Thank you for the opportunity to respond to this petition set up by Jacqui Dixon. We are focusing the skills budget where it can have most impact.
This will focus on providing young adults with the skills they need for sustainable work, skills training for unemployed adults, and English and maths for all those who have yet to achieve a Grade A*-C, recognising these are essential requirements for sustainable employment. Apprenticeships and Traineeships will be a particular priority. Full funding rules are available at: https://www.gov.uk/government/publications/sfa-funding-rules.
Of course, older learners need additional help so we have made more funding available for Advanced Learning Loans, enabling learners to access support to help meet up-front fees, and removing one of the main barriers to learning.
The petition suggests that in areas of high unemployment such as the North East, people are discouraged from taking on a government backed Advanced Learning Loan. Applications for loans in their first year of operation (over 66,000 to the end of April) have been strong. In recent meetings with providers and stakeholders from across the FE sector we received positive feedback on the way the loans programme has been implemented. I believe that Advanced Learning Loans provide an opportunity for individuals to undertake learning which should improve their employment prospects at no up-front cost and are only repayable when they are earning £21,000.
For younger learners, our priority remains to provide a high-quality study programme for every 16-19 year old, especially 16 year olds who are now legally required to participate. To that end despite a decrease in the population of 16-18 year olds we will be funding in 2014/15 at least as many places as were filled in the academic year 2013/14.
We will be reducing funding for 18-year-olds to £3,300 compared to £4,000 for 16- and 17-year-olds. Students without GCSE grade C in English or mathematics and those with statements of special education needs, learning disability assessments or education, health and care plans are excluded from this reduction. Full-time 18-year-olds will still be funded for programmes broadly the same size as the core element of programmes they undertook prior to 2013/14. For the academic year 2014/15 we will cap any losses resulting from this change to the funding for 18-year-olds at 2% of the institution’s programme funding, protecting more than 450 schools and colleges that would otherwise have lost more than 2% of their funding from the 18-year-olds funding reduction. Full funding rules are available at: https://www.gov.uk/16-to-19-education-funding-guidance.
I appreciate that any budget reductions are unwelcome and Northumberland College, like all providers, will have had to re-prioritise its provision. However, in order to reduce the budget deficit, reductions to programme funding have been necessary and I believe that the funding priorities we have established are the right ones. The College’s 2014/15 Adult Skills Budget will be £3,092,460 plus an increased Advanced Learning Loan allocation of £756,036, representing a total £890,519 reduction. Its 16-19 budget will be reduced by £60,000 to £7,378,751 (excluding student support funding).
One of our key funding priorities is Apprenticeships which equip people of all ages with the skills that employers need to compete and grow. I was therefore disappointed to read in the petition that small employers in the North East are reluctant to take on an apprentice due to bureaucracy. Small businesses are the cornerstone of our economy and high quality training opportunities like Apprenticeships are key to supporting their growth and success. Many small business employers already recognise the benefits of recruiting Apprentices and recent evidence suggests that about half of all Apprenticeship employers are small, with 1-24 employees.
However, many small businesses are not engaged and are missing out on the opportunities that Apprenticeships offer for improving productivity and supporting sustainability and we want to address that. We are therefore making it easier to take on an Apprentice by cutting back on bureaucracy and replacing complex frameworks with simple standards set by employers. The Apprenticeship Grant for Employers also provides support for smaller employers taking on young apprentices aged 16-24. The Budget announced an additional £170 million funding over the next two years to support the current very high demand for the grant. The additional support will fund over 100,000 additional incentive payments. The grant has been particularly successful at removing barriers to smaller businesses taking on their first apprentices.
Finally, I would like to pay tribute to the college and all the work it does in Northumberland, particularly in view of the employment and skills challenges facing people in the communities it serves. I know that local colleges play an important role in inspiring people and equipping them with the skills that they need to engage more successfully with their local labour markets.