Investing in Skills: Taking Forward the Skills Strategy

A NIACE Response to the Learning and Skills Council Consultation Paper on Fees, Funding and Learner Support in Further Education

Published: October 2004

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1. This response is from NIACE, the National Institute of Adult Continuing Education. NIACE’s aim is to improve opportunities for adult learners across all sectors with a particular focus on those adults who have not had successful access to education and training in their initial education. We are pleased to have the opportunity to respond to ‘Investing in Skills: An LSC Consultation Paper on Fees, Funding and Learner Support in Further Education’ (issued July 2004).

2. NIACE supported the government’s Skills Strategy white paper ‘21st Century Skills - Realising Our Potential’ and in particular those parts of the strategy which prioritise helping adults with low skills and no qualifications or few qualifications to achieve a platform (the level 2 entitlement, currently being trialled in the North East and South East regions of England) for sustainable and productive employment since this priority has the potential to open learning more widely to adults who have had least benefit from education and training. We would also want to emphasise the point that such skills also fit people better for their roles in their communities - a point made strongly by Ministers but sometimes less so by the Learning and Skills Council.

3. In addition the consultation paper considers the implications of the White Paper’s commitment to target the delivery of level 3 qualifications that meet particular regional or sectoral skill priorities.

4. NIACE understands that in order to deliver these priorities within existing resources there will need to be some rebalancing of the investment in funding in education and training. We understand and support the intention that employers and those learners who can afford to do so should contribute more. We believe that a high fee/high volume economy gives the best opportunities for all learners to be able to take part in learning and particularly for those with low skills and low qualifications to discover and recognise that they are able to join in and that their needs are at the forefront of government policy. We want to see a rich system available to all learners and for those who cannot afford to take part, a system of remission that enables them to do so. We are however particularly concerned to see that those people entering the system who do not yet feel ready to commit to a full level 2 should find that they have sufficient support to enable them to participate in learning and to become engaged.

5. To turn to the specific comments and questions in the consultation:-

6. NIACE supports the argument for changing the balance of current investment in an environment where public funding is limited. It would of course be easier to implement the proposed changes in a period of more generous growth funding for further education, as the injection of more funding would have the potential to reduce and mitigate the inevitable turbulence and we believe that the Government should endeavour to increase funding for FE if at all possible.

7. As stated, we do support the case for change and the priorities for the investment of public funds although we see some issues where qualifications in technician advanced craft and associate professional skills will result in very high levels of income to those taking part and wonder whether in such sectors, free provision is necessary. We are also concerned about the position of adults who have obsolete qualifications at level 2 (for example those adults, such as women returners, who have been outside the labour market for a significant period).

8. We are particularly supportive of the need to safeguard a varied range of learning opportunities for personal fulfilment, community development and active citizenship. We believe that this is an important contribution to the cultural and personal life of adults and also to the civic life of communities and of the nation, however we would wish to see such opportunities available to all of the population, not merely those who can afford to take part. We believe that it is essential for the level two entitlement to be interpreted as widely as possible and that there should be a range of accessible provision for those below level two to begin to access education and training.

9. NIACE accepts that this rebalancing of priorities may prove challenging. Free provision will not in itself necessarily result in high recruitment of disadvantaged learners as the experience of Skills for Life programmes have shown. Level two learners may have higher non-completion rates than current learners and the rise in costs of learning may result in at least a temporary drop in numbers affecting the viability of provision. All these factors point to the need for marketing and promotion and to the possibility of considerable turbulence in the system.

10. When considering the benefits for colleges and training providers, we agree that the college sector needs to be a place where employers chose to go for their employee training but we feel this is contingent upon employers making a significant contribution towards fees, otherwise the public sector will be supporting the private in buying education and training at low (below-cost) prices. Currently we know that employers convinced of the benefits of learning spend money on education and training from private providers at quite high rates. We would not wish changes to introduce ‘deadweight’ with public sector funding being used to displace private sector investment.

11. In the case of intermediate and higher level skills to meet regional and sectoral priorities, NIACE would welcome greater clarity about who will assess the evidence of need and assess competing demands on the public purse. Whilst acknowledging the warnings given by Adrian Perry’s paper for the LSC (‘Talking about Fees - provider policy and practice on course fees’, LSC 2004) that some groups of adult learners may be disincentivised, NIACE would not favour a system where those who shout the loudest in regional or sectoral forums are afforded special treatment at the expense of those who have benefited least from learning in the past.

12. We believe that the fees and income targets and learners support approach can be best integrated into the LSC’s business cycle through a careful attention to the outcomes of strategic area reviews which carefully identify the mix and pattern of provision enabling income targets to be realistically applied to the kinds of learning opportunities which providers are best placed to offer. There is anecdotal evidence that, in some local LSCs, the role that reviews should be playing in identifying unmet need has not been fully appreciated. We believe that members of local LSCs may need to consider how best to develop the capacity of staff at local LSC level to engage in such discussions with providers.

13. NIACE supports the proposed approach to reforming fees - albeit with caveats. We urge the LSC to take a generous interpretation of “committing to a full level 2” and this should be given to the adults who are pursuing their first full level 2 qualification. We believe there may be issues in recruiting adults in this category to provision and that the signing up to a first full level 2 should not be too prescriptive. We understand the pressures that providers have been under and which have led to a position where not enough fees are being collected from learners and employers but believe this may have led to a position where the public purse is funding opportunities which learners and employers could well pay for themselves.

14. NIACE supports the joint approach (i.e. a higher national fee assumption and income targets) and would not support a detailed mandatory fee schedule. However our discussions with the field lead us to believe that there is considerable support for a national minimum fee. The thinking behind this, for providers, is that this would mitigate the worst effects of competition by ensuring that everyone was required to collect at least a minimum, enable provider flexibility because decisions could be taken where more than a minimum was collected, and mean providers themselves would not be held solely responsible for the introduction of fees where currently no fee or very low fees are being charged. A minimum fee could exist alongside income targets and an increased fee assumption.

15. A national minimum fee, alongside income targets and a higher fee expectation, might be an option that would be supported by providers who have been subject to particular difficulties from competition between institutions leading to ‘price wars’.

16. The means by which income targets could be introduced seems to us to be to be feasible and appropriate. We would, however, encourage the LSC to pay particular attention to each college or provider’s mission. In the case of to 6th form colleges, the consultation paper states that these would have very little or no capacity to charge fees. However, our advice from the field suggests that although there is little provision in such establishments, where there is, it is provided at marginal costs and whatever fees are charged, income expectations should be relatively high.

17. We believe that the proposals in the document in relation to income targets require providers to think and behave in ways that are not yet common within the sector. We think that work should be done to help providers adapt to a context where full fees are expected as a matter of course. This may include research into market sensitivity and work to enable systems for instalments, direct debits and so on to be introduced to providers in such a way that they can anticipate what their effect might be. Consideration also needs to be given to how the changes in fee levels will be presented to learners - especially where current fees are low. We are aware of practice from the USA where the full cost of provision is given alongside the level of public support and the level of fees required of learners (or employers).

18. NIACE also asks the LSC to take a sympathetic approach to specific provider concerns. We understand, for example, that some large-scale providers running small numbers of courses in a large number of dispersed venues will face genuine additional administrative costs in collecting relatively low levels of fees (after taking remissions into account) from multiple course centres. An example of this might be single WEA or college outreach classes running in remote rural villages).

19. The income target will need to take on board provider mission and constituency as well - and, in the initial stages of implementation, should take account of historic charging levels - in some parts of the country particular fee patterns and assumptions have been in place for many years. Public expectations will not shift overnight. It will also be important to ensure transparency around the setting of income targets - with local LSCs sharing information with providers. The availability of other funding streams will also need to be taken into account.

20. The opinion of those we have consulted in the field is that the scope of the income target should ideally be drawn narrowly and relate to tuition fees from individuals and employers in respect of LSC funded training programmes alone. We believe providers prefer this approach because it gives a level playing field to institutions which have very different abilities under categories B, C and D of the consultation document. However monitoring this may be overly bureaucratic and thus we support the range of sources quoted with the exception of sources of a kind that depend upon on location and historic circumstance (for example car parks or buildings having significant potential for commercial exploitation).

21. NIACE shares the belief that governing bodies should be involved in consideration of fees and income policies - not to involve them would negate one of their most important functions. We believe that if fee income becomes a much larger proportion of the institutions income, this will happen as a matter of course. The LSC should also recognise that LEA providers may need some flexibility in considering how best to involve elected members in such decisions given their current role in fee setting.

22. NIACE is sympathetic to the thinking behind this section of the circular, which tries to look at how income target could be shared as a responsibility among all colleges and providers in an area and would urge the establishment of pilot programmes to test different models. However, we think it will be very challenging, and maybe impossible, to attain such collective ownership in actual practice. We believe that it may be possible for providers to come to an understanding about not competing around particular areas of their business, but more than ten years of historical practice suggests that there will always be areas where competition is fierce. We think local LSCs have a key function in making sure that providers are not charging fees in a way that actually ends up with fewer learners being involved in provision. Thus we believe that the LSC should be the key player in local discussion and ownership of income targets.

23. We share the view that it will be necessary to incentivise the achievement of income targets within the performance management framework.

24. Our consultation with the field leads us to believe that a four year period allowing for the change in fee assumption would be much preferred and that this should be timed at 2006/07 at the earliest. If change is introduced too quickly, serious damage to participation patterns will result. However, the front-line providers believe that an announcement of intent needs to be made at the very earliest opportunity that it is expected that fees will rise so that providers who are charging very low fees, or no fees, currently can begin to move towards the position they will need to reach.

25. As suggested above - a longer timescale would probably be preferred by providers but risks inertia by those with only small movements to make when a shorter timescale could produce funding shifts earlier.

26. Changes should commence as soon as possible but the LSC should attend to the need to help learners understand the changes to their fees and to market the new level 2 entitlement and other higher level provision adequately.

27. NIACE is particularly concerned about the implications of fee assumption changes for low-skilled learners undertaking courses at level 1, below level 1 or other progression provision. It would be iniquitous if a situation arose where those who had better qualifications were receiving free provision whereas those just entering the system were paying more. This is a particular issue before the development of a credit framework that enables people to work towards their level 2 in smaller steps. We believe that some of the proposals about learner support for these groups should be endorsed and there might be some kind of means tested relief for those just outside the remission groups although we accept there will always be discomfort around any cut off point.

Learners

28. We believe that the impact of change upon learners with no (or very low levels) of recognised qualifications demands needs urgent and specific attention and that learner support funds are one way of dealing with this issue. However we believe that local LSCs, working with providers, will need to ensure that there is a sufficient raft of provision of this kind to enable there to be good carry-through to full level two qualifications. We believe that the recruitment of adults to take a full level 2 will be a big issue for providers and one where recruitment may not be as easy as it seems in spite of free provision and the adult learning grant. We note especially the fact that Basic Skills provision has been free for many years and yet a full-scale national campaign has been required to increase take-up.

Colleges and training providers

29. It is clear that income should increase as a result of these proposals; for publicly-funded learning the key will clearly be increasing the scale of programmes within priority areas. However, since many people who need a full level 2 are in the work place and may not fit easily into conventional core-spaced provision, there may be issues about the amount of income as opposed to expenditure that is required to deal with these groups. There are also unanswered questions about price sensitivity and how learners who already have a level 2 will deal with the necessary increase in fees. This is why we propose that providers are asked to put into place a gradual rise in income since this has less likelihood of producing a situation where there are insufficient learners to ensure viable provision. We think that the modelling to take place is critical and would want to see some of this done before some of the actions proposed in the circular are put into place. We are also concerned about issues in relation to the employer contribution. We do not wish to see employers receiving a higher public subsidy for provision they are paying at present and we understand that this may be the case in certain high-demand trades. We believe that employers are not completely governed by price in relation to the provision that they buy and urge that there should be close monitoring of how employers’ contributions change as a result of the actions proposed in the circular.

Employers

30. NIACE continues to believe that the absence of any obligation on employers to provide training to their workforce is a weakness in current public policy. Although such strengthening is beyond the remit of this LSC document, NIACE believes that there may be merit in the LSC urging government to consider supporting establishing an employee’s right to request financial support and time off for learning and an employer’s duty to consider such a request.

31. We believe the proposals in this consultation might be undermined if employers fail to respond to the challenge of increasing their contribution to adult skills learning - whether through the public system or privately.

32. NIACE notes that many providers would prefer to see a minimum fee than to have complete discretion over fee policies although we would argue for as much flexibility as possible above this. We absolutely agree that income targets should be set at aggregate level and that the trust relationship established through the work of Sir George Sweeney’s group should be a key in this process. We anticipate that there will be a need for research into issues around price, research into good practice and useful practice in charging and recovering fees and we believe that there is a case for a national promotional campaign around the level 2 entitlement and the extensive current national fee remission arrangements. We would be happy to discuss with the LSC what role Adult Learners’ Week might play in this respect.

33. We agree that the objectives proposed for learners’ support are correct but we would want to be sure that support is targeted particularly at those who are accessing ‘first step’ provision. Without a raft of such provision available at no or low cost it is unlikely that learners will progress to a level 2 qualification. NIACE agrees, therefore, with the proposed approach to prioritising discretionary learners’ support funds and urges that these be enhanced to ensure that there is access for low skilled and disadvantaged learners who fall outside the remission categories. This would include many who are in low paid occupations. We would not want providers to hesitate to engage in this kind of provision because it attracts neither a high subsidy or fee income. NIACE urges the LSC to guard against introducing such a perverse disincentive.

34. NIACE agrees that loans have a role in funding adult further education particularly for substantial courses where fees are likely to be perceived as prohibitive and perhaps especially for those just above the remission categories. However, we do believe that the loan arrangements must be very simple and straightforward. We believe that trying to differentiate between different kinds of learners and enabling priority groups to have better access than others over-bureaucratises what will already be seen as a complicated system. We believe that those who can afford to pay would probably take advantage direct debit and instalment systems rather than loans and we would hope that any loan system could be kept absolutely simple and be advertised widely. There may be scope here for mutual initiatives based on local or workplace-based credit unions

35. NIACE supports unequivocally the proposal that assessment and payment process for financial support should be improved and simplified. We support single assessment for adult learners and believe this should be carried out once for each learner and that in the absence of a unique learner number, a passport should be issued to enable a learner to be assessed once and get access to all provision on the basis of this assessment. We do not support the central payment function - we believe that most central payment systems result in delayed payments rather than efficient processes.

36. NIACE welcomes the opportunity of contributing to this consultation and remains ready to assist the LSC in any aspect of delivery. For answers to any queries raised by this response, please contact Sue Meyer, Director of Programmes and Policy.