The UK is due to leave the European Union on Thursday 31 October 2019. The new Prime Minister, Boris Johnson, promises that this date will be met, even if there is no deal. If there is no deal, there will be a lot for everyone including issues relating to travel, migration, customs, tax, licensing and other rules.
College Readiness Pack
AoC staff have produced a 21 page College Readiness Pack to help those in leadership positions at colleges work through the issues for their staff, students and institutions. By “leadership positions”, we mean everyone from the chair of governors and principal to course leaders and supervisors. The pack is available here and is correct, to the best of our knowledge on 8 October 2019. If we make updates, we will clearly indicate them by putting a new version number and date on the cover page.
We recorded a webinar on 16 October 2019, the recording is available here.
We have also recorded a series of three podcast:
If you have any questions on Brexit please email email@example.com.
Colleges and Brexit
The UK has published more than 750 communications about no deal since August 2018, many of which promise short-term continuity. The EU commission and member state governments have likewise promised to act to reduce disruption in the short-term. There will, however, be change.
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 but others will happen quickly. There may also be confusion. Many people have switched off listening to news about Brexit but may then assume that lots of things will change when it happens. Colleges will have a role in these cases in explaining that, contrary to what they believe, nothing has actually changed.
Longer-term issues associated with Brexit
The impact on colleges is less than in some areas of national life but 45 years in the EU has made a difference to our sector. This AoC position paper sets 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 rest of this website explains the main Brexit issues for colleges:
- Scenarios (updated 7 October 2019
- No deal contingency planning advice (updated 7 October 2019)
- Migration and freedom of movement (updated 7 October 2019)
- Recruiting and retaining teachers
- Students of sixth form age, adult learners and apprentices
- Changes to regulations (state aid, procurement)
- VAT after Brexit
- Student Mobility and Erasmus
The current position
Following a year and a half of negotiations, the UK government and EU agreed a Withdrawal Agreement and Political Declaration in November 2018. The UK Parliament refused to approve the deal in spring 2019 (in three separate votes) so the EU Council extended the withdrawal date to 31 October 2019. A new prime minister, Boris Johnson, was elected by the Conservative party in July and has promised that Brexit will happen on this date. 31 October 2019 is just a few weeks away and there are various scenarios for what might happen:
- The UK exits on 31 October 2019 with a deal: If this happens, then the issues for colleges in England are likely to be straightforward because any deal is likely to involve some form of transition. The Home Office has opened its EU Settlement Scheme for applications from any of the 3 million EU nationals. This process continues until 2021 and while it does, it is unlikely there will be significant changes to the immigration system, employment rules or education funding arrangements for EU nationals. Any deal is likely to include transitional arrangements for UK participation in EU programmes like ESF and Erasmus until December 2020. For all intents and purposes, a deal inmplies little change for colleges in 2019-20.
- No deal: If the UK government pulls out of the deal and there is no deal, there is a longer list of issues to address. These include issues relating to people, migration, travel, customs, tax, licensing and other rules. The UK published more than 750 no deal notices since August 2018 which set out scenarios. The government 's no deal planning (known as "Operation Yellowhammer") involved estimates about what a worse case scenario might involve. This document published by the government on 2 August 2019 sets out the scenarios. 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 main issues for colleges to watch out for relate to employment of EU nationals ("no change" in right to work checks until 2021), access to publicly funded FE courses by EU nationals (eligibility rules unchanged in 2019-20 academic year), teacher recruitment, food supplies, data protection, EU funded programmes and more complex contracts (eg those relating to bank loans and insurance). DfE updated its no deal notice for colleges on 5 August 2019.
- Delay beyond 31 October 2019: Despite what the Prime Minister promises, there may be a delay perhaps following a vote of no confidence and/or a decision to proceed with a second referendum or a new general election. There has been endless speculation about what might happen. Nevertheless, if it happens, then, as with the current deal, not much changes in the short term but bigger developments in other respects (for example a new government).
DfE updated its no deal contingency planning advice for colleges on 5 August 2019. DfE's advice covers:
- employment of EU nationals ("no change" in right to work checks until 2021)
- access to publicly funded FE courses by EU nationals (eligibility rules unchanged in 2019-20 academic year)
- teacher recruitment
- food supplies
- data protection
- EU funded programmes (those receiving ESF or Erasmus+ can access a government guarantee of funding (up until December 2020)
AoC's College Readiness Pack published on 8 October 2019 offers some advice on short-term planning
The government issued more than 100 no deal notices before March 2019 and is going through a new planning exercise now. Key points:
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 later in autumn 2019. At the time of writing, the next steps are unclear.
The current position
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 government presented an Immigration and Social Security Co-ordination Bill to Parliament in January 2019 that repeals EU law relating to free movement and places EEA nationals and their families under UK immigration control after Brexit, while protecting the status of Irish citizens in UK immigration law. The bill has passed most of its stages through the Commons but has not yet been debated in the Lords.
The UK/EU Withdrawal Agreement proposed a transition period after a March 2019 Brexit date that would run until December 2020, during which time freedom of movement could continue 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.
If the UK leaves the UK without a deal, the government’s no-deal notice said that EU nationals should register with the EUSS by December 2020 and that a new status of European Temporary Leave to Remain would be introduced. People would be expected to apply for ETLR within their first 3 months in the UK. The Home Office say that leave to remain would normally last for 3 years after which time the new immigration rules would apply.
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. The proposal is for a common set of rules covering all non-UK nationals but with considerable differentiation based on individual skills and future trade deals. The Home office cannot introduce the new system until it has legal authority to do so (which will require a further bill) and this will require clear political direction on key issues. 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 Home Office's Immigration white paper was published in December 2018. with a plan for a 12 month programme of engagement after which there was an expectation of detailed legislation but the current situation is unclear because the new Prime Minister and Home Secretary has talked about new approaches (eg a Points based system). These are likely to build on existing plans which are as follows:
- A single set of rules: the government's central plan is for a single set of immigration rules covering EU and non EU nationals. The baseline plan involves extending the current Tier 1,2, 4 and 5 rules to EU nationals with (a) possible variations for specific countries as part of trade deals (including any deal with the EU) (b) a promise to make the new arrangements more flexible, digital and customer friendly than the current system.
- Higher threshold for migration from EU citizens: there is a proposal for a single £30,000 salary threshold for 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 former Home Secretary (now Chancellor), Sajid Javid, asked the Migration Advisory Committee in summer 2019 to look again at the threshold. The white paper sets out several ways in which the Tier 2 system would be improved with the removal of the need to prove that jobs cannot be filled locally and a promise that visas will be issued within 3 weeks but the context for the proposals was to reduce low skilled migration with the hope that the existing pool of EU workers and British citizens will fill available jobs.
- 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 in response to the white paper is available here
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
- Home Office might apply a blanket salary threshold (eg extend the £30k used for non-EU workers) 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.
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 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.
- 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. The trickiest area of all would be distinguishing between UK and Irish citizens.
- 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. There are several senior UK politicians who are married to EU27 citizens and whose children would therefore 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.
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.”
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 2014-2018 Erasmus+ programme cycle, UK colleges received over €59m for vocational projects through Erasmus+, benefiting over 100 colleges. 200 separate mobility grants have been made to 95 UK colleges, with a 20% increase in funding to UK colleges in 2017 compared to 2016.
Whilst the big focus in the past has often been on university student mobility schemes for a semester or a year abroad, there have already been 34,239 UK vocational mobilities through Erasmus+ in the current funding cycle. College student and staff participants account for half of these. 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 there is no commitment from the UK Government to remain in Erasmus+ beyond the current programme cycle. However, there is clear acknowledgement of the soft power of Erasmus+ and of the benefits to students. There may be options for the UK to continue participation after exit from the EU as a non-EU programme country such as Norway or Iceland. AoC will continue to push for the UK to remain in Erasmus+.
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.
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. 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..
If you have any queries about the information on this page, please contact Julian Gravatt in the first instance.