Brexit

The UK is due to leave the European Union. The UK government and EU council have agreed a deal. This now needs to be ratified by the UK Parliament and European Parliament. Following the election, the government will take steps to get the new withdrawal agreement bill through Parliament quickly. The agreement includes a provision for an extension until 31 December 2020 after which either a new longer-term deal will take effect or there will be no deal. 

Brexit and colleges

The impact on colleges is less than in some areas of national life. The vast majority of income comes from UK sources while most of their spending is mainly on UK-based staff not on supplies or services provided from the EU. Forty five years in the EU has made a difference to our sector.  There will be changes relating to the rights of EU nationals, access to publicly funded FE courses by EU nationals, teacher recruitment, food supplies, data protection and the regulation of services. Many of these changes will take time to come into effect.
The rest of this website explains the main Brexit issues for colleges:

The withdrawal agreement and the transition period

The UK government and the EU agreed a deal in November 2018, involving a withdrawal agreement and a political declaration. After several failed attempts to secure approval for this deal and a change of Prime Minister, the UK and EU agreed a new deal in October 2019. This is the deal that Parliament is now voting on.  The new Withdrawal Agreement runs to 541 pages and sets out arrangements for UK's exit on 31 January 2020, a transition period until 31 December 2020, financial arrangements, protection of citizen's rights and the new Irish protocol. The Political Declaration runs to 30 pages and sets out the outlines for a longer-term UK/EU deal 

The transition arrangements mean that the issues for colleges in England are fairly straightforward. The Home Office has opened its EU Settlement Scheme for applications from any of the 3 million EU nationals. This process (governed by articles 13 to 23 of the withdrawal agreement) continues until June 2021 and while it does, it will only be marginal changes to the immigration system, employment rules or education funding arrangements for EU nationals. Meanwhile the UK continues to participate in EU programmes like ESF and Erasmus until December 2020 (as agreed in articles 137 and 138 of the withdrawal agreement). Brexit on 31 January 2020 will therefore have little immediate impact on colleges in 2019-20 or in the first part of 2020-1.

The future UK/EU relationship (updated 17 December 2019)

AoC published a position paper in April 2019 setting out issues in five Brexit-related issues for colleges (access to education for EU nationals, outward mobility/Erasmus, recruiting teachers, regional funds and regulation)  

The UK/EU's political declaration promises negotiations on a number of these areas including:

  • future UK participation in EU programmes, including Erasmus (paragraph 11)
  • cross-border data flows (paragraph 38)
  • mobility arrangements, including "visa-free travel for short-term visits", "conditions for entry and stay for purposes such as research, study, training and youth exchanges" and "social security coordination" (presumably including access to education for children and young people) (paragraphs 48-57

The plans for migration ("mobility") depend, in part, on how the UK government constructs its new points based immigration system.

According to the Political declaration, the negotiations over participation in Union programmes depend on agreement in four areas:

  • a fair and appropriate financial contribution
  • provisions allowing for sound financial management by both Parties
  • fair treatment of participants
  • management and consultation appropriate to the nature of the cooperation between the Parties.

The UK government is determined to reach a deal during 2020 so that this is nothing resembling an extension in 2021. The obvious risk for colleges is that this deal is a limited to trade in "goods" (food, fish, physical commodities) and does not include arrangements for easy travel for those wishing to travel, data transfer or future UK participation in Erasmus and other programmes. AoC will ensure that DfE and other departments understand the issues in this area that make a difference to colleges and their students. 

No deal contingency planning(updated 17 December 2019

 The UK government has a deal with the EU and (following the election) a majority in Parliament to ensure it is passed. The threat of a no deal as at 31 January 2020 has diminished. Instead there is a risk of no deal in 2021.

The UK government started and then suspended no deal planning twice in the last 18 months. The government published more than 1,000 documents associated with no deal including a worst case scenario document published by the government on 2 August 2019. Many of the no deal notices involve unilateral UK recognition of EU rules in the short-term as a way to ensure continuity (for provision of services, imports, normal life etc). The most up-to-date DfE no deal contingency planning advice for colleges was published on 5 August 2019. DfE's advice covers:

AoC received funding through the Department for Business, Energy and Industrial Strategy Business Readiness Fund in September 2019 to offer further advice for colleges on a possible no deal. We filtered all the advice from government and put together a College Readiness Pack to offer advice on short-term planning and should help those in leadership positions at colleges work through the issues for their staff, students and institutions The pack includes is a GDPR briefing produced by Irwin Mitchell, a short risk assessment checklist, continuity plan checklist as well as frequently asked questions we have received. 

 

We recorded a webinar on 16 October 2019, the recording is available here.

We have also recorded a series of three podcasts:

Travel


People


Running a college

If you have any questions on Brexit please email brexit@aoc.co.uk.

Migration and freedom of movement

The government has plans to overhaul UK immigration rules once the UK leaves the EU. These plans will take time to comes into effect because the Home Office needs to complete the EU Settlement Scheme process and to develop new IT systems. The government needs to secure Parliamentary approval for the removal of EU freedom of movement rules from UK law and for implementing a new immigration system. In the Immigration white paper published in December 2018, the UK government set out plans for new rules to take effect in 2021. The Migration Advisory Committee is currently investigating two sets of changes to these plans (a revision to skilled worker salary thresholds and the feasibility of an Australian-style points based system) and will not report until January 2020. The Conservative manifesto in the general election promised that the new system would:

  • prioritise people who have a good grasp of English, have been law-abiding citizens in their own countries and have good education and qualifications.
  • prioritise health staff (via an NHS visa) and leaders in their fiend 
  • treat EU and non-EU citizens equally

The current rules

The EU’s founding treaty (the Treaty of Rome) included freedom of movement as a right for workers and over the next fifty years these rights were extended and codified into a Freedom of Movement Directive that has been written into UK law and that guarantees equal treatment for EU nationals and home nationals in terms of access to education and training.

The UK/EU Withdrawal Agreement proposes a transition period running until December 2020, during which time freedom of movement continues on a fairly similar basis as now. The withdrawal agreement also provided protections for EU citizens living in the UK (and UK citizens living in the EU).

The Home Office has developed an EU settlement scheme to allow the 3 million EU nationals to prove their rights which are set out in the Withdrawal Agreement. If an individual can show he/she has lived in the UK for 5 years, they can qualify for “settled status”. If less than 5 years, “pre-settled status”. The EU Settlement scheme was launched for all applications in spring 2019 with a deadline of June 2021.

What the Immigration white paper said

The Home office published an immigration white paper in December 2018 which sets out plans for a new immigration system to take effect in 2021 and afterwards. This is no longer government policy but the white paper provides a useful indication of how things might change. The Home office cannot introduce the new system until legislation has passed through Parliament. The Home office also needs time to complete the registration of EU nationals and to implement new IT systems. Things will not change much in immigration policy and practice until these changes are all in place. The key changes associated a new immigration system are:

  • A single set of rules: the government's central plan is for a single set of immigration rules covering EU and non EU nationals with possible variations for specific countries as part of trade deals (including any deal with the EU)
  • Higher threshold for migration from EU citizens: The immigration white paper proposed a single £30,000 salary threshold for migrant works (on Tier 2 visas) along with a minimum Level 3 qualification threshold. The salary threshold has attracted widespread criticism from employer groups because it would eliminate more than 80% of current EU migration and create skills shortages. The Migration Advisory Committee is now reviewing this threshold and will report in January 2020. 
  • System and rule improvements: The white paper proposed the removal of the resident labour market test for Tier 2 visas (the need to prove that jobs cannot be filled locally) and a promise that visas will be issued within 3 weeks. The Home Office is upgrading its systems to make them more customer friendly and more digital.
  • Short-term work visas: there is a proposal for short-term visas of up to 12 months which could be used to fill lower paid roles and which would only be available to nationals from certain countries. This does not go very far in addressing employer concerns and implies some major changes in the labour market.
  • Post-study working rights: there is a proposal for six month post study visas for those attending institutions with degree awarding powers. This partly addresses the case made by universities but not colleges, though we are on the case.

AoC is represented on the Home Office's employer group and education group. Our paper on the Future Border and Immigration System  is available here 

Recruiting and retaining teachers

There are significant teacher shortages in colleges in construction, engineering, maths and other areas. Staff turnover levels are increasing, partly because of relative pay levels and workload pressures. There are also shortages in schools. There's a risk that a new migration regime for EU workers might make this worse because:

  • teachers leave for jobs in industry 
  • people from other EU27 countries who might have come to the UK in the past will stop doing so in future
  • the new rules (and immigration fees) which excludes lower paid staff in education. We want people in our sector who work for love as well as money.

There is no firm data on the proportion of EU nationals in colleges because it has not been necessary up to now to collect this. We have collected estimates from colleges via our 2017 and 2018 workforce surveys which suggests that colleges employ an average of 20 EU nationals. This adds up to a total of 7,000 people or 4% of the college workforce. Around 85% of colleges surveyed employ at least one  EEA employee whereas 5% reported more than 20. Colleges employ an estimated 189,000 people, of whom 76,000 are teachers.

The Office of National Statistics estimates that education as a whole has an estimated 4% of non-UK EU staff whereas higher education has 15%. Higher education may be an outlier because universities have a strong tradition of international partnership, income from multinational research projects and a tendency to employ their own graduates, an increasing number of whom come from the EU. The university workforce has expanded in the last 10 years (at a time of higher EEA immigration to the UK) while the college workforce has contracted by a few percentage points. It may also be relevant that college employment is geographically dispersed with substantial numbers in relatively small towns whereas UK's EU27 population is weighted towards bigger cities.

Students of sixth form age, adult learners and apprentices

There are complicated issues for students of sixth form age, adults and apprentices. However, ministers have offered protections for EU students, including a guarantee of continued funding, for courses starting in 2019 and 2020. Click here to read AoC’s note on EU students, fees and immigration status.

There is no official data on the number of EU27 nationals in colleges. The sector used to collect nationality data via the Individual Learner Record (ILR) but it was unreliable and the collection has been discontinued. We estimate that the numbers might be around 40,000 (2%) but this is very much a guess. There are some points to note:

  • The UK/EU withdrawal agreement reached effectively extends existing arrangements and rules until 31 December 2020, though with some tweaks in the details. 
  • There are some wider issues relating to access to the UK education system which go beyond the EU. In terms of school admission, DfE guidance is that “children arriving from overseas have the right to attend state funded schools in England” except for children from non-European Economic Area (EEA) countries who are short-term visitors or whose permission to study was given on the basis that they attend an independent fee paying school. DfE’s School Admissions Code restricts the factors that can be used to decide admission which means that other EU nationals are treated on the same basis as UK nationals.
  • Increased mobility within the EU suggests that there are a higher proportion of children of other EU nationals in UK schools but DfE does not collect data on this issue in the school census. However it is worth noting that the national 2011 census reported that the vast majority of the UK residents born overseas were adults rather than children. The current school admission rules do not test nationality or residence (beyond current address) and it would be a massive reform if a decision was taken to do so. 
  • Since the early 1990s, EU member states have offered access to further, higher and adult education on the same terms to nationals of other member states as citizens of their own state. The rule for publicly funded education and training outside schools are slightly more restrictive. EU nationals living and working in the UK have been able to enrol on further education courses or take apprenticeships on the same basis as UK citizens with the key test being three year's ordinary residence in any one of the 28 EU states plus some further countries. Existing education entitlements extend to the EEA (ie the EU plus Norway, Iceland and Liechtenstein).

Any data on nationality needs to be treated with care. A front page Sunday Telegraph story from May 2016 quoted an ONS estimate that 700,000 school children have one or more parent who are citizens of another EU country without explaining that this is a very wide interpretation. Some  senior UK politicians are married to EU27 citizens and their children would be categorised as "foreign" under this definition.

The main source of figures on the numbers of HE students from the EU is taken from student loan data, which reports about 125,000 EU students at UK universities and £224 milllion was paid in fee loans to EU students on full-time courses in England (3.7% of the total). Colleges incidentally have almost no students in this funding stream because their higher education student population is non-residential. Around 70% of college HE students live less than 25 miles away from their place of study. There are significant numbers of EU students in universities in major cities. It is no accident that three of the five universities that recruited more than 1,000 EU students are in London.

The English approach to FE funding/fees gives EU27 exactly the same entitlements as UK students (and non EU students). Key rules are:

  • The course is in England (with some exceptions for armed forces)
  • The student has three year's ordinary residence in the UK
  • Because many FE funded courses are also free (16-18s, basic skills, Level 2, first Level 3 up to age 24), this acts as a government subsidy to EU27 citizens but also ensures that those living and working here attain education and skills for daily life and for work.

In recent years governments across the EU have been fairly ‎constrained by European Court of Justice (ECJ) judgements relating to freedom of movement/benefits/HE rules. The Danish Government lost a case in which they tried to restrict HE funding for their residents vis-a-vis commuters from Malmo. There have been other precedents in the benefit/tax credit areas. When it comes to students - the rules bar discrimination between home/other EU countries when it comes to fees/funding while allowing restrictions on maintenance support.

Departure from the EU would give the UK Government more control over funding rules relating to students but it is quite plausible equal treatment for EU27 citizens may continue as part of a deal to secure access to research funds or to avoid barriers to trade in services. 

There is an interesting issue in apprenticeships which ‎may not be widely understood:

  • Companies employing staff in the UK will pay the levy for anyone paid here (just as they pay employers NI for them) but a fair percentage of this payroll in some companies and public services will relate to EU27 national and non-EU staff.
  • The apprenticeship funding rules restrict spending to anyone with three year's residence.​

In other words, there will be companies paying the levy for members of staff who they cannot claim training funds to support.

European Social Funds

Colleges have used the European Social Fund (ESF) over the last two decades to help retrain and improve the skills of hundreds of thousands of people. Exit from the EU requires a fresh look at the priorities but should not result in any reduction in spending because this would widen existing social and economic divisions.

The UK/EU withdrawal agreement anticipated a transition until the end of December 2020 which implies that UK will continue to make payments to the EU until the end of the 2014-20  budget. In return, programmes like ESF will continue with the same set of rules, audits, clawbacks etc. For those who have ESF contracts and who have compliance sorted, this is obviously good news. Now that the UK is staying in the EU until later in 2019, things continue as usual.

In the longer term, the government has promised that a Shared Prosperity Fund will replace ESF though with different objectives. Whether Ministers keep the promise to maintain the same level of funding for social and regional funds remains to be seen. We believe the emphasis should be on providing a degree of continuity by maintaining funding levels but perhaps with less bureaucracy. Funds should be targeted on areas where economic activity is lower and unemployment is higher to narrow gaps in our society and to make the country work for everyone.

‎The amount of ESF funding received by colleges fluctuates widely because of the stop-start nature of government procurement and the complexity of the funding rules. At its height (in 2014-5) colleges received £100 million in ESF income and £18 million in direct European grants which is high because the previous programme was coming to an end. This represented almost 2% of total income and is less in absolute and relative terms than the £1 billion a year (3% of total income) received by UK universities from EU research funds. Nevertheless, the money is very important to colleges in the more economically disadvantaged parts of the country. The money is concentrated in a small number of colleges..

This is how one college used ESF funding in the 2007 to 2013 period:
“Calderdale College is running the Skills Enhancement Fund project with up to £33 million of ESF funding via the Skills Funding Agency. The project, which ends in 2015, engages with employers to invest in skills development and helps them respond to changes in market needs and the economy. Through contracts with providers and employers, the project has so far supported 43,400 starts on learning and helped people to gain over 14,700 accredited qualifications or units.”

Student Mobility and Erasmus+

The EU has encouraged student and staff mobility through schemes such as Erasmus+ for over 30 years. Erasmus+ aims to modernise education, training and youth work across Europe whilst encouraging a better understanding of different societies and the sharing of educational practice. The transition agreement reached between the UK government and EU in March 2018 effectively extends existing arrangements and rules until 31 December 2020, though with some tweaks in the details. However, whilst the Government's latest no-deal Brexit notice on Erasmus+ continues to underwrite the programme and encourages institutions to register for the UK Government guarantee, the notice suggests that the underwrite guarantee is subject to certain conditions.

In the current 2014-2020 Erasmus+ programme cycle, UK colleges have received over €77m for vocational projects through Erasmus+ to date, benefiting over 100 colleges. 266 separate mobility grants have been made to 96 UK colleges. Whilst the big focus in the past has often been on university student mobility schemes for a semester or a year abroad, colleges have delivered nearly 17,500 placements since 2014, almost 50% of the total number of mobilities delivered by UK institutions. Erasmus+ has been successful as it provides a mechanism for college students to undertake short placements in Europe. Short placements fit better with how college courses are traditionally delivered and the work or family commitments that college students often have. The opportunity for a European placement attracts students to college courses and can improve retention and student outcomes. In some parts of the UK, a lack of local work placements has meant that placements in Europe, in subjects areas such as social care or childcare, have been essential. There is no equivalent UK scheme to Erasmus+, and any future domestic scheme arguably could not guarantee the same work experience, foreign language and cultural benefits that Erasmus+ provides.

AoC’s 2018 survey of college international activity indicates the importance of EU countries to college international work. The UK is one of the largest host countries for Erasmus+ mobilities, and our strong vocational education system, population size and our place as the home of the English language mean the UK has welcomed significant numbers of Erasmus+ participants from EU27 countries. There is therefore considerable concern at European Commission level about the withdrawal of the UK from Erasmus+ after Brexit.

At the present time the UK Government is considering a range of future mobility options, including both staying in Erasmus+ as a non-EU programme country and also developing its own replacement programme. AoC's 2019 impact study on Erasmus+ in colleges shows the programme brings clear benefits to college students and staff. AoC will continue to push for the UK to remain in Erasmus+. 

Changing regulations (state aid and procurement)

There are quite a few rules which constrain ESFA, colleges and others in the education system designed on the basis that we provide services that trade across the EU and where the objective is to promote competition.

UK membership of the EU means that a large body of legislation has been shaped by EU directives including employment, public procurement, consumer protection, competition, energy, intellectual property and social security law. It is a matter of conjecture what EU exit would mean for these various laws because this would be a decision for the Government in future, would be tied up in the UK/EU exit negotiations and would be affected by the UK’s wider international commitments. Some of the laws that vex colleges most (for example public procurement laws or state aid) are part of World Trade Organisation (WTO) commitments. Exit from the EU might allow some flexibility because their main focus is to improve competition for services where there is cross-border trade. There is very little of this in further education and training. However the UK Government has pressed for decades for governments to open their markers and economies so it is not that likely that it will choose to close them off in our sector. AoC nevertheless continues to push for a more intelligent approach to developing education and training capacity.

Colleges would love less regulation but it is not clear that Brexit would deliver it for them. Most education regulation is home-grown:

  • The Ofsted system was designed to meet English priorities and issues.
  • The system of qualifications and awarding bodies has adapted to fit EU classifications and requirements on mutual recognition but is recognisibly and distinctly English.
  • The UK has four different national education systems which allows different approaches in different places regardless of what might happen at EU level.
  • Other sources of regulation in English colleges include a very English approach to funding (described by Professor Alison Wolf as being unique in the world).
  • Child protection rules, health and safety laws, freedom of information and other causes of additional work for colleges are all very heavily influenced by the government in Westminster.

The Foreign and Commonwealth Office's balance of competence review of education from 2013 concluded that EU policy making had some impact on UK policy but not that much and arguably EU less influential than OECD.

VAT after Brexit

The UK introduced Value Added Tax (VAT) on the day that it joined the EU. VAT rules in EU members states are partly controlled by the EU treaties because a slice of VAT revenues is used to calculate contributions to the total budget. This means that college students are disadvantaged by the current unjust VAT regime which reduces the resources available to them by about 3% compared to school sixth form students. Government funding levels fix the full-time funding rate for 16 to 18-year-olds at £4,000 until 2019 which is 20-25% less than paid to pre-16, half that available for HE students and insufficient to build a better technical education system.

There are two sets of VAT rules that could be reviewed once the UK Government has more control over the legislation:

  • the rules that limits public service VAT refunds to councils, academies and national museums‎ but leave colleges outside the fence.
  • the rules that exempt education (schools, private schools, colleges, universities) from VAT but leave private training providers and private universities outside the fence.

Colleges lose out from the first set of rules but benefit from the second. AoC has argued for years that the government should extend the VAT refund scheme to all sixth form education. There is risk in seeking changes in VAT rules is that UK Government might use its new found flexibility to "do a New Zealand" and extend VAT ("Goods and Services Tax") to just about everything‎. This is not beyond the realms of possibility. Labour's 2017 manifesto proposed VAT on private school fees and some Conservative MPs have described this as an idea worth considering. Given the importance of education and training to future economic success, any changes to VAT rules should be introduced with care. The VAT paid by colleges for 16 to 18-year-olds acts as a form of learning tax which reduces the resources available to the most efficient and effective sixth form providers..

More information

If you have any queries about the information on this page, please contact Julian Gravatt in the first instance.