Skills and post-16 Education Bill, House of Lords, Second Reading, 15 June 2021

As furlough ends, no community will be untouched by unemployment. It is vitally important that a joined up, place-based employment, skills and careers system offers adults and young people the recovery they deserve by providing access to quality education and training opportunities.


Key messages

  • As furlough ends, no community will be untouched by unemployment. It is vitally important that a joined up, place-based employment, skills and careers system offers adults and young people the recovery they deserve by providing access to quality education and training opportunities.
  • Local government has an important role in making the skills and employment system work for their area and provide strong local strategic and democratic oversight. Councils have direct functions to plan post 16 skills, support young people with specific needs and deliver adult and community learning and other related functions. Mayoral combined authorities (MCA’s) have devolved responsibility for the adult education budget (AEB), which they have used to reshape the local further education offer, working with employers, FE providers and constituent local authorities. This briefing focuses mainly on local authorities outside of devolution areas, unless otherwise stated.
  • The LGA supports an employer-led approach to develop Local Skills Improvement Plans (LSIPs) alongside training providers. To enhance this, we believe MCAs and local authorities should be core and strategic partners. Their wide-ranging knowledge and expertise on this agenda is missing from the Bill, and we hope this is redressed during its passage through Parliament to support the employer-led approach.
  • Local government should be a core and strategic partner in the development of Local Improvement Plans, and we recommend that this role is outlined in any statutory guidance for LSIPs implementation.
  • The Bill’s provision to broaden opportunities for adults to access higher technical level skills through Lifetime Skills Guarantee initiatives are welcome. But there are too many adults not yet qualified to Level 2 (equivalent of GCSE level) who are unable to access this offer. These groups are most at risk of being out of work and increasing their skills is crucial to improve their chances in the job-market.
  • Local authorities’ adult and community provision is the bedrock of adult learning, providing adults with opportunities to upskill and retrain, through the Adult Education Budget (AEB). To accelerate and expand opportunities for people to progress their skills at every level, the Adult Education Budget should, as a minimum be restored to its 2010 levels (from £1.5 to £3 billion).
  • The Bill is silent on how the needs of public sector employers, such as the NHS and local authorities, will be factored into the development of LSIPs. With the right powers and resources, local government would be well placed to act as a convener of local public sector employers’ and feed their strategic input into LSIPs.
  • Good jobs and career opportunities where people live are central to the Government’s levelling up ambitions. Local and combined authorities are ambitious to do more to join up local provision to better meet the needs of communities and create local, integrated skills and employment offers tailored to the needs of local economies and residents. We will be working with government to ensure that the changes put forward in this Bill make use of local government’s expertise to deliver the best outcomes for every community.

Local skills improvement plans (Part 1: Chapter 1, Education and Training for Local Needs)

  • The Bill legislates to place Local Skills Improvement Plans (LSIPs) on a statutory footing. These plans will be developed by employer representative bodies – for example, accredited Chambers of Commerce - in partnership with colleges and training providers and in consultation with key local stakeholders, to set out training provision for a local area and align it with employers’ skills needs. The aim is to give employers a stronger voice in shaping local skills systems and ensure people have the skills needed to secure jobs.
  • The Bill introduces a new power for the Secretary of State for Education to designate employer representative bodies to lead the development of the plans (2) and to remove designation (3). It also places a statutory duty on all colleges and training providers to co-operate in the development of (LSIPs), and act in regard to the plans.
  • Employer representative Bodies will draw on employers’ views operating within a specified area, and any other evidence, to assess the skills, capabilities or expertise that are, or may be needed in the future. Collaborative arrangements could also be suggested if they could support a better response to local needs.
  • Employer Representative Bodies will be directly accountable to the Secretary of State.

The LGA View

  • Every area needs a mix of provision, specific to their local context, community and sub-economy. As no area is the same, a local approach is important and the LGA supports a differentiated model tailored to local needs. However, the Bill is not explicit about certain features of the LSIP, including what constitutes ‘local’, ‘a specified area’ or the scope of further education provision included. However this may become clearer once LSIPs are piloted and evaluated. It is also not clear how they will link with Skills Advisory Panels.
  • The importance of local input into provision and strong partnership working to ensure the best outcomes has been acknowledged by bodies as part of the LGA-led Skills Taskforce. The LGA believes the case for a more place-based partnership for education, employment and skills that brings together employers, education, employment and training providers, democratic local authorities as conveners of partners and local leaders (local authorities and Mayoral Combined Authorities), unions and other sector representatives has never been stronger.  
  • The LGA supports greater strategic direction from employers in the delivery of post-16 technical training and education. However, alongside this there needs to be a strong role for local government - local authorities and mayoral combined authorities (MCAs) – in the development of LSIPs to provide local oversight and democratic accountability for the outcomes they deliver. We  recommend that local government’s role as a core strategic partner is outlined in any statutory guidance regarding LSIPs implementation.
  • Local government remains committed to creating an integrated, comprehensive skills and employment system that works flexibly and provides support for learners of all ages, skill and support levels, and are working on the ground to join-up national and local services to drive better training and employment outcomes. As a strategic partner in LSIPs, local government would ensure these plans work alongside existing local training provision and services, and build on existing infrastructure and local partnerships.
  • It is vital that there is join-up between post-16 education and technical training and the commissioning and delivery of other local support, services and training pathways, to enable all learners achieve their potential. Many young people (including care-leavers, those with SEND or NEET) and adult learners, including long-term unemployed people, face complex barriers and need access to a range of local services to enable them to be training or work ready.  Local authorities can provide the link with adult education provision and other support (such as mental health, housing, debt management, support for parents and childcare support) to prevent those most in need of support from being left behind.
  • While local authorities have limited influence over national skills and employment system, their role is significant in trying to make it work for people and places and filling in the gaps to provide a coherent skills and employment offer. Therefore, it is logical that their wide-ranging role is acknowledged and integrated into the LSIP process:
    • Prime delivery partners for adult and community learning to level 2
    • Statutory duties to plan young people’s learning for their area, including NEETs (not in education employment or training) and SEND.
    • Many fund further education colleges outside of the Education and Skills Funding Agency, and support capital investments to improve the local FE estate.
    • Connect, simplify and promote multiple national employment, training, skills and economic growth initiatives so they are greater than the sum of their parts and reach more residents and businesses.
    • Have economic development functions so work closely with businesses (large / small) and bodies such as accredited Chambers and have a new direct role over the Levelling Up Fund, Community Renewal Fund and the upcoming Shared Prosperity Fund.
    • Perform local and granular level analysis of national data including ward level unemployment, district level educational attainment to ensure provision is targeted 
    • Use locally generated data and strategies to forward plan – to address growth, inward investment, SME and job growth, input to wider spatial strategies including Skills Advisory Panels
    • Identify, promote and incentivise learning with residents in their communities.
  • Mayoral Combined Authorities have devolved responsibilities for over 50 per cent of England’s Adult Education Budget (AEB) and are responsible for the planning of adult education in their areas. Given their important role in this space, they should have a clear and strong role in developing the further education offer for their local area working with employers and providers, and working closely with constituent local authorities. In areas not covered by devolution deals, employer representative bodies and local authorities should work across functional economic areas, or a travel to work or learn pattern.
  • Public sector organisations, including the NHS and local authorities, are major local employers and their skills needs must be considered in the forward planning of skills and training. Add to this the Government’s commitment to relocate Whitehall departments and agencies to different parts of the country, the workforce considerations are acute. However, the Bill and explanatory notes are silent on how the skills needs of public sector organisations will be factored into the development of LSIPs.
  • Local government would be well placed to act as a convener of local public sector employers’ and feed in their strategic input into LSIPs. Councils and MCAs would need recognition of this role, potentially through statutory guidance and adequate funding.

Support for Lifelong learning (Part 1: Chapter 3)

  • The Bill aims to introduce a new loans system to allow adults to access funding for courses and flexible access to learning across their lifetime. The “lifelong loan entitlement” will provide all adults with four years’ worth of loan funding for higher technical and degree level learning (levels 4 to 6), at university or college, and enable people to take-up individual modules to study flexibly alongside work. A full consultation is expected this year. The Government will lay the underpinning secondary legislation in Parliament by summer 2024, in order to introduce the “lifelong loan entitlement" in 2025.
  • As part of the Plan for Jobs, the Government introduced a new Level 3 offer (equivalent to A level) to support adults not yet qualified to this level to pursue training for a range of economically viable qualifications.

The LGA view

  • There are several elements to the Lifetime Skills Guarantee. The provision for adults to pursue their first Level 3 in-demand qualification is welcome, as is the ‘delegated’ role for MCAs which will allow them to plan how the L3 offer will work locally. We further recommend local flexibility is applied to all areas such as relaxing the eligibility for unemployed people who are re-skilling and changing sectors but who may already have a First Level 3 qualification, or those that are furloughed and need to retrain.
  • Supporting individuals to be work-and learning-ready must sit alongside developing higher-level skills. Without a skills escalator, the Government’s policy to support social mobility will not be fully realised.
  • Funding for adult skills mainly comes from the £1.5 billion annual Adult Education Budget (AEB), which has been vital in providing support for those without Level 2 qualifications to improve their basic skills and gain essential qualifications, and we know that where it is devolved MCAs have used it innovatively. The overall AEB funding pot has reduced by 50 per cent over the last decade, which has coincided with a drop in adult learner numbers. AEB funding should as minimum, be restored to its 2010 levels to expand training opportunities and help people increase their skills, alongside the lifetime skills guarantee.

The regulation of Post-16 education or training providers (Part 3: Chapter 1)

  • The Bill plans to introduce a new list of independent training providers to “indicate which providers have met conditions that are considered to prevent or mitigate risks associated with the disorderly exit of a provider”. Any provider not on the list will not be awarded contracts.
  • Conditions for a provider to be included on the list may relate to whether they have a student support plan; insurance cover; willingness to give access to information about the owners; and those relating to the relevant provider taking action specified in directions given by the Secretary of State. The Secretary of State may by regulations amend subsection (3) so as to add, vary or remove a category of education or training.

LGA view

  • The provision to introduce a new list of independent training providers, who have met the required standard is welcome as this would ensure a high-quality education and training offer.
  • Independent training providers play a key role in many local areas, providing valuable learning or support for both adults and young people. Due to growing gaps in learning provision, particularly for the vulnerable and disadvantaged groups, sudden removal of providers could result in significant challenges for local training and education provision which will need to be managed.
  • Independent training provider lists should therefore be developed in consultation with local authorities to ensure that the introduction of the assessment criteria does not result in gaps in provision, and to avoid any swift national changes that could disrupt the local market of providers.

Further education in England: intervention (Part 3: Chapter 1)

  • The Bill seeks to extend the statutory intervention powers currently applicable to colleges under the Further and Higher Education Act 1992.
  • This will enable the Secretary of State for Education to intervene where there has been a failure to meet identified local needs, and to implement structural changes such as mergers in order to secure improvement.

LGA view

  • It is not yet clear how it will be determined when a post-16 training or education institution is not meeting local needs. We would like to understand the criteria for mergers and they should not be purely based on making financial savings. This power may unduly affect smaller colleges in more remote or rural areas.  
  • We are concerned that the Secretary of State will be the first port of call to make a decision on the local relevance of plans before approving them, and have powers to intervene for poor plans and / or poor performance.
  • The first port of call for approving local plans and remedying poor local performance should, by its very nature, be local. We believe there should be more local democratic accountability for Further Education provision across a local area.
  • There are lots of ways this can be done locally at local authority level, from ensuring providers attend scrutiny committees or employment and skills boards, for example. This could an element of the final LSIP approach which should include local authorities as educational authority and, or, adult learning authorities.  

Background

Councils’ role supporting jobs and skills during the pandemic

  • Throughout the pandemic, local authorities have been trusted to coordinate employment, training and business support for their local area. Many set up redundancy taskforces, delivered grants to businesses, supported employers to create new Kickstart placements and created more within their own councils, kept adults learning through community provision and online support, and supported FE providers locally.
  • Devon County Council responded rapidly to the collapse of one of the region’s biggest employers, Flybe, as well as the other economic impacts bought on by the pandemic. They swiftly set up a redundancy support team, aimed at being the ‘joining glue’ for local support, including linking recently redundant workers to training support, through both the adult education budget and a £750,000 fund to provide training focused on transition to growth sectors.
  • Halton Borough Council, in the north west of England, and the London Borough of Hounslow, have found a significant increase in vacancies in the healthcare sector, forming strong partnerships to help move people from other forms of local employment, notably Heathrow Airport and manufacturing, into temporary work in sectors with a growing number of vacancies.
  • For further in depth case-studies, see the LGA’s local employment and skills recovery hub.

Joining up delivery to reach those who need it most

As a result of the pandemic, the Government has introduced welcome new employment and skills support, including through the Plan for Jobs. Coordination of these funding streams to target them to the needs of communities and individuals is crucial as the existing national skills and careers support system is fragmented and doesn’t serve people and businesses who need it. At our last count in 2017, £10.5 billion was spent across 20 employment and skills funding streams and managed by eight departments or agencies.

As we turn to recovery, local government remains committed to creating the conditions for new jobs and supporting people to retrain or improve their skills, as described in Government’s levelling up ambitions. This can best be done by giving combined authorities and groups of councils, working with local and national partners, the powers and funding to plan, commission and oversee a joined-up system by bringing together advice and guidance, employment, skills, apprenticeships and business support for individuals and employers, at the local level.

There are clear benefits from national and local government combining resources and expertise. Based on analysis of an anonymised medium-sized combined authority, a localised model could lead to additional fiscal benefits for a local area of £280 million per year, with a benefit to the economy of £420 million. This would be associated with an additional 8,500 people leaving benefits, an additional 3,600 people achieving Level 2 skills, and an additional 2,100 people achieving Level 3 skills.

The Government’s forthcoming Levelling Up White Paper provides an opportunity to boost local recoveries by empowering councils and combined authorities to streamline the delivery of skills and employment support in their areas, accompanied by a sustainable funding settlement.

Funding pressures: Adult Education Funding Clawback

Council run Adult Community Learning Services play a vital role in providing adults with flexible access to learning and opportunities to upskill and retrain. Funding for these services mainly comes from the £1.5 billion annual Adult Education Budget (AEB), which has faced a 50 per cent reduction since 2010.

Adult education providers, including councils, are allocated with funding calculated on their projected number of learners for the year and remaining allocations are reclaimed by the Education and Skills Funding Agency (ESFA) if the provider misses these targets. As COVI9-19 part affected the 2019/20 academic year, the Department of Education (DfE) lowered their reconciliation threshold at which the ESFA reclaims funding from 98 per cent to 66 per cent, in recognition that learner numbers had reduced but costs remained for providers.

In March, the DfE subsequently announced that the threshold will be increased to 90 per cent for the 2020/21 academic year. This decision was unexpected and will have serious financial implications for councils’ adult education learning services.

A recent survey of ACL providers – primarily councils – by Holex (the representative body), found that 81 per cent of providers would not reach the 90 per cent target. The 2020/21 academic year has been equally, if not more exceptional than 2019/20. The change does not take account of the continued impact of lockdown on learning, local variations, or the additional set up costs for socially distanced learning in classroom settings and online learning.

The Government needs to urgently review the new 90 per cent reconciliation threshold, taking into consideration real-time data from providers’ returns at the end of the academic year. If the threshold decision is not lowered, councils will need to find money from already stretched wider council budgets, or will be forced to make further reductions to adult community learning services in the next academic year, when these services are most needed.

Contact

Megan Edwards, Public Affairs Support Officer

megan.edwards@local.gov.uk