There should be a fairer distribution of the cost of further education between the state, the employer and the individual, says Chris Banks
Earlier this year, I chaired an independent review of the way colleges and private training providers are funded. The work was initiated by the Labour government – titled the Independent Review of Fees and Co-funding in Further Education – and the report has been delivered to the coalition. While the government has changed, the case for reform has not. Far from being lost in the new political landscape, the need for a new approach has become more apparent than it was even before the work was started. The time for change is now – and our vision is set out in our report, Co-investment in the skills of the future.
At the heart of our findings is the proposition that, where the learner is 19 or over, there should be a fairer distribution of the cost of further education between the state, the employer and the individual – and that the contribution from the taxpayer should only be forthcoming when fees have been collected first. We suggest that providers should be precise about establishing the value of the courses they offer. This, and not the pursuit of public funding, should be the starting point.
While we have been doing our work, Lord Browne has been leading the Independent Review of Higher Education Funding and Student Finance – with a wider remit and rather more attention. Will he favour a graduate tax, an increase in student fees or something completely different? Essentially, the issue was funding – and the balance of responsibility between the customer and the state.
Our proposals for reform concern an education sector that is often able to provide a return on investment – for the individual, the employer and the state – in a much shorter time than the traditional three- of four-year route from university entry to a degree.
Further education can make a difference to the economy. So it may as well get itself in the best shape it can in terms of its financial health. We identified that there may be up to £1bn a year of fees that should have been collected under the current rules but were simply never charged. Working with experts, we brought forward a set of simple and practicable recommendations. Our review panel is drawn widely from the education and training world, and from business.
The report has been well received, and a number of proposals were included in the consultation on the funding of further education by the Department for Business, Innovation and Skills. At the heart of the change we propose is the recommendation that government funding should follow and support the choices and contributions from learners and employers, based on principles of matched funding. In other words, let the customer choose and make a commitment, then match it.
To make it work, we'll need more transparency on price and quality. We acknowledge that some people will need financial support. In higher education there is a system of fees and loans. In further education there is a system of fees – but this needs to be revisited. That's why the government should take a serious look at the financial support available to FE students, and look to expand the professional and career development loan system as a first step.
The key, though, will be the changes that follow. The current system for securing co-investment simply doesn't work, so it has to be changed. We need an approach that will ensure that FE provision receives the level of investment it deserves. We need to get started on building a new system now.
• Chris Banks is former chairman of the Learning and Skills Council