Looking ahead – spending review 2015: outcomes for learning, skills and employment?

20th November 2015

This Wednesday’s Spending Review will set the framework for policy and debate for the next five years. We know it will include further cuts in public funding and that, with schools, health, defence and overseas aid protected, this means big cuts in learning, skills and employment. With that in mind, here are five things to look out in the Chancellor’s speech and its aftermath:


1. Cutting the cost of Government


Part of the Government’s narrative will likely be cutting the costs of Government so that efficiency savings can be invested in front line services. For learning, skills and employment this is likely to mean significant reductions in the number of civil servants employed in BIS and DWP. This may be coupled with a new ‘bonfire of the quangos’. 


We’ve already had the merger of the Higher Education Funding Council (HEFCE) and the Office for Fair Access (OFFA) announced in the HE White Paper. Could the Skills Funding Agency and Education Funding Agency (who already share a Chief Executive) be merged to reflect the reduced amount of funding for adult learning and its increasing focus on young people? Look out for other bodies either abolished, merged, or spun out into the sector too. In our Spending Review submission , NIACE called for such a rationalisation.


2. Expecting the beneficiary to pay


Over the last 20 years, there has been a big switch to expecting university students to contribute the bulk of the costs of their education, through a switch from grants to loans.  The principle is that those who benefit directly should contribute to the costs. We have seen the start of a similar switch in Further Education too, with the introduction of Advanced Learning Loans for people aged 24 and over learning at Level 3 (A Level equivalent) and above. The Spending Review is likely to herald a major expansion of this system, to lower age groups and lower levels of learning.


In this context, NIACE will make two arguments. The first is that the whole economy and society benefit from Further Education, so this is a clear case for ongoing public investment. The Chancellor is very focused on the productivity gap. Skills are a key way to close this. The second is that the loans system needs reform to work: we’ve argued that modular learning should be eligible for loans and information on the link between learning and earning needs to be much more widely available to encourage people to invest in their own learning. We will shortly be starting a project to boost take-up of loans in retail and social care in London.


3. Devolution


Expect the Northern Powerhouse, and announcement of other devolution deals, to feature prominently. For learning and skills, this is likely to mean cities and local areas having commissioning responsibility for the adult skills budget outside Apprenticeships (a diminishing pot of course). And within this a greater focus on outcomes (what people achieve as a result of their learning) rather than qualifications.  At the same time, local areas will be expected to boost demand for Apprenticeships and Advanced Learning Loans. For employment services, there is likely to be a greater role for co-commissioning, particularly for the hardest to help groups who need the most support from a range of services (see below).


At NIACE, we have long argued for this shift. Our Citizens’ Curriculum pilots, based on a co-designed programme of study approach for the core capabilities needed for life and work in 21st century Britain, showed not only increased participation in learning and progression to further learning, but also reductions in calls on other public services as a result. And before the General Election we called for a greater role for local areas in commissioning and overseeing employment services.


4. Integrating services to focus on outcomes


One of the Government’s headline employment commitments is to halve the disability employment gap. Many of Britain’s 2.5 million Employment and Support Allowance (ESA) claimants have not worked for many years, lack functional literacy and numeracy skills, and require support from a range of public services. Too often these services can work in their own silos rather than together based on what people need. 


So the Spending Review is likely to extend the Troubled Families approach, which provides caseworker support to integrate services for families with a number of disadvantages. This links to the argument for devolution: that people need a range of support services built around them, and that this is most likely (though not certain) to happen if these services are locally run.


5. The Spending Review is just the start


There will be a temptation to see the Chancellor’s statement on 25 November as the end of the process. In fact in many ways it will be just the start. It will set out the spending totals for each Government Department and some headline policies and directions of travel. Officials will then go into overdrive working out the detail and split of remaining funding between priorities (in many ways each Department will go through a mini Spending Review bidding process themselves once the total pot of funding available is decided).


It is now broadly too late to lobby the Treasury for what goes in the Spending Review – most of the headlines will by now have been decided. But when the Chancellor sits down having completed his statement, the hard work of lobbying and working with ministers and officials to work out and influence what it means will have only just begun.