Another year, another set of funding changes. The Learning and Skills Council introduced a new way to calculate funding this autumn. Next year it plans to change all the numbers in the calculations.
The plans for 2003-4 may change the amount of money paid for more expensive courses, courses in more expensive locations and courses taken by more expensive students - including those with learning difficulties and those who start with a social or economic disadvantage.
The LSC will publish its proposals soon but intends to have the new rules done and dusted by next Easter. It will be a busy six months. People in the LSC and colleges need to understand next year’s rules, make the new system work this year and bring last year’s funding audits to a close.
Managing three years at once is a routine matter for government agencies but no less important for that. Avoiding problems in the routine issues matters more to a quango’s reputation than participation in high-profile initiatives.
Changes will happen in 2003-4 but they won’t stop there. The LSC is still completing the funding work passed on by the Department for Education and Skills in 2000. It will declare the system ready in 2004 but is already working on the next set of changes.
An impatient government and tough targets mean we should not expect anything else. But a generation of education managers who spent time learning about funding in the 1990s have been de-skilled. Time is wasted catching up. The effect is a bit like the relentless series of upgrades applied to computer software. You are left with a suspicion that the world could have saved a lot of time if it had stuck with Wordperfect 5.1.
Change is non-negotiable but there are different ways of managing the process. The LSC’s predecessors were simpler organisations which could drive through changes in the knowledge that they had consulted everyone affected. The LSC’s larger remit and complex structure makes this more difficult to achieve.
The National Rates Advisory Group has lead responsibility for funding and has money to commission research, but its work is shadowed at various other meetings. An influential group is the funding meeting of local LSC directors, which meets in private and reports to the LSC management board. The youth and adult committees give their views, as do various special purpose groups.
This autumn, the Bureaucracy Task Force will make its first report. Funding is a major source of bureaucracy and the taskforce is likely to recommend simplification. This may happen just as various pilots make life more complex. The LSC is testing new ways to fund work-related education for 14-year-olds, qualifications for unskilled workers and the impact of telling learners the full cost of their courses. For several years it has been running pilots in specific industries. If you are not confused, you are not informed. The LSC is a big tent and has to accommodate diverging views on where it should go next.
Two key concepts about funding have emerged in the LSC’s first two years: the first is that the council should seek to create a demand-driven system; the second that it needs a plan-led system.
John Harwood talked about demand-driving the LSC when he first became chief executive and the idea has been carried forward in various plans since - including the recent workforce development strategy. A demand-driven system might devolve purchasing power to particular employers or individuals and let them get on with it. The alternative, of plans leading decisions, is implicit in the legislation which created the council.
The LSC has to publish annual plans and to take action based on them. A line of thinking suggests that bureaucracy could be reduced if plans drove funding decisions and less use was made of audit.
The LSC will try to reconcile these competing visions. If its plans can encapsulate all relevant employer demand then it can force appropriate action from providers. The employment market is so complex that employer demand is not easily summarised. The national vocational qualification experiment also showed that some employers may say one thing while others carry on as they have always done.
The demand identified as coming from employers is often a description of their needs - outsiders deciding that employers need more skilled staff and helping them to achieve this. There is no short answer to the problem of assessing demand but there will be plenty of attempts at a solution. The risk is in losing sight of the individual learners - if they are not persuaded to enrol and commit to learning, then a lot of money will be wasted.
Julian Gravatt is finance director of The City Lit, London
