Select Committee on Education and Skills Fourth Report

4  Inspection, oversight and planning

Merger of ALI and Ofsted

71. Currently, further education is inspected by two different bodies—Ofsted and the Adult Learning Inspectorate (ALI). Ofsted has sole responsibility for examining provision for those up to the age of 16. Colleges where there is a mixed economy in terms of age groups are assessed by joint teams from ALI and Ofsted. Other adult provision falls within the remit of ALI—which also carries out commissioned inspection and development work on behalf of employers running their own training programmes.

72. In July 2005, the DfES launched a consultation on the future of the Adult Learning Inspectorate, proposing that ALI would be merged with Ofsted (as would some parts of the Children's Social Care Inspectorate) to form a single organisation, provisionally called the Office for Standards in Children's Services, Education and Skills.[54] This forms part of a Government-wide programme of reform to significantly rationalise the number of regulatory bodies having oversight of public services and the regulatory burden the latter face.

73. Sir Andrew Foster, concerned about the number of bodies which scrutinised further education (and the demands this placed on institutions), gave his support to the Government's proposals in respect of the merger. Shortly after the publication of his report, the DfES indicated that it intended to press ahead with the changes. We took evidence from ALI and Ofsted both before and after the merger announcement. We also asked other witnesses during the course of our inquiry for their views on the proposals. Our findings indicated mixed views on the merger; while many were supportive of the drive to "reduce and rationalise", this was balanced by fears about how approaches developed by ALI would be preserved within the new organisation.

74. ALI originally told the Committee that it was opposed on several grounds to the merger as first laid out. Firstly, there were concerns from the providers and employers that the focus on adult learning would be lost if the organisation were to be merged into a body whose main areas of responsibility were in the regulation of statutory services for children and young people, rather than adults. Second, ALI was concerned that there were significant differences in the cultures of the two organisations which would make the merger problematic; while Ofsted operated as a statutory, regulatory body ALI combined scrutiny functions more explicitly with direct support for quality improvement. Organisations representing the business community had come out against the merger, ALI told us, as they did not think the interests of employers would be best served from within a statutory regulator. Speaking after the announcement of the merger, David Sherlock of the ALI, told us:

"I think it is a little early to say that we have lost all our concerns. I think what did happen was that as a result of the consultation the original proposition changed somewhat. Some of the rougher corners—if I may put it this way—were knocked off and I think we are reassured by the process [...] I think we have an awful lot of work to do together to determine what an inspectorate for 2010 and beyond is going to look like. I think it is pretty much for sure it is not going to look like any of the organisations which currently exist [...]"[55].

He later continued:

"The trick is going to be building a culture which is capable of addressing in a sensitive kind of way this very wide constituency of different customer groups. I think we have a nervousness about becoming part of the Civil Service, I am bound to say; I have never been a Civil Servant before […] I think the cultural issues that go with that are the things that worry us. The comments from people like the Institute of Directors and the CBI were very much about engagement with the interests of employers and maintaining that edgy, difficult relationship between the public and the private sector. We need to carry on doing that and move probably a little bit further towards the private sector within an organisation which has got very, very substantial regulatory duties in childcare and in other areas"[56]

75. The aim—rationalisation of inspection and scrutiny—is unarguably correct but it remains to be seen whether ALI's fears of a diminution of its role will be borne out in practice. It is crucial that in the transition to the new arrangements, the many identified strengths that have characterised ALI's approach to its work are not lost. Joint inspections carried out by ALI and Ofsted have to date worked well, and this provides us with some level of reassurance that the merger will achieve its aims.

76. Nevertheless, we think that ALI is right when it says that integrating the cultures of the two organisations into one functioning whole is likely to be deeply challenging for all concerned. The process of adaptation will be occurring at a time when the resource base for inspectorates is being gradually reduced. We hope that this does not lead to a lack of rigour in any areas of its work—and particularly, given our concerns elsewhere in this report, in the area of scrutiny and support for adult learning and employer-based learning. In our regular sessions with Ofsted, we will be seeking evidence on progress toward the new arrangements to incorporate ALI's activities, and will also be keen to look for evidence of a sustained focus on adult learning and employer-focused provision. We also look to Ofsted to come forward as soon as is practicable with further details of how it intends to incorporate the work of ALI into its future work, including information on the allocation of staff and budgets to adult- and employer- focused work. Moreover, it will be vital that, in support of adult- and employer- oriented provision, the enlarged Ofsted retains operational contact with the Quality Improvement Agency, who will take over some of the developmental activities previously undertaken by ALI itself.

Self-assessment and self-regulation

77. As part of plans to reduce the onerous reporting and oversight burden currently facing colleges, Sir Andrew Foster also advocated a conscious move toward a system which would have as its ultimate aim a self-assessment, peer review approach. He told us:

"I am arguing that you should be even tougher on the under-performing and you should over a period of three, four or five years start to give increasing freedoms to those who are doing well. Clearly, what you would do is you would not let anybody be in a peer review self-assessment system until you were feeling very confident that they were excellent. So you would gradate it over a period of time and you would never let anybody migrate to that until you were clear that they had good standards".[57]

78. We asked Ofsted whether they supported Foster's proposals in this respect. They told us that, in their view, a system based solely on self-assessment and peer-review would not be achievable in the short-term. However, they were very committed to moving toward a more proportionate system of inspection, whereby the weakest providers would be subject to tougher, more regular scrutiny, while those doing well would be increasingly free from the demands of external oversight. Additionally, they would be moving to a system whereby providers were increasingly encouraged to develop effective self-assessment processes which would support institutional improvement.

79. We asked the AoC if they thought that this sort of approach went far enough. John Brennan, Chief Executive, told us:

"I think the emphasis upon improving data collection and improving measurement in the system has been hugely beneficial; I have no doubt about that. I equally agree that inspection is an important component in the process, both to provide public reassurance and to provide a stimulus to institutions. What I would say, though, is if you look at the inspection profiles across each of the three cycles which we have now been through since incorporation, they are not very different between each cycle. Individual institutions will have moved about a bit within those frameworks, but the broad profile is very similar across each one. I think there is an important question to be asked about how frequently you have to go and pull up the roots to check that everything is all right. The issues are about the frequency, the extent of the depth of inspection and measurement, and so on, in the system. I think we should be moving towards a system in which there is a lighter touch in respect of those activities and those institutions which are seen to be broadly performing pretty well, but a much tighter and sharper intervention in those areas where we know there are failings"[58]

80. The relationship between inspection and improvement is clearly a very complex one—and we have had an informative ongoing debate with Ofsted about their plans for a more proportionate inspection system for schools. We intend to continue these conversations in the future—and to focus equally on how proposals are being implemented with regard to colleges and other further education providers. We concur with Foster that the evidence for a headlong rush to an approach based entirely on self- and peer-assessment in the FE sector is not strong, and we would wish to see evidence of more consistent quality before endorsing plans to move in this direction. Building capacity for self-analysis and, in particular, the ability to use the results of such analysis to formulate plans for improvement, is clearly a crucial area, and the Government should offer strong support to inspectorates and other relevant agencies for developing their work in this regard.

Making inspection fit for purpose—"impact" analysis

81. In parallel to the reforms suggested to make providers themselves more responsive to the needs of learners, employers and their communities, Foster also recommended that inspectorates should to some extent refocus their methodologies to assess how far colleges and other providers were succeeding in meeting the new priorities that had been set for them. Specifically, Foster said, inspection should be "re-engineered from two angles", the first of which was "assessing the experience of learners in a local setting, both from their individual perspectives and from the perspective that provision is making on local learning needs".[59] Interestingly, an approach to quality improvement which makes use of "impact analysis"—gauging effect on learners, employers and local communities—was also one recommendation of a recent review of the vocational education and training system in Northern Ireland.[60]

82. In their recommendation-by-recommendation response to the Foster report, published as an annex to the White Paper, the Government confirmed that the development of an "impact analysis" approach, was being "built into the framework of the single inspectorate".[61] This is not discussed in any further detail elsewhere in the White Paper.

83. We spoke to the inspectorates about proposals that inspection should aim to gauge impacts on individuals and on the local area. David Sherlock of the ALI, told us that in his opinion, this was "one of the most interesting suggestions in the [Foster] report" and one "thoroughly worth trying" to implement.[62] However, he also argued convincingly that this would present some significant practical challenges:

"The basic premise of the Foster Report that general FE colleges should be focussed on employability seems to me to be right. The disappointing element of the Foster Report from our point of view in that regard and many others is that he does not actually follow that on to look at the knock-on consequences and I think that is one of them. I think it is something we would want to try to see whether we could assess the impact of employability on the local community and employment rates and skills shortages in the local community. That is something we certainly do not have a method for right now."[63]

84. Maurice Smith, HMCI, Ofsted, offered a similar analysis, adding that in some respects Foster—and by implication, the Government—appeared to be asking inspectorates to do conflicting things:

"[...]we do not have that breadth of inspection methodology at the moment. We do not go out and do a needs analysis of the community on each institutional inspection. Of course that will add to our responsibilities and at a time when we are constantly being bombarded with demands to constrain our responsibilities by Foster in the same breath, so to speak, then we do find ourselves a bit between a rock and a hard place I am afraid"[64]

85. We are attracted to the idea of reforming inspection so that it is able to comment on the effectiveness of colleges in meeting local skill needs and the needs of individual learners. If the prime driver for colleges is to be responsiveness to employers' and to learners' needs, then it follows that inspection should judge them on how well they perform in this regard. We also believe that, if developed well, such impact analyses would play a useful role in helping to raise esteem for, and interest in, some areas of adult learning in particular, the value of which it is currently sometimes difficult to objectively measure. However, adapting inspection methodologies in this way would be a major undertaking and we are not convinced that the White Paper deals adequately with the sheer scale of this task. Moreover, such reform presents significant challenges at a time when inspectorates are also under pressure to rationalise their demands on providers, fulfil their remit within a dwindling resource base and undertake internal restructuring. The Government should consider, as an initial step, commissioning a feasibility study to assess how the kind of "impact analysis" approach to inspection might usefully be taken forward in light of resource constraints and the imperative to "slim down" the inspection burden. In any event, inspectorates should be given a reasonable time to explore this area and to develop meaningful methodologies rather than being rushed into producing frameworks that in the event add little.

Adult learning

Impacts of current funding priorities

86. Two recent reports—one by a committee formed and led by NIACE to look at adult learning, and the other by the Associate Parliamentary Skills Group—raise serious concerns about the likely unintended consequences of the Government's decision to focus funding very substantially on young people, those seeking a first full level two qualification and those in need of basic skills.[65]

87. We sought further evidence from witnesses on this issue. The soundings we took suggest to us that while the identified priority areas are all worthy of funding in themselves, there was a real risk that types of learning which were judged not to fall inside these priorities would founder. Given that the economy would come to rely increasingly on adult returners to the labour market rather than young first-time entrants, this was concerning. NIACE told us:

"Our central concern is that the number of publicly-supported opportunities for adults in England to undertake self-chosen education and training will decline steeply over the next three years—not as the result of a deliberate desire to reduce opportunity but as the unintended consequence of decisions taken for other purposes. We estimate that by 2009 there will be at least one million fewer places for adults in further education colleges and publicly-funded community education as a result of current policies. NIACE believes that such a reduction will make it harder rather than easier for Government to raise the education and skill levels of the adult population with the objective of creating a more productive and competitive economy and a fairer and more inclusive society."[66]

88. Witnesses told us that they had collected evidence that in practice significant amounts of learning deemed to fall "outside" priority areas were being cut from college programmes. Moreover, this was not simply a matter of the loss of "leisure learning", but of courses that contributed in the long run toward the very priorities identified elsewhere by the Government—for example, skills for employability. Jacqui Johnson, a Lay member, of the NATFHE National Executive, told us:

"Across the country these courses are being hit and nobody can predict what the outcome is going to be because they have been with us for so long and have led on to something else. It is very difficult to say if we drop that one it will mean people do not go on to something else and get a job."[67]

89. Other areas being affected included access courses. Kat Fletcher of the NUS elaborated:

"Our focus over the last plan has been particularly on access courses because we think access courses are the jewel in the crown of further education [...] What we are seeing because of the LSC's priorities as fed down by the Government is that access courses are being cut because they are over-19 and they want to go into HE. What colleges are doing is cross-subsidising their access courses because they feel so impassioned about them and the value they play in wider society and therefore taking it out of other bits of funding and that is obviously difficult to sustain."[68]

90. The Government has argued that the state should direct its contributions in terms of funding for further education colleges, to those courses which indirectly or directly meet the economic imperatives of equipping people with the skills necessary to participate in the world of work. In a recent article in The Guardian, the Secretary of State for Education and Skills, the Rt Hon Alan Johnson said that in future, funding of further education would mean: "[...] more plumbing and less pilates […] Tai chi may be hugely valuable to people studying it, but it's of little value to the economy. There must be a fairer apportionment between those who gain from education and those who pay for it—state, employer or individual."[69]

91. We accept that within limited funding, there are "difficult choices" that have to be made about what is to be supported by the public purse, what must be paid for by learners themselves, and what will be paid for by employers. We put it to Ministers that while investment in their priority areas was welcome, this was leading to unacceptable declines in learning opportunities not just in terms of "leisure courses for the middle classes", but of types of learning which actually contributed to key government priorities—often taking place in communities where there was a great need. Fundamentally, we argue, the dividing line between what is of value—to individuals and to the economy—and what is less so, is nowhere near as clear as is currently implied in government rhetoric. Phil Hope, Under-Secretary of State for Skills at the DfES told us:

"[...] for many of the communities that we are describing it is very important that if individuals start a course, a short course, a literacy or numeracy course, an ESOL course, that course leads somewhere. We are quite concerned, I think we say this in the White Paper, that a number of those courses do not add up to a point of progression. People do a course and it does not create for them added-value as an individual. It does not provide them what they describe as a stepping stone, it is not a stepping stone on to progression on to level one or, indeed, level two qualifications. Now that is part of the change that we want to see happen, either through the way the PCDL might be developed but also through the development of the foundation learning tier that we talk about in the White Paper which provides—and that will be built into the framework for achievement of new qualifications—a coherent package so that when individuals begin the course they know that the course develops their basic skills, adapts their needs and also leads on to higher qualifications[70]. There is a genuine vocational pathway on the way through. That is the challenge for all of us nationally and locally."[71]

92. We understand, and support, the Government's intention to improve the quality and relevance of learning opportunities for those at the very start of their return to education. However, there is no demonstrable evidence that it is poor quality provision or that with the lowest "returns" that has been strategically cut in order to concentrate public funding on priorities and it is disingenuous to suggest that this is so. Rather, we have the impression that reductions in places on some courses have happened swiftly and as the result of funding pressure, rather than conscious, area-level planning. We therefore think that Ministers' confidence about outcomes in this area is misguided. While the foundation learning tier is a very welcome development, we note that it is only to be funded "as resources allow".

93. Our point here extends beyond adult learning to the broader climate in which further education operates. Bill Rammell told the Committee that 10% of people doing degrees are doing so through FE. It is important that a priority is placed on strengthening the relationship between universities and FE colleges through such mechanisms as the Lifelong Learning networks and regional partnerships. Colleges and other providers have traditionally been very flexible in terms of responding to new initiatives and changes in policy. Being "fleet of foot" is seen by many as a positive feature of the sector. However, there is a point at which the constant pressure to react to a changing policy and funding landscape undermines stability and puts pressure on long-established, valued provision which suddenly becomes uneconomical to continue to provide. This is a situation which must change. The LSC and the DfES say they are moving to a more stable, long-term approach to funding, especially for the most successful providers. At the moment, though, secure long-term funding is not a reality on the ground and there are even questions about whether it will become the norm for the majority of providers—rather than those who perform exceptionally—in the medium term.

94. We also heard compelling evidence on the need for a more liberal interpretation of the way the value of some types of adult learning was determined, which went beyond the economically-based approach currently taken. NIACE, for example, argued that there were sound reasons for funding non-formalised and non-award-bearing learning opportunities and that in many cases this kind of provision in colleges was at risk:

"[...] it is absolutely reasonable to my mind for a pensioner to prolong active citizenship through engaging in learning. That saves the state money in terms of social work or hospital visits in lieu, as it were. It benefits a number of other government policy strategies as well that there are opportunities for adults to engage in learning that does not immediately have a labour market focus. If you are in rural Cornwall, if the college is not doing it, who is to do it? What we are facing is a diminution of offer for too many people. In the National Mental Health Strategy last year, the role of adult learning in colleges or outside them, of enabling people to put their toe back in the water, to engage in rebuilding relationships, is a perfect environment because the world does not fall down if you do not feel up to going next Thursday, exactly the sort of modest engagement with public support that people need in order to be independent. Without that kind of infrastructure there, what kind of expensive systems are we going to have to put in place to enable people to take a step back into the community? What we are facing is a diminution of offer for too many people."[72]

95. One area of our questioning of Ministers focused on the measures they proposed to put in place to ensure that these types of learning were able to continue. They told us that the intention was for local authorities, the LSC and other local organisations including the voluntary sector to work together to ensure that an acceptable level of "non-priority" provision remained for adults. Phil Hope told us that budgets for "adult and community" learning would not be given over to local authorities, but would remain with the LSCs. He outlined how he saw this working in practice:

"I would anticipate the partnerships—everybody bringing what they are doing to the table, sharing it, and then perhaps changing and developing what they are delivering at a local level. Now they have had that dialogue, had that discussion, had that assessment, and saying, 'It is daft that you are funding it and I am funding it and we are both funding the same thing, and we are both not meeting the needs of the community; why do we not look at what we are doing and find ways of using that resource more creatively at a local level?' I would hope that they would be innovative in their way of going about doing that. It might be that the college is around that table, in that partnership, with a proud tradition and history, as it were, of delivering this and carrying on doing so. It may be that in other areas that has not been the position for that FE institution, and they will not be. That will be a matter for local partnerships to develop."[73]

96. Evidence we took prior to the release of the White Paper from organisations currently working in the area of adult education suggested that while a planned approach which sought to reduce duplication was seen as eminently sensible, there were mixed views about how such a system would work in practice. The AoC told us:

"Colleges provide a certain amount of what we used to call adult and community learning, and now perhaps call personal community development learning—the labels change from time to time—and they have a role in relation to that and that role may continue for individual institutions [...] Alongside that, there have been many adult education institutions, higher education institutions and so on and, indeed, voluntary and private providers. I do not think anyone in the college system is unduly worried about that, that plurality will remain."[74]

However, Colin Flint, Director of FE, NIACE, told us that he did not share this confidence and was concerned about how a broad range of adult learning would be sustained:

"The TES headline the Friday before last, after the conference and Foster, was 'Colleges are Skills Training Centres'. I fear that may be the most powerful message that was taken from Foster and we are in danger of losing the infrastructure of adult learning."[75]

97. During its first term in office, the Government published The Learning Age, which emphasised the benefits—and the necessity for public funding of—provision for older learners. The Government has told us that it values learning which does not have an immediate economic imperative, but we are concerned about how opportunities in this area will be sustained. The contention that partnership working at the local level will ensure an adequate range of courses is highly questionable given the current resource constraints: this is an area that needs close monitoring. We recommend that the Government, working with the LSC, comes forward with more concrete information on how it expects local authorities, working with the LSC, to fund and plan this sort of provision.

More fundamentally, we recommend that the Government base its decisions on the targeting of funding on much more solid and extensive research than is currently available. This research needs to provide a through analysis of the relative benefits of different types of learning—particularly, what the likely returns of public investment in different types of learning are, and for whom. Only in this way can the Government substantiate its claim that funding is being targeted where it is most needed.


98. In line with recent policy, the White Paper reaffirms the Government's expectation that colleges and other providers are expected to raise a larger amount of income from fees— sometimes charging full cost for courses classed as non-priority—in order to maintain an adequate range of provision. In parallel, changes are also being made to the basic fee assumption for adult "approved" courses. This means that the learner contribution to the cost of courses is expected to rise from 27.5% in 2005-2006 to 37.5% in 2007-2008.[76] We asked the AoC for their estimate of what this would mean in terms of actual cost for learners:

"If you look at it in terms of course hour [...] over the next couple of years you might be looking at an increase from about £1.45 an hour to something like £1.95 an hour. It is a significant amount, I do not want you to think it is something you can dismiss."[77]

99. Several witnesses have told us that they are worried that this policy may produce two unintended consequences: firstly, that the levels of expected fee income will not be reached and courses will not run as a result, and secondly, that those on lower incomes will be adversely affected even if recruitment levels are maintained, and wealthier learners will displace less affluent ones. We asked Ministers about this issue. Phil Hope told us:

"[...] the issue here is about the opportunity the colleges have got to take the courses that they were previously running and to market those courses with an increased contribution in fees from those taking part […] we know that colleges which go out in the community, market in that way and sell those courses in that way, those courses that are valued by those employers can continue to run. I think it is very important that the Committee appreciate the importance as we steer down these new priorities that colleges take these opportunities. We had evidence from a Mori opinion poll that showed that learners and the community out there do say they expect we say a 50% contribution towards the cost of a new course, actually most people do not even know they are going on courses which are heavily subsidised to the tune of 75% or 72.5% already. When this is explained and talked about and comparisons given people say, 'Well fair enough, we should be paying more as a contribution towards courses.' […] The challenge for the colleges is to carry on running those courses at higher fee levels or, indeed, full cost recovery levels by going out to the community to explain the value that the courses have and the funding requirements for them."[78]

Bill Rammell went on to give examples from Brighton College, which he argued had developed a highly proactive approach to marketing courses and had therefore been successful at charging a higher level of fees. The LSC took a similar stance, admitting that raising fee levels would be challenging for colleges, but that they intended to provide support and would circulate examples of best practice.[79]

Other evidence we have received, however, is less positive about the introduction of higher fees. The AoC have said that while supporting in principle and in the long term a move to such a system for those who could afford it, they were "deeply concerned at the imposition of large increases in such a short timescale".[80] Similarly, NIACE told us that they were in favour of a higher fees approach over the longer term but did not think that this was something that should be introduced too rapidly:

"I am in favour of higher fee contributions […] Night school adult education has traditionally charged significantly higher fees. What you find if you do a fee hike too quickly is people go away and they may come back in two or three years' time as long as you stabilise your fees, but what you cannot do is rush from being 'pile 'em high, sell 'em cheap', to 'let's run an expensive boutique' overnight, and I am afraid that is the way our fees policies look like they are working."[81]

100. The LSC has introduced targets for fee income in response to the direction of public subsidy increasingly toward its identified priorities. We asked the Minister whether they would expect the LSC to let colleges cut courses if they did not meet their fee income targets. He told us:

"Frankly the market will work in that way. If the college does not raise the fees it will not have the income to run the courses. The pressure will be from the LSC to say, 'Live up to your targets' but actually if they do not get their targets for raising the fees they will not have the money and that will be the key that will drive those colleges to either do better at marketing to raise their fee income and to make choices about which courses they offer. It will be the very fact that they are not getting their fee, it will not be the LSC, 'you have not reached your target that is going to be the pressure', it is going to be if they have not raised the cash from fees that will be the pressure and change the performance and behaviour of the college."[82]

101. We find this attitude blasé and deeply concerning. While there may be good reasons for seeking an increased contribution from learners, if this is not achieved in practice, valuable provision could certainly be lost and learners who could benefit from education will not do so. The DfES and LSC need to negotiate a contingency plan to deal with this situation, should it arise.

102. Furthermore, while it is feasible that colleges could, in the long run, succeed in raising much more income from fees and therefore continue to run a wide range of high quality courses, there is no guarantee that this means they will be catering to the same student profile. We are not aware of any substantive research which has been undertaken to assess the risk that more affluent students will replace those who are less well off, and think that this situation needs to be rectified rapidly. We therefore recommend that in Autumn 2006, the DfES or one of its agencies should undertake an impact assessment of how the new fees regime is affecting the overall socio-economic profile of adult learners. Monitoring should continue as the increase to the fee assumption is rolled out, and the Government and LSC should be prepared to take action if the findings suggest problems in this area.


103. We are also not convinced that there is a coherent underpinning logic as to who is expected to pay for what across the education landscape. We put it to Ministers that the standards applied to further education and higher education were different in this regard; students who, for example, wanted to study introductory Spanish in a community or workplace setting would increasingly be expected to make a larger contribution to their own learning than they would if the subject was one of more indirect or direct economic benefit. If the course was at university level, the amount of subsidy would not depend on such considerations. Asked what the distinction was between university-level study of Classical Greek and Spanish for holiday purposes, Phil Hope replied:

"I think the distinction I would make would be that if the individual is going to go on to getting a level two qualification—if there was progression for those individuals, if we could make a judgment that by taking part in these courses it would help their employability either to get into work or to be a more productive person in the workforce, and from there lead on to other training […] we want them to be attracted into learning that takes them somewhere"[83]

He also stressed that university students were expected to contribute to their own learning by way of fees.

104. The Ministers' response does not fully reassure us that a coherent funding logic is in place across the education system. We accept that students in higher education are expected to make a significant contribution to the costs of their own learning. However, there is still a difference insofar as the level of public subsidy for places at university does not depend on whether the subject being studied is deemed to be of direct economic benefit; to put it another way, classics is funded on broadly the same basis as engineering, despite the fact that an argument could be made that the latter is more "economically relevant" and in some respects more likely to lead to employment directly related to study.


105. In the FE White Paper, the Government announced that it intended to put in place an entitlement for study at level three for those aged 19-25. This was in recognition of the fact that, until now, young adults who had not, for whatever reason, managed to attain a level 3 qualification by the age of 19 were not always guaranteed LSC funding. Often, colleges funded their learning from other sources.

106. We asked Ministers whether it was envisaged that learners would have to register for a "full" level three qualification to take advantage of their entitlement, or whether they would be able to complete units of study. Phil Hope told us:

"We have not got to a point yet—although we are trying to do so with the Framework for Achievement[84]—whereby individuals can take units of study that accumulate up into a full level two and level three qualification. At present we are describing the level three entitlements to a full level three qualification, so individuals would need to join up to and take part in a full qualification as part of their learning [...] We have an aspiration towards the way you are describing it, because it suits learners' needs as well as employers' needs to unitise learning in that way."[85]

107. The Minister went on to say that he was "hopeful that next year, once the [unitisation] pilots have been trialled, we will be in a better position to roll out the new Framework for Achievement following that. I cannot give you exact dates until we see the results of the trials and the pilots this year."[86]

108. We also asked Ministers whether the entitlements were intended to stimulate demand in this area or whether they were intended to serve in effect as "replacement funding" for those who colleges currently subsidised out of other budgets. Phil Hope told us:

"[…] those colleges will receive the full amount for the courses they are providing for 19-25-year-olds, when they should be collecting fees now; and secondly it means employers will not have to pay a contribution to their fees because they can claim their full level 3 entitlement […]What we did not want to do is to expect students who had got their level 2 by the age of 19 but hadn't moved on to a level 3 qualification, but then had realised the value of a level 3 qualification, to be disadvantaged, to be dissuaded from going back into learning at level 3; and this entitlement which starts from September 2007 will do that."[87]

Bill Rammell expanded:

"I think you may get some expansion as a result of this policy change, and we will have to deal with that; but this is a real issue in disadvantaged communities where arguably people progress at a slower rate, go out of the system and come back. I think that through this change, which is significant, we have made it that much easier for people in those circumstances to do that."[88]

We interpret this to mean that the function of the 19-25 entitlement in the short-term is primarily one of replacement funding as fees increase.

109. The announcement made in the FE White Paper concerning a new level three entitlement for 19-25-year-olds is very welcome indeed, not least because it addresses a long-standing issue of lack of support for those who, for whatever reason, have not progressed to level three study before the age of 19. It also addresses the need to increase the number of people qualified to level three. However, the Minister told us that currently it was envisaged that the entitlement would only apply to those studying toward a full award at level three, rather than smaller units of learning which could be built up at a pace that suits the learner. As the Government clearly recognises, many of the people who would benefit from this entitlement are likely to have had less than positive experiences of formal, qualification-based education and risk being "turned off" at the outset by the requirement to register for a "whole" qualification. Ministers told us that the unitisation being piloted under the Framework for Achievement would bring about improvements in this area, but that the date for final implementation was not yet known. We agree with Foster that work on the Framework for Achievement needs to be speeded up—and seek a commitment from the Government on when we can expect conclusions to emerge.

110. It appears that the entitlements will be designed to soften the blow for those already enrolled on courses rather than attracting significant numbers of new learners. We recognise that there would be serious issues of affordability in extending this scheme to everyone who might benefit from it, and that arguing for additional funding for this scheme while recognising a limited funding envelope would risk displacing funding from other areas. However, the Government needs to bear in mind that the new National Learning Model will have to relate to the 19-25 entitlement, and will also need to reference the entitlements in the "national debate" about "who pays for what". We argue later in this report that this needs to take place as a matter of utmost urgency.


111. The White Paper also contained one other proposal with potentially very great significance for adult learning: the re-introduction of a new scheme of personalised, portable "Learner Accounts", which are described in the following terms:

"The account will hold virtual funds, which can be used to pay for learning at the discretion of the learner. It can have a life extending over a period of time and can hold funds from the state, the learner and the employer. It will be administered by a third party and made robust by the development of the Unique Learner Number. Accounts could be used in principle for all education costs. But they work best where there is an informed and demanding customer group, able and motivated to exercise real choice. So we propose to test the concept with adult learners studying for a level three qualification, as a further way of tackling our relative skills gaps at that level, increasing choice and generating demand for higher level learning from non traditional groups."[89]

112. Clearly, these proposals reignite the debate over Individual Learning Accounts (ILAs). Our predecessor Committee undertook, in 2002, an inquiry into the fraud to which these accounts were subject and the consequent loss of an estimated £67 million in public funds through "fraud and serious irregularities".[90] They concluded that the problem had essentially been one of maladministration, rather than a fundamental problem with the underpinning idea. As a concept, our predecessors concluded, ILAs had much to recommend them—especially in terms of the role they could play in bringing about a more demand-led system Clearly, we were concerned to seek reassurances from Ministers that steps would be taken in order to avoid a repeat of the ILA maladministration. Phil Hope told us:

"Certainly we are going to take it very carefully so we do not repeat the mistakes of the past. A number of lessons have been learnt from how the old ILA system was operating to ensure that we do not fall into those traps, if I can put it that way. We are going to be piloting the level 3 learner accounts in two regions [...] "[91]

Ministers told us that they were not in a position at that time to provide extensive further details of how the accounts would work in practice, but expected to be able to publish more details in the autumn.

113. In line with our predecessor Committee's general support for the principle of the original Individual Learning Accounts, we commend the Government's decision to return with new proposals in this area. Given past fraudulent activity, much is at stake in the roll-out of this project but we are partly reassured by the clear and repeated commitments from Ministers that full piloting of the new Learner Accounts will take place before things are taken forward. We cannot stress strongly enough that lessons from the pilots need to be fully absorbed before any plans for the future are made.

Funding for 16-18-year-olds in colleges

114. Throughout this inquiry, we have also taken evidence on the issue of differential funding between school sixth forms and colleges in respect of provision for those aged 16-19. In 2005, commissioned research from the Learning and Skills Development Agency was published, which quantified the gap and provided an explanation of the specific funding conditions through which it was perpetuated.[92] The existence of a gap of approximately 13% was subsequently accepted by the Government, since when they have made clear and repeated commitments to reducing the disparity. Bill Rammell told us:

"[...] there has been a very concrete timetable to reduce that gap. The financial year we are in at the moment—the gap as estimated by the Learning and Skills Development Agency is 13%; next year that will reduce to 8% and the following year it will reduce to 5%. Those are not warm words; that is a big change and a big difference in the funding gap between schools and FE. My sense, going around colleges up and down the country, is that whereas in the past we might have been accused of warm words, there is recognition that we are moving on it."[93]

When asked about whether the gap would be reduced to zero after 2008, he replied:

"[...] as resources allow—and the reason for that formulation—is that we only can commit in the three-year spending review period; but we would hope to move beyond that position of a 5% gap by 2008 to eventually eradicate that gap. The gap is important, but I would make a broad point that the funding base in further education colleges is substantially better today than it has been in the past because of the significant boost in investment we have delivered over the last nine years"[94]

115. We also took evidence on the relationship between funding and quality—and particularly, on whether there was a direct relationship between the two. Sir Andrew Foster, who had been criticised in some circles for not addressing funding levels in his review of colleges told us:

"I certainly think it is an issue, and I think it is an issue which needs attending to. When we start to look at what affects quality, I suppose we would get into an argument or a debate about causality, and when we talk about quality for me the key issue about quality would be the motivation of the learner, the student, and it would be the professional development of the teacher, the lecturer. Those would be the two key things which would impact on quality. So we would have to start talking about the relationship between those, in my mind, and the funding gap."[95]

116. We accept that there is no simple, deterministic relationship between funding and the quality of what is delivered. Nevertheless, this is an issue of fairness and while a gap persists, colleges can justifiably argue that they are achieving in spite of inequities in the funding system. We welcome the Government's commitment to narrow the gap in funding between what colleges and school sixth forms receive for the education of 16-19-year-olds; if implemented this will be a very significant development. The Government told us that narrowing the gap further was a high priority, and they must demonstrate this by revisiting the remaining funding gap after the next Comprehensive Spending Review has taken place in 2007, explaining clearly what further action will be taken, and by when.

Workforce development

Ownership of the workforce development strategy

117. Following Foster's recommendations, the Government have committed to the development of a more comprehensive and coherent workforce development strategy for further education staff. The White Paper announced that responsibility for the development of the strategy would be given to Lifelong Learning UK (LLUK—the sector skills council for lifelong learning). Foster's original recommendation had been that the DfES should develop a workforce strategy. LLUK explained why Foster had not indicated that responsibility should lie with them. They told us:

"We did not appear extensively in Foster because at the point at which he was consulted we were a very new organisation. We have now been licensed by the DfES, with agreement from DTI, to address the FE and wider Learning and Skills Sector workforce development needs and workforce data requirements and will be addressing this across the UK through our Sector Skills Agreement which the Department has recently agreed to fund."[96]

118. Later, and after the publication of the White Paper, we asked Ministers to clarify why responsibility for the strategy had been given to Lifelong Learning UK, rather than retaining responsibility within the DfES. Bill Rammell told us:

"If you look at the Department's five-year strategy, we took the view that as a general rule we wanted to set the overall policy framework and strategic goals, but the detailed implementation was much better done by others, by intermediary bodies. It was in that context that we took the view that that focus on workforce quality should be undertaken by LLUK. That does not mean that we will just say, 'there it is; get on with it' and have no dialogue with them. I think this is a really important initiative."[97]

119. We very much welcome the commitment in the White Paper to developing and implementing a coherent Workforce Development Strategy for further education. It is rational that having created an industry body for the lifelong learning sector, the DfES has passed responsibility for workforce development issues to that organisation. Elsewhere in this report, we comment on the need to reduce overlap, duplication of effort and confusion about ownership of responsibility in further education policy—and this appears to be one area where clear ownership has the potential to be established. Nevertheless it is crucial that the DfES acts on its commitment to maintaining strong working links with LLUK as the latter works on developing and implementing the strategy. Delegation of responsibility for the workforce development strategy to LLUK should not mean abnegation of responsibility by the DfES. In particular, the DfES needs to make clear how it intends to monitor progress and should negotiate with the LLUK a clear timetable for the production and implementation of the strategy. This is particularly important given that LLUK is a relatively young organisation.


120. Building on Foster's recommendation that opportunities for Continuous Professional Development for further education staff needed to be improved and standardised, the Government announced in the White Paper proposals to introduce a minimum 30 hours annual CPD for the workforce. Bill Rammell elaborated:

"[the] 30 hours per year, […] will be a responsibility for the individual, their line manager, and will be built in to the inspection framework for the college, is a very important way, alongside professionalising the workforce, as we have made the commitment to do by 2010, to continue the progress that has been made and drive up quality across the board."[98]

The AoC have since told us that while they support the White Paper's emphasis on staff development they had "concerns regarding the implementation of the 30 hours CPD and the cost to colleges. We suggest that new regulations on staff development should apply consistently to all LSC funded organisations".[99]

121. Since we have taken evidence, the Government has announced that it intends to roll out a network of new training centres for further education tutors, teachers and trainers, which will be called Centres for Excellence in Teacher Training (CETTS). It is intended that these will be up and running by September 2007. £70 million will be provided in 2007/2008 for "workforce development and initial teacher training".[100]

122. We welcome the announcement that Centres for Excellence in Teacher Training will be rolled out and await further details on the scale and nature of this programme. Likewise, we support in principle the idea of a standardised requirement for Continuing Professional Development (CPD) for further education staff, as laid out in the White Paper. However, there are some concerns about the affordability for providers of a 30-hour CPD requirement. What is more, the Government's proposals for the requirement appear to relate to colleges only; other LSC-funded providers, such as voluntary and community groups, work-based learning and Learndirect, are not explicitly referred to. The DfES needs to explain how it expects the CPD requirement to be resourced, and how it intends to apply the requirement to staff in non-college settings. It also needs to clarify how the requirement will apply to part-time and fractional staff, who constitute a large proportion of the further education workforce.


123. A very strong theme in the evidence we have taken has been support for Sir Andrew Foster's emphasis on the need to improve leadership and management in further education. At the beginning of our inquiry, and in the context of a discussion about the most important influences on quality, he told us:

"[...] quality of leadership in vacuo of resources can still do excellent things. I am not, therefore, arguing for low resources, but to say that resources is the key issue towards excellent service is not correct. If you actually do a scattergram about the level of investment relative to the quality of the product, there is not a direct relationship between them."[101]

124. He went on to add that further education had an ageing workforce profile—with many senior managers and Principals due to retire in the next decade. Compounded with general concerns about the quality of management in further education, the prognosis for the future was poor, he argued, and therefore significant effort needed to be put into the recruitment of new managers from outside the sector alongside development support for existing staff showing potential.

We asked the inspectorates whether they understood part of the problem to be an insufficient intake of new talent from "outside" the sector. Penny Silvester, Divisional Manager, post-16, Ofsted, told us:

"Most of the senior managers within colleges have come up through the sector themselves. However, many lecturers in FE have actually had experience in industry before they came in so therefore if they have moved up through the lecturing route, through middle management and senior management, they do actually have some industrial background or business experience behind them. It is maybe not as incestuous as you are saying […] Some colleges have brought senior managers in from outside. It has not always been the most successful because they do not understand the intricacies of the business […] What we would want to see is good quality managers in those posts who understand the sector and who are committed to driving up the quality within colleges."[102]

Conversely, Lifelong Learning UK told us that they saw definite merit in recruitment campaigns to attract new talent:

"We have never had a recruitment campaign for our sector as a career of first choice. We have seen very successful campaigns from the police service and social care, et cetera, on a national basis that have brought in quite a lot of interest. We will see what comes but we are hopeful that we will be able to make up that deficit."[103]

125. The Further Education White Paper takes forward Foster's suggestions in this area and outlines two programmes which the LLUK and Centre for Excellence in Leadership will be invited to run:

  • The "Make a difference programme"—this will "encourage high-flying graduates to make a career in the sector";
  • "'Business talent'—a management recruitment programme as suggested by Sir Andrew Foster, [to] help colleges and providers attract exceptional talent from business and the public sector into senior management roles".[104]

126. The Government intends to introduce programmes to recruit new managers and leaders from outside further education. We think that programmes like this could have the potential to reinvigorate the leadership of the sector. However, Ofsted told us that in their experience, bringing in fresh talent from business and industry had not always been a clear success. The Government needs to be clear about what contribution it expects external recruitment to make and what particular skills needs such external recruitment programmes will fill. The input of Lifelong Learning UK and the Centre for Excellence in Leadership will be crucial here—not just in terms of implementation but also in terms of designing programmes around the identified needs of the future further education workforce, and the management and leadership needs of the sector.

127. "Golden Hellos" might be one way to attract FE lecturers and assistants needed to teach key skills where there is currently an acute shortage—such as construction. The likely demographic change in the next 10 years needs to be very closely monitored, particularly as regards planning strategy, and funding decisions, and the need to retrain the workforce. As David Hunter of LLUK said: "75% of our workforce for 2020 is already in service now and that needs continual tweaking and refining […] In the next eight to ten years we will have to replace maybe 430, 000 roles in all the sectors we have responsibility for across the UK. Government and its partners need to look in this connection to strengthening the proportion of full-time contracts and career paths to ensure a productive and enthusiastic workforce.


128. During the course of our inquiry, we were concerned to hear suggestions that LSC did not in future intend to continue collecting data on the college workforce, as it had done to date as part of the Staff Individualised Record (SIR). This was a result of a commitment to reduce the data provision burdens on colleges. We asked David Hunter, Chief Executive, LLUK for his views on this. He told us that LLUK were "very concerned about that. We are going to have to find, as the new organisation charged with this responsibility, another way of doing this [collecting FE workforce data]. We are in discussion with the Department about that at the moment".[105] He went on to say that LLUK were determined to cut through the overlap and lack of clarity surrounding responsibility for workforce data collection and were "in discussions with the Department" about the issue. Subsequently, in a memorandum to the Committee, LLUK confirmed that responsibility for data collection and analysis had indeed passed to them, and that they would "let the Committee know if there are problems with the core data set—the Staff Individualised Records—being collected."[106]

129. The FE White Paper states that workforce data collection arrangements will in the future be "developed through the work of LLUK." We are pleased to see that this issue is on the Government's radar, but seek clarification on what this means in practice and specifically, who is to have responsibility for collecting and analysing FE workforce data in the future. If, as we believe, responsibility for this is to pass from the LSC to LLUK, we would wish to see evidence that the latter has the operational capacity—and the support it needs—to carry out this task effectively.

130. We were also advised during our inquiry that while data on the workforce in further education colleges is weak, information about those working in other areas of further education, including in the work-based learning sector and in adult and community learning is poorer still.[107] In overseeing the implementation of its plans for workforce development, the Government should seek to ensure that the workforce data and analysis that underpins planning takes full account of the work-based learning and adult and community learning sectors.

54   DfES A single Inspectorate for Children and Learners-consultation document. Back

55   Q 435 Back

56   Qq 467-68 Back

57   Q 199 Back

58   Q 285 Back

59   Foster report, para 230.  Back

60   LSDA NI/ DELNI Purpose, performance and public value: a review of quality assurance and performance for vocational education and training in Northern Ireland, 2006: Back

61   DfES Foster annex. R 59, march 2006: Back

62   Q 436 Back

63   Q 436 Back

64   Q 499 Back

65   NIACE Eight in ten: Adult Learners in Further Education. The report of the independent Committee of Enquiry invited by NIACE to review the state of adult learning in colleges of further education in England (2005); National Skills Forum/Associate Parliamentary Skills Group Skills: a Parliamentary Perspective, (2005). Back

66   Ev 39 Back

67   Q 530 Back

68   Q 536 Back

69   Guardian Education, 7 June 2006, Johnson: Fund more plumbing and less pilates,,,1792395,00.html. Back

70   The Government's FE White Paper describes the Foundation Learning Tier as "a framework of well understood, high quality foundation programmes encompassing Entry and Level one, supported by appropriate qualifications and units from the FfA [Framework for Achievement] [...] This coherent framework of provision below Level two-the Foundation Learning Tier (FLT)-will replace the present, confusing arrangements. [...] A key driver of the FLT will be the establishment of progression pathways: clear stepping stones to enable learners to access a first full Level two programme. These will be supported by accredited units and qualifications from the FfA, developed in line with a clear qualification strategy".  Back

71   Q 591 Back

72   Q 243 Back

73   Q 651 Back

74   Qq 241-242 Back

75   Q 243 Back

76   LSC Priorities for success: funding for learning and skills, para 52, (October 2005) Back

77   Q 232 Back

78   Q 583 Back

79   See Q 24 and Q 25 Back

80   Public says no to paying for work training-and to subsiding large companies, AoC press release, 11 November 2005. Back

81   Q 234 Back

82   Q 593 Back

83   Qq 605-606 Back

84   The Framework for Achievement will be a unit-based qualification framework, under which learners will be able to accumulate and transfer credits toward full qualifications. Key features of the FfA are being trialled between 2006 and 2008. The Qualifications and Curriculum Authority has responsibility for this area.  Back

85   Q 616 Back

86   Q 618 Back

87   Qq 619-621 Back

88   Q 621 Back

89   FE White Paper, para 3.7. Back

90   An additional £19 million is thought to have been paid to providers "[...] where learning was delivered but where the claims did not fully meet the programme rules". The DfES says that this amount is based on estimates and extrapolations, and that the precise extent of fraudulent activity will not be known until investigations are complete. It is not clear whether this is now the case. See: Back

91   Q 596 Back

92   LSDA The funding gap. Funding in schools and colleges for full-time students aged 16-18, (2005). Back

93   Q 638 Back

94   Q 639 Back

95   Q 146 Back

96   Written evidence from David Hunter (FE 06) [not printed] Back

97   Q 629 Back

98   Q 629 Back

99   Written evidence from AoC (FE 12) [not printed] Back

100   New training centres for FE teachers by next year-Rammell, Department for Education and Skills press release 2006/0087. Back

101   Q 156 Back

102   Qq 484-486 Back

103   Q 373 Back

104   FE White Paper, para 4.30. Back

105   Q 331 Back

106   Evidence from David Hunter (FE 06) [not printed] Back

107   Q 487 Back

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