Patrycja Lipi ń ska R esearch and Policy Analysis

1. Financing Adult LearningToday and TomorrowIt is Always a Good Time to Learn: Final Conference on Implementing the Action Plan on Adult Learning Budapest 7-9 March 2011 Patrycja LipińskaResearch and Policy Analysis 1

2. Pre-crisis trends • limited public resources • lower company expenditure on CVT courses • cost (and time!) prevents adults from participating in learning • more emphasis on investment in adult learning • more emphasis on efficient use of resources (mergers, partnerships, performance-based funding) • national resources being complemented by EU funds (ESF, LLP, ERDF, EIB loans) • developing/implementing cost-sharing policies to enhance investment and participation in learning Patrycja Lipińska 2

3. Financing instruments training funds • levy-based, oblige companies to invest a certain % of payroll (0.1-2.5%) in training; employees may contribute • national, sectoral - involvement of social partners • levy-grant: BE, BG, CY, DE, DK, ES, GR, HU, IT, IS, NL, PL, RO, UK; levy-exemption, ‘train or pay’: FR tax incentives • tax allowance, tax credit – most common • allow deduction of E&T expenses from personal/ corporate tax • for individuals and companies • AT, BG, CZ, DE, EE, FI, FR, IR, LT, LV, LU, NL, PT, RO, SK, SI Patrycja Lipińska 3

4. Financing instruments loans • provided by state, banks, building societies • mortgage-type: predominant, income-contingent: limited • address mainly individuals • amounts available: EUR 40-1100/month • available mainly for HE, less popular for adult learning • in nearly all EU MS(but few developed loan systems) saving schemes • money set aside regularly over a period of time • individual savings may be matched by contributions from government, employer or both (AT) Patrycja Lipińska 4

5. Financing instruments vouchers/ILA • direct, fixed government payment with possible (one-off) co-payment by beneficiary • amounts awarded - usually up to EUR 500 (higher in e.g. Ireland, Italy) • beneficiaries themselves choose the courses • schemes are universal or targeted at specific groups • AT, BE, DE, ES (Basque Country), IT, IR, NL, UK (England, Scotland, Wales); many pilot projects Patrycja Lipińska 5

6. Financing instruments educational/training leave • grants temporary leave from work for learning • unpaid and/or paid • in all 27 EU MS • individual training right (FR: saving time - accumulating hours which can be spent on learning) payback clauses • setting conditions for repayment of training expenses to employer (if employee quits) • for individuals and future employers • AT, BE, BG, CZ, EE, FR, HU, LT, LU, PL, PT, RO, SI, SK Patrycja Lipińska 6

7. strengths mobilise substantial financial resources improve quantity and quality of training supply strengthen social dialogue increase company awareness of importance of training; strengthen commitment to training may promote more equitable access to training centres of expertise on LM and training weaknesses levy seen as additional tax reducing competitiveness not all enterprises benefit (esp. SMEs) heavy administrative burden deadweight loss (esp. large enterprises) employers’ perspective on training needs takes precedence over employees’ Training funds Patrycja Lipińska 7

8. strengths evidence of positive net effect on participation in learning (e.g. NL, tax incentives for individuals) low bureaucracy/ administrative cost promote specific types of E&T/courses/groups (esp. tax incentives for individuals) weaknesses low take-up; complexity of some systems as disincentive no incentive for those with no income favour in general high income earners and large enterprises deadweight loss and substitution effect (e.g. NL, tax incentives for companies) disconnect between tax policies and E&T policies Tax incentives Patrycja Lipińska 8

9. strengths suitable for financing expensive courses/HE loans: can mobilise large amounts of money, good complementary tool community loans can address financially disadvantaged (who cannot access government and commercial loans) weaknesses seem more successful for high qualified/high income people and less used by low qualified/low income people savings: alone (without additional incentive) may have weak mobilising effect Loans and saving schemes Patrycja Lipińska 9

10. strengths increase freedom of choice for individuals promote investment in subjects prioritised by learners themselves positively influence attitudes, motivation, personal development, participation in learning appear more suitable for groups at risk make learning providers more responsive, flexible weaknesses difficult to reach all underrepresented groups (e.g. IT); need to target each specific group individually need for strong marketing and PR strategies to address hard-to-reach groups need for a fuller package of information and guidance risk of deadweight loss Vouchers/ILA Patrycja Lipińska 10

11. large increase in public spending to keep people at work and combat unemployment incl. compensating short-time work; promoting work-based learning/apprenticeship; extending educational leave; supporting people laid-off, at risk of redundancy, unemployed greater use of EU funds (esp. ESF, EGF) indications of reduced company resources less willingness to provide work-based training but: some companies committed to invest examples of social partners’ initiatives (e.g. workplace training fund in IS, joint security fund in FR) unclear picture of individuals’ expenditure Effects of the crisis: short-term Patrycja Lipińska 11

12. need to respond to higher demand for E&T necessity to address groups affected by the crisis (high increase in unemployment of the low-skilled) need for re-skilling (redundancies) and up-skilling but: unavoidable cuts in public spending  uncertainty about sustainability of funding for adult learning risk of abandoning/altering some plans for introducing/ expanding cost-sharing instruments not clear if the crisis will increase or decrease willingness of companies to provide work-based training; risk of fall in training once state’s support ends Effects of the crisis: long-term Patrycja Lipińska 12

13. Challenges/recommendations • improve monitoring and evaluation of financing instruments • improve current financial arrangements • coordinate/rationalise implementation of various financing instruments • raise awareness of existing financing instruments • develop effective, efficient, equitable schemes: ensure better targeting, pay more attention to disadvantaged groups, minimise administrative burden Patrycja Lipińska 13

14. Challenges/recommendations • raise awareness of benefits of learning • provide guidance and counselling to individuals and employers • promote partnerships • provide stimulus to employers/ involve (more) social partners • involve (more) financial institutions • make best useof EU funds Patrycja Lipińska 14

15. Cedefop’s research on financing learning • Sectoral training funds in Europe, 2008 • Individual learning accounts, 2009 • Tax incentives to promote education and training, 2009 • Sharing the costs of vocational education and training. An analysis of schemes in the newer EU Member States, 2009 • The role of loans in financing vocational education and training in Europe (publication in preparation) • Training leave in Europe, on-going study • The use of payback clauses to promote training, on-going study • Financing vocational education and training in Europe, on-going study Patrycja Lipińska 15

16. Thank you for your attention! patrycja.lipinska@cedefop.europa.eu www.cedefop.europa.eu