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Skills for every young person Contents

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Chapter 4: Further education

140.Further Education (FE) is a fundamentally important component of post-16 education provision, but we heard that for many years it has been undervalued and significantly underfunded. Its providers—FE Colleges, Sixth Form Colleges and specialist colleges such as Land-based or Art, Design and Performing Arts Colleges—sit between secondary and tertiary education, offering 1.7 million learners in England opportunities to study for a range of qualifications at a range of levels.284 It is therefore a crucial springboard into employment for many young people.

141.However, the FE sector has faced disproportionate funding cuts over the past decade compared to other types of post-16 education and is held back by a system of funding student places that is no longer fit for purpose. The IFS reports that “16 to 18 education has been the big loser from changes over the last 30 years”.285 This has limited the sector’s capacity to support its students, many of whom come from the most disadvantaged groups in society. Furthermore, despite the benefits it can offer, FE is too often regarded by schools and parents and students as a less prestigious and less desirable option than higher education (HE).

142.Together, these factors are limiting the potential of the FE sector to contribute as much as it could, and should, to the ambitious ‘levelling-up’ plans laid out by the Government in the Skills and Post-16 Education Bill, not least in apprenticeship provision and the roll-out of T Levels.

The pressures on FE funding

143.The number of young people aged 16 and 17 who are in full-time education reached a record high of 85% in 2020.286 This was in part a result of the COVID-19 pandemic and higher GCSE grades, but is also a result of longer-term trends.

144.FE for those aged 16 to 19 (up to 25 if they have an Education, Health and Care (EHC) Plan) is funded via a funding formula, allocated annually to institutions and based on considerations including student numbers and programme cost. Funding is not demand-led and does not automatically follow the student but is limited by the institution’s previous record. This restricts its capacity to provide places for all qualified people who want them.

145.Total spending on post-18 education is around 50% lower than it was in 2009–10 and two thirds lower than it was in 2003.287 In 2020–21 prices, adult FE funding stood at £2.9 billion in 2009–10 and was under £1.5 billion in 2019–20 (see Figure 18). Total funding for 16 to 18-year-olds in FE has fallen by 25% in real terms between 2010–11 and 2019–20, while funding per pupil of this age fell by over 11% in real terms between 2010–11 and 2020–21.288

Figure 17: Funding for FE has fallen over the last decade

Source: Institute for Fiscal Studies, Further education and sixth form spending in England (18 August 2021), p 2: https://ifs.org.uk/uploads/R333-Further-education-and-sixth-form-spending-in-England.pdf [accessed 18 August 2021] and Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020): https://ifs.org.uk/uploads/R183-2020-annual-report-on-education-spending-in-England%20%281%29.pdf [accessed 16 November 2021]

Figure 18: Public spending on 16-18 and post-18 FE in £billion in England

Source: House of Commons Library, Further Education funding in England, CBP 9194 30 April 2021 and Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020), section 4: https://ifs.org.uk/uploads/R183-2020-annual-report-on-education-spending-in-England%20%281%29.pdf [accessed 10 November 2021]

146.Teachers in FE institutions are paid £9,000 less than their counterparts in schools, a disparity which may have contributed to more than half of the college workforce from 2014/15 leaving. They have been followed by students; since 2015, the number of people taking FE courses has dropped from 2.6m to 1.7m. This is despite the fact that FE courses are generally shorter and cheaper than HE courses.289 Annual public funding per university student averages £6,600 compared to just £1,050 for adults in FE.290 The Association of Colleges concluded that FE funding is “wholly inadequate” compared to both university and school funding. The North East LEP told us:

“Further Education funding in general has been in decline since 2010 and is not currently sufficient to deliver much needed quality and additionality required to meet the needs of young people. The current funding envelope only allows for core aspects of curriculum delivery rather than investment in the additional and essential skills required to succeed in the labour market”.291

147.During the COVID-19 pandemic, the Government made several ad hoc commitments to funding including £400 million for colleges and sixth forms in the 2020/21 financial year and a capital fund to improve the quality of college infrastructure.292 Prison education was not included (see Chapter 6).293 In 2020, the Institute for Public Policy Research found that £2.7 billion a year was needed for 16 to 19 education to have kept up with population changes and inflation over the past decade.294

148.At the recent Autumn Budget 2021, the Chancellor confirmed an additional £1.8 billion for education recovery overall on top of the £3.1 billion announced already; £800 million of this will be allocated to 16 to 19 catch up, funding an additional 40 hours across the academic year. In addition, an extra £1.6 billion will be invested by 2024–25 to fund additional teaching hours for T Level students and to “maintain funding rates in real terms per student”. However, it is unclear if this means funding will increase with inflation.295

149.The Government also announced the core schools budget will receive a £4.7 billion boost on top of the 2019 settlement, returning it to 2010 levels in real terms by 2024–25. This equates to an increase of £1,500 per pupil.296 However, FE education is not included in this. Analysis by the IFS shows that cuts to FE and sixth forms are only partially reversed by the Budget and will still be 10% down on their 2010 levels in 2024 despite the new funding.297

Support for learners who are disadvantaged

150.A particularly concerning aspect of the cuts FE is the impact it will have given that FE institutions cater for some of the most disadvantaged. In the 2020–21 academic year, over £530 million was allocated to colleges, schools and other providers to support, attract and retain 16- to 19-year-olds who are disadvantaged and those with additional needs.298 However, there is no pupil premium in FE, a sum of money given to primary and secondary schools to improve the attainment of children from disadvantaged backgrounds.

151.Many young people need significant financial support to stay in education after 16. Until 2011, young people aged 16 to 18 from low-income families could claim Education Maintenance Allowance (EMA), totalling £30 a week. In 2011, 650,000 people received EMA, 45% of all 16 to 18-year-olds in full-time education.299 It still remains in Wales, Scotland and Northern Ireland. Research found that EMA, which could be spent as young people chose to help them stay in post-16 education or training, made young people more likely to do so and reduced the number of young people NEET. It had a particularly positive impact on the destinations of young men.300 Despite this, it was abolished on the grounds it was “deadweight”.301 There is now little maintenance support for young people in FE. This is not the case for young people who go to university, who can take out a student loan for tuition and a maintenance grant to support living costs.

152.Learners disadvantaged by socio-economic status can access the 16 to 19 Bursary Fund, which was introduced to replace EMA in 2011 and supports the costs of participation such as transport, books and equipment up to £1,200 per year. The budget of the Fund was less than a third of the EMA budget and targets a smaller group of young people. Colleges and FE providers can choose how they allocate the fund. An impact evaluation found that full-time participation of students in Year 12 who would have been eligible to claim full EMA fell by 1.6 percentage points, while another found that the short-term savings were outweighed by long-term costs due to lower projected lifetime earnings and tax receipts of individuals.302 In 2020–21, £130m was made available for Discretionary Bursaries for disadvantaged young people, and £32 million was allocated for free FE meals in 2020/21.303

153.The Skills and Post-16 Education Bill introduces the Lifelong Loan Entitlement, which will ensure adults can access a loan for the equivalent of four years of student loans at higher-level study at either university or college.304 The Government has not confirmed if the Lifelong Loan Entitlement will cover maintenance support.

154.We heard that after the age of 18, obtaining funding to study at an FE institution is hard.305 This can be problematic for some young people. Those who have a level 3 qualification may wish to ‘reskill’ in another, but they will face an “unforgiving” system that does not automatically fund them to complete another qualification at this level.306 The University of Lincoln said that many young parents may seek to return to FE when their children are older; however, Care to Learn funding (which helps to pay for childcare while studying) ends at age 20.307 We were told by the Youth Employment Group that there is a clear need to ensure FE colleges can guarantee places for any suitably qualified young person who wishes to (re)enter education.308

The reputation of FE institutions

155.We heard on several occasions that FE colleges face a “reputational deficit” compared to universities.309 While FE was championed by the FE Funding Council until 2001, it no longer has a body or agency supporting its interests, a role played by the Office for Students in the HE sector. However, the DfE has recently broadened the portfolio of the Minister for Universities to FE, under the new title of Minister for Higher and Further Education.

156.This reputational mismatch is felt by students, who told us that they were encouraged to attend sixth forms instead of FE colleges. Speaking to organisations in the East Midlands, we were told that schools and parents often pressure young people into academic routes because they are seen as the higher status route even when it is not most suitable for a young person.310 One young person from West Yorkshire told us that choosing to attend a college to study anything other than A Levels rather than going to sixth form was seen as a poor choice by their teachers.”311 A young person in Greater London told us: “I was quite a high achieving student, so the school pressured me into going into HE—I got the feeling that this was to get them better statistics and ‘bragging rights’ rather than in my best interests”.312

157.In July 2021, the Government published new statutory careers guidance, which combined guidance for schools, sixth forms and FE colleges. The guidance sets out that academic routes of education including HE should not be prioritised over technical routes like FE or apprenticeships. We also welcome guidance that schools with sixth forms should not promote this avenue over alternative routes, and the recognition that schools and colleges should inform students whether courses under consideration lead to positive outcomes.313

158.The Government has also set out its ambitions to overhaul the reputation of the FE sector and rebalance it with HE institutions. In September 2020, the Prime Minister announced that that the Lifetime Skills Guarantee would seek to end the distinction between practical and academic training.314 These principles were later laid out in the Skills for Jobs White Paper and are now passing through Parliament via the Skills and Post-16 Education Bill. At the Autumn Budget 2021, the Government committed £2.8 billion of capital investment, part of which would be used to raise the condition of FE colleges in England and create “high-quality facilities”.315 However, it remains unclear if this is new funding, as previous announcements have been made in this area—for example to improve facilities to deliver T Levels (£50 million) and via the Further Education Capital Transformation Programme (£1.5 billion).316

159.We heard that FE institutions need more funding to fully achieve the Government’s ambitions. The Collab Group suggested that funding must be targeted towards ensuring that teaching staff are up to date with the latest industry standard skills.317 This will be critical to ensuring that FE institutions can compete with HE institutions for both teachers and learners.

160.For too long successive Governments have failed to give FE the focus and support it deserves. It needs significant funding reform to ensure that it is brought on par with HE. Funding must be demand-led so that students who wish to study an approved course in an FE institution receive automatic funding, supported by a national tariff. This will enable it to increase capacity to deliver on the Government’s rhetorical ambitions to ‘level up’ technical education. The Government’s ambitions are welcome, but it is impossible to expect more from FE institutions until this funding imbalance is redressed.

161.The Government must devise a new method of funding for FE. Funding should be determined by student demand, and students accessing the Lifetime Skills Guarantee at levels 2 and 3 in approved institutions should attract automatic in-year funding determined by a tariff. This would help to ensure that there is a place in FE for any suitably qualified person who wants one. It would also result in significant additional funding for FE institutions so that they are able to compete with industry to hire high quality, experienced teachers and obtain the latest industry-standard equipment.

162.The Government must support socio-economically disadvantaged learners by increasing flexibility in the Lifelong Loan Entitlement to provide for maintenance support in FE, so that it aligns with HE maintenance grants. The Government must reintroduce Education Maintenance Allowance or alternative maintenance support for FE students from disadvantaged backgrounds to ensure that they are financially able to stay in post-16 education or training.

T Levels

163.T Levels have been launched by the Government as a high quality technical alternative to A Levels. We heard from a range of voices that they are a step in the right direction towards rebalancing parity of esteem between technical and academic routes and a good option for young people for whom academic study is not their preferred choice. Jane Gratton, Head of People Policy at the British Chambers of Commerce, told us that their employer-led design was welcome and stated that “we cannot afford for T Levels to fail”. She also said, however, that more clarity was needed over the pathways that they lead to and greater awareness of the qualifications generally was required.318

Figure 19: Composition of T Levels

Source: HM Government, ‘T Levels’: https://www.tlevels.gov.uk/ [accessed 10 November 2021]

164.We have heard that entry requirements for T Levels may be too high for some students who achieve mid-level grades at GCSE but for whom the T Level option would be a good fit. The Collab Group told us that only 67% of Year 11 students get ‘good’ grade 4 GCSE grades in English and Maths, and as such a significant proportion of young people will not be able to progress to T Level (or A Level) study, which it argues will be a “strong barrier to social mobility”.319 Tom Dower, Principal at UTC South Durham, noted that Engineering T Levels will demand a grade 6 in maths and science.320 While this will ensure rigour, it may present a barrier to those who do not wish to go on to academic FE or HE, but who do not have the grades for T Levels. This is a particular concern for young people from disadvantaged backgrounds, who are less likely to achieve top grades. In 2020, only 56% of disadvantaged pupils achieved grade 4 or above in GCSE English and maths.321

165.If young people cannot or do not want to take a T Level, they may choose the T Level Transition Programme. Others may prefer to take another form of qualification, most commonly BTECs or Applied General Qualifications (AGQ), but they may soon find that these qualifications are not available.

Box 10: Defunding of ‘competing’ qualifications

The Government has proposed to cut funding for qualifications that it sees as overlapping with T Levels. These include alternatives such as Applied General Qualifications (AGQs), Extended Diplomas and BTECs, which are often practical in nature. Some large BTECs over one A level size will be funded, but only in areas that do not overlap with T or A levels.322 230,000 students received level 3 BTEC results in August 2021.323 They are a common route into HE and are particularly taken up by students from disadvantaged backgrounds or those with special educational needs and disabilities (SEND).324 Almost half of black British students accepted into university have at least one BTEC.325 The Government recognised in its updated impact assessment that 16- to 19-year-olds who are male, from Asian backgrounds, have a history of SEND support or are disadvantaged are most likely to be impacted.326 Several groups including the National Union of Students, National Education Union, Collab Group and the Association of School and College Leaders have campaigned against the binary choice between A and T Levels, arguing that “they are a different type of qualification that provide a different type of educational experience”.327 In the Government’s response to its consultation, the Department for Education acknowledged that 86% of respondents opposed its proposals to defund existing qualifications that overlap with T or A Levels or which have “low” levels of enrolment.328 Despite this, the Government intends to allow the Institute for Apprenticeships and Technical Education (IfATE) to delist the qualifications it no longer sees as valuable. An amendment to the Skills and Post-16 Education Bill recently passed in the House of Lords would introduce a four-year moratorium on doing so. During debates on the amendment, it was argued that swift reduction of funding from 2022 would not give employers or students time to review the success of T Levels, nor will it take into account the results of T Level students who began learning in September 2020. More recently, the Education Secretary told the House of Commons that he recognises the value of these qualifications and stated that it is “quite likely we will see many BTECs and other similar applied general style qualifications continuing to play an important role in 16-19 education, for the foreseeable future.” The Education Secretary has said that plans to defund these qualifications will be delayed by a year from 2023 to 2024.329

166.An industrial placement is a key attribute of the T Level programme and is being piloted with employers. BAE Systems is supporting the Engineering T Level and is piloting design activity with Blackpool and the Fylde College and Furness College, developing a template model for the industry placement.330

167.Some employers may have concerns about their ability to guarantee provision of a 45-day placement over two years. This could explain why fewer than 200 providers have confirmed they will offer T Levels.331 We heard that the Government should provide more incentives to employers and local councils to offer more industry placements, as well as the resources to manage and promote them.332 The City & Guilds Group suggested it should be made clearer how employers can use industry placements to build a talent pipeline.333

168.Even if employers offer industrial placements, young people who have limited access to transport due to limited infrastructure or financial means may miss out on opportunities due to a lack of placements in their local area (see Chapter 6). This may particularly impact young people who live in rural, coastal or hard-to-reach areas that do not benefit from good connectivity, or a plethora of local businesses and education providers. The Collab Group told us:

“As T Levels roll out there is a potential problem whereby extensive industry placements…exclude students from subjects where there is limited capacity for placement in their local area. A 16-year-old who dreams of entering the Visual Effects industry will not be able to conduct a 45-day placement in London at 16 years if they live in Lincoln. This policy ensures that only learners from regions with an established workforce can deliver in a subject area—this will impact upon social mobility and aspiration”.334

169.We heard concerns that some universities will not accept T Levels as an entry qualification despite their equivalence to three A Levels.335 The Minister for Apprenticeships and Skills told us that as of July 2021, 32 universities have said they will accept them, including three from the Russell Group, with three saying they will not (University of Cambridge, Imperial College London and Queen Mary University London).336 T Levels may be most relevant for technical degrees, and as such humanities or arts courses may choose to prioritise applications from students with A Levels. However, the decision of some universities not to accept T Levels on a blanket basis as equally valuable to A Levels may reflect the tendency to treat technical qualifications with condescension. It threatens the credibility of T Levels and may encourage some young people not to take them if they feel it limits them from going to university later.337 The Minister for Apprenticeships and Skills told us conversations with universities are ongoing to encourage them to explore how T Levels align with their degrees.338

170.The distinction between academic and technical education is complex and difficult to define. Tom Dower of UTC South Durham argued that the nature of the binary choice of A versus T Levels is reinforcing a false divide that limits a young person’s options.339 Ofsted’s National Director for Education urged caution in using words like ‘creative’ and ‘technical’ given the interdisciplinary nature of such skills and the need for both in technical and creative roles.340 80% of the T Level course is taught in the classroom and as such could be considered academic.

171.T Levels present an opportunity to develop a high quality technical alternative to A Levels. While we welcome their introduction and the ambition to streamline choices and declutter the qualifications landscape, we are concerned that the prioritisation of these untested qualifications over other valued options, and generally high entrance criteria for T Levels, will result in a lack of options for young people who either cannot or do not wish to take A Levels.

172.The Government must reconsider its decision to defund tried and tested level 3 qualifications like BTECs, Extended Diplomas and AGQs. We support the amendment to the Skills and Post-16 Education Bill requiring a four-year moratorium on defunding these qualifications and urge the Government to reconsider this policy in its entirety.

Figure 20: Proposed timeline for the reconsideration of funding for qualifications that overlap with T Levels

173.The Government must set out a plan detailing its offer to employers to help them to provide industry placements to ensure that T Levels are a success. It should continue to work with universities who offer STEM subjects to fine tune the T Level course so that they are convinced of its merits and accept it as an entry qualification.

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