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From the Queen’s Speech to the next election: what now for the government’s agenda?
From the Queen’s Speech to the next election: what now for the Government’s agenda?

Archive for the ‘Education & Skills’ Category

A lifelong commitment? What to expect from the Lifetime Skills Guarantee

Skills are a key part of the government’s agenda, seen as vital for unlocking its ‘Levelling Up’ commitments in the light of skills shortages in areas like engineering, IT, and accounting. These shortages are long-standing. A 2018 study by the Open University found that skills shortages were costing UK companies £6.3 billion a year due to factors such as training and additional recruitment costs.

The government has acknowledged these shortages, and the need to ensure the education and training system is able to cope with the ever-increasing demands placed on it. In a foreword to the January 2021 White Paper on skills, the then Education Secretary Gavin Williamson indicated that more opportunities for training needed to be made available. As part of its response, the government has introduced a new policy – the Lifetime Skills Guarantee. It hopes that this initiative will address changing skills needs and employment patterns by giving people the opportunity to train and retrain throughout their lives.

What is it?

The Prime Minister announced the Lifetime Skills Guarantee in a September 2020 speech. The scheme covers a lot of ground policy ground. Pledges include increasing investment in FE colleges, introducing a lifelong loan entitlement, and a new funding system for higher technical courses. Only two policies, however, are being funded by the National Skills Fund: a new Level 3 qualification offer for adults and the extension of digital skills bootcamps.

The qualification offer, which commenced in April 2021, aims to give all adults without a Level 3 qualification (equivalent to A level) access to a fully-funded course. Previously, only adults under the age of 24 could access funding. The courses are taught by a range of state and private providers.

The government maintains a list of eligible courses, with 379 currently listed, and has made digital, engineering, health, and construction qualifications a clear priority with 37, 51, 54, and 66 courses available respectively. Whilst course lists are subject to review, investors in training providers that deliver these courses are likely to be particular beneficiaries of the scheme.

A high priority, and a long-term solution for a long-term problem

The Lifetime Skills Guarantee tackles big challenges, and the government has devoted significant effort to implementing it. The Guarantee was referenced multiple times in last month’s Budget, which also included a wider commitment to increase spending on skills by £3.8 billion by 2024/25 – a cash increase of 42% compared to 2019/20. These are not small pledges. The government has expended serious political capital on addressing the problem of skills shortages and, given this emphasis, is likely to release further funds in future years to support the scheme.

Announcing the Guarantee, the Prime Minister also made clear that the initiative is intended as a long-term scheme, rather than a short-term remedy to fill immediate skills gaps – that the nature of learning demands time and resources. He suggested that other countries have had an advantage over the UK when it comes to skills and technical education “for 100 years”. Indeed, the government’s Skills and Post-16 Education Bill confirmed that the planned rollout of the Lifelong Loan Entitlement, another major Guarantee commitment and one that aims to make it just as easy to secure loans for higher technical qualifications as for full-time degrees, remains over three years away in 2025.

Considering the CBI’s October 2020 analysis that predicted around 90% of employees would need to reskill by 2030, if the government is serious about this issue– and all indications suggest it is – then funding for initiatives like the Level 3 offer is likely to be enduring. The fact that only £375 million from the £2.5 billion National Skills Fund has been allocated for 2021/22 reinforces this. There are an estimated 11 million people who would be able to access the free qualifications under the Level 3 offer. Given the political weight the government has placed on these Level 3 offers – literally labelling them a ‘Lifetime Guarantee’ – the £95 million that is currently funding courses over 2021/22 is very likely to represent a prelude to further funding in the future.

The outlook for investors

The Lifetime Skills Guarantee is a key piece of the government’s education agenda. Both the Prime Minister and the Chancellor have been personally involved in its roll-out and have alluded to long-term planning happening in this space. This suggests that scheme will benefit from ongoing investment, particularly in sectors which government has identified as priorities. Technicians, engineers and social care professionals are consistently namechecked by ministers as occupations that the country lacks, and current course lists reflect this. Providers with speciality in these areas look set to benefit from the increased demand that funding from the scheme is likely to stimulate. As a result, investors in the technical education sector will want to monitor the government’s developing thinking closely in order to identify potential opportunities from future funding allocations for the scheme.

 

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Educating through change: what are the opportunities and challenges facing the education sector?

Earlier this week we were delighted to host a high-level seminar with Robert Halfon MP and leaders from the education sector, where we discussed the priorities of the Education Select Committee and the challenges facing the education sector more broadly.

After what has been a turbulent few months, we at WA have also been reflecting on the education agenda and the opportunities and challenges facing education providers as we head into a new year.

The government is ramping up its focus on education and skills

At the outset, one of this government’s key priorities has been on tackling regional inequalities through its levelling up agenda. Investment in education and skills must underpin this as the government seeks to widen opportunity, improve social mobility and meet people’s aspirations for better lives. And indeed, this was the rationale behind the creation of the National Skills Fund.

Over the last few months the coronavirus pandemic has heightened the need to invest in training and skills around the country. With unemployment rates rising and the nature of work changing, more needs to be done to upskill the country’s workforce and set the economy on its path to recovery.

The government recognises this and the Chancellor set out his Plan for Jobs in the summer, which included a £2 billion Kickstart Scheme to help open up new jobs for 16-24-year-olds who are at risk of long-term unemployment, as well as measures to provide bonuses for employees who hire trainees and apprentices. Skills and retraining will also be a key focus of the Spending Review later this month too.

Investment is going into closing the inequality gap

Another consequence of the pandemic is that it thrust education to the top of the political agenda in a way that had not been anticipated, as education settings closed their doors for all but the children of key workers and the most vulnerable learners for several months. Parents suddenly had to make emergency childcare provisions and young people faced uncertainty about their future learning opportunities.

This laid bare the inequalities that exist around the country, which have a serious impact on the educational attainment of children from disadvantaged backgrounds. Marcus Rashford’s free school meals campaign highlighted this well, and led to a high-profile government U-turn, while ministers also introduced a £1 billion Covid-19 catch up premium to support children in making up for lost learning.

Where are the opportunities for education providers?

The government will need to work closely with providers – private, charitable, and public – in driving forwards this agenda. What are the opportunities for them?

First, the government’s focus on upskilling presents several opportunities for skills, training and apprenticeship providers to help the workforce to meet the country’s skills needs. Notably, there is funding available for providers through the National Skills Fund, Kickstart Scheme and Lifetime Skills Guarantee initiative, alongside the anticipated boost for further and technical education that is likely to be announced in the forthcoming FE White Paper and government response to the Augar Review.

Next, the £1 billion Covid-19 catch up premium package will allow organisations sector to partner with schools to deliver real support for pupils. The official guidance on how to spend the funding was left deliberately vague to give schools flexibility on how best to focus the support in their own settings, and as a result there are opportunities for a wide range of educational providers. This includes providers able to deliver targeted tuition, intervention programmes, summer support programmes, access to technology, and support for parents and carers.

Lastly, the increased focus on young people’s mental health, from school children through to university students, presents an opportunity for mental health services, providers and charities to work with education settings to make a difference to young people’s wellbeing.

What this means for the education providers and what they should do about it

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Far enough on Further Education?

On the back of the Prime Minister’s announcement to create a Lifetime Skills Guarantee, Cameron Wall considers what this tells us about the Government’s strategic plans for Further Education and how the sector could respond.

Words into action

A cornerstone of the Prime Minister’s ‘levelling-up’ agenda, has been one of bold commitments on further education and skills. Covid and rising unemployment is putting even more pressure on Number 10 to ensure the UK’s workforce is equipped with the skills our economy needs to recover.

In his speech on Tuesday, the Prime Minister set out more detail on the government’s plans, signalling how the Government intends to grapple with this inevitable unemployment crisis and begin to fulfil the ‘levelling up’ promises.

The PM set out how he plans to end a “bogus distinction between FE and HE”, introducing a series of changes aimed at making practical study more attractive

Front and centre was his announcement to create a new ‘Lifetime Skills Guarantee’ offering free Level 3 courses to adults without equivalent qualifications.  This will be paid for from the National Skills Fund, announced in the Conservative election manifesto. To date there has been no other real detail about how the fund will work or what it will cover. Eligible courses will be announced in due course, meaning there is still time for providers to ensure that their courses are covered while also making sure that any further action on the National Skills Fund is aligned with their offer.

Reforms to the apprenticeship system will enable businesses to use unspent levy funds to support apprentices within non-levy paying SMEs, and apprenticeships will become “portable”, so they can easily be moved between companies. This has long been called for by many in the sector, but questions still remain about whether this will be sufficient to fully fund non-levy apprenticeships.

The PM also committed to taking forward a key recommendation on further education from the Augar Review, opening up the main student finance mechanism to students undertaking higher technical qualifications. This is a positive step, but without adequate maintenance support, potential learners may question how they can support themselves to study such a course without an income.

Building on this, the Lifetime Skills Guarantee will over time progress into a system where all students can access a lifelong loan entitlement to four years of post-18 education, as part of cementing efforts to bridge the gap between Higher and Further Education. This ambition sits at the heart of the Government’s education agenda.

A signal of future system overhaul?

Reform has long been on the agenda, and a Further Education system that meets the economy’s skills needs has been a key aspiration for governments going back over decades.

The reforms announced by the Prime Minister cast some light on the potential foundations of the imminent Further Education White Paper which is expected to begin that process of better aligning Further and Higher Education and ensure the value of Further Education is recognised by learners and employers. However, a lot more needs to happen to deliver the Education Secretary’s vision to create a “world-class, German-style further education system”, which would “level up skills and opportunities” and “give FE the investment it deserves”.

Covid has, of course, posed some significant short-term challenges for the Further Education sector, but the White Paper must also settle a number of long-term questions regarding the future of Further Education. Whilst there is agreement the system needs reform, there is a lack of consensus over what this reform looks like.

Clearly Number 10 and the Department for Education are keen to show they are responding to challenges on the horizon with bursts of good news. But, as officials hash out the details of reforms behind the scenes, there is now a clear opportunity to influence what Further Education reform looks like on the ground, and government will be no doubt be looking to the sector for guidance.

Aligning business priorities with government aspirations

Foremost is the question of, in practice, how much the Education Secretary’s vision for a German-style Further Education system actually borrows from Germany. In Williamson’s speech announcing the White Paper, he only made two references to Germany. Instead his tone focused on the value that the UK attaches to Further Education, and how it falls far short of our European neighbour.

Like Germany, Williamson wants our Further Education system to put employers at its heart. He sees colleges acting as hubs within regions, linking vocational training with employers and helping meet the skills needs of the local economy. Now is the time for providers who hold strong local business links and play a role in supporting the local skills needs to make a case to government for regional control. Otherwise, the question government will be asking is, can their desired vision to bridge the gap between Higher and Further Education be achieved without national, centralised oversight?

It is also still to be seen whether the Further Education White Paper will come alongside the long-awaited review of the Apprenticeship Levy, first announced by then Chancellor Philip Hammond in 2018. This also reappeared in the Conservative’s election manifesto, which promised to improve the workings of the levy.

Whilst concerns that expensive apprenticeships are sapping up levy funds have been temporarily supressed by the pandemic, this issue will undoubtedly return in the long-term. Providers should use this opportunity to push for system changes they want to see which have been exposed by how the levy has been used to date. In any case, training providers and employers drawing on these funds will need to justify the contribution to the economy their programmes deliver.

Whilst Williamson may have a clear vision in his head, officials at the Department for Education – under the watchful eye of Number 10 – will now be in listening mode to help flesh out the details of Further Education reform as we approach the White Paper’s launch – and as they begin implementing policy reform on the ground.

To speak to Cameron about this article please email cameronwall@wacomms.co.uk

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2020 vision: What challenges lie ahead for higher education over the next year?

Higher education did not feature heavily in the 2019 general election campaign, with political attention inevitably focused on Brexit and the NHS.

The election result, however, will have significant implications for the higher education sector over the next year and beyond.

As ever, concerns over funding and the long-term financial sustainability of higher education institutions will dominate discussions within the sector. But beyond funding, higher education faces political pressures on a range of issues from grade inflation to Vice-Chancellor pay.

Below is a snapshot of the five biggest challenges facing the higher education sector in 2020:

 

Funding and fees

The Augar Review of post-18 education and funding, published in May 2019, recommended the government reduce tuition fees to £7,500 per year, with the government replacing any lost funding through increased grants to universities. The Conservatives’ general election victory means it is unlikely the government will cut tuition fees but there is some scope for funding shifts to support subjects deemed to be of most economic value.

Funding changes will emerge from the 2021 Research Excellence Framework (REF) which determines the allocation of quality-related (QR) funding for research and will realign the funding settlements for research institutions.

Demonstrating the impact of research is worth 25 per cent of the 2021 REF, an increase from 20 per cent in the last iteration in 2014, and institutions will have to carefully consider how best to demonstrate the social and economic impact of their research beyond academia.

This will involve higher education institutions needing to prove their research has had a positive impact on the economy, government policy, public services, the environment or society, taking into account the priorities of the REF panel.

 

Brexit

Despite Boris Johnson running on the promise that he would ‘get Brexit done’, the implications of Brexit still loom large for higher education.

Indications suggest the government will charge EU students full international fees for the academic year following 2021/22, which could impact on demand and create financial pressure on institutions that recruit heavily from the EU.

There also remains the question of the extent to which the government will replace the lost income of universities from EU research funding beyond the end of the transition period.

 

Grade inflation

The past year has seen increased media and political attention paid to the number of Firsts and 2:1s awarded to students by UK universities, prompting fears grade inflation is undermining the value of British university degrees.

In response, the UK Standing Committee for Quality Assessment launched a new framework for the classification of degrees as part of a new voluntary code towards the end of 2019.

The extent to which the new code of practice is able to halt the number of top degree awards will determine whether the government seeks to introduce further regulatory oversight of the classification of degrees. How the government decides to deal with grade inflation will indicate the extent to which it is comfortable with the marketisation of the higher education sector.

As a potential consequence of institutions needing to attract students, the government may be forced to correct market incentives through increased regulation.

 

Free speech

Gavin Williamson has publicly stated universities must take steps to ensure free speech on campus or the government will legislate to protect freedom of expression. Writing in The Times last week, the Education Secretary warned higher education institutions that intimidation of academics by students and other protesters is unacceptable and they must do more to protect the safety of academics and their right to free speech. Williamson has pledged to change the legal framework to strengthen free speech rights if universities do not take sufficient action.

The intervention by the Education Secretary will be a challenge for universities as they try to balance the right of students to protest against the need for academic freedom and expression. The government’s demand for free expression on campus will be particularly tested when it comes to topics like transgender rights and the politics of the far-right.

 

Vice-Chancellor pay

Media and political scrutiny of Vice-Chancellor remuneration has continued into 2020, following recent analysis that nearly half of Russell Group universities have increased Vice-Chancellor pay over the past year. A lot of the pay increases awarded to university bosses have been above inflation, with the Vice-Chancellor of the University of Liverpool receiving a 12.8 per cent increase, increasing her annual pay to £410,000.

Some universities, such as the University of Southampton, have cut pay when appointing new Vice-Chancellors, and the Russell Group has stated pay awards are down by nearly two per cent across the group.

Faced with hostility from unions and students, higher education institutions will need to work hard to justify their pay awards to Vice-Chancellors to avoid further straining their relationships with ordinary staff and students.

 

 

 

 

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Re-engineering apprenticeships

Last week the government launched its new apprenticeship campaign #FireItUp. But, with apprenticeship starts still lagging behind target, does the government need to refresh its strategy?

At the 2015 General Election, David Cameron’s manifesto committed to a target of three million new apprenticeship starts by April 2020. Theresa May repeated this commitment at the snap election in 2017, with the policy appearing to have firmly made its way into core Conservative Party narrative. But with only just over a year left to reach the target, and with starts still down, the government appears to have dropped the ball.

The ill-fated levy

Blame for issues to date has largely been directed towards the decision to introduce the apprenticeship levy. Whilst the notion of the levy was largely welcomed, in practice it has been criticised for being “overly bureaucratic” and overly rigid – to the extent that less than 10 per cent of income raised from the levy has been spent.

Out with the old, in with the new 

The government has also received criticism over the implementation of the new apprenticeship standards which replace the legacy system of frameworks. With the 2020 deadline to have fully-transitioned from frameworks looming, there has been criticism of the bureaucracy and delay in approving the new standards from both providers and employers alike.

Many of the ‘trailblazer’ employers who were tasked with developing the standards have yet to receive approval from the Institute for Apprenticeships (IFA), meaning they are still operating without choice under a framework system that has been deemed “redundant” and of insufficient quality by the government.

Tinkering with the faults

Seeking to fix the faults of the levy, Chancellor Philip Hammond announced a review at Conservative Party Conference in September. He pledged to “engage with business on our plans for the long-term operation of the levy”. Reports trailing the announcement hinted reforms could include enabling employers to share up to 25 per cent of their funds with businesses in their supply chain and increasing the availability of courses in STEM subjects.

The Chancellor has already committed to halving the co-investment rate for small businesses, backed-up by £240 million of funding. Hammond also laid out plans, and crucially funding, to support the IFA in identifying gaps in the training provider market and in clearing the backlog of apprenticeship standards awaiting approval.

Apprenticeship reform will also see collaboration between HM Treasury and the Department for Education, with ministers Robert Jenrick and Anne Milton working with a range of employers and providers to consider the impact of the apprenticeship levy across sectors and regions in England.

But for many, including big industry voices, the reforms aren’t likely to go far enough. Commenting on Hammond’s announcement, Dr Adam Marshall, Director General of the British Chambers of Commerce, said “the measures announced today are an important step in the right direction… but the Chancellor must introduce greater flexibility to the apprenticeship system”.

Apprenticeship renaissance?

In an attempt to reinvigorate the apprenticeship system once again, Education Secretary Damian Hinds last week launched the #FireItUp campaign. The campaign seeks to expand the apprenticeship offering to include more ‘white-collar’ jobs like accountants, actuaries and teachers. Hinds has called it a “sad truth that outdated and snobby attitudes are still putting people off apprenticeships”, and that he wants to “shift deeply held views” of apprenticeships.

Hinds has also commended apprenticeships as an alternative to university degrees, saying that three years in an apprenticeship can be just as valuable, and workers don’t end up saddled with up to £50,000 of debt. This comes at the same time as record numbers of first-class degrees were awarded last summer, an increase of more than double in a decade.

Apprenticeship reform

With reforms on the table, is it now time to iron out some of the creases in a well-intentioned, but poorly executed system?

As Hinds suggests, his vision for apprenticeships sees them becoming the norm for white-collar jobs. The challenge therefore is to adapt a system which has traditionally served industries like engineering and construction, into one that suits 83 per cent of Britain’s workforce – the service sector.

Given the areas that government have already shifted on, including reforms to the co-investment rate, there could be scope for further reform if the sector can demonstrate benefit to both the Treasury and DfE – both in terms of economic value and in enabling more people to access quality training opportunities.

The government is keen to reconnect with business following claims that Theresa May has let relationships with business groups slide. Add to this the growing pressures of Brexit and its potential impact on the UK’s productivity and workforce, it is likely that government will be looking to appease business where it can. However, this creates a risk that providers, i.e. those actually delivering apprenticeships, will not be given due consideration during this process – which will ultimately be to the detriment of the sector and of government.

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Will the Augar Review see cuts, caps and chaos?

Despite its publication seemingly caught up in a Brexit gridlock, the higher education sector is braced for the highly anticipated Augar Review of post-18 education.

Launched by the Prime Minister just over a year ago to tackle concerns over high tuition fees and spiralling repayments rates, the review is set to make a number of wide ranging – and potentially sector shocking – recommendations that send a tough message to universities about value for money.

Numerous leaks from the inquiry and rumours over its potential recommendations have been shared over the last couple of months, but it remains to be seen if Augar will set out radical, long-term higher education reform, or if his review will fall flat on arrival.

 What’s Augar got in store?

The most attention-grabbing rumour is that the review is expected to recommend a cut in tuition fees. Reports suggest this would vary depending on the degree, with prices potentially falling as low as £6,500 for most students on arts and humanities courses, and STEM subjects more than doubling to £13,500 or more. This premium level is intended to reflect both the costs involved in running an intensive laboratory-based subject such as medicine, and the additional earnings expected by graduates.

Estimates have put the cost of such a cut at around £3 billion. Unsurprisingly, this hasn’t settled well with the sector, with heads of universities warning of the devastating impact this would have on teaching and research, particularly as the extent of any replacement funding from government remains unclear.

Besides issues with funding, the sector has suggested this would create a ‘two-tier’ system, with lower funding and consequently lower status for courses in the arts and humanities compared to other subjects. This would also have consequences for social mobility, with poorer students being pushed away from more expensive degrees and onto cheaper courses.

The Russell Group has recently come out to warn this approach would lead to a de facto cap on student numbers, particularly if the funding gap isn’t covered by the Treasury. This argument is likely to face a strong push back from government, with recently appointed Universities Minister Chris Skidmore being clear on his opposition to a cap. However, if courses come under pressure due to cuts in funding, this could become a reality for many universities in England.

In addition to fee cuts, the Augar Review team is rumoured to be considering a minimum A-level grade threshold for student loans, with students who fail to achieve three Ds at A-level becoming ineligible. Similarly, this has been branded as a further blow to disadvantaged students, with MillionPlus, a group representing almost half of the UK university sector, criticising the move as a “cap on aspiration”. Vice-chancellors have also argued this would reduce disadvantaged student numbers “by the back door”, going directly against the DfE’s, and the Prime Ministers’ own, social mobility agenda.

 How likely is this?

A headline cut in fees will be seen as an important outcome by No.10, with political commentators viewing the decision to launch a review as an attempt to reconcile the Conservatives’ poor electoral performance in 2017 among young people. As such, the government will be under pressure to agree proposals that reduce the overall cost for students, or come up with a ‘retail offer’, to compete with Labour’s pledge to abolish fees in a general election. However, the Treasury is unlikely to be keen to provide additional funding for universities at a time of uncertainty about future public finances post-Brexit.

It’s clear that universities are expecting this to be a challenging review. Arts institutions are most likely to be holding their breath, with ministers having been dismissive of their role since the review was launched. With the additional pressure from Brexit, the creative industries are feeling particularly at risk.

Beyond the arts, any cut in tuition fees could have a considerable impact on scientific research and teaching, reducing the government’s chances of meeting its target for research and development spending, and undermining its own Industrial Strategy. Again, with Brexit looming on the horizon, the drive to deliver growth and improve productivity is more important than ever, and universities have a major part to play.

Whatever Augar decides to recommend, he has been set a difficult task of finding attractive solutions without incurring significant additional government expenditure or a loss of income for universities. With tuition fees the most politically contentious issue being considered, the sector seems likely to face tough questions about the value for money they offer for students, while continuing to face pressure to widen access for disadvantaged groups.

Skidmore has attempted to reassure the sector by stating that any funding changes would be subject to consultation and introduced gradually, offering longer-term opportunities to influence the government’s final approach. While there has been a strong sector-wide lobby to date, HE providers now need to consider their individual positions within this debate and ensure they can demonstrate the value of their specific provision and the need to protect funding for, and access to, their courses.

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