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AELP

Wish list - December update

Each month I’ll be giving a quick update from the Skills Sector. Here’s a quick note of what’s front of mind this month:  

Ben Rowland

Ben Rowland, AELP Chief Executive Officer

 

Budget Update

AELP remains at the forefront of making the strong case that boosting growth, productivity and living standards requires a stronger, better-funded skills system. 

Key messages you can promote for the benefit of employees, those not yet in work, employers and organisations delivering training in your constituency: 

  • The skills system delivers a rapid and (all but) guaranteed return for every Treasury £ - they need to put more – way more – in to maximise life changes and economic growth for all of us 
  • The system works already, and is demonstrably getting better 

Key local actions you can take: 

  • Encourage Mayors and local authorities to prioritise skills spending with their discretionary funds, especially around pathways back towards the workplace, if they want a quick and effective way to local economic renewal 
  • Reach out to, champion and support all providers of training in your constituency – FE Colleges do a great job, so do your Independent Training Providers and Universities delivering degree apprenticeships 

How AELP can help you: 

  • Explain how the skills system works, strengths, weaknesses, warts ‘n’ all – and opportunities and reasons to be cheerful 
  • Identify good training providers in your constituency to visit, and help make those happen 
  • Our Wishlist drop in for all Parliamentarians, the 2nd Wednesday of every month, to give you a fuller update and to answer all your questions 

Here’s what you need to know for now: 

What’s good for skills right now 

  • Skills are, at last (you might say)), front and centre: skills was a major positive item in the Prime Minister’s Conference Speech, the Leader of the Opposition’s Conference Speech (fringe sessions on skills at all conferences were packed) and led the positive news in led the positive news in the Autumn Budget. 
  • The Budget included £820 million for six-month paid placements for young people furthest from the labour market as part of the Youth Guarantee (half of which is new money).  
  • And £725m more for the Apprenticeship Programme Budget (over three years - C£242m for each year from 26/27 to 28/29). 

What’s less good (and what you need to bear in mind) 

  • £820m only helps 140,000 people if the wage subsidy is £6,000 – we have c950,000 NEETs right now 
  • £242m a year on apprenticeships = c 25,000 apprenticeships, there are currently 740,000 people doing apprenticeship at the moment; also, £725m is just 20% of the money that the Treasury is due to ‘top slice’ from the levy in the same three year time period that is actually raised by the levy but does not go back into the skills system 
  • I.e. the numbers sound big, but they don’t really touch the sides – Government needs to add an extra zero to both these numbers 

Other key changes 

  • In 2026 we will see the emergence of the new Growth & Skills Levy offer: full apprenticeships (but see below for changes), foundation apprenticeships and ‘short courses’ (which the Government was referring to as ‘apprenticeship units’) 
  • There will be new rules for apprenticeships, which will push employers to do more apprenticeships earlier, but within tighter constraints, and for the first time, with restrictions on the amounts of funding for different types of apprenticeships and apprentices.  The changes include: 
    • The end of the 10 per cent levy top-up (in effect reducing the amount available to each employer). 
    • A move to 12-month expiry of unspent funds 
    • Increased employer co-investment (to be confirmed exactly how) 
    • Full funding for under-25 apprentices in SMEs 
    • Integrated devolution settlements and renewed work with Skills England signal progress on long-term system design. Now is the time to push Mayors to prioritise skills, especially for adults who don’t make the cut for  

 

Need to know: the skills system is a good system that is getting better 

The latest Ofsted data (to 31 August 2024) shows that the Further Education and Skills sector continues to perform strongly. Across colleges, adult community learning, sixth-form colleges and specialist provision, the large majority of providers were judged good or outstanding, signalling a broadly stable sector delivering consistently solid outcomes for learners. 

Independent Training Providers have seen particularly notable improvement. 84% of ITPs are now rated good or outstanding, up from 77% the previous year and building on the six-point rise recorded in 2022/23. This sustained improvement reflects the significant effort providers have made to maintain quality in a period of major policy change and rising learner need. 

This year’s Ofsted Annual Report is the final one to use single-word overall judgements. From 2025/26, Ofsted will move to a refreshed framework with more detailed “report cards”, aimed at offering a clearer picture of performance across different aspects of provision. We will continue to monitor the impact of these changes, and plan to support our members to understand the impact of the new framework.