Skip to main content

FE and skills must be reformed to meet the economic and social needs of the nation, says AoC

09 April 2024

100 Opportunity

The future government must reform the apprenticeship levy, introduce a young person’s guarantee to education and training, and establish a national social partnership body, the Association of Colleges has said.

In a seminal report, 100% opportunity: the case for a tertiary education system, ahead of mayoral and general elections this year, AoC says that England’s post-16 education system needs urgent reform if it is to meet the needs of 100% of young people and adults.

Currently, there is a set of siloed and fragmented education policies, with some good features, but without any clear strategy and priorities. Despite this, colleges across the country still manage to deliver great outcomes. However, they could do so much more with a better system.

The changes set out by AoC would empower colleges to fulfil their role in boosting our economy and society, by ensuring equitable access to education and improved outcomes for individuals and employers alike.

In the report, new analysis from London Economics is brought together with AoC’s expert insight to conclude that the existing system is ineffective, inefficient and unfair despite having strength in parts.

It’s ineffective because even with sustainable public investment and the collective effort of those working in post-16 education, the system fails to deliver the outcomes needed by society and the economy, with too many people not achieving Level 3 by the age of 19, skills shortages increasing and stalling economic growth.

It’s inefficient because a very high proportion of government funds supports young people to complete higher education (HE), with far too little funding going to those who need to access further education and apprenticeships, and those adults who want to re-train or upskill.

It’s unfair because the fact remains that the household and place you grow up in has a major impact on your chances of progressing and achieving in our education system. Socioeconomic class is a major driver of success for the most advantaged and lack of progress for those from poorer households and places.

Research from London Economics, and commissioned by AoC, found that based on current trends, the net annual cost of higher education funding will be £3.14 billion in 2030/31, adding real pressure on HM Treasury and Department of Education budgets, and therefore putting at risk the funding across the rest of the education system.

Research also found that since the introduction of the apprenticeship levy, there have been fewer apprentices, a big drop in young apprentices (aged under 25) and narrowing of access with the proportion of starters from deprived areas decreasing and least deprived areas increasing, all while the average cost of an apprenticeship has doubled.

What a system that serves everyone would look like

  1. A national social partnership body, working across the government to support strategies like the green transition plan, NHS long term workforce plan, industrial strategy, digital transition and inward investment plans, and set priorities for the whole country.

  2. An effective system of devolution, establishing local skills improvement plans (LSIPs) which are aligned to national priorities and set out how the locality can deliver on them as well as the local economic growth priorities.

  3. A young person’s guarantee and demand-led adult funding, guaranteeing every 16-year-old a minimum offer they can access and providing adult funding so everyone can access the learning and skills they need.

  4. Mission clarity of schools, colleges, universities, encouraging them to collaborate and signup to the new system, ensuring there is a complete ‘offer’ for every 16-year-old and bringing together the adult education budget (AEB), apprenticeships, Higher Technical Qualifications (HTQs) and degree education for adults.

  5. Curriculum and qualifications that reflect national and local needs, through a national review centred around more hours for 16 to 18-year-olds, a broader curriculum, stronger enrichment and more inclusion and urgently reconsidering English and maths GCSEs and the resit policy.

  6. A reformed apprenticeship levy, top-slicing the levy to fund national and local priorities.

David Hughes, chief executive of Association of Colleges, said: “Our report is an urgent call to action for both the government and the Labour party. We desperately need an effective, efficient and fair tertiary system, and the recommendations we set out would achieve that by putting colleges at the heart of the reform.

“Colleges are in the unique position of playing a significant part across all areas of post-16 education and skills, and in all areas of the country.

“With the changes we propose they will be able to motivate, engage and support far more 14 to 16-year-olds, young people and adults, and support more employers. As anchor institutions in a tertiary system they would be able to work with schools and universities to offer a broader, more coherent place-based offer to young people, adults and employers – and therefore help the economy and society as a whole.”

Pietro Patrignani, Principal Consultant at London Economics, who led the study, said: "Apprenticeship starts in England in 2022/23 were 160,000 lower than those observed before the introduction of the Apprenticeship Levy in April 2017. This decline is particularly alarming as it disproportionately impacts those most in need of training, in particular younger people and those from disadvantaged backgrounds. Over time there has been a notable shift of apprenticeship funding towards higher-level apprenticeships, leading to a significant decrease in training opportunities at lower levels."

Alice Battiston, a Senior Economic Consultant and co-author of the study, said: "In addition, northern regions with traditionally high levels of apprenticeship intensity and SMEs have been particularly affected. It is now time to think how the system may be reformed and improved to provide a wider range of training opportunities”

Maike Halterbeck, a Divisional Director at London Economics and author of the study, said “The recent reforms to student loan repayment terms implemented in response to the Augar Review are expected to result in a large decline in the net Exchequer cost of the English higher education funding system. However, in spite of these reforms, the costs of the system continue to apply significant pressures on the public finances – particularly in the context of a demographic boom in the number of 16 to 18-year-olds.”

“A lot of the debate has focused on the current costs of the system. However, the surge in expected costs going forward as a result of rising student numbers will need to be addressed urgently.”

The full report can be accessed here.