What does the spending review mean for FE and skills?

Dear Member

Today’s Spending Review 2010 announcements – early indications of what they mean for FE and skills

I write to you in sombre mood about cuts in further education. As you read further, you may feel unsettled and have more questions to ask. I am sorry that you may also have a sense of worry for our sector, your learners and for yourself and your colleagues who are teachers and trainers.

We anticipate that the 25 per cent reduction over four years in further education will inevitably involve loss of provision and loss of jobs in our sector, including for teachers and trainers, even though IfL urges sector leaders to protect the frontline provision for learners and protect teachers’ and trainers’ jobs as much as is possible. There are also a few areas indicated in today’s spending review announcement where you may feel there is a definite silver lining, and some where the announcements are not as harsh as many had anticipated.

There will be more details to follow from the government on its spending plans, but I wanted to let you know the headlines as soon as possible after the Chancellor’s announcement in the House of Commons. Please look on our website at www.ifl.ac.uk/spendingreview2010 for further information about the spending review and its implications for teaching and training in further education and skills, as new details emerge over the next days and weeks.

Summary of the Spending Review 2010 from the Department for Business, Innovation and Skills (BIS)

The further education resource budget will be reduced by 25 per cent, or £1.1billion, from £4.3 billion to £3.2 billion by 2014-15. BIS will continue to support basic skills provision, so that those left behind first time around can continue to gain basic numeracy and literacy skills. BIS will continue to support adult and community learning, and reduce the complexity and bureaucracy that hampers providers from responding to community needs.

To ensure that businesses have the highly skilled workforce needed to drive growth, the government will boost spending on adult apprenticeships by up to £250m a year, providing up to an additional 75,000 apprenticeship places by the end of the spending review period.

Reductions to key BIS activities include ending Train to Gain and replacing it with a small and medium enterprise (SME) focused training programme, and ending English for Speakers of Other Languages (ESOL) funding for people not in settled communities. The regional development agencies (RDAs) will also be abolished in 2012. 

Over the course of the spending review period, BIS will reduce its resource budget by 25 per cent. Taking into account anticipated receipts, the cut to capital spending by 2014-15 will be 44 per cent. BIS will have its administration budget reduced by 40 per cent, including savings from abolition of the RDAs. (Please note that further education and skills provision is funded through participation funding, not from administration, which is the internal funding for government’s own departmental administration.)

The government is removing the entitlement to free training for a first full level 2 qualification for those over 25. Further education students aged 24 and over studying for a level 3 qualification (A-level equivalent) will be asked to pay fees. These students will be supported by the offer of a government-backed loan, where repayments will be dependent on the learner’s income, protecting those with lower earnings.

IfL’s initial interpretations of the spending review for teachers and trainers

To achieve the 25 per cent reduction announced in the spending review over four years is tough, despite it being lower than central government’s own departmental reduction of some 40 per cent. As stated above, we anticipate that 25 per cent will inevitably involve loss of provision and loss of jobs in our sector, including for teachers and trainers, even through IfL urges leaders in our sector to protect the frontline provision for learners and teachers’ and trainers’ jobs as much as is possible.

Overall, the government is forecasting job losses of 490,000 across the public sector, and a prominent management consultancy modelled the spending review reductions resulting in a total of over a million job losses across public and private sectors. The nation’s need for further education is likely to be even greater in this context, as individuals look to reskill and upskill, and as they seek new employment or to create their own new business enterprises. IfL considers that further education and skills is a national investment for building our way out of recession, and not an overhead that it is reasonable to reduce.

The spending review announcements refer to employers and individuals having to pay more for their courses or training, mirroring Chris Banks’ recent review of fees, which called for a rebalancing, with the government paying a smaller percentage of the costs of courses. The announcement includes a reference to student loans in further education. IfL sees the expectation for individuals or employers to pay possibly hundreds or even thousands of pounds for a course or training as a tall order. To succeed, this will need a major cultural shift for colleges and providers, teachers and trainers, and your relations with learners and employers.

Therefore, following the Chancellor's statement on the spending review today, IfL has urged the coalition government to set up an independent inquiry into how teachers and trainers can be supported for excellence and always being leading edge in their practice. This is because when individual learners and employers are expected to pay far more for courses or training, their expectations of teachers and trainers are likely to rise dramatically. As the professional body for teachers and trainers, IfL is determined that members should get recognition for their demanding professional role, and the support needed for professional development opportunities to meet ever greater expectations on them.

Positive elements in the spending review, we think, are that literacy and numeracy provision is given a priority, as is adult and community learning. The principle of less bureaucracy for colleges and providers is good news, but only if this translates into leaders and managers reviewing and slimming down their own procedures and administrative demands on teachers and trainers in order to free you up to focus on your professional role and your learners.

It looks as if the government’s commitment to keeping the participation age in education or training until age 18 is retained, although in the lead-up to the spending review it was suggested that the government may step back from this. Similarly, the indication in the spending review announcements that a reworked education maintenance allowance (EMA) might become available is encouraging, when rumours abounded until only a day ago that it may cease altogether.

There will probably be mixed reactions to the Train to Gain programme being abolished, but we welcome the increase in adult apprenticeships by 75,000. We think it is disappointing that the entitlement for free training for a first full level 2 qualification for those over 25 is being removed, and that those over 24 will have to pay fees for level 3 qualification. As long as the new further education student loan rates are at low and not commercial rates, this should help ameliorate the worst effects of price driving away anyone aged 25 or over from learning, which would be to the detriment of themselves and their families and the economy. Loans may not be powerful enough as a countermeasure.

The government announced unit cost reductions for the 16-19 participation budget, although the spending review also will support further increases in participation through until 2015.

Looking beyond further education, schools have a real-terms increase in their budgets over the next four years. In higher education, in line with Lord Browne’s recommendations, the government is changing the way that higher education is funded, moving away from the current model to one where those who benefit make a greater contribution to the cost. This means that the overall resource budget for higher education, excluding research funding, will reduce from £7.1 billion to £4.2 billion, a 40 per cent or £2.9 billion reduction by 2014-15. BIS will continue to fund teaching for science, technology, engineering and mathematics (STEM) subjects. The government will, by 2014-15, establish a new £150m National Scholarship Fund to support students from disadvantaged backgrounds.

How IfL is supporting teachers and trainers

We are creating a new section on our website to support career development, and this includes information and links about employment and what to do if you think you may be made redundant. We will continue to develop information and guidance to support you. Please let us know the career related questions you have that you would like answered by emailing suggestions@ifl.ac.uk  This will help IfL cover areas that are most valued by you and other members.

I hope that by setting out the headlines of the spending review today, this letter gives you information that is timely and useful. If you have thoughts and concerns relating to the spending review, and that you think might be useful for other members, please feel free to email me at chiefexec@ifl.ac.uk

IfL recognises that those working in further education often have great resilience and that as needs arise from learners and local employers, sometimes creative ways of meeting these are found. IfL does see investing in adult and further education as an investment for the future wealth of the nation, and that teachers and trainers are the engine for economic recovery.

We believe that frontline teachers and trainers have the most crucial role to play in making the difference for the millions of learners every year who benefit from further education. We will continue to make this case.

With best wishes

Toni Fazaeli
Chief Executive
Institute for Learning (IfL)