The Skills grant letter - the Adult Education Budget and devolution

This week’s skills funding letter answers the fears of those who believe the devil is in the funding detail. The Chancellor’s promise in his spending review announcement that the adult skills budget will be maintained in cash terms for four years is now written down for all to see. The letter from the Skills minister to the SFA chief executive documents a £1.5 billion Adult Education Budget (a rebrand) for every year up to 2019-20. This is the first time in twenty years that the funding agency has had a four year budget. This, plus the fact that the letter is two months earlier than last year is progress. Several budgets have been combined to create a single Adult Education Budget (AEB) which is fixed at £1.5 billion. The AEB combines three budgets in one including community learning and financial support to help learners with childcare and travel. The £1.5 billion baseline takes into account the large budget cuts made in March and July 2015 plus current levels of activity in colleges and providers. The theme in England (and also in Scotland and Wales by the way) is stabilisation as a plaform for reform rather than restoration of recent cuts. Reform is a big theme in the Minister's letter because it gives approval to SFA to move ahead with plans to change its funding system. SFA plans involve block grants, more flexibility in how money can be used, simpler eligibility rules and the drawing up of local delivery agreements. Some policy changes may prove difficult (for example the plan to cut co-funding for workplace training) but existing statutory entitlements to free tuition remain. A large share of this money (perhaps £800 million) is currently directed to funding the full cost of adult programmes. The longer term aim in the Minister’s letter is“single offer for ages 16 to 23 focussed on high quality technical and professional qualifications”. Merging different government budgets and requiring new conversations with local agencies takes the college planning process in a whole new direction, particularly as it is already quite late to make changes for 2016-17. There is now a long list of skills issues that LEPs and combined authorities need to focus on including these local agreements, area reviews, skills capital and European Social Funding. How they cope will be interesting to watch. The issues and challenges are right in front of us not buried in the text. If you believe in devils, then the place to look is in the devolution deals. The Treasury’s devolution agreements with local government leaders in 8 metropolitan areas cover 50% of the England population. It is not yet clear what happens in the rest of the country or whether the deals in London, Greater Manchester and West Yorkshire will be updated to fit the favoured model. Devolution is a worthy goal but deal-making has already made things quite complicated and there are lots of unanswered questions. The big task in 2016 will be to manage this change in a way that is simple and efficient as well as responsive to new demands.