Select Committee on Education and Skills Fourth Report

2  Introduction

What role should further education play?

4. Firstly, it is necessary to outline what we include in the definition of further education, for the purposes of our inquiry. In it, we include all skills training and education which falls outside compulsory schooling and which is not delivered by institutes of higher education. In practice, this means education and training undertaken, principally by those aged 16 or over, in further education colleges, sixth-form colleges, workplaces, community venues, or with a private training provider.

5. Since its election to power in May 1997, the Government has given significant policy attention to the issue of further education and skills, including, notably, the publication of the National Skills Strategy in 2003 and a subsequent second Skills Strategy document in March 2005.[2] [3] In November 2005, Lord Sandy Leitch published interim findings on the future skill needs of the UK up until 2020. His broad conclusion was that even if current skills targets were met, very significant skills gaps would still remain in the economy. It therefore seems likely that colleges and other providers of further education are likely to be asked to play an even greater role in equipping young people and adults with the skills needed for the future. He is due to publish his full inquiry report in 2006 although at the time of going to press no publication date had been confirmed.

6. This is clearly a formidable challenge for further education to meet, and we strongly concur with Ministers' express views that the "supply side" of skills—publicly funded further education in particular—merits closer attention and focus to ensure that it is appropriately placed to meet this challenge. David Hunter of Lifelong Learning UK told us that the training and education system operating at its current capacity might not be able to fill the skills gaps that were emerging—suggesting that if the supply side was not significantly improved, England would come to rely even more on migrant labour, including from outside the European Union.[4]

  1. Skills training and education is a major area of public spending. The following table shows how Government expenditure on further education has compared with that for schools and for higher education, over the period 2000-2006. Figures are in millions, in real terms:

Table 1: Education expenditure (revenue and capital funding), by sub-sector, 2000-01 to 2005-06, England.
2000-2001 2001-20022002-2003 2003-20042004-2005 2005-2006Change 2000-2001 to 2005-06
Schools (DfES)4918 58708849 934410151 10981+123%
FE, Adult5674 65877104 77737927 8394+48%
Higher Education6541 65456680 69597191 7529+15%
Other1258 17542339 26572467 2801+123%
TOTAL (DfES)18389 2075624572 2673327736 29705
TOTAL (all education) 3983743741 4543849686 5241955021 +38%

Adapted from HM Treasury (2006) Public Expenditure Statistical Analyses 2006, CM 6811, table 3.1.

From the table above, it is clear that the actual amount of spending on further education has risen substantially over this period. However, it must be borne in mind that over the same period further education has seen a substantial increase in the number of enrolments. In light of this, we have included the table below to show what effect increases in funding are having on expenditure per learner in further education, and how this compares to schools and higher education:

Table 2: Real terms funding per student/pupil, 2001-02 to 2007-08
2001-02 2002-032003-04 2004-052005-06






Schools100 104109 113120 124129
FE100 100108 106117 116117
HE100 100102 102105 106107

Source: DfES (2006) Departmental report, CM 6812, tables 8.4,8.7 and 8.8. Numbers in italics derived from stepped time series shown in tables)

Table 3, below, shows how expenditure on young people compares with expenditure on adults in further education:

Table 3: Comparison of spending on under 19s and on adults, 2001-02 to 2007-08
2001-02 2002-032003-04 2004-052005-06

(estimated outturn)





Expenditure supporting young people 2,449.2 2,671.6 3,206.1 3,414.3 3,781.5 4,076.5 4,373.0
Expenditure supporting adults 2,336.8 2,424.1 2,709.6 2,751.4 2,905.0 2,886.2 3,030.6

Source: Reply sent by the Secretary of State to questions raised by the Committee in Public Expenditure inquiry, (not published). NB figures exclude expenditure on school sixth forms.

Further education—the current state of play

8. Historically, serious concerns have been expressed by inspectorates—as well as employers—about the standard of further education in England. It is frequently contended that the quality of education and training provided in colleges, workplace and work-based learning and through private providers does not fully meet the needs of learners or employers.

9. In the wake of the Foster report, much of the press coverage focused on the finding that around 90% of colleges were providing an education that was satisfactory or better—and by implication, that 10% of colleges were providing an education that was less than satisfactory.[5] We asked Sir Andrew Foster about whether he was surprised that weaknesses existed in that proportion of colleges. He told us:

"I was trying to think just for a minute about failing hospitals, failing schools, and what the normal distribution chart is and frankly the level of complexity which has existed here is greater than I have seen in some other public services with which I have been involved in the past. I think the number of failing colleges is not a great surprise."[6]

We asked him whether he thought it was the case that colleges had been "relentlessly failed" rather than "relentlessly failing":

"There are two separate things I would say. One is that I think the system which we currently have has not made it easy for colleges […] I have some understanding, therefore, of the situation of colleges and that is where this report does lay a challenge to the Government, the LSC and the regulatory framework. So there is a challenge to Government. There is then, however, a challenge to under-performing colleges too, so it is not either/or, I am afraid it is both, and if the learner really is to be put first I think that this system has not been very good at resolutely bringing about change either, in under-performing colleges, but you will see that we do not just talk about under-performing colleges, we are talking about under-performing departments and that is equally as important as under-performing colleges. So we are challenging departments even in reasonably performing colleges or even excellently performing colleges. Basically, I am nobody's dinner guest in FE any longer because I have been quite critical and challenging of everybody, but I have done that after reflection because I think this is a system which has not had as much attention as it might."[7]

10. The AoC told us that they thought colleges' reputation for poor quality provision was largely undeserved, and that FE colleges performed well in comparison to other parts of the education system:

"On the most recently available data, college non-completion rates for 16-18s was 17% and for 19s-plus 15%. For universities, a comparable figure was 14.4%, marginally worse in FE, but not hugely so. Just for comparison, in the work based learning sector, the non-completion rate was 54% in the most recent year. I make the point that I think we need to put this in perspective. There are issues around quality, quite rightly, and the Committee is right to focus on them, but let us not get this out of proportion"[8]

11. The evidence we have heard, as well as that compiled elsewhere—suggests a clear overall trend toward improvement in the quality of further education, with some areas of excellence and a very small—and decreasing—proportion of unacceptable provision. While few in the course of this inquiry have challenged the need to tackle the areas of weakness that exist, there are clearly differing views about how best this should be achieved. Moreover, most witnesses have been equally keen to stress the need for a sea change in discourse about the sector, with less emphasis on the "failings" of the system—and in particular, colleges.

Policy direction; current initiatives

12. Historically, further education has been granted few favours by successive Governments. In one of our first evidence sessions, Dr Robert Chilton, who worked with Sir Andrew Foster on his report, told the Committee that he viewed the further education sector as the "neglected middle child" of the education world,[9] sitting uncomfortably between the better understood and more vocally supported worlds of school and university.

13. In recent times, further education has become more visible in policy terms and has been notably better resourced. Significant additional funding has been made available through policy initiatives, such as a national push to improve the literacy and numeracy levels of the large proportion of the population who lack appropriate basic skills. There are also positive signs that things are beginning to change in terms of the level of attention paid to further education at policy level. In November 2004, the DfES and the LSC jointly commissioned Sir Andrew Foster to carry out a comprehensive independent review of further education with the intention of establishing current stumbling blocks and charting a direction for the sector in the coming decade. Foster produced his report, Realising the Potential—A review of the future role of further education colleges, in November 2005. It contained 81 recommendations for action on the part of colleges, inspectorates, the LSC, DfES and Government. Concurrently, HM Treasury has commissioned Lord Sandy Leitch to carry out a review of demand-side issues, identifying "the UK's optimal skills mix in 2020 to maximise economic growth, productivity and social justice, and to consider the policy implications of achieving the level of change required".[10] An interim report, published in November 2005, suggested that even were current targets achieved, future skills needs were unlikely to be met in full.[11]

14. Subsequently, the DfES has indicated acceptance of the majority of Foster's conclusions and released a White Paper: Further Education: Raising Skills, Improving Life Chances outlining the ways in which further education would be reformed over the coming period.[12] It makes proposals in seven key areas, including:

  • Mission and specialisation for further education colleges;
  • Meeting employer and learner needs;
  • A national strategy for better teaching and learning;
  • Spreading success and eliminating failure;
  • Funding;
  • A new relationship between planning and funding bodies, and providers; and
  • Establishing a set of agreed "outcomes" for further education.

15. One very clear message emerges from the evidence we have taken: a considerable degree of goodwill has been generated among representative organisations and those at the "front line" by the recent policy focus on further education. Martin Dunford, Chairman, Association of Learning Providers told us:

"[...] certainly having worked in this activity for 15 years, I would say the championing and promotion of skills has never been greater; whether that is enough, I do not know.

Graham Hoyle, also of the Association of Learning Providers, continued: "I do not think we ought to minimise the rise up the political ladder which skills has done in the last few years."[13]

16. The evidence we have received is suggestive of broad support for much of the content of Foster's report and those proposals carried through in the recent Further Education White Paper. Nevertheless, we have heard a range of concerns which suggest that some of the measures being considered have been insufficiently thought through. These include proposals concerned with refining the focus of further education around "skills and employability", the reform of inspection, and making further education more responsive to learners and employers. We also comment on what, in many ways we see as a much bigger issue, which Foster touched on but did not explore to its full extent: the complex and unwieldy morass of planning, funding and stakeholder bodies that overlay further education.

17. Finally, and perhaps most importantly, we examine an issue not considered in any detail by Foster and covered to a greater—but still insufficient—depth in the Further Education White Paper: the funding of adult learning generally in a system heavily skewed toward younger learners and certain groups of adults. Our intention in this report is neither to complete a blow-by-blow re-analysis of every area covered by Foster, nor to respond point by point to the content of the recent Further Education White Paper. Rather, we have sought to identify those areas which we think are of particular significance and where we felt our inquiry process could add most value.

Further education's organisational overlay

18. A key theme running through much of the evidence we have taken has been the apparent complexity of what might be termed further education's "organisational overlay" —that is, those bodies and structures which oversee, direct, and audit further education. Below is a diagram, taken from Leitch's interim review of skills in the UK, which gives a clearer idea of the organisational frameworks within which further education is enmeshed.[14]

Figure 1: organisational structure for further education and skills in England

Chart 5.6: Departments and delivery agencies for educational skills in England

Source: Leitch interim review, Chart 5.6

19. The need to rationalise these organisational systems—not just to reduce "numbers" but more importantly, to ensure there is less overlap of functions between different bodies—was clearly laid out in Foster and has been very strongly supported by witnesses from whom we have taken evidence. Barry Lovejoy, NATFHE, told us: "Quite clearly we can do nothing but agree on the amazing jigsaws that exist that sometimes do not fit in with one another."[15] He went on to outline his perception of some of the reforms that the Government were putting in place to address the issue of over-complexity and overlapping organisational responsibilities:

"[...] developments like the new Quality Improvement Agency we are hoping will assist in the process of having some sort of rationalisation in bringing the numerous institutions associated and involved in quality down to a lower level and maybe we can have some sort of bottom line idea about what quality is. We are hoping that will assist there. Similarly, the inspectorate and the merging of the two, as long as we do not throw out the baby with the bathwater so that ALI's strengths are not lost in the merger, I think that is vital. That is the situation with all of these things. As long as these are not reduced and we will not lose some of those key functions, that is fine. Obviously we did have an issue in terms of the LSC was established and all of a sudden we hit a crisis and there was an enormous amount of redundancies announced, et cetera. We are worried how well thought out they are. Probably some sort of mapping exercise needs to be done and thought out as to what are the key functions to be pursued. We are up for that. I think Foster highlighted that and that is something we would certainly be on board for."[16]

20. Earlier in the course of the inquiry, we took evidence from the LSC who told us that rather than being in danger of creating a more and more complex bureaucracy, "what we are in danger of is making sense of it".[17] They went on the argue that the creation of bodies such as Regional Skills Partnerships, new collaborations between local authorities and the LSC, the reform of the LSC itself and the development of Sector Skills Councils had a real chance of bringing about organisational structures which were fit for purpose and less confusing for those who had to negotiate them.

21. Similarly, the Sector Skills Development Agency told us that it saw clear evidence of rationalisation occurring on the ground through its own work. Its Chief Executive, Mark Fisher explained:

"One of the things I did when I was thinking of applying for [my current] job was I put 'skills' into Google which turned out to be a big mistake given the number of different bodies that came out. Yes, employers desperately need help through the number of bodies and how they access help, funding, support and training. A key role for Sector Skills Councils is not only to give coherence in terms of what employers want but also to present a coherent face of the system to employers. A number of the councils are very deliberately trying to put themselves between employers and the whole edifice and say, 'You talk to us, we will deal with all the wiring behind' and that might be one successful way through it."[18]

22. We appreciate that there is government recognition that the further education and skills landscape is organisationally over-complex. We also appreciate that some measures are in train to make the structural overlay more proportionate and helpful, with less overlap of functions between different bodies.[19] We also recognise that there are areas of good practice from particular areas of the country, and think these should be more widely shared. However, overall, it is not clear that the separate "parts" of the planning and organisational system which overlay further education are currently working smoothly together, without overlap and toward the same ends. The Government states that, in respect of the regulatory and organisational frameworks for skills, "over time […] [we will] look for further rationalisations which will make it much clearer".[20] This is insufficiently specific and indicates that Ministers are not approaching the problem with the urgency it merits. We intend to undertake an inquiry in the near future on how the overall skills and training framework fits together but in the meantime look to the Government to carry out an urgent review of whether the organisational, planning and funding frameworks for further education and skills, viewed as a whole, constitute a coherent system.

International experience

23. During the course of our inquiry, the Committee visited the Republic of Ireland to examine the operation and organisation of further education there. Ireland's education and training system is credited by many as playing a key role in the country's economic regeneration over the past decade. In structural terms, we found that the Irish further education system was very different to England's, yet was facing many of the same challenges—particularly in terms of the retention of young people and more generally, in terms of the planning and funding structures for further education, which often seemed of similar complexity to those in this country. We discuss in more detail what we learned from our visit in the appropriate sections of this Report.

2   DfES 21st century skills. Realising our potential. Individuals, employers, nation, CM 5810, 2003. Back

3   DfES Skills: Getting on in business, getting on at work CM 6483-I, 2005. Back

4   Q 347 Back

5   Foster report, para 14. Back

6   Q 178 Back

7   Q 179 Back

8   Q 281 Back

9   Q 159 Back

10   Taken from HM Treasury website, Back

11   Leitch Review of Skills Skills in the UK: the long term challenge. Interim Report, December 2005. Back

12   DfES Further Education: Raising Skills, Improving Life Chances, CM 6768, March 2006. Back

13   Q 421 Back

14   Leitch interim review, para 5.46 Back

15   Q 552 Back

16   Q 552 Back

17   Q 76 Back

18   Q 369  Back

19   For example, the Quality Improvement Agency (QIA) issued in July 2006-a draft quality improvement strategy for consultation, entitled Pursuing excellence. When finalised, it is intended that this document will be the single strategy driving and co-ordinating quality improvement work in further education.  Back

20   Q 569 Back

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