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Hampshire principals, 23 June 2017 Policy update and discussion

This article provides an overview of the 2017 general election and its impact on government, policy, and funding in education. It discusses the return to two-party politics, higher turnout, Labour revival, and key budget components. The article also highlights the role of AoC and colleges in influencing policy decisions.

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Hampshire principals, 23 June 2017 Policy update and discussion

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  1. Julian Gravatt, AoC deputy chief executive Hampshire principals, 23 June 2017Policy update and discussion

  2. The 2017 general election The vote • Return to two party politics (Con 42% of vote; Labour 40%) • Higher turnout (69% - it was 61% in 2005) • Labour revival (vote up from 30% in 2015 to 40% in 2017) • A new map (Labour Canterbury; Conservative Mansfield) • Con 318, Lab 262, SNP 35, DUP 10, LD 12; Other 6; SF 7 • 321 votes needed to win if all MPs vote

  3. The 2017 general election Government • Teresa May still PM • Majority of cabinet return to same roles (Greening, Clark and Hammond back). Some junior ministerial changes (Milton replaces Halfon) • Confidence and supply deal in negotiation with the DUP • Queen’s speech for next 2 years with fewer bills • Brexit negotiations overshadow policy agenda

  4. The 2017 general election A minority government • PM required to consult cabinet, 1992 committee & MPs • Legislation depends on party deals and discipline • The budget process becomes more important • Grammar schools dropped but school reform continues • School funding reforms paused • Industrial strategy & tech ed reforms go ahead

  5. The 2017 general election AoC, colleges and the political process • Our manifesto had 6 themes. All still relevant • UK needs to be more self sufficient in skills, to improve productivityand to fund post 16 education properly • We are encouraging ministers to take forward some promises, for the FE/HE funding review • Some immediate issues: English and maths condition of funding, 16-18 retention, apprenticeship allocations, IoTs • Individual MPs may be important in helping colleges

  6. AoC Policy Groups Apprenticeships

  7. Public spending and funding

  8. The pre-election public spending plan Figures as % of GDP Sources, assumptions and issues • Figures from the budget in March 2017 • £3 bil saving by 2019 (“6% of non-protected budgets”) • Everything depends on GDP. This depends on world events, Brexit, financial stability, migration, productivity etc 2016-17 FY Spending 39.3% Receipts 36.7% Net borrowing 2.7% 2021-22 FY GDP 10% up Spending 38.0% Receipts 37.3% Net borrowing 0.7%

  9. Public spending overall plan From the queen’s speech statement “We will reflect on the message voters sent at the General Election – while always remembering that we have to balance the books and eliminate the deficit we inherited following the financial crisis. This is to ensure that future generations doe not pay where we fail to live within our means” “We have committed to budget balance – matching what the government spends with what we raise in taxation – by the middle of the next decade” Translation: Room for lower tax or extra spending in next budget

  10. The DFE budget, key components School grants (£32 bil/yr EFA to Academies direct in 2019) 16-18 grants (£6 bil via EFA) High Needs (£5 bil/yr via councils) HE (and FE) Student Loans (£20 bil/yr by 2020) Levy funded And SME co-funded Apprenticeships (£2 bil/yr by 2018) High cost HE (£1 bil via HEFCE) Adult Education (£1.5 bil, via SFA & Mayors)

  11. College income lines and % share 16-18 education £3,200 mil 31% 55% 42% FE 13% SFC 4% High Needs £120 mil 2% 50% 65% HE Fees (Loans) £400 mil Levy and SME Apprenticeships £500 mil Fees & contracts £300 mil FE Fees (Loans) £110 mil 30% Other income £500 mil ESF £50 mil Adult Education £900 mil HE teaching £100 mil 5%

  12. 16-18 education funding 16-18 education £3,300 mil Of the total £6 bil budget 42% FE 13% SFC 40% Schools Well established national student numbers based formula • Total 16-18 down 10% since 2010 and still falling • Fall in student numbers in 2016-17: FE -3.2%, Schools -3.6% • Some short-term issues (English/Maths, retention factor) • Longer-term reform (£500 million/year for T-levels by 2021-22

  13. 2017/18 Allocations: All institutions Change in Student Numbers and Change in Funding

  14. Adult education Adult education £880 mil Of the total £1.3 bil budget 65% FE 20% community learning 15% other (incl Unis, private provider) National historic allocations, formula to price students • Budget cut every year for ten years 2005 to 2015, now fixed • Restricted eligibility rules because of apprenticeships & loans • College underperformance in 2015-16 and worse in 2016-17 • Skills devolution due in 2018-19 but may now be delayed • Industrial strategy in autumn 2018 may clarify devolution plan

  15. Skills devolution Devolution of adult education due in 2018 West Midlands, Greater Manchester, Liverpool City Region, West of England Tees Valley, (Greater) Cambridgeshire Devolution of adult education in 2019 London

  16. Apprenticeships Apprenticeships £500 mil Of the total £1.6 bil budget 30% FE 70% private providers • Major reform underway in 2017 • £2.6 bil levy supporting £2.0 bil English spending in 2017-18 • Carry-in allocations worth £1.0 bil due to be confirmed in July • Levy payers have 24 months to spend 110% of what they pay • Squeeze on allocations for non levied apprentices

  17. Apprenticeships Everything is changing • The levy • Spending decisions devolved to 20,000 employers • New system, new formula, new rates, new standards • New register, temporary (8 month) SME allocation

  18. Higher education fee loans HE & FE loans £400 mil £12.4 bil student outlays in 2016-17 £400 mil HE fees to FE (c4%) Well established student loan with changing regulation • HE full-time fee cap £9,000 (2017-18), rises to £9,250 (2018-19) • HE entry rate age 18/19 at record high (but still less than 45%) • Reduction in part-time HE numbers (including in colleges) • Changing set of rules (TEF, OFS etc) • Institutions have to plan 18-24 months in advance

  19. Flat cash funding No inflation in post -16 education • 16 to 18 rates fixed for 4 years (eg £4,000 rate) • Adult education budget fixed at £1.5 bil/year • Apprenticeship rates based on old rates • No uprating for 5+ years With some exceptions • RPI indexing on HE fees • HEFCE grants up c1%

  20. Competition for students 318 colleges operate in a world with • 3,600 EFA funded institutions, 1 million 16-18 year olds • 200 new sixth forms, free schools, UTCs since 2010 • 1,000+ training providers • 131 Universities

  21. Area reviews

  22. Area reviews What happened? • 37 reviews, 332 colleges visited, 182 steering group meetings, 365 recommendations so far With what result? • 19 mergers since start of 2016; 29 scheduled • 21 SFC academy conversions; some GFE/SFC mergers • Lots of standalones; some large college groups • No action on school sixth forms

  23. Intervention now area reviews are over The work continues • 1 FE commissioner, team of 18 deputies and advisors • 31 current interventions • Fewer Ofsted inadequate colleges (14 FE, 2 SFC right now) • Several college financial failures (where cash runs out) • Continuing referrals from ESFA to commissioner • 8 commissioner-led structure/prospect appraisals leading to fresh start or merger

  24. A cocktail of financial challenges Rising staff costs College credit crunch Competition for students Flat cash funding Poorly controlled pension system Funding reform and uncertainty

  25. Quality and accountability

  26. Post-16 Performance Tables

  27. E&T 16-18 Achievement Rates 2015/16 Provider Type

  28. Introduction

  29. GCSE English and Maths A*- C Achievement

  30. Headline Summary - Ofsted

  31. A system of multiple regulators Special Administrator (2018) FE Commissioner ESFA Office for Students (2018) Ofsted College LGPS Fund External auditor The College’s bank

  32. College strategies

  33. College strategies Some starting points • Severe rationing of government funding • Emphasis on skills (apprenticeships, T-levels) • Squeeze on middle class professional jobs (incl teaching) • Technology continues to offer hope of change • Tough intervention regime (college insolvency from 2018) • DFE wants colleges to succeed

  34. What other colleges are doing Variety of responses • Merger (30% colleges). More to come • A few are expanding 16-18s but most face declines in 2016 • Income diversification (HE, apprentices, international) • Relatively few new capital projects • Emphasis on maintaining Ofsted rating • Cutbacks continue in significant number of colleges • Agree your plan, deliver it, be flexible as things change

  35. Running a successful college Class size Income and cashflow Student taught hours Positive completion Staff costs per teaching hour Student satisfaction Staff and student engagement Costs of running the college

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