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Finance and Funding Task Group
The letter and report should be read in conjunction
Ref: 6/002
Our Ref: AT/HP/fryer.lt
12th March 1998
Bob Fryer
Chair, NAGCELL
Northern College
Wentworth Castle
Stainborough
BARNSLEY
South Yorks
S75 3ET
Dear Bob
I attach the report of the Finance and Funding Task Force. As you will recognise it is, substantially, the interim report we prepared for you in advance of the publication of ‘Learning for the 21st Century’, tidied up to clarify meaning in one or two places. Taken with this letter it represents the work of the Group up to the publication of ‘The Learning Age’. I am grateful to the members of the group, who have been generous with time, and in argument.
It is perhaps, important to note that some of the issues we discussed have led to concise recommendations; others are backed by more substantial discussion. That reflects areas where we have sought to reconcile the different perspectives different group members brought to the argument.
Our work is, of course, unfinished. I waited until the publication of ‘The Learning Age’ to write this letter, so that I might contextualise our conclusions. You will know that a number of our recommendations are accepted in your report, and that others appear in modified form. Some of our conclusions are explored in ‘The Learning Age’, and some, like the need for coherence in discretionary grants and Access funds have been taken on by other bodies.
Paragraph 6 of the report recognises the need to take account of the different pressures on public funding, and calls for a focused national public debate on how, and for whom, priorities in public expenditure should be identified. We also make clear our shared views on changes in the balance of expenditure needed, over time, to secure a system equally responsive to the learning needs of the old as well as the young; of those without qualifications as well as those building on earlier success; of those studying at a distance, as well as those studying face to face; and of those studying part-time as well as those studying full-time. Whilst we welcome the principles highlighted in paragraphs 2.3 to 2.6 of ‘The Learning Age’, we are convinced that a lifelong learning system will be centred on studies undertaken part-time, alongside the other challenges and priorities of adult life, and to bring about that system institutional funding and support for individuals needs to be mode-free, and based on consistent principles.
We believe there remains a substantial agenda for future work for NAGCELL and for the task force. We commend that priority should be given to:
 | commissioning a comparative study on the rates of return for public investment in further education; |
| undertaking an evaluation of the value added in adult learning which is based in, and organised by local communities, or provided for them by voluntary and statutory providers - which offer access to opportunity in contesting social exclusion, in supporting families, and in enriching the spiritual and aesthetic dimensions of community life, in the way David Blunkett expressed eloquently in the foreword to ‘The Learning Age’. Inevitably, this work will need to look at the wide range of social policies impacted on by such learning, and will need to consider how to evaluate value which is added outside of the cash economy; |
| reviewing the impact of regulations and funding mechanisms on adults wanting to study, to secure a coherent learner-centred policy framework; |
| reviewing the national accounting conventions where loans are treated as expenditure rather than investment, and the OECD Finance Ministers’ recommendation that human resource investment should be amortised over time like capital investment |
| undertaking further work on the issues raised in paragraphs 5 of our report; how to preserve and enhance quality and expand opportunity in further and higher education, whilst securing enough transfer of resources to be successful in widening participation and achievement; |
| and in particular, examining the relationship between strategies to include and support unemployed people, part-time and temporary workers, low waged and short-term employees in learning; |
| monitoring the impact of changes arising from the work of the Lane Committee for institutions, learners, providers and employers; |
| exploring with broadcasters and the University for Industry transition team the most
effective strategies for motivating and mobilising adults to take up learning. |
This is, I think, a demanding agenda, which can usefully contribute to the consultation process the Secretary of State has launched in ‘The Learning Age’.
Yours sincerely
Alan Tuckett
Convenor, Finance and Funding Task Group
_______________________________________
Report and Recommendations to the National Advisory Group for Continuing Education and Lifelong Learning
1. The Finance and Funding Task Force was established by the National Advisory Group for Continuing Education and Lifelong Learning to provide specialist advice for the work of the group on finance and funding issues.
It met three times between July and October 1997, and once in January 1998.
2. The members of the Group were:
Nigel Boot, Co-operative Bank
Clare Callender, Policy Studies Institute
Dick Corbridge, Manchester LEA
Mel Doyle, WEA
Mike Fitzgerald, Thames Valley University
Leisha Fullick, Islington Council
Pat Gale, Darlington College
Dave Gibson, City College, Manchester
Janice Shiner, FEFC
Alan Tuckett, Chair
3. At its first meeting the group enunciated the principles that informed its work:
| that the Government should be committed to widening participation to post-compulsory education to the full range of Britain’s people |
| that lifelong learning policy be developed system-wide to secure equity of opportunity and of support |
| that we recognise that a coherent equitable framework for decision making and funding cannot be achieved overnight, but that all Government policy initiatives should contribute to greater equity of support and provision for learners, whether urban or rural, old or young, full-time or part-time. |
4. We reassert that the clear challenge is:
| to release maximum leverage from public investment |
| to stimulate employer investment for all employees in all sectors of the economy |
| to encourage increased individual investment |
| to create a regulatory and funding regime where providers are responsive to the needs of lifelong learners |
| and, at the same time, to widen participation to include people currently excluded from existing provision. |
These challenges will not be met without money, nor will they all be met with new money
alone.
(1.33 in ‘Learning for the 21st Century’ addresses these points.)
5. We recognise that access to education is an important underpinning of
human rights, and of the capacity for everyone to engage in active citizenship. The
challenge posed in the FEFC’s Tomlinson Report, to develop Inclusive Learning
strategies addressed that issue directly in relation to people with learning difficulties
and/or disabilities. But we believe the principles of inclusive learning need application
more widely, to secure a system in which those currently excluded are welcome, confident
and achieving participants. We also recognise that equal rights for all do not come
cheaply.
These issues are considered in the ‘agenda’ and ‘principles’
section, and in 5.7 of ‘Learning for the 21st Century’. However, the
committee felt it was important that the key concerns of Tomlinson (that a learner-centred
system in which appropriate learning paths were identified for individual learners would
benefit all, and offer improved opportunities for people with learning difficulties and/or
difficulties) and of Kennedy (widening participation and achievement) be kept distinct, so
that each received proper attention.
6. We believe the balance of investment by Government, individuals, and others should be reviewed in respect of:
| entry level (including basic skills, new learning pathways) |
| NVQ 3 level (the key National target level) |
| higher education (at sub-degree and degree level) |
| community related and led adult learning. |
We considered the powerful evidence in Claire Callender’s paper "The Funding Lottery", which was commissioned by the FEFC’s Widening Participation Committee. It showed the disparity in student support available to further education against full-time higher education students, evident in mandatory grants (until now), loans and access funds.
We noted the evidence that the overwhelming majority of working class participants in post-school education used further education.
We recognised, too, that endorsement of the Kennedy Committee’s principles would involve a greater proportion of FE funding being concentrated on new returners, with established students over 19, with the ability to pay, paying more of the costs of provision.
We recognised that there is a solid body of evidence about rates of return on investment in higher education, but little evidence in further education, and haphazard data available about the volume, economic and social data available for community based or related adult learning, and in particular for the sort of capacity building collective activities which can be difficult to limit to pre-negotiated curricula (including much family and inter-generational learning, tenants’ group work, and voluntary agencies’ programmes).
We recommend that comparative studies be instigated to identify rates of return on investment in post compulsory education and training.
We recommend that work be undertaken to codify benefits beyond the narrowly economic,
and beyond those readily susceptible to short-term monitoring. We recommend that the
Green Paper should launch a public debate which recognises the need for the UK to invest
in knowledge creation, to maintain its competitiveness in a global economy; recognises the
dignity, confidence and power which access to learning can offer to everyone; recognises
the benefit society gains from social cohesion, and the high price of social exclusion and
reviews the balance of investment responsibility highlighted above.
(These issues are included in 1.32, 8.21, and 8.22 of ‘Learning for the 21st
Century’.)
7. We believe that more money is needed to create the learning society, but
we also believe that over time this will need to lead to a shift in priorities for public
investment for creating a level playing field for student support which does not
differentiate in offering access to support by mode of learning, by age of learners, or,
eventually, by level of study.
(See 1.35 in ‘Learning for the 21st Century’.)
8. We recognise the importance of the work done with adult learners in
higher, further and adult education. We believe that work needs strengthening through
funding incentives and that the complexity of adults’ learning routes need
recognition and support. For many this will involve progression from community settings
through further into higher education; for others it is as likely to be from theoretical
(higher) to practical (further). Both need support. Yet we also recognise that the most
pressing need for greater public investment lies with those who benefited least from
initial education, and are currently not participating. To meet their needs will require a
further shift in the balance of public investment, balanced by increases in other funding
streams.
A key issue for Government in expanding towards a mass system is to identify ‘who
pays’, given that even significantly increased resources will still leave hard
decisions to be made about priorities. For example, the FEFC’s funding mechanism
currently differentiates between full-time (mainly young) learners on A level programmes
and those on part-time courses (mainly adults) studying for the same exams, or for lower
level qualifications adding a premium to the funding for full-time work towards A levels.
Faced with the difficult choices of narrowing the curriculum approved for FEFC funding, or
with changing the balance of who pays, the balance of public investment needs, over time,
to be more strongly loaded towards entry level work, in recognition of the costs in
effectively securing wider participation and achievement. The same arguments can be
applied within higher education and between higher and further education.
We believe then, that over time, public investment will need to shift:
| within further education to prioritise and better support entry level work |
| in higher education to complement public funding of research with a higher proportion of resourcing going to teaching, and from full degree work to the support of studies leading to partial credit |
| from higher to further education |
| to strengthen the legislative underpinning and funding for community based or related provision for adult learners. |
There is a need, too, for more effective inter-agency, inter-departmental and
inter-institutional collaboration to improve effective and efficient resource allocation.
(1.36 and 8.16 in ‘Learning for the 21st Century’ cover some of this
ground.)
9. We recognised that many adults move in and out of unemployment, part-time, temporary and low-waged work, and experience barriers to participation in learning in all of them. The is an urgent need to harmonise arrangements to take account of this labour market mobility, and to offer access to learning to people trapped in poverty.
10. We welcome the introduction of a learning option in the Welfare to Work plans for people over 25 and registered unemployed for 2 years, and for single parents, but believe that for many the success of such programmes will depend on the flexibility and imagination with which equivalents to the Gateway programme are developed.
11. In developing the programme for over 25s the Government will need to consider flexibility for single parents, including the offer of study options with fewer hours per week (noting how many jobs are now less that full-time). We noted that not all students who might benefit from Welfare to Work are at entry level. We felt that the programme might usefully include provision for study up to NVQ level 3, in line with the Kennedy Committee’s proposals. This would enable Welfare to Work students to take Access courses as a part of a work focused learning strategy.
12. We recognised that there were also benefits in providing incentives to learn for people unemployed for shorter periods. We welcomed the expansion of the Workskill Pilots, and would welcome an overhaul of JSA regulations, to remove disincentives to learning.
13. Successive reports have noted the lack of access to education and training for part-time and temporary workers. We believe these groups, particularly where they work in small and medium sized enterprises to be the most easily excluded from publicly supported provision. We believe they should be clearly targeted for the Individual Learning Accounts pilots announced in ‘The Learning Age’. Employers’ performance in offering staff development to part-time and temporary staff will need to be monitored.
14. We welcome the plans to introduce ILAs. Where they are available, it will be important that the scheme administrators, and guidance advisers draw on the lessons of employee development schemes on the link between general and explicitly vocational study. Access to those without NVQ level 3 qualifications or their equivalent, and should include an initial information and guidance session.
15. We recommend that arrangements for student loans for learners should be available on a means tested basis to all learners in further and higher education. To that end:
| We endorse Dearing’s call for a change in the auditing convention where loans are treated as expenditure rather than investment in the national accounts, and welcome the news in the Government’s response to Dearing that the Treasury is considering this as part of the comprehensive spending review; |
| We think steps should be taken immediately to extend loans, available on a means-tested basis, to part-time students in higher education, recognising the changing mix of full and part-time study, and the likely impact on that mix of an end to full-time study; |
| Plans should be brought forward to extend loans to learners in further education, again on a means-tested basis; |
| Steps should be taken to end the age discrimination which denies access to loans to people over 50. |
In an ageing society, there will be significant changes in the pattern of working lives, and participation in education, accompanied by sharper differences in wealth and poverty among older adults. We shall need to overcome the discrimination against older learners enshrined in current funding models, if we are to meet the increased challenge older adults will, and should make on post compulsory education.
16. We recommend that institutional funding for FEFC and HEFC sector activity should, over time, be linked to credit bearing courses - this is, of course, dependent on the evolution of a post-school credit accumulation and transfer system which offers learners consistency of standards, mobility and flexibility, and which recognises credit whilst recognising the importance of institutional autonomy in the design of specific courses.
It is also dependent on the parallel development of a national framework for credit.
(‘Learning for the 21st Century’ addressees these issues more widely
on pages 82-84.)
17. We recommend that the commitment to widening participation in the Kennedy report be endorsed;
| endorse the Recommendations in Chapter Five of ‘Learning Works’; |
| note in particular the need to use Schedule 2d of the 1992 Act to ensure that adults taking a first step back to learning can benefit from the new learning pathway proposed in Kennedy; |
| recognise the importance, until other measures assessing need are identified, of using postcodes to identify those learners from under-represented groups, and to provide additional entry and on-course units in recognition of the additional costs of providing for them effectively; and recommend that the use of post-codes to offer additional resources be monitored and, where appropriate, fine-tuned; |
| that the Government move towards equalising public investment for the same ‘episode of learning’ irrespective of sector; |
| and that in further education, some of the shift in the balance of expenditure needed to widen participation be met from changing the balance of fees paid by individuals and employers, rather than through a narrowing of the range of courses funded by FEFC. It must be recognised, however, that new money will be needed to address the widening participation agenda fully. |
18. We debated at length how best to strengthen the statutory underpinning of
local education authorities’ duty to ‘secure adequate facilities’. Strong
concerns were expressed that definitions of minimum levels of service would be used to
justify further reductions in provision, in places offering more generous levels of
service.
We recommend that the Government issues guidance to LEAs on LEA secured adult education,
following consultation with the LGA; and that the Government requires each LEA to publish
Development Plans with evidence of how they have assessed adequacy; plans to secure
adequate provision, targets for participation (including targets for under-represented
groups) and for curriculum range and levels offered; and details of mechanisms to secure
quality assurance, staff development and for monitoring success in achieving the Plan.
Local Development Plans need to be able to show the SSA allocation and planned expenditure
on adult education and the Government should be in a position to publish league tables of
SSA allocations and expenditure to highlight the practice of local authorities. To achieve
this local authority adult education needs to be clearly defined as a component of SSA
allocations.
The clear duty should be to prepare Action Plans for adult learning, but authorities
should be encouraged to set such plans in the context of overall Lifelong Learning policy
- relating the adult plan to youth service, early years, and school-community link plans,
and to the lifelong learning impact of other local authority services.
We recommend that the Government reviews the success of these arrangements after three
years.
(These issues are reflected in 1.22 of ‘Learning for the 21st
Century’.)
19. We recommend that regulations be tabled in Parliament to clarify FEFC’s powers under the 1992 Further and Higher Education Act to permit spending in curriculum areas where the duty lies with the LEAs, in order to strengthen its capacity to widen participation and achievement. Government will need to recognise the cost implications of this.
20. We discussed proposals for regional and sub-regional Lifelong Learning
Forums, with representation from a wide range of agencies, and with a remit to review
Access, discretionary funds, and childcare support; to foster strategic partnerships and
to advise on the distribution of Learning Regeneration Funds. In the light of changing
arrangements we agree with the formulation in paragraph 1.21 of ‘Learning for the 21st
Century’, and the proposals for local strategic planning made in ‘The Learning
Age’.
We were attracted by the argument that funds could effectively be harmonised in a single
fund for lifelong learning (not least because of the disparities in help available for
students learning in different contexts), but also recognise the need to have mechanisms
for reacting at speed. In the medium run, harmonising budgets through a single forum
should overcome the current imbalance in access to such funds between learners in
different institutions, and in different areas.
We welcome the establishment of the Lane Committee to seek to create coherent, fair and
consistent funding arrangements for full-time students. Once its work is complete it will
be important to ensure that its findings do nothing to exacerbate the inequality in
funding support between full-time and part-time students.
21. We recommended that a national Lifelong Learning Fund be established, as a public-private sector initiative:
| drawing on lottery funding from the year 2000 |
| and with additional matching public and private sector funding to foster initiatives to develop lifelong learning for the many not the few to distribute funding via regional Lifelong Learning Forums. |
We believe the Adult and Community Learning Fund announced in ‘The Learning Age’ can fulfil this function.
22. We recommend that priority be given to the development of a series of local learning centres in employers’ premises, educational institutions, libraries and community settings, in many cases building on, or adapting existing provision. Local Learning Centres will offer adults access to the National Grid for Learning, and will be crucial to the success of the University for Industry in contributing to widening participation.
23. We are concerned that planned changes in ESF funding regimes resulting from Agenda 2000 may put at risk substantial volumes of education and training currently offered in the UK. We are concerned that institutions are insufficiently aware of their dependence on, and exposure to EU funding. We recommend that the Government takes steps to identify the scale of exposure to change in policy UK institutions risk, and to ensure that changes arising from Agenda 2000 do not lead to a diminution in investment in education and training in the UK.
24. VAT law is complex, and avoiding unintended taxes on learning must be a
priority for the Government. We recommend that Government re-assert its policy of treating
education provision for adults offered by higher, further and LEA sector bodies, and by
not for profit voluntary organisations with an educational remit as non-business
activities, and, therefore outside the scope of VAT, except where institutions apply to
Customs and Exercise for permission to be treated as exempt.
We recommend that the Government exempt expenditure on books, I.T. and other learning
equipment and other educational materials from VAT where used for education provision by
higher, further and LEA sector bodies, and by not for profit voluntary sector
organisations with an educational remit.
25. We recommend that the provisions made in the 1996 budget extending the range of studies qualifying for tax remission, where the employer pays the fees, to include non-vocational courses, should be similarly broadened where individuals meet their own costs.
26. Given the Government’s commitment to persevering with voluntary measures to secure increased employer investment in lifelong learning, the Government should:
| continue to promote IIP and IIP Plus to employers; |
| monitor employer expenditure on lifelong learning, recognising the importance of applying the Kennedy ‘principles’ of widening participation to those in the workforce who have benefited least from past employer-led training; |
| consider sector specific incentives (including access to ILAs) for participation in UfI; |
| identify sectoral, regional and local targets for employer training and staff development, with clear dates at which the voluntary approach will be reviewed. |
27. Training and Enterprise Councils have an important role to play in securing
increased participation in education and training for people in work, and out of it.
However, current performance targets, which ignore provision in firms with fewer than ten
employees, ignore key areas of local labour markets, and performance targets which exclude
the least well qualified inhibit the role TECs can play in supporting widening
participation. We feel that Government should reinforce TECs’ advice and brokerage
roles, and discourage TECs from developing as direct providers of training.
We recommend that regional and sectoral targets for participation should be developed, and
that new targets be adopted for participation (and pursuit of IIP) in the smallest firms).
28. We recommend that all terrestrial broadcasters should report to an Educational Broadcasting Council on the contribution made through educational and educative programming to promotion and participation in lifelong learning. The Council should report to the Secretary of States for Education and Employment, and for Heritage, and its reports should be made public.
29. We welcome the BBC’s proposals that its range of digital services will include a dedicated educational channel. Given its charter remit, we recommend that the BBC should develop the channel, working in collaboration with, and affording access to, other broadcasters.
30. We are convinced that the promotion of lifelong learning is a key task for all the partners involved in planning or delivering provision. We recommend that the Government supports public information and promotional initiatives designed to secure wider participation.
31. We recommend that the Government should make a commitment to securing
effective inter-agency partnership at local, regional, national and international level to
secure efficient and cost-effective lifelong learning for all; and at national level such
partnerships be developed to secure best value, e.g. in provision for older adults (where
Health and DfEE might collaborate along the lines developed in Joint Care Planning
mechanisms supporting Care In The Community); between DfEE, and the Home Office in respect
of provision for refugees; and in respect of provision for offenders; between DTI and DfEE
in respect of lifelong learning and local economic regeneration. Without such
partnerships, and serious attempts to assess value from inter-departmental perspectives we
shall fail to create a learning society, or to foster a culture of learning.
To this end, we recommend that Government adopts the practice of evaluating the lifelong
learning dimension of its decisions, and comments formally (whether publicly, or in
Government papers) on that impact.
32. We recommend that there should be a universal adult entitlement to high quality initial educational guidance, free to the user, leading where appropriate to a range of services for which fees are charged. For some groups of learners, and some curriculum areas further advice would be free. The entitlement would be accessed through Learning Direct and local information networks. To meet individual, community and industrial needs such networks - comprising careers services, colleges and other guidance services - should collaborate so that adults are offered a seamless, independent, and impartial service.
33. We recommend that the Government explore, over its lifetime, the possibility of introducing a universal adult entitlement to five days’ learning a year, backed by a cash limited budget, available as a priority to those who have not benefited before.
34. We are convinced that widening participation does not and must not lead to a
dilution of standards. We welcome moves to identify NTOs for further education and
informal learning and believe it to be important to cost properly the development of
part-time and full-time staff working in education.
THE CASE FOR MORE MONEY:
a) The case for lifelong learning is that economic prosperity and social cohesion are both secured through the creation of a learning society, where everyone is confident to participate. There is a widespread consensus that to secure such a learning society there needs to be major new expenditure by individuals, employers and the state. Yet the state is committed to inherited spending plans. Most of the proposals the task group has considered involve changes which can be made without new expenditure, or at quite modest cost.
b) However, we need also to consider how Government might, within its spending plans, secure a major increase in investment. Here are some proposals to start with:
c) Year One
I. The Government should adopt the proposal made by the Dearing Committee that student loans be treated as investment rather than expenditure in the national accounts, as is done e.g. in Canada and Denmark.
II. The Government should press for the international acceptance of OECD finance Ministers’ advice that human resource investment should be treated like physical capital in national accounts, and be written down over a number of years.
III. Monies saved by these measures should be reinvested in the expansion of post-school learning.
d) Year Three
I. The Government should adopt the Kennedy proposal that the millennium lottery fund be succeeded by a Learning Regeneration fund, with a remit to foster the creation of a learning society.
II. Meanwhile, educational initiatives should be central to the Millennium Exhibition in 2000.
III. The Audit Commission, Government and institutions should work to develop more effective social audit measures to capture non-cash based activity, and less quantifiable learning gain, to enable policy planners to capture better the value added by investment in lifelong learning.
Year Five
Political parties might be encouraged to consider including proposals in election
manifestos to introduce a graduate tax for all pre-1998 graduates paid above an income
threshold, in recognition of the value added by higher education.
February 1998
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