NTRL Autumn ConferenceMonday 26 October (my birthday!)

Nick Linford

Train to Gain planning and funding: what went wrong and how to fix it

TtG funding history

National roll-out from Aug 2007, and byAugust 2008 £100m under-spend went to HE

TtG ‘flexibilities’ introduced from Aug ’08 and in less than a year demand outstripped supply

FE Focus 03/07/09 and 04/09/09

FE Focus 08/08/08 and 29/08/08

TtG funding pressures

“it is unlikely that there will be sufficient funding to meet the high level of demand from employers and learners for new starts, particularly in the August-March period of the 2009/10 academic year” Source: Geoff Russell’s LSC letter to providers (11/06/09)

Theflexibilities

1 Paymentprofile

2 More providers

3

1st Pressure: flexibilities

> Skills for Life at Entry Level

> Non-first full level 2s fully-funded (free)

> Level 3 (incl.19-24 ‘first’ fully-funded)

> Selection of thin and unitised QCF quals

For 2008/09 ‘flexibilities’ were introduced to stimulate both demand and supply. These included:

The policy worked too perhaps too well!

and 3% TtG premium has already been scrapped

2nd pressure: profile

£100

£200

£300

£400

£500

£0

Jan Feb Mar Apr May Jun Jul

Monthly instalments

Cumulative instalments

07/08

09/1008/09

Achievements, new profile and higher rates

07/08

09/1008/09

£0

£400

£800

£1,200

£1,600

£2,000

Jan Feb Mar Apr May Jun Jul

Example for 1 NVQ in Construction Consequences• Instalments quickly ramp up

• Funding for achievement is now starting to be claimed in big numbers

• Big ‘carry-in’ funding commitments

Also• Qualification rates simplified for 09/10, which will be expensive for LSC

• LSC and providers really struggle to forecast monthly instalment profile

2nd pressure: profile

Apr May Jun Jul Aug Sep Oct

Nov Dec Jan Feb Mar

Financial year Grant Letter (government budgets)

Academic year provider contracts (MCVs)

Aug Sep OctNov Dec Jan Feb Mar

Apr May Jun Jul

£925m 09-10 TtG budget in Grant Letter (more than last financial year but less than last academic year)

About half of 09-10 financial year spent on last four months of 08/09 academic year. The eight months (67%) left of 09-10 financial year only covers 47% of 09/10 academic year commitments

3rd pressure: more providers

Source: LSC provider Allocations Spreadsheet (Feb 2009)

9201212

2035

2006/07 2007/08 2008/09

Number of 19+ ER contracts (TtG and Apprenticeship)

Nearly all the additional contracts have been for new providers of TtG

Solution p1: prioritisation

> Stop funding Level 3 in many, if not most cases> Stop funding Level 2 repeats in the same sector > Co-fund Level 2 repeats if new to the sector> Continue to fully-fund first full Level 2

> Review numeracy and literacy/language rates

Return Train to Gain to its original model of a broad training offer, to suit a range of employer needs (including real fee contributions and full-cost)

> Marginal funding rate for large employers

> Stop funding 19-24 year-olds who should be apprentices

Solution p2: payment profile

> Trusted and well organised contract management

> Simpler and better understood instalment plans

> Long-term plan to move to financial year contractsNeed to do everything to avoid

Solution p3: No. of contracts

Source: LSC provider Allocations Spreadsheet (Feb 2009)

£20k

200

400

600

800

1000

1200

Con

tracts

Contract size less than

£40k £60k £80k £100k£120k£140k£160k£180k£200k

10%18%

25%30%

35%38%

43%47% 50%

53%

Train to Gain contracts

What if the SFA only gave £200k+ contacts?

TtG future is uncertain

> Providers waiting for confirmed 09/10 contracts (MCVs)

> Lack of funding and cash-flow issues mean many likely to go out of business

> Government will scrap some flexibilities (claw-back 3% uplift and remove fully-funded non-first L2)

> Uncertain impact of QCF and interim ‘fullness’ definitions

> NAO report said poor value for money (21/07/09)

> Conservatives say they would scrap TtG

> Skills Funding Agency (SFA) will take it over from LSC from April 2010

The pre-employment marketFor many providers TtG presented an opportunity to offer a package of support to SME and large employers

> Employability and Skills Programme (LSC)> Response to Redundancy (LSC)

> Six Month Offer (LSC)

> Flexible New Deal (DWP)

The biggest opportunity is for those that can act as both recruitment, induction and training agenciesNew pre-employment programmes:

Other stuff…

> 2009/10 edition with new chapters (160 pages)

> Find out more at www.fundingguide.co.uk

> Now working in partnership with The Data Service

on The hands-on guide to post-16 performance and data

> Find out more at www.dataguide.co.uk

The hands-on guide to post-16 funding

Funding masterclasses and free resources

> Training events around the country

> Sign-up online for access to a variety of free resources

> Find out more at www.planningandfunding.co.uk

Any questions?

These slides will be sent to you and are a free resource on www.planningandfunding.co.uk