Finance and Funding Task Group

The letter and report should be read in conjunction

Ref: 6/002
Our Ref: AT/HP/fryer.lt
12^th March 1998

Bob Fryer
Chair, NAGCELL
Northern College
Wentworth Castle
Stainborough
BARNSLEY
South Yorks
S75 3ET

Dear Bob

Yours sincerely

Alan Tuckett

Convenor, Finance and Funding Task Group

_______________________________________

Report and Recommendations to the National Advisory Group for Continuing Education and Lifelong Learning

1.   The Finance and Funding Task Force was established by the National Advisory Group for Continuing Education and         Lifelong Learning to provide specialist advice for the work of the group on finance and funding issues.

It met three times between July and October 1997, and once in January 1998.

2.   The members of the Group were:
Nigel Boot, Co-operative Bank
Clare Callender, Policy Studies Institute
Dick Corbridge, Manchester LEA
Mel Doyle, WEA
Mike Fitzgerald, Thames Valley University
Leisha Fullick, Islington Council
Pat Gale, Darlington College
Dave Gibson, City College, Manchester
Janice Shiner, FEFC
Alan Tuckett, Chair

3.   At its first meeting the group enunciated the principles that informed its work:

4.   We reassert that the clear challenge is:

These challenges will not be met without money, nor will they all be met with new money alone.
(1.33 in ‘Learning for the 21^st Century’ addresses these points.)

5.   We recognise that access to education is an important underpinning of human rights, and of the capacity for everyone to engage in active citizenship. The challenge posed in the FEFC’s Tomlinson Report, to develop Inclusive Learning strategies addressed that issue directly in relation to people with learning difficulties and/or disabilities. But we believe the principles of inclusive learning need application more widely, to secure a system in which those currently excluded are welcome, confident and achieving participants. We also recognise that equal rights for all do not come cheaply.

These issues are considered in the ‘agenda’ and ‘principles’ section, and in 5.7 of ‘Learning for the 21^st Century’. However, the committee felt it was important that the key concerns of Tomlinson (that a learner-centred system in which appropriate learning paths were identified for individual learners would benefit all, and offer improved opportunities for people with learning difficulties and/or difficulties) and of Kennedy (widening participation and achievement) be kept distinct, so that each received proper attention.

6.   We believe the balance of investment by Government, individuals, and others should be reviewed in respect of:

We considered the powerful evidence in Claire Callender’s paper "The Funding Lottery", which was commissioned by the FEFC’s Widening Participation Committee. It showed the disparity in student support available to further education against full-time higher education students, evident in mandatory grants (until now), loans and access funds.

We noted the evidence that the overwhelming majority of working class participants in post-school education used further education.

We recognised, too, that endorsement of the Kennedy Committee’s principles would involve a greater proportion of FE funding being concentrated on new returners, with established students over 19, with the ability to pay, paying more of the costs of provision.

We recognised that there is a solid body of evidence about rates of return on investment in higher education, but little evidence in further education, and haphazard data available about the volume, economic and social data available for community based or related adult learning, and in particular for the sort of capacity building collective activities which can be difficult to limit to pre-negotiated curricula (including much family and inter-generational learning, tenants’ group work, and voluntary agencies’ programmes).

We recommend that comparative studies be instigated to identify rates of return on investment in post compulsory education and training.

We recommend that work be undertaken to codify benefits beyond the narrowly economic, and beyond those readily susceptible to short-term monitoring.  We recommend that the Green Paper should launch a public debate which recognises the need for the UK to invest in knowledge creation, to maintain its competitiveness in a global economy; recognises the dignity, confidence and power which access to learning can offer to everyone; recognises the benefit society gains from social cohesion, and the high price of social exclusion and reviews the balance of investment responsibility highlighted above.

(These issues are included in 1.32, 8.21, and 8.22 of ‘Learning for the 21^st Century’.)

7.   We believe that more money is needed to create the learning society, but we also believe that over time this will need to lead to a shift in priorities for public investment for creating a level playing field for student support which does not differentiate in offering access to support by mode of learning, by age of learners, or, eventually, by level of study.

(See 1.35 in ‘Learning for the 21^st Century’.)

8.   We recognise the importance of the work done with adult learners in higher, further and adult education. We believe that work needs strengthening through funding incentives and that the complexity of adults’ learning routes need recognition and support. For many this will involve progression from community settings through further into higher education; for others it is as likely to be from theoretical (higher) to practical (further). Both need support. Yet we also recognise that the most pressing need for greater public investment lies with those who benefited least from initial education, and are currently not participating. To meet their needs will require a further shift in the balance of public investment, balanced by increases in other funding streams.

A key issue for Government in expanding towards a mass system is to identify ‘who pays’, given that even significantly increased resources will still leave hard decisions to be made about priorities. For example, the FEFC’s funding mechanism currently differentiates between full-time (mainly young) learners on A level programmes and those on part-time courses (mainly adults) studying for the same exams, or for lower level qualifications adding a premium to the funding for full-time work towards A levels. Faced with the difficult choices of narrowing the curriculum approved for FEFC funding, or with changing the balance of who pays, the balance of public investment needs, over time, to be more strongly loaded towards entry level work, in recognition of the costs in effectively securing wider participation and achievement. The same arguments can be applied within higher education and between higher and further education.

We believe then, that over time, public investment will need to shift:

There is a need, too, for more effective inter-agency, inter-departmental and inter-institutional collaboration to improve effective and efficient resource allocation.

(1.36 and 8.16 in ‘Learning for the 21^st Century’ cover some of this ground.)

9.   We recognised that many adults move in and out of unemployment, part-time, temporary and low-waged work, and experience barriers to participation in learning in all of them. The is an urgent need to harmonise arrangements to take account of this labour market mobility, and to offer access to learning to people trapped in poverty.

10.  We welcome the introduction of a learning option in the Welfare to Work plans for people over 25 and registered unemployed for 2 years, and for single parents, but believe that for many the success of such programmes will depend on the flexibility and imagination with which equivalents to the Gateway programme are developed.

11.  In developing the programme for over 25s the Government will need to consider flexibility for single parents, including the offer of study options with fewer hours per week (noting how many jobs are now less that full-time). We noted that not all students who might benefit from Welfare to Work are at entry level. We felt that the programme might usefully include provision for study up to NVQ level 3, in line with the Kennedy Committee’s proposals. This would enable Welfare to Work students to take Access courses as a part of a work focused learning strategy.

12.  We recognised that there were also benefits in providing incentives to learn for people unemployed for shorter periods. We welcomed the expansion of the Workskill Pilots, and would welcome an overhaul of JSA regulations, to remove disincentives to learning.

13.  Successive reports have noted the lack of access to education and training for part-time and temporary workers. We believe these groups, particularly where they work in small and medium sized enterprises to be the most easily excluded from publicly supported provision. We believe they should be clearly targeted for the Individual Learning Accounts pilots announced in ‘The Learning Age’. Employers’ performance in offering staff development to part-time and temporary staff will need to be monitored.

14.  We welcome the plans to introduce ILAs. Where they are available, it will be important that the scheme administrators, and guidance advisers draw on the lessons of employee development schemes on the link between general and explicitly vocational study. Access to those without NVQ level 3 qualifications or their equivalent, and should include an initial information and guidance session.

15.  We recommend that arrangements for student loans for learners should be available on a means tested basis to all learners in further and higher education. To that end:

In an ageing society, there will be significant changes in the pattern of working lives, and participation in education, accompanied by sharper differences in wealth and poverty among older adults. We shall need to overcome the discrimination against older learners enshrined in current funding models, if we are to meet the increased challenge older adults will, and should make on post compulsory education.

16.  We recommend that institutional funding for FEFC and HEFC sector activity should, over time, be linked to credit bearing courses - this is, of course, dependent on the evolution of a post-school credit accumulation and transfer system which offers learners consistency of standards, mobility and flexibility, and which recognises credit whilst recognising the importance of institutional autonomy in the design of specific courses.

It is also dependent on the parallel development of a national framework for credit.

(‘Learning for the 21^st Century’ addressees these issues more widely on pages 82-84.)

17.  We recommend that the commitment to widening participation in the Kennedy report be endorsed;

18.  We debated at length how best to strengthen the statutory underpinning of local education authorities’ duty to ‘secure adequate facilities’. Strong concerns were expressed that definitions of minimum levels of service would be used to justify further reductions in provision, in places offering more generous levels of service.

We recommend that the Government issues guidance to LEAs on LEA secured adult education, following consultation with the LGA; and that the Government requires each LEA to publish Development Plans with evidence of how they have assessed adequacy; plans to secure adequate provision, targets for participation (including targets for under-represented groups) and for curriculum range and levels offered; and details of mechanisms to secure quality assurance, staff development and for monitoring success in achieving the Plan.

Local Development Plans need to be able to show the SSA allocation and planned expenditure on adult education and the Government should be in a position to publish league tables of SSA allocations and expenditure to highlight the practice of local authorities. To achieve this local authority adult education needs to be clearly defined as a component of SSA allocations.

The clear duty should be to prepare Action Plans for adult learning, but authorities should be encouraged to set such plans in the context of overall Lifelong Learning policy - relating the adult plan to youth service, early years, and school-community link plans, and to the lifelong learning impact of other local authority services.

We recommend that the Government reviews the success of these arrangements after three years.

(These issues are reflected in 1.22 of ‘Learning for the 21^st Century’.)

19.  We recommend that regulations be tabled in Parliament to clarify FEFC’s powers under the 1992 Further and Higher Education Act to permit spending in curriculum areas where the duty lies with the LEAs, in order to strengthen its capacity to widen participation and achievement. Government will need to recognise the cost implications of this.

20.  We discussed proposals for regional and sub-regional Lifelong Learning Forums, with representation from a wide range of agencies, and with a remit to review Access, discretionary funds, and childcare support; to foster strategic partnerships and to advise on the distribution of Learning Regeneration Funds. In the light of changing arrangements we agree with the formulation in paragraph 1.21 of ‘Learning for the 21^st Century’, and the proposals for local strategic planning made in ‘The Learning Age’.

We were attracted by the argument that funds could effectively be harmonised in a single fund for lifelong learning (not least because of the disparities in help available for students learning in different contexts), but also recognise the need to have mechanisms for reacting at speed. In the medium run, harmonising budgets through a single forum should overcome the current imbalance in access to such funds between learners in different institutions, and in different areas.

We welcome the establishment of the Lane Committee to seek to create coherent, fair and consistent funding arrangements for full-time students. Once its work is complete it will be important to ensure that its findings do nothing to exacerbate the inequality in funding support between full-time and part-time students.

21.  We recommended that a national Lifelong Learning Fund be established, as a public-private sector initiative:

We believe the Adult and Community Learning Fund announced in ‘The Learning Age’ can fulfil this function.

22.  We recommend that priority be given to the development of a series of local learning centres in employers’ premises, educational institutions, libraries and community settings, in many cases building on, or adapting existing provision. Local Learning Centres will offer adults access to the National Grid for Learning, and will be crucial to the success of the University for Industry in contributing to widening participation.

23.  We are concerned that planned changes in ESF funding regimes resulting from Agenda 2000 may put at risk substantial volumes of education and training currently offered in the UK. We are concerned that institutions are insufficiently aware of their dependence on, and exposure to EU funding. We recommend that the Government takes steps to identify the scale of exposure to change in policy UK institutions risk, and to ensure that changes arising from Agenda 2000 do not lead to a diminution in investment in education and training in the UK.

24.  VAT law is complex, and avoiding unintended taxes on learning must be a priority for the Government. We recommend that Government re-assert its policy of treating education provision for adults offered by higher, further and LEA sector bodies, and by not for profit voluntary organisations with an educational remit as non-business activities, and, therefore outside the scope of VAT, except where institutions apply to Customs and Exercise for permission to be treated as exempt.

We recommend that the Government exempt expenditure on books, I.T. and other learning equipment and other educational materials from VAT where used for education provision by higher, further and LEA sector bodies, and by not for profit voluntary sector organisations with an educational remit.

25.  We recommend that the provisions made in the 1996 budget extending the range of studies qualifying for tax remission, where the employer pays the fees, to include non-vocational courses, should be similarly broadened where individuals meet their own costs.

26.  Given the Government’s commitment to persevering with voluntary measures to secure increased employer investment in lifelong learning, the Government should:

27.  Training and Enterprise Councils have an important role to play in securing increased participation in education and training for people in work, and out of it. However, current performance targets, which ignore provision in firms with fewer than ten employees, ignore key areas of local labour markets, and performance targets which exclude the least well qualified inhibit the role TECs can play in supporting widening participation. We feel that Government should reinforce TECs’ advice and brokerage roles, and discourage TECs from developing as direct providers of training.

We recommend that regional and sectoral targets for participation should be developed, and that new targets be adopted for participation (and pursuit of IIP) in the smallest firms).

28.  We recommend that all terrestrial broadcasters should report to an Educational Broadcasting Council on the contribution made through educational and educative programming to promotion and participation in lifelong learning. The Council should report to the Secretary of States for Education and Employment, and for Heritage, and its reports should be made public.

29.  We welcome the BBC’s proposals that its range of digital services will include a dedicated educational channel. Given its charter remit, we recommend that the BBC should develop the channel, working in collaboration with, and affording access to, other broadcasters.

30.  We are convinced that the promotion of lifelong learning is a key task for all the partners involved in planning or delivering provision. We recommend that the Government supports public information and promotional initiatives designed to secure wider participation.

31.  We recommend that the Government should make a commitment to securing effective inter-agency partnership at local, regional, national and international level to secure efficient and cost-effective lifelong learning for all; and at national level such partnerships be developed to secure best value, e.g. in provision for older adults (where Health and DfEE might collaborate along the lines developed in Joint Care Planning mechanisms supporting Care In The Community); between DfEE, and the Home Office in respect of provision for refugees; and in respect of provision for offenders; between DTI and DfEE in respect of lifelong learning and local economic regeneration. Without such partnerships, and serious attempts to assess value from inter-departmental perspectives we shall fail to create a learning society, or to foster a culture of learning.

To this end, we recommend that Government adopts the practice of evaluating the lifelong learning dimension of its decisions, and comments formally (whether publicly, or in Government papers) on that impact.

32.  We recommend that there should be a universal adult entitlement to high quality initial educational guidance, free to the user, leading where appropriate to a range of services for which fees are charged. For some groups of learners, and some curriculum areas further advice would be free. The entitlement would be accessed through Learning Direct and local information networks. To meet individual, community and industrial needs such networks - comprising careers services, colleges and other guidance services - should collaborate so that adults are offered a seamless, independent, and impartial service.

33.  We recommend that the Government explore, over its lifetime, the possibility of introducing a universal adult entitlement to five days’ learning a year, backed by a cash limited budget, available as a priority to those who have not benefited before.

34.  We are convinced that widening participation does not and must not lead to a dilution of standards. We welcome moves to identify NTOs for further education and informal learning and believe it to be important to cost properly the development of part-time and full-time staff working in education.

THE CASE FOR MORE MONEY:

a)   The case for lifelong learning is that economic prosperity and social cohesion are both secured through the creation of a learning society, where everyone is confident to participate. There is a widespread consensus that to secure such a learning society there needs to be major new expenditure by individuals, employers and the state. Yet the state is committed to inherited spending plans. Most of the proposals the task group has considered involve changes which can be made without new expenditure, or at quite modest cost.

b)   However, we need also to consider how Government might, within its spending plans, secure a major increase in investment. Here are some proposals to start with:

c)   Year One

I.   The Government should adopt the proposal made by the Dearing Committee that student loans be treated as investment rather than expenditure in the national accounts, as is done e.g. in Canada and Denmark.

II.  The Government should press for the international acceptance of OECD finance Ministers’ advice that human resource investment should be treated like physical capital in national accounts, and be written down over a number of years.

III.  Monies saved by these measures should be reinvested in the expansion of post-school learning.

d)   Year Three

I.   The Government should adopt the Kennedy proposal that the millennium lottery fund be succeeded by a Learning Regeneration fund, with a remit to foster the creation of a learning society.

II.  Meanwhile, educational initiatives should be central to the Millennium Exhibition in 2000.

III. The Audit Commission, Government and institutions should work to develop more effective social audit measures to capture non-cash based activity, and less quantifiable learning gain, to enable policy planners to capture better the value added by investment in lifelong learning.

Year Five

Political parties might be encouraged to consider including proposals in election manifestos to introduce a graduate tax for all pre-1998 graduates paid above an income threshold, in recognition of the value added by higher education.

February 1998

Top of page

Top of page