Memorandum 3
Letter from the Rt Hon John Denham MP,
Secretary of State for Innovation, Universities and Skills to
the Chairman, Phil Willis MP
During Parliamentary Questions last week you
asked me about budget transfers between Further Education and
Skills and Higher Education in the department's Resource Accounts
for 2007-08. I said I would write to you to explain the background
and effect of these transfers.
RESOURCE ACCOUNTS
AND BUDGETARY
TRANSFERS
The DIUS 2007-08 Resource Accounts reported
an underspend in 2007-08 of £172 million on the Further Education
and Skills budget. The Accounts also show an overspend on Higher
Education expenditure of £128 million. A transfer of £116
million was therefore made from Further Education and Skills to
Higher Education in 2007-08 to address the overspend.
Of the £116 million transferred, £67
million was temporarily made available from Further Education
and Skills to Higher Education. This relates to payment made to
students for the third academic term (these payments were made
within the 2007-08 Financial Year as a result of Easter falling
earlier than usual). The remaining £49 million was a permanent
transfer from Further Education and Skills to Higher Education
in 2007-08. The budget for these payments has now been allocated
to Higher Education within the 2008-09 Financial Year and the
£67 million has been reallocated to Further Education and
Skills budgets.
REINVESTMENT OF
£115 MILLION IN
FE AND SKILLS
PRIORITIES
Separately, in response to emerging underspends
in 2007-08, the LSC made payments in 2007-08 to meet commitments
that would normally have fallen in 2008-09. This reduced the required
spend on some LSC budgets in 2008-09, allowing the flexibility
to invest £115 million in additional FE and Skills priorities
in 2008-09 including:
— Our leadership and management offer
in Train to Gain for small and medium sized businesses.
— Enabling adult learning providers
such as WEA to continue to offer provision that contributes to
the wider adult learning offer.
— Supporting adult learners to gain
employability skills.
— Ensuring the continued roll out of
National Skills Academies.
— Funding pathfinder Networking Projects
designed to unlock the talent of the FE workforce to drive business
innovation through knowledge transfer.
— Supporting an additional 1,200 adult
apprenticeships in the best training companies as announced through
WorkSkills in June this year.
— Expanding Level 3 pilots focused
on removing barriers to training.
You will also be interested to know that we
expect to publish shortly our LSC Grant Letter for 2009-10, setting
out our strategy for continuing investment in further education
and skills.
October 2008
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