Spending Review 2010 - Treasury Contents

Written evidence submitted by the Association of Colleges (AoC)


  The Association of Colleges (AoC) represents and promotes the interests of the 352, Further Education Colleges and Sixth Form Colleges established under the Further and Higher Education Act 1992, and their 3.4 million students.

  The following key facts illustrate Colleges' contribution to education and training in England:

    — Every year Colleges educate and train three million people.

    — 831,000 of these students are aged 16 to 18 which compares to 423,000 in schools.

    — 74,000 14 to 15 year olds are enrolled at a College.

    — One-third of A-level students study at a College.

  Colleges are making a vital contribution to helping businesses recover from the recession and are a major draw for inward investment because of the range of skills they offer—a rich mix of academic and vocational education ranging from basic skills to higher education degrees. Colleges currently train many thousands of apprentices and provide 11% of higher education places and 39% of all vocational qualifications achieved each year, supporting key objectives of the Department for Business, Innovation and Skills.


  In the Spending Review the Government announced that the Education Maintenance Allowance is to be abolished. In making this announcement the Chancellor said:

    "We will fund an increase in places for 16 to 19-year-olds, and raise the participation age to 18 by the end of the Parliament. That enables us to replace education maintenance allowances with more targeted support."[1]

  Young people from households with an income of less than £20,800 per year currently receive an EMA of £30 which is of great significance to those families and evidence shows that it has had a positive impact on recruitment, retention and achievement.

  Research conducted by CfBT[2] concluded that EMAs have been:

    — Successful in delivering their intended outcomes. There is robust evidence that EMAs have increased participation and achievement among 16 and 17 year olds, and contributed to improved motivation and performance.

    — Effectively focused on the target group. EMAs are restricted to low-income households, and disproportionately taken up by those with low achievement levels at school, those from ethnic minorities and those from single-parent families.

    — As relevant to the future policy agenda as to the past. Although EMAs have helped to improve staying-on rates the UK is still characterised by lower numbers participating between 16 and 18 and a wide gap in performance linked to social background.

  For example, research by the Institute for Fiscal Studies[3] shows attainment at GCSE and A-level by recipients of EMA rose by 5 to 7 percentage points since its introduction, and by even more for those living in the most deprived neighbourhoods.

  This evidence is reinforced by the strong message we have had from College principals who believe that many young people would not be able to stay in education and training without their EMA and therefore would not have the opportunity to continue on to higher education.

  AoC has always believed that raising the education participation age to 18 would only be successful if sufficient financial support was available to young people. As a result of withdrawing EMAs we believe it will become financially difficult for many young people to participate in education post-16 and that there will be an increasing reliance on financial penalties to ensure full participation.


  The Department for Education has announced[4] that FE and Sixth Form Colleges (where the majority of 16-18 year olds choose to study) and schools will have to make unit-cost reductions in their 16-19 budgets.

  We are pleased that the Department said that "there is also scope for achieving savings from back office costs and by raising all provision to the level of the most efficient." In light of this statement we look to Government to review whether it needs to continue to pay schools and academies a greater amount of money to educate each 16-19 year old than it does FE and Sixth Form Colleges. The difference in funding now stands at 9.6% (not including VAT). This premium is given despite evidence that Colleges recruit a more disadvantaged cohort of students. We hope that when DfE Ministers look to make savings to 16-19 spending they bring school and academy sixth form funding levels down to that of FE and Sixth Form Colleges.


  Although the Chancellor's speech identified education and skills as a budget priority to support the economic recovery, the budget settlement for BIS involved above-average cuts of 25% on the revenue budget. AoC believes the total reduction in further education and skills funding will be around 25%. This follows a cut of 14% to the adult learning budget earlier this year following decisions made by the previous Government.


  Following the Browne Review, higher education, of which FE Colleges provide 10%, will experience a 40% cut over four years. We hope the wider recommendations from Browne bring some much needed flexibility and efficiency to the HE system by further allowing local FE Colleges to provide affordable HE opportunities to adults, many of whom study part-time.


  The Spending Review statement included a promise of a big increase in spending on adult apprenticeships compared to the plans of the previous Government but this reflects a need to consolidate the one-off budget increase announced in May 2010 which funded 50,000 extra places. The extra money promised last week will take the total up to 75,000. Total funding for 19+ apprenticeships in the 2010-11 academic year, delivered via the Skills Funding Agency, is £402 million of which £85 million goes directly to Colleges. Despite these ambitions which AoC and Colleges support, there remains insufficient employer places to meet demand from potential apprentices.


  The Chancellor announced the abolition of the Train to Gain scheme in his speech, through which businesses received funding to train their staff, but we understand that funding will still be available for workplace learning outside apprenticeships (a scheme for small to medium enterprises) but details are yet to be confirmed. Total Skills Funding Agency funding for Train to Gain in the 2010-11 academic year is £707 million, of which £395 million, goes directly to Colleges. We would welcome further information on these BIS plans.


  Government has pledged to create a better balance of funding between the state and individuals. The entitlement to free training for a first full level 2 (GCSE equivalent) qualification for those over 25, will be scrapped. We would welcome clarification from Ministers as to how many people have taken advantage of this entitlement in the past and what level of fees they expect this age group in the future to pay for level 2 courses.

  Further education students aged 24 and over studying for a level 3 qualification (A-level equivalent) will be asked to pay fees. These students will be supported by the offer of a Government backed loan where repayments will be dependent on income, protecting those with lower earnings. BIS have said they are "exploring mechanisms to increase employer contributions such as voluntary training levies."[5] AoC welcomes this proposal.


  Among the savings that BIS will make is a restriction of English for Speakers of Other Languages (ESOL) funding to "settled communities". ESOL provision is absolutely vital to community cohesion is many areas and therefore we would welcome clarification from Ministers as to how they define "settled communities" for this purpose.

November 2010

1   House of Commons Hansard, 20 Oct 2010: Column 964 Back

2   "Should we end the Education Maintenance Allowance" Mick Fletcher, CfBT, 2009 Back

3   http://readingroom.lsc.gov.uk/lsc/National/nat-emaevaluationadministrativedata-jan2008.pdf Back

4   http://www.education.gov.uk/b0065551/what-does-the-spending-review-mean-for-me/16-19-education Back

5   http://cdn.hm-treasury.gov.uk/sr2010_chapter2.pdf :page 53 Back

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