Supplementary evidence from the Department
for Business, Innovation & Skills
At our recent evidence session I agreed to send
you some further information, which I now enclose. I hope it may
be of some assistance to the Committee in producing its report.
Firstly, I agreed to send the Committee a list
of the bodies involved in the delivery of skills in England from
1 April 2010. Please find this attached as Annex A.
I also agreed to confirm the costs of the transition
to the Skills Funding Agency and local authorities (supported
by the Young People's Learning Agency) as well as details of the
savings made through the reduction of the LSC estate.
The new system is expected to be cost neutral
for the exchequer. Public updates on transition costs were provided
during the passage of the Apprenticeships, Skills, Children and
Learning Act (two letters were sent to the bill committee in May
2009 and October 2009) and long-term plans have been set out in
the Skills Investment Strategy 2010-11, including an indicative
2010-11 Skills Funding Agency budget. Local authority 2010-11
budgets are also published.
We anticipate some transition costs, currently
estimated at £3 million to standardise transfer terms to
local authorities; £2-3 million for pensions; and £36.8
million for premises. Premises costs will only be incurred where
there is a value for money case to do so. Over time, these changes
are expected to generate net annual savings of some £17 million
from rationalisation of premises, IT and shared services, and
streamlined contracting and data collection processes. Costs will
be met from within current budgets.
Finally, I undertook to provide an update on
the details of the staff transition and any costs or savings involved.
In December 2008 details of staffing plans for
the Skills Funding Agency and YPLA were published in the 16-19
and post 19 Funding Transfer: Bulletin No 5 as follows:
"DIUS and DCSF Ministers have agreed an
overall staffing need of some 3,300 for the new 16-19 and post-19
systems. These numbers are in line with existing LSC staffing
levels and reaffirms our commitment to retain the expertise of
LSC staff in the new arrangements wherever possible.
We expect around 1,000 posts to transfer to local
authorities, 500 to be in the YPLA and 1,800 to be in the Skills
Funding Agency including 400 posts in the National Apprenticeship
Service."
Since then, as part of the new role for RDAs
in regional strategic skills, over 50 posts have been transferred
to them.
In doing this, we were clear that we were not
seeking to make staffing reductions at the same time as implementing
this complex change.
In the Apprenticeships, Skills, Children and
Learning Act 2009 impact assessment it was outlined that we expect
ongoing costs of operating the new system to be revenue-neutral
compared to the current system in the short term, with savings
and efficiencies through a more integrated service at local authority
level in the medium to long term.
In comparison to retaining the LSC (£210
million admin allocation in the LSC grant letter for 2009-10),
the Skills Funding Agency is expected to operate with an admin
budget in the region of £81 million (Skills Investment Strategy
2010-11) and will be responsible for managing staffing within
this budget.
The rest of what would have been the LSC's baseline
will transfer to other bodies, principally local authorities and
the YPLA.
Annex A
ORGANISATIONS INVOLVED IN THE DELIVERY OF
ADULT SKILLS AND THEIR RESPONSIBILITIES
The Department for Business, Innovation and
Skills (BIS):
— Determine overall investment and
priorities.
— Determine performance system (Framework
for Excellence).
— Meet the Skills Public Service Agreement.
— Sponsorship of colleges and training
organisations and their contribution to Department for Children,
Schools and Families targets.
The UK Commission for Employment and Skills:
— Advise BIS on the current and future
skills needs of the country, including what is identified in the
Single Integrated Regional Strategies.
— Monitor and challenge Government performance
on employment and skills.
— Manage the Further Education and Skills
Research Function.
— Manage Sector Skills Councils and ensuring
their effectiveness.
— Advise on Sector Skills Council relicensing.
Sector Skills Councils:
— Determine the Skills required within
their vocational area.
— Raise employer engagement with, demand
for, and investment in skills.
Regional Development Agencies:
— Work with employers, local authorities,
sector skills councils, Jobcentre Plus and all other relevant
sources to identify demand at the regional, sub regional and local
level.
— Produce Single Integrated Regional Strategies
incorporating skills priority statements.
— Ensure that sub-regions and city-regions
are able to shape policy in line with their own priorities.
— Spearhead multi-agency action to identify
and resolve mismatches in the demand for, and supply of, skills.
— Be an advocate for skills. Actively engage
with employers to raise their demand for, and investment in, skills
(eg through the Skills Pledge).
— Manage the Skills brokerage service.
Skills Funding Agency:
— Fund colleges and training organisations
through a Single Account Management System.
— Lead and provide customer focused services
and underpinning systems (eg Train to Gain, the National Employer
Service, the National Apprenticeship Service and the Adult Advancement
and Careers Service).
— Design and manage the underpinning systems
for funding, settlement, data collection and exchange etc.
Employment & Skills Boards:
— Set the strategy for delivery of adult
(post 19) skills in their area, taking into account key national
priorities in Skills for Growth and other relevant strategies,
such as the Single Integrated Regional Strategy.
— Actively engage with employers to raise
their demand for, and investment in, skills.
— Provide feedback to Skills Funding Agency
assessing how well the skills and employment system is responding
to employer demand in its area.
Local Authorities:
— Statutory responsibility for assessing
the economic needs of their areas, including skills and employment.
— Convene local area agreements, bringing
together the action of other public bodies and colleges.
Colleges and Training Organisations:
— Meet the requirements of learners and
employers.
— Collaborate with relevant bodies and
each other to respond to demand.
— Collaborate with each other to provide
a range of support services to the sector, including peer assessment,
staff development programmes, shared services and improved procurement.
Ofqual:
— Regulate the qualifications offer.
LSIS:
— Support college and training organisations
performance and facilitate self regulation (owned by the bodies
it supports).
Becta:
— Champion use of technology to support
learning.
Ofsted:
— Provide an independent view of college
and training organisation performance.
4 March 2010
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