More, Different and Better

In a week that has seen some important and welcome concessions from government on loans for adults 24 years old and over wanting to do further education, it is also timely to turn our thoughts to some longer term issues.

Policies, like governments, come and go, but further education loans policy really is a game changer and will not be a passing fad. The debate is about how we think adult education should be financed in this country. Did anyone think when higher education loans were introduced under a previous government that it would be the thin end of the wedge? Yet now it is the predominant means of financing teaching and learning in HE.

Both HE and FE sector bodies have been effective in broadening the debate about loans and have made their voices heard inside and outside Parliament. But despite party political wrangling around FE loans, there is still a serious discussion to be had about what is the role of government in making sure there is enough money in the FE system to provide for the people who need it most. Will any UK political party take a ‘Nordic approach’ and go for higher taxes, greater income equality and fully fund adult education? I don’t think that is on the table somehow.

Whichever party or parties are in power next time around, they will probably go for a system that keeps at least some education funding off the balance books of departments and in the tax system. The question is where do you draw the line?

At present that line hovers over FE students at level 3 who become 24 next year. The proposed system mirrors that for the 500,000 part-time adult students who access HE loans for the first time this year.

A lot of wrinkles are being ironed out at the same time. It is all very new. It is largely untested in the market place. It is a debate mainly dominated by opinions and suppositions in preference to hard facts, as there aren’t many. But the real life experience of people working with adult students has raised some very valid concerns that NIACE has tried to air. In the main these are not seen as insurmountable problems with the main concern being around the speed of transition and the turbulence caused.

These have been well raised elsewhere. But the big question we are in danger of ignoring in our rush to implementation is: what if this is the thin end of the wedge for FE? What if the whole system were to be supported via loans? Not now, not even in the next Parliament, but for people about to leave school with few or no qualifications. What would it mean for those future adults?

We know England’s Department for Business, Innovation and Skills (BIS) in its last set of Spending Review negotiations with the Treasury was forced to consider a loans system that started at 19 or at level 2. And to its credit BIS presented good arguments why this should not be the case in the original Impact Assessment.

However, if loans do turn out to work for 10% of the current skills budget, what follows from that? Here are a number of longer term questions to consider if FE loans policy really is a game changer for adult learning:

1. Will it lead to a greater integration of funding at FE and HE? At the last election the LibDem Manifesto called for greater alignment, even a fully fledged tertiary system. If HE in FE settings is what some adults and employers want, as some recent reports have argued, then why not greater parity between the systems, including student support and maintenance? Who would be the winners and losers in that shake up?

2. What are we going to do about workplace learning? The public purse currently funds where there is perceived to be market failure. But it also FINANCES employers to train through tax relief, an amount that dwarfs government spending on skills. In all this who is responsible for apprenticeships? Government behaves like it is their programme, but aren’t real apprenticeships a contract between an individual and their employer? Who funds that if the employer and the individual are being financed by government through loans and/or tax relief? While we are on the subject of tax, why do some learning providers pay VAT and others don’t? Will this particular can of worms be opened as we work through the implications of system wide loans? Why should learners pay VAT on some products and not on others?

3. How will loans link with the rest of the policy landscape? Very little thought has been given yet to the implications of that other ‘game changing’ flagship policy, Universal Credit. Will beneficiaries be eligible for loans? To be on UC you can be in work, or not actively seeking work and a long way from the labour market. What will it mean for those potential learners?

4. How will providers and awarding bodies respond to a system when more spending power is in the hands of the individual? There are many interesting models out there. Much depends on what individuals think they are purchasing– a qualification or an education? Both hopefully. Will loans be there to assess existing skills and accredit them? Or will they fund things less easy to measure and therefore justify. What are the implications for the mode of study? What level of part-time will be acceptable? Will there be more cost-efficient blended learning solutions that will save the learners time and money?

5. What about the subjects and the sectors we need to support most? If the Government follows through with the current proposals, STEM subjects will cost far more than others. Learners might have less opportunity to do these courses or not see the cost-benefit. Will that skew demand away from some of the most important courses which we’re told are needed to support economic growth?

6. And, finally, what about localism? If government is serious about decisions and accountability being more community based, how will a blanket loan system based on individual decision-making work in practice? How will local funding pots complement loans? What local deals will be struck? How will social mobility and fairness issues be addressed? Will differences between areas really matter? This could be, long-term, the solution to next year’s wicked issue not covered in today’s announcement. How and when will provider loan allocations (or notional values) be moved where there is over demand in some areas and under demand in others? Some providers are already saying that selling loans will be harder in some parts of the country than others.

Selling loans to the country as a whole might be a bigger job. It will force us to think about what education is for, whether it is worth the investment and what our collective role in providing the funding (or the financing) through taxation should be.