pay wages for sponsored 19-25 FE & employed 19-25 WBL learners but paid wage compensation under Train to Gain at first L2 if in small firms 25th JULY 2006

  10. CURRENT ADULT LEARNING & SKILLS POLICY By Age 25 up to first Level 3 • 19-24 Spending up to L3 Less than £0.9bn in 2007/08 19-24 WBL £229m (07/08) 19-24 FE £511m? (04/05) 19-24 Train to Gain ? • 19-24 Spending on L3 Very limited in 2004/05 19-24 FE ? 19-24 WBL £140m? 25th JULY 2006

  11. CURRENT ADULT LEARNING & SKILLS POLICY 25+ Adult Learning & Skills - Individuals Free Provision for: First Full L2 Entitlement - 25+ FE & Train to Gain 50% Fees by 2010: Above first full L2 including L3 Limited Financial Support • Employers Free Provision for adult basic skills & first full L2 via 25+ FE & Train to Gain 50% Fees for first full L3 wage compensation in certain circumstances at first full L2 via Train to Gain 25th JULY 2006

  12. CURRENT ADULT LEARNING & SKILLS POLICY 25+ Adult Learning & Skills • 25+ up to Level 3 estimated to be £2.4bn in 2007/08 very limited funding on 25+ L3 provision: 19+ FE 2004/05 £418m 25th JULY 2006

  13. POLICY CONTEXT • Public Spending Constraints - 42% of GDP and rising • Demographic Change - falling numbers of 0-24 year olds between 2011 and 2021 - ageing society from now • Demographic Dividend for State Education & Training - assume funding is retained in education and training sector 25th JULY 2006

  14. POLICY CONTEXT Priorities for the Demographic Dividend - Edu-Care - 14-19 Reform – including closing the 16-18 funding gap - 19-25 Foundation Tier Entitlement - 19-25 First Full L3 Entitlement [46% of 20-24 year olds not have L3+] - 19-25 ALGs for first L3 - Closing Gap between State & Private Schools [Budget Speech 2006] 25th JULY 2006

  15. POLICY CONTEXT • Priorities for the Demographic Dividend - Savings in tuition and support costs from 2011 to 2021 0-24 up to first Level 3 18-20 in HE which is the largest cohort of 18-30 year olds But unlikely to be any savings in HE: - 42% baseline for 18-30 - fee loans keep it around 42% - might miss 2010 target - savings used to get from 42% to 50% 25th JULY 2006

  16. POLICY CONTEXT • Pinch Points Limited public resources for: - 17+ HE above 50% target - 25+ Adult skills (+0.5m 25/64 by 2021) above first full Level 2 Co-Funding in HE and 25+ Adult Skills - New Fee Loans from 2006 - FE White Paper Long-Term Direction - Leitch Review - 2009 HE Funding Review 25th JULY 2006

  17. POLICY CONTEXT • Pinch Points Higher Education Funding 2007/08 HEFCE & TTA 5,039 Fee Loans (cash) 1,050 Maintenance Loans (cash) 3,000 Grants 1,031 Total £10,120m 25+ Adult Skills 2007/08 LSC £2.4bn ESF? JCP? Total £2.4bn+ 25th JULY 2006

  18. POLICY CONTEXT • Co-Funding Constraints - National Pension Saving Scheme (2012) 4% from employees with an opt-out 3% from employers without an opt-out 1% from the taxpayer - 900,000 private sector firms which are mainly small firms - £2.6bn from employers and £2.6bn+ from employees 25th JULY 2006

  19. POLICY CONTEXT • Statutory Intervention Constraints - Funding National Pension Savings Scheme – Soft Employee Compulsion Hard Employer Compulsion - Regulation NPSS collection systems work-life balance 25th JULY 2006

  20. POLICY CONTEXT • Institutional Landscape It’s messy even in England…………. 25th JULY 2006

  21. CONTEXT • Institutional Constraints It’s a mess…………. NORTH EAST REGION LSC – MATFEN HALL – 10/11 JULY 2006

  22. NEW DEVELOPMENTS • Learning after the 14-19 Phase - Higher Education Gordon Brown – Centre for European Reform Alan Johnson – IoD Speech – 14th June 2006 “If we want to massively expand universities – and we do – then people must make a greater contribution. This is a sensitive issue but we must press on in the direction we have set.” 25th JULY 2006

  23. NEW DEVELOPMENTS • Learning after the 14-19 Phase - Financial Incentives Alan Johnson – IoD Speech – 14th June 2006 “On one side, we should look at whether there are new incentives we can put in place to improve business and personal investment.” 25th JULY 2006

  24. NEW DEVELOPMENTS • Learning after the 14-19 Phase - Statutory Intervention “On the other, we should look at those sectors which consistently fail to address long term training needs and consider radical action to help them raise their game. This must include examining options such as imposing training levies licences to practice, if necessary, in a particular sector.” 25th JULY 2006

  25. CONTEXT • Institutional Constraints It’s messy even in England…………. NORTH EAST REGION LSC – MATFEN HALL – 10/11 JULY 2006

  26. NEW DEVELOPMENTS • Learning after the 14-19 Phase - London Mayor 19+ Adult Skills new London Skills and Employment Board chaired London Mayor Board to link training and employment Board to work within the national skills strategy framework Statutory Annual Adult Skills Plan 19+ Adult LSC Funding in London separately identified Statutory Adult Skills Plan shape the way the LSC allocates funds Existing LSC Regional Board will remain for 14-19 25th JULY 2006

  27. THINGS TO LOOK OUT FOR 1 LSC Powers over Colleges - managing failing colleges - replacing college principals • Managing Contestability - colleges as 16-19 academies - private providers contesting the 19+ FE budget - skills brokers • Internal Reform of the LSC - formal abolition of the 47 local councils? 25th JULY 2006

  28. THINGS TO LOOK OUT FOR 4 25+ Adult Skills - this is the neglected child of the publicly funded system - compare 25+ Adult Skills with 17+ HE - priority provision for 16-19/25 funding - re-engineering 25+ funding to first Level 2 entitlement - re-engineering 25+ FE funding to first Level 3 - balance between 25+ FE and Train to Gain - balance between: customer demand - employers and adults aggregate demand - employers and areas employer demand - SSAs and RSPs - giving SSAs more bite – statutory SSAs? 25th JULY 2006

  29. THINGS TO LOOK OUT FOR 5 City-Regions, Fair Cities and Local Authorities - RDAs - Statutory Regional Skills Partnerships - City Mayors and Local Government Local Area Agreements – Block 4 pooling of LSC, JCP, Local Authority and RDA monies where is this leading… Communities and Local Government white paper 6 Welfare to Work - LSC/JCP interface in England - JCP programme money passed to LSC and vice-versa - where is this leading…… - Leitch Review 25th JULY 2006

  30. THINGS TO LOOK OUT FOR 7 New Financial Incentives - Leitch Review - CSR 2007 Summary - Budget 2007 and CSR 2007 8 Statutory Intervention - statutory training levies and statutory licenses to practice 9 Learning and Skills Bill (2007)? - LSC powers over colleges? - legal definition of colleges and private providers? - abolition of the 47 local councils? - statutory RSPs & statutory sector skills agreements? - extension of income contingent loans outside HE? - powers and process to impose statutory framework? 25th JULY 2006

  31. THINGS TO LOOK OUT FOR 10 Longer Term Issues and Options - local authorities as the single commissioners of 0-25 children’s and learning services? - regionally merged 25+ LSC/Jobcentre Plus/RDA? - 2009 HE Funding Review? - balance between Level 3 and HE is meeting our higher skill needs? - 25+ adult skills and the ageing society? - balance between publicly and privately funded 25+ adult skills, and voluntary and statutory funding? - strengthening the system of business links and sector skills councils in England? 25th JULY 2006

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