LGPS and national insurance contribution guarantee will save colleges millions, says AoC

David Hughes, Chief Executive, Association of Colleges, said: “It’s great to have Skills Minister Jacqui Smith speak directly to college staff here at the AoC Annual Conference and Exhibition, and set out her vision for the future of the sector. It’s a vision which resonates well with the way colleges view their roles, strengths and opportunities.

“Colleges are rightly frustrated about the pay gap between schools and colleges, as am I. It is encouraging to hear the Minister recognise that this gap needs to close and to share our frustration, as well as the discrepancy on VAT rules which is not fair on college students. We will work hard to make the case on this ahead of the spending review in the spring.

“I welcome her announcement on both the LGPS guarantee and national insurance contributions, both of which show that this government wants to support colleges more. This will make a huge financial difference to colleges; we estimate that the LGPS guarantee alone will save colleges around £30 million a year, with a lifetime saving of more than half a billion and the NIC funding will be over £100m per year.

“I welcome her confirmation that a new post-16 education and skills strategy is on its way; it’s refreshing to hear that we will have a long-term vision for further education, which is a direct contrast to the short-term thinking that has come out of past governments. I am thrilled to hear her recognise that skills and colleges are essential to each of the government's missions, not just to breaking down barriers to opportunity, but to economic growth and productivity, net zero, community cohesion and the future of the NHS.

“I also agree with the Minister that there is a big job to be done, and I am pleased to say that AoC and college leaders are being engaged to help across this new agenda, including around the establishment of Skills England to ensure that it truly delivers system change for further education, and has value for colleges, their communities and wider society.

“The minister is spot on that a cultural shift is needed, and a national conversation about skills, with the sector, not to the sector, will be music to college leaders' ears. We look forward to working with the Minister and the DfE to make this a reality.”