Hey, big spender

The
LSC has £6bn to make the Learning Age a reality, but will this be lost in
bureaucracy? In this three-page special we look at hopes for its future and
offer a guide to Britain’s new learning landscape. By Elaine Essery

This
month sees what David Blunkett hails as the most significant and far-reaching
reform in post-16 education and training ever enacted in this country.

From
2 April 2001 the Learning and Skills Council (LSC) takes on the responsibility
to plan, fund, monitor and improve the quality of post-16 learning up to higher
education.

The
LSC is a huge body responsible for around 7 million learners and £6bn of public
money, and charged with meeting the economy’s short-term and long-term needs.
It is also the first time that a public body has had a statutory duty placed
upon it to encourage participation in learning.  

The
new arrangements are designed as a long-term strategy to help realise the
Government’s vision of a learning society set out in the Learning Age Green
Paper, published in 1998.

Previous
organisational arrangements for post-16 learning have not worked well, says the
Secretary of State, “There have been three separate systems, each working
differently for the purpose of planning, funding, auditing and inspection.”

Focus
on quality

“Interaction
between these systems has resulted in incoherence and complexity, and
insufficient focus on quality.

“Unhelpful
competition and large overheads meant that too little of the allocated funding reached
individual learners and employers.”

Through
integration, the new system aims to overcome duplication and overlap of
provision, provide effective co-ordination and strategic planning, with a focus
on skill and employer needs at national, regional, sectoral and local
level.   

Supporting
the national LSC are 47 local LSCs, each with boards made up of representatives
from industry and education.

Local
LSCs are allocated a budget from the council to pay for most provision through
a nationally-determined funding system, but volumes of learning will be
allocated locally.

Each
local LSC also has a significant local initiatives fund which it can use
flexibly to meet local needs. At both levels, the success of LSCs will depend
on strong partnerships and effective linkages with a wide range of
organisations. Among others, they will need to work closely with the Small
Business Service, the Employment Service, the Connexions careers service,
Regional Development Agencies, local learning partnerships and – not least –
employers. 

“I
want the council to engage employers in new ways and for council members, at
both national and sub-regional level, to make strong links with employers,
their representative bodies, and sector-based National Training Organisations,”
says Blunkett.

“This
new engagement will help ensure that we have more employers who are better
informed about, and more actively engaged in shaping our education and training
system,” he says. But how likely is this to happen?

Richard
Wilson, business policy executive at the Institute of Directors, is
disappointed that there are not more employer representatives on LSC boards.
“With Tecs, something like two-thirds of their boards came from the business
sector, but with the LSCs, business is in a minority and I think that’s a
retrograde step. It’s very important that they listen to what local employers
are saying.”

Greater
coherence

Wilson
views the combining of arrangements for FE and work-based learning as “a good
move on the Government’s part” and hopes above all to see greater coherence in
funding.

“I
hope it will be simpler for employers to understand and approach, because the
way Tecs funded work-based training was quite confusing.

“Generally,
we hope the LSC will be able to raise the proportion of people who have
suitable qualifications, particularly at the intermediate level,” says Wilson.

But
he has concerns about the complexity of the new system and the potential for a
waste of money. Wilson’s reaction when he first read the Learning Age Green
Paper was that “it looked like a version of Stalinist central planning”.

He
says, “There are far too many players and I think it needs severe
rationalisation. I do feel there’s a great danger that a lot of money will be
wasted in pure bureaucracy.”

NTO
National Council is keen to see a post-16 learning and skills infrastructure
which is clearly demand-led. Policy director Tom Bewick highlights the
importance of the local LSCs.

“They
have particular responsibility to meet the needs of the local labour market and
it’s the first time a body has been under statutory duty to meet the workforce
development needs of employers and individuals in a given area. There’s
tremendous potential for forging partnerships and funding local provision,” he
says.

“But
we’ve got to find a mechanism of linking employers locally and there’s no easy
answer.”

Bewick
is also aware of a number of issues surrounding funding which give providers
cause for concern. “Wherever you’ve got a major change to the system there’s
going to be some instability and I know some training providers are not happy
with some of the changes,” he says.

“The
important thing is there appears to be a commitment from the LSC to ensure a
steady-state situation when it gets up and running.”

Harsh
criticism

Nick
Morrissey, chief executive of Seta is one provider who has harsh criticism of
the new system (see News, page 3). Seta delivers engineering training under the
EMTA (NTO for engineering manufacture) Modern Apprenticeship framework to
companies in the Southampton area.

Like
Wilson, Morrissey was looking forward to greater coherence on the funding front
and a more level playing field than under the system administered by Tecs.

Now
he estimates his business will face a £200,000 drop in funding in the transition
from the old system to the new. 

“The
way it’s been handled is an absolute shambles. We’ve been asked to put our
businesses on the line and sign contracts without fully knowing the financial
implications and what’s going to happen next if the risk is high.

“The
mechanism is not well thought-out, they haven’t consulted on the detail
sufficiently and it’s a mess,” Morrissey says. “The DfEE has taken on far more
than it can cope with.”

The
main problem is that the new funding rates will not kick in immediately so a
complicated system of cushioning and damping, based on 1999/2000 figures, has
been devised to protect providers who would be worse off or better off,
respectively, under the new system. Seta will suffer because its performance
dramatically improved during 2000/2001.

Serious
problems

“Ironically,
cushioning and damping was supposed to stop putting people out of business, but
it’s going to mean serious problems for many providers in the next 18 months to
two years,” Morrissey claims.

Moreover,
extra demands of the new Modern Apprenticeship framework have immediate impact
on providers, but the funding is not there to follow. “It doesn’t make sense at
all. There’s no joined-up thinking,” says Morrissey.

“For
sure, training providers are going to go out of business and there are going to
be people who won’t go for contracts. Inevitably that’s going to mean a
reduction in training. I suspect that’s not what the DfEE wants: it just hasn’t
understood it.”

Those
providers who do remain in business will be subject to inspection by the new
Adult Learning Inspectorate (ALI). The Government has made it clear that it
will play a key role in driving up standards and influencing LSC plans through
its findings.

David
Sherlock, chief executive and chief inspector of the ALI, held a similar role
in the former Training Standards Council. He is looking forward to inspecting
education and training provision in a much wider range of contexts.

“It’s
a huge jump from where we were. A particularly interesting change to me is that
we’ll be taking in much more community-based learning and that will take us
into contact with more people who were previously excluded,” he says.

“Secondly,
we can now inspect privately-funded provision at the request of industry as a
consultancy service, which is very exciting. We’re already talking to one
public company about that. We’ll be talking to the CBI and Institute of
Directors about it and publicising it as our capability of doing it grows.”

The
ALI has also been asked to inspect, on a cost recovery basis, competency-based
awards overseas where they have been promoted by British Training, now part of
the British Council.

Transforming
perspective

The
great increase in the remit of the inspectorate transforms the whole perspective
of inspection from something that was only about the public funding of
relatively few people to something which could now encompass the whole of adult
learning, where the estimated total spending is around £20bn a year.

“Industry
spends roughly three times as much as the public purse does, so the scope is
potentially extraordinary,” says Sherlock. 

There
will be little change in the conduct of inspection under the ALI. Provision
will be graded on a numerical five-point scale which providers currently use
for self-assessment.

But
there will be a sharper emphasis on the learning experience and less so on the
organisational context.

“The
common inspection framework majors on the big questions like, ‘how well do
learners learn – and why?’ It should also enable us to dig out more of the
‘whys’ which allow people to adopt good practice,” says Sherlock.

Cost
effectiveness and value for money will also be a big issue. It is unclear
whether providers who deliver work-based training for young people, which is paid
for by the LSC, and for adults, which is funded by the Employment Service, will
be subject to separate assessments.

Sherlock
believes, however, that it will be possible to make a summary judgement on the
quality of each type of provision for the benefit of the relevant funding body,
based on what the provider’s contract is intended to achieve.

According
to Sherlock, providers have nothing to fear from the ALI’s routine inspection
process.  

“Inspection
is not a punishment for bad practice nor is absence of inspection a reward for
good practice.

“I
hope employers and training providers will come to feel that inspection by the
ALI is part of their quality assurance regime and welcome what we have to do as
a contribution to a ‘right first time’ philosophy which they themselves would
want to apply.”

Who’s
out – and who’s in

An
at-a-glance guide to the reforms in post-16 provision

OUT:
Tecs and FEFC
IN: Learning and Skills Council

The
LSC is responsible for the planning and funding of all post-16 education and
training. Its responsibilities include:


FE colleges
– School sixth form
– Work-based training for young people
– Workforce development
– Adult and community learning
– Information, advice and guidance for adults
– Education business links

OUT:
Training Standards Council
IN: Adult Learning
Inspectorate

The
ALI will carry out all inspections previously conducted by the TSC and
FEFC.  Its remit covers all post-16
work-based training, including:

– Education/training which contains an element of workplace experience
– All adult learning in colleges
– Provision by the UfI’s learndirect
– Learning in prisons
– Community-based learning
– New Deal provision
– All work-based training for adults 

The
Office for Standards in Education will inspect learning provision for young
people in schools and colleges through to age 19. The ALI and Ofsted will work
to a common framework and carry out joint inspections as appropriate.

OUT:
Further Education Development Agency
IN: Learning and Skills Development Agency

Feda’s
remit has been widened to work across the whole post-16 range and not just
focus on FE. The organisation has changed its name to reflect this. It has been
tasked with carrying out research into work-based training and has established
a new centre for learning and skills research at its headquarters.

OUT
(by April 2002): Network of 73 NTOs
IN: Smaller network of up to 30 sector bodies  

Consultation
is under way to rationalise the current NTO structure and develop a network of
fewer, larger sector bodies better able to represent employers’ skill and
training needs (see ‘NTOs await their fate’).  

OUT:
National Advisory Council for Education and Training Targets

The
role of Nacett as an employer-led body advising Government on setting
educational and training targets and promoting lifelong learning has been
handed over to the LSC.

OUT:
Welsh Tecs and FEFCW
IN: National Council for Education and Training

Changes
in Wales arise from the Education and Training Action Plan for Wales. Regional
arms of the National Council will contract with community consortia for the
provision of education and training in the country. Arrangements for Scotland
and Northern Ireland remain the same.

NTOs
wait to learn their fate

As
the new learning and skills arrangements come into force, a major consultation
on the future of the National Training Organisation network concludes on 12
April 2001. 

The
National Skills Task Force endorsed the important role of NTOs in its final
report last year, yet highlighted the need for considerable change to the
network to make it effective within the new structure.

The
Government aims to put in place this spring a framework for fewer, larger,
stronger and better-resourced NTOs which will have solid employer backing.

The
number of sector-based bodies has reduced from around 180 Industry Training
Organisations, Lead Bodies and Occupational Standards Councils to 73 NTOs. This
figure is expected to come down to between 20 and 30 by April 2002.

Although
the eventual number of recognised sector bodies has not been prescribed, the
consultation document suggests a minimum sector workforce coverage of 500,000
people per NTO. Currently 42 NTOs represent sectors with below that number of
employees.

Tom
Bewick, policy director at the NTO National Council, welcomes the Government’s
consultation and has been charged with drawing up proposals for fewer sector
bodies.

“We
have no problem with Government’s vision and commitment to very strong and
powerful sector bodies and agree that a degree of restructuring is necessary,
but we haven’t got to lose the important diversity that exists in employment
sectors.

“NTOs
have come an extremely long way since they were conceived back in 1996 but,
given that the whole institutional post-16 map has changed beyond recognition,
we have to respond to that positively in a way that gets the best deal for
everyone.”

Bewick
will be coming up with proposals that maintain employer involvement and step up
to the higher strategic agenda Government is seeking. “Government clearly wants
bodies which are far more influential in articulating the skill needs of
sectors, leading action on workforce development and training issues as well as
regularly auditing and reviewing how well the sector is doing,” he says. 

A
number of existing NTOs feel ill-equipped to fulfil those roles, claims Bewick,
who is striving for a more rational structure which on the one hand satisfies
the Government and on the other “ensures that the needs of employers and the
economy are in the bloodstream of the LSC”, he says. 

Models
that Bewick has been exploring include turning the current 15 NTO groups into
legal entities to become government-recognised “super-NTOs”.

He
is also studying the Canadian and US systems. Canada set up 26 sector councils
seven years ago with initial pump-priming funding from the Government.

Now
employers and unions are collectively taking over responsibility for funding
them. In the US, 15 national skills standards boards made up of business people
oversee the setting of occupational standards.

“We
want to be proactive and take positive proposals to the Government,” says
Bewick.

“We
recognise the concerns and fears of our 73 members, but we’re absolutely determined
to show leadership and make proposals with our members’ backing on what the
future structure should look like and move forward sensibly,” he says.

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