RAISING EXPECTATIONS - CONSULTATION: 157 GROUP RESPONSE1. Do you agree that transferring funding from the LSC to local authorities to create a single based strategic leader for 14-19 education and training is the right approach?
Yes provided the issues of student choice, irrespective of local authority, is dealt with in the interests of the learner and does not create obstacles or funding complexities for the providers.
2. Do you agree that the model we have proposed for transferring funding to the local authority is the best way to give local authorities effective powers to commission, to balance the budget, create coherence for providers and retain the national funding formula.
No. The demand-led real time model should be used pre-19 as well as post-19. An individual should carry a funding value based on previous achievement and actual choice of course. This value would be the same whatever the establishment they attend. Commissioning is likely to be bureaucratic, arbitrary and may create barriers to choice. It is however entirely reasonable for poor quality providers to have caps placed on their provision. The criteria for poor provision needs to be more sophisticated than the minimum level of performance. It would need to be transparently applied to all 16-19 provision in a sub-regional area. Dialogue with providers should be used to encourage them to respond to shortfalls in provision and where necessary new providers invited to enter the market. If the government's aim is to have 100% participation in education and training then that participation would need to be funded. Commissioning is always likely to overestimate demand or frustrate student choice.
3. Do you agree that there is a need for:
a) Sub-regional groupings of local authorities for commissioning. Not for commissioning but rather to monitor quality of provision and gaps in provision and approve new entrants. In a sub-region there will be a list of approved providers who must then meet quality, range of provision and volume expectations.
b) Authorities to come together regionally to consider plans collectively?
See answer to a) which proposes a more market based system. The simple way to generate the additional provision is to manipulate the funding model in favour of the areas to be encouraged, as is happening with the introduction of the New Diploma.
c) A slim national 14-19 Young People's Learning Agency with reserve powers to balance the budget and step in if needed?
The market proposed above would require minimal intervention apart from monitoring the national funding model as the providers would be making the local judgements. They would need good quality up-to-date market data to assist them and the young people to make informed choices. This role should be undertaken by the network of regional observatories in dialogue with the RDA and LA network.
4 Do you agree that we have described the way that these bodies would fund in broadly the right way? Is the balance of responsibility between them right?
In the model described above the Young People's Agency is the funding conduit via the LA to all providers (including academies). The funding will be driven by the size of the cohort and price attached to each learner. LAs would concentrate on the quality of the educational experience for their young people wherever they chose to study. Through the sub-regional groupings they would apply pressure on each other to raise the standards of the providers for whom they were allocated funding responsibility. Together they would agree these minimum quality standards and the case for new entrants.
5 Do you agree that there is a need for a single local authority to lead the conversation with each provider?
Yes. For the purpose of 14-19 full-time provision there is no benefit in treating colleges any differently from schools. All colleges and school including academies should be treated like all 14-19 providers for funding purposes. Little useful purpose is served by DIUS sponsorship for colleges with more than 20% 19+ provision. The autonomy which colleges enjoy is akin to that currently granted to academies. All providers should also be required to meet the appropriate quality standard before they are granted permission to recruit. 6 Do you agree with the proposed approach for learners with LDD?
In principle the same model as proposed above can be used for learners with LDD as for other provision provided there is an effective sub-regional network.
7 Do you agree that LAs should be responsible for covering provision for young offenders in custodial institutions?
No. Whilst in custody the young persons should be funded by the YPLA and common education and training standards should be applied in all 37 institutions. When they emerge from custody the LA has a responsibility to ensure their education and training continues within the mainstream offer and the funding from YPLA then comes via the relevant authority to the providers. The weighting for emerging young offenders has to be attractive enough to ensure that providers of suitable quality and curriculum offer are available to deliver the pledge.
Do you favour the 'host' funding model or the funded model where 'home' authorities are charged?
Neither: See above
Are there planning or legislative levers other than funding systems which would create the right responsibilities and incentives to provide the best outcomes for the group of young people?
Whilst in custody the responsibilities and standards are a national not a local responsibility. This is important particularly if offenders are moved between establishments. 8 Do you agree with:
a) Proposals to ensure that informed learner choices should be a key part of shaping the system?
Choices should be well informed, supported by IAG that is closely linked to an understanding of the changing employment opportunities both nationally and locally. Success rates should not be an element in the funding as they are dependent at least in part on curriculum mix, students previous attainment and the nature of the local competitive environment. It will often penalise those institutions that most need the resources to improve the quality of their provision. Success rates fit better with the quality assessment around recruitment ceilings for poor performance. The market place will deal with underperformance as students exercise their choices of provider based on good market information, supported by the opportunity for students to comment on the quality of their learning experience. The reward for high success rates is popularity and potential growth.
b) The proposed approach to a common performance management framework based on the Framework for Excellence?
If a system such as Framework for Excellence is to be used it is vital that it applies to all 16-19 providers.
c) The local Authority role in commissioning to improve quality?
LAs should address quality through an agreed improvement strategy for weak providers, together with minimum levels of performance (calibrated to appropriate sector benchmarks), caps on volume for poorer performance and the ability to accredit new providers. This should be done as part of sub-regional groupings.
9 Do you agree with the proposals for managing change to 16-19 organisation and adjusting the arrangements for 16-19 competition and presumptions?
In principle this is agreed however if student satisfaction and success rates are acceptable it is important that commission is used sparingly to ensure that collaborative local structure are able to flourish., This local trust and cooperation is in many ways a stronger long-term route to quality, achievement and student satisfaction. LAs should be required to consult with the provider network before finalising the local/multi area agreements.
10 Are you content with the proposals:
a) to retain a national funding formula based closely on the existing one?
A national formula is vital but it should be attached to the individual learner and based on their prior attainment and their subject area choice not the institution. Funding should increase the lower the prior attainment and the more costly the subject choice. The cost of educating individuals does not fall as they become less successful. Institutional achievement should be measured by value added and sensitive benchmarking designed to push up standards. The threat is not loss of funding it is loss of opportunity to deliver the course or to grow the provision.
b) For funding to flow to institutions on the basis described?
No. Funding should flow via the host authority to each provider solely on the basis of the student numbers they attract (subject to any quality caps imposed). Funding should be in real time i.e. as Post-19 based on actual recruitment in-year. It is quite possible to start the funding year on the basis of the previous years performance and then adjust as necessary in year as numbers are reported. If necessary the Careers Service (Connexions) can be used to work with the LA to trace every learner.
11 Would you support a move to a single national 14-19 funding system.
Yes
12 Do you agree with the proposals for capital funding?
No. The 14-19 framework needs to cover all provision. Where this involves a GFE college with pre and post 19 provision the LA and the SFA should be required to coordinate their plans to enable comprehensive institutional development.
13 Do these proposals about timescale and transition appear reasonable?
Broadly the timescale looks to be manageable. The most difficult but also the most important part from the point of view of large GFE colleges serving multiple LA areas is the development of collaborative sub-regional structures. Whilst appreciating the transitional role of the LSC, it is important that these larger colleges are involved directly with the LAs in agreeing and developing that structure. Potentially, particularly if linked to MAAs these groups can play a crucial role 14-19 and 19+ as authorities develop their local economic strategy. It should be a requirement of the signing off process that GFEs are content with the arrangements.
14 Do you agree with the proposal to create a new Skills Funding Agency to replace the LSC post 19?
Yes, an agency to channel funding is clearly necessary.
15 Do you agree with the proposal role of the Agency?
It is difficult to reconcile the statement that this agency is focused on funding not planning given the statement that it will manage these incentive structures for the FE system. This is in itself a mechanism for manipulating the market to achieve sector objects, in particular the Leitch targets. There is a clear tension between the Leitch targets and employer and individual priorities which need to be openly recognised and addressed. The role of the Commission, overseeing the SSCs whilst advising government on achieving Leitch's targets, the place of RDAs and RSP at regional level with LAs at local level attempting economic skills planning, and the work of the SFA managing the National Employer Service(NES) and the National Apprenticeship Service (NAS) will provide a very complex scene for both employers and providers. GFE colleges believe that they can play a key role at sub-regional and regional level in understanding both the employers agenda and the central and local government priorities. All provides would welcome a clear statement of government priorities, simple funding streams and then the freedom to deliver that agenda with the minimum of bureaucratic intervention. The SFA should ensure that every provider meets the new criteria to be recognised as a quality deliverer of government funded programmes and then a deregulated rather than self regulated systems should operate. If quality is assured and the SSCs ensure the qualifications structure is fit for purpose then a framework has been established and the market should be allowed to operate. From the current contracting arrangements it isn't clear how the DWP/DIUS interfaces will work to provide a simple skills based route back into employment for unemployed and economically inactive (currently we have a plethora of initiatives).
16 Do you agree with the funding and commissioning role proposed for the SFA?
It is right that the rates received should be based on a national funding formula reflecting delivery costs. There is growing evidence that current funding levels make it difficult for providers to operate responsively and deliver a quality training and assessment service. This is particularly true when working with SMEs. Evidence shows that brokers generate between 2½/5% of most providers' T2G candidates which means that the delivery funding also has to cover effective brokerage and training needs analysis. A successful model for the new SFA would ensure that providers were part of strong supply chain structures that didn't need a host of initiatives to "help". Slimming downs these structures would save significant government expenditure. If in addition the "licence to practice" model extended across much of the employment market backed by legislative force when necessary the limited government funding could be better focused on priority groups such as the economically inactive.
Commissioning in a demand led environment is a flawed model. Once the level of funding available is determined it should be available to providers on demand against their order book. The government's energy now needs to be focussed primarily on stimulating the demand rather then managing the supply.
17 Do the proposals in this chapter reflect the right balance of strategic commissioning and individual customer service?
If the SFA is not a planning body it is not clear why it needs a sub-regional structure. The sub-regional players such as the Employment and Skills Boards and LAs with MAAs need to work with their local employers to recognise the value of training and skills and raise the demand. It will be easy to generate the supply side response to an upturn in demand if employers and the SFA together provide the right funding mix.
18 Do you agree with the proposals on performance management and the performance interim role of the SFA?
The SFA needs to set standards and performance that apply consistently to all providers. That might be the Training Quality Standards or the Framework for Excellence. If a provider doesn't meet that standard they should be given a notice to improve and then if improvement is not achieved funding should be withdrawn from some or all of its provision until such times it can demonstrate those standards can be achieved. It is likely that other providers will step in to fill the gaps. Funding levels to providers would reflect their need to spend on quality improvement and business generation rather than those sums being diverted to intermediaries such as the new improvement body or brokerage networks.
19 Have we got the right approach to sponsorship of the FE sector as a whole?
Sponsorship seems to have relatively little meaning. FE colleges are autonomous and responsible for delivering their own strategies. They need to be valued by the communities within which they operate and able to compete for local, regional or national contracts on even terms with the private sector. Regional structures that restrict such action are no longer appropriate. If colleges wish to collaborate they should be free to do so in ways which seem appropriate to their governing bodies. The government may have a view about a stable, nation-wide structure of GFE providers servicing sub-regions. If so it should make that view clear and establish how it will be achieved and sustained.
Do you agree that each of the functions in this chapter should be performed by the Skills Funding Agency?
The new Adult Advancement and Careers Service is a logical development to support individuals to parallel the brokers service for employers. However, the lesson from the broker developments is that the interface between broker and provider is not as effective as either side would desire and most providers have their own business engagement teams. To avoid this situation recurring with the new AACS it is suggested that both Job Centre Plus and College advice and guidance centres are used as locations for the new service. This is sensible as colleges tend to be the place that most adults go to seek information about further learning programmes. Nearly all colleges are Matrix accredited.
Whilst the need to spearhead the push to increase apprenticeships is well understood and strongly supported, the creation of another team to visit employers on top of the business brokers, providers business engagement teams and education business partners does not fit well with the notion of simplification for employers. It might be more effective to resource existing apprenticeship providers with the resource to sell the message and expand their provision. Each proposal seems to imply funding an intermediary rather than trusting quality providers to do the job that is required. In the private sector this would appear to be an unnecessary additional cost and obstacle to a close provider/consumer relationship. If the requirement is for providers to sign up more apprentices, why do you need complex contracting and commissioning arrangements and sub-regional structures?
Again it is sensible to have an overview of financial support for learners but once the funding rules have been determined, then providers, just as in HE, should be trusted to ensure those who need the support get it.
The National Employer Service should only exist if there is a demand for it from employers. If providers are able to offer a national service (what is the point of artificial regional boundaries), then it should be up to individual employers to chose the route that suits them. This fits with the 'no wrong door approach' to employment and skills.
It is right that the Offenders Learning and Skills Service shall be funded by the SFA. They should demand the same standard of quality that applies to all other provision. A consistent service at a national tariff rate should apply across the system. This should not be a local authority responsibility at the adult or young offender level until the offender is discharged back into the community.
21 Do you agree that each of the functions in this chapter should be performed by the SFA?
The relationship of authority and de-regulation for colleges is correct. The approach should be to assume de-regulation and only impose rules and restrictions when these clearly bring major benefit to the training and skills market.
A careful evolution of the cost and impact of the CEL/QIA initiatives should be undertaken with the views of providers being sought taking full account of the cost of these interventions to date. As previously suggested, commissioning should be avoided wherever possible. Accreditation providers should be enabled to access public funding against clear rules, based on their ability to attract business and deliver it to the quality required. We would strongly support any more towards an FE student support guarantee to match the HE guarantee. In equity this is long overdue. A good data and non bureaucratic central audit system is sensible to ensure the system works as intended and public funds are properly applied. The unique learner number will be a significant contribution to that process of monitoring entitlement and progression.
22 Do you agree with the description of the wider skills landscape with which the SFA will operate?
We believe the system can work provided it is founded on autonomy and deregulated for all providers. Wherever possible the market should be allowed to operate without bureaucratic regulation and a plethora of sub-regional staff who will inevitably want to control and second guess the operations. The keys are a system that guarantees quality providers, a clear set of objectives (Leitch) and a qualification and funding regime that lets the providers, employers and learners work together to achieve those objectives. Civil Servants don't by and large do it better that the practioners. RG Moore On behalf of the 157 Group May 2008
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