Autumn Statement Submission 2016

Published: 10 Oct 2016


The Government’s current plans for public spending on post-16 education and training were set out in the 2015 Spending Review. In key decisions, Ministers decided to fix the funding rate for 16 to 18 education, to protect the adult education budget and to introduce major changes to the system via the apprenticeship levy, skills devolution and the extension of student loans. These decisions introduced some welcome stability and predictability to parts of the system at a time when radical changes are being made to apprenticeships. At the very least the Government should honour these spending decisions but it should also consider doing more.

The decision to leave the European Union (EU) casts a sharper light on the weaknesses in our society and economy in particular the shortfalls in workforce skills. Some companies and public services employ significant numbers of staff from other EU countries. It is likely that Brexit will mean more controls on movement to the UK for work and therefore more must be done to educate and train the UK workforce. In the longer term businesses, individuals and families should take back more responsibility for this. In the short term, the Government needs to act.

In this paper, AoC suggests some actions. We think it is necessary to increase 16 to 18 funding rates to avert a funding crisis in academic and technical education for that age group. At the same time, the Department for Education (DfE) needs to ensure money is used efficiently by tackling the waste that arises in small sixth forms. The current plan for apprenticeship funding rates and the existing GCSE funding condition should be reviewed. As well as protecting the budget for adult skills and UK based European Social Fund (ESF) programmes, there will need to be a new approach from 2019. Opportunities should be seized by DfE to make the education system more efficient and the allocation of budgets more logical. Tough issues related to pensions should be tackled sooner rather than later. We explain the detail of these proposals in the rest of the paper which covers issues mainly within DfE’s remit.

Main recommendations

Our two main recommendations are

  1. HM Treasury should set a medium term target to increase spending on education and training to 5% of GDP and direct a share of the additional funding to post-16 education.
  2. The management of education spending should be reformed to improve efficiency, to allocate funds to areas of greatest need and to provide more predictability.

Funding issues

  1. The national base rate for 16 and 17-year-olds (currently £4,000) should be increased so that it provides the necessary funds for high-quality education.
  2. The recommendations of the Sainsbury Review should be fully implemented and funded, including additional funding for work placements and for 18-year-olds.
  3. The Adult Education Budget should be sustained at least at £1.5 billion in the short term and should be used to guarantee a Citizen’s Skills Entitlement. After 2019, the budget should be used to support a new English Social Fund (new ESF).
  4. The apprenticeship funding rates that take effect in May 2017 should include a higher factor for 16 to 18-year-olds, should reflect area costs for technical programmes and should retain a factor for those from low income families.
  5. The Government should topslice the apprenticeship levy to create a fund to use to promote access to apprenticeships and help raise quality.
  6. Financial support for young people should be reviewed to eliminate unhelpful obstacles to participation, for example the transport costs and child benefit rules.
  7. DfE should reallocate capital budgets so that colleges have funding for building maintenance and equipment.
  8. HM Treasury and DfE should plan for the additional education places that will be needed when the number of 16-year-olds increases towards the end of the decade.
  9. There should be a 10-year programme to double the supply of maths teachers across all parts of the education system to reach a goal by 2030 that all 18-year-olds are qualified at the current Level 2 standard and the majority reach Level 3.

System improvements

  1. The Budget rules should be amended to include three-year funding agreements, virement across the age 19 and more end of year flexibility.
  2. DfE should carry out some targeted reviews of post-16 provision in schools using the two tests developed in post-16 area reviews of colleges.
  3. DfE should review the English and maths condition of funding and introduce new English and maths qualifications for professional and technical students.
  4. HM Treasury and DfE need to streamline the process for colleges to apply for restructuring funds and to double the transition fund grants so that area review recommendations can be implemented quickly.
  5. DfE and the Department for Communities and Local Government (DCLG) should publish a Skills Devolution Green Paper to help clarify responsibilities and priorities and encourage debate about the potential benefits and risks.
  6. On the day that the UK leaves the EU, VAT should be removed from all publicly funded education for 16 to 18-year-olds.
  7. The current student loan system should be converted into a personal learning account system which includes a lifetime loan allowance and maintenance loans for all courses at Level 4 and above.
  8. HM Treasury, DfE and DCLG should re-open negotiations on the Teacher Pension Scheme and Local Government Pension Scheme to contain the costs of the scheme for employers.
  9. A DfE review should consider rationalisation of agency responsibilities but also ways to reduce the costs of assessment and inspection across the education system.