Dave Phoenix: We need to expand both HE and FE

Right2Learn was established following publication of the Lifelong Learning Commission’s report “The Future is ours to Learn”. It is an independent campaign for a lifelong right to free access to high quality education and training but there are questions as to what ‘free access’ should mean.

I believe that our education system needs to change. To be more joined up and with qualifications that meet the needs of the future not the past. For this to happen though we need clarity on our higher level ambition and a simple funding system that will underpin those aims. Below, I set out four principals and five asks for Government which I believe can deliver a fair yet relatively simple approach to funding via relatively modest adjustments to our current system.

For those under 19, learning is essentially free; and the “standard” trajectory determines that, by this age, learners have completed a Level 3 qualification. For those who haven’t reached that point, and for many who have, educational funding structures thereafter are confusing and often unattractive. The funding system dissolves into complexity with free and full cost, grant and loan opportunities determined by type, age, provider, subject and socio-economics. When we reflect on these complexities, we should not be surprised that so few learners make the transition from Level 3 to Level 4 study, other than those who make the, relatively well understood and promoted, leap to degree level (Level 6).

A reasonable, navigable, accessible and sustainable education system does not require all qualifications to be funded in the same way; nor is it reasonable to assume that, if an individual is to benefit, they shouldn’t make a contribution to the cost of the benefits received. “Free access” is a phrase open for debate; but in this short paper I argue that what is important is that education is free at the point of access.

In developing a funding system for life-long learning I suggest the following principles:

1. There should be no financial barriers to education
2. The system should be sustainable and, as proposed by Dearing in 1997, the costs should be shared by the beneficiaries – government/ taxpayers, the individual and employers
3. That, given variations in the nature of qualifications, we do not need a single funding approach and indeed it could be regressive if this was the case (with, potentially, for example, the taxes of young people on the minimum wage funding masters degrees for retirees)
4. That education should not be rationed; and in particular we should be ambitious in the proportion of society that is able to qualify at least to Level 4 which government and employers regard as a key area of skills shortage.

To increase the numbers of learners qualified to Levels 4 and 5, where government and employers see our greatest need, we must first focus on increasing the pipeline of learners coming through Levels 2 and 3. Currently (2016) 17.2% leave school without achieving Level 2 and a further 34.7% don’t obtain Level 3. England is the only OECD country where younger people (16 to 24), do not have stronger basic skills (Level 2) than the generation approaching retirement (55 to 65).

A range of ‘core’ Level 2 and 3 qualifications must be free for everyone. We know from experience that for adult learners seeking these vital gateway qualifications loans do not work, with learners unable or unwilling to wager the cost of repayment with the earnings return. The take-up of Advanced Learner Loans in 2014/15 was only £149 million out of the £397 million that was budgeted. However, without these key gateway qualifications, educational, financial and social progression are heavily hampered with immense national opportunity costs. As the key beneficiary of education at these levels, we the taxpayer need to invest to ensure they are free to the learner.

It is imperative that we increase the number of learners qualified at Levels 4 and 5, by increasing the pipeline from Levels 2 and 3. We must not instead try to supress the numbers seeking qualification at Level 6 and in so doing play a perverse zero sum game in which we seek to deliver a knowledge economy whilst reducing educational opportunity. The UK is by no means an outlier in our numbers on degree level study, and especially not for a country that sees, or at least wants to see, itself as a knowledge based economy. Furthermore, it is important to remember that we now have far fewer people in Higher Education in the UK than in 2008. And even if we were to significantly grow Levels 4 and 5 we might at best restore HE numbers to what they were before the haemorrhaging of part time student numbers when the Government increased university fees in 2008/9.

As the Government increasingly seeks to ‘put employers at the heart’ of our skills system and to measure courses principally by the earnings premium they generate; employers are a more and more glaring omission from the funding equation.  The Government has, with the Apprenticeship Levy, drawn employers directly into secondary and tertiary level education funding. Apprenticeships from level 2 to post-graduate degree apprenticeships are already funded by employers through their Levy payments. The new Higher Technical Qualifications (HTQs) provide the opportunity to extend this further to other tertiary qualifications. HTQs are based on employer endorsed occupational standards, alongside apprenticeships, and it therefore makes perfect sense to bring these into line. Indeed, before the Apprenticeship Levy (and since) many employers funded staff on HNCs and HNDs, which it could be argued are the archetype of these new HTQs. The level of employer based investment in education remains low in the UK compared to other countries and by seeking to have employers support a range of work based  qualifications from which they will benefit we can help increase access to vocational and technical qualifications in a way that may also support social mobility

I would argue that higher education is largely free at the point of use – funded half by income-contingent loans and half through taxpayer subsidy on those loans. However, missing from that equation is the hidden but growing subsidy paid by many families to cover the, often significant, shortfall between maintenance loans and the realistic cost of living (as much as £17,700 for student living away from home in London according to Money Saving Expert).  If we are to genuinely level up and make university education truly free at the point of access, we must recognises the real cost of university study and use the grant and loan system to provide additional support for low income families, living often in our large northern cities.

If we take the PM at his word, FE colleges will soon be given access to the main student finance system “for a specific list of valuable and mainly technical courses”. If this is the case, we may be edging towards something akin to a joined up funding system and one which genuinely begins to break down what the Prime Minister himself described as the “bogus distinction” between FE and HE. It is now possible to imagine, with a few further steps, a coherent structure that meets the PM’s promise of a lifelong learning entitlement that could actually work. These steps might look something like:

• In addition to school level study foundation entry and core level 1 programs should be free for adults to enable engagement with the learning process. These need to be funded at a level that is sustainable and which recognises the costs of delivery
• Level 2 and 3 tuition on ‘core’ courses should be fully funded. Such courses should, for the majority,  provide gateways into work or further study hence generating significant societal benefit. In addition, to ensure that the provision remain robust, Adult Learners be should be funded at the same rate as 16-18 year olds to avoid the risk that these left behind learners are neglected by colleges  for more “lucrative” younger learners or those on technical qualifications. As with higher levels of study, maintenance support, in the form of a restored Education Maintenance Allowance, should be available to those who need it given the time required to support completion.
• Learners on Levels 4 and 5 standalone course should be supported by loans for maintenance and tuition with means tested grants for low income families. These could be available in smaller bites – perhaps equivalent to a semester / half a year. As with degree level study below such programs should, for the majority, support individual advancement.
• Degree level study should be available to all, with loans for maintenance and tuition and realistic means tested grants for low income families including those studying part time.
• Employers should be encouraged to fund properly accredited work based learning. Tax credits should be available to employers that sponsor employees’ education at Levels 4-7. Employers should also be able to use their Levy contributions to fund employers on HTQs to reflect their comparability with apprenticeships. This could encourage HEIs to align degree content with HTQs where they wish to attract employer sponsorship – making degrees more “employer focused” and reducing call on SFE for loans.

Currently, our funding framework is disjointed and complex, often we seem to start not with the higher level purpose but with the design of the funding mechanism that seek to capture a mind boggling array of options. This leads to a framework which is off-putting to learners and creates unforeseen and often unhelpful incentives for providers. We need a more coherent approach which starts with our aims, follows with qualifications and only then addresses the most appropriate funding mechanisms. Without a sustainable and well-structured funding system that encourages people to learn throughout their lives we will constantly be seeking short term solutions driven not by the needs of individuals, employers, and the UK but by funding and regulatory structures and institutional objectives.

Very often, government announcements on further education and skills have created high hopes which have then been confounded by poor or partial implementation. The relatively “green” nature of the recent white paper leaves open the opportunity for the Government to work collaboratively with the further and higher education sectors to make the ambitious sounding words become a reality, not just another missed opportunity.

Dave Phoenix OBE is the Vice Chancellor of London South Bank University