Question

To ask the Secretary of State for Business, Innovation and Skills, what assessment he has made of the funding requirements of the further education sector.

The Department plans to continue to provide funding for further education for adults. Across all our grant, loan and capital support for adult further education, we are making available over £3bn in 2015-16.

For apprenticeships, Government and employers will continue to jointly invest in the training, reflecting the economic benefits that apprenticeships bring. For older learners studying at advanced level (age 24 and upwards studying at level 3) our policy is to provide HE-style loans to fund tuition fees to colleges. We have made £498m of provision available in 2015-16. For adult further education, our policy is to pay grant to providers based on the numbers of learners they teach and characteristics of those learners. There are also specialist funds to support joint projects with employers to grow skills in strategic areas of the economy; to support prisoner education; and for community learning. We also make capital funding available to colleges. In 2015-16 £410m of capital funding is available, of which £330m is distributed according to the requirements of Local Enterprise Partnerships. Finally, our policy is to provide funding to support the learner to access the system and get the most from it.

Apprenticeships are our priority for skills and colleges have been encouraged to expand their apprenticeship offer. As government funding has reduced, colleges have responded well by looking at generating other income streams and creating sustainable business models for the future. This entrepreneurial approach will help ensure sustainable future business models with less reliance on government funding.

The financial health of further education colleges is under constant review by the Skills Funding Agency based on self-assessment information from colleges and the publication of college accounts. Colleges with inadequate financial health are subject to intervention led by the FE Commissioner.

Our funding mechanism is designed to allow providers the freedoms and flexibilities to decide how best to use their allocation to respond to local learner and employer demand. As autonomous organisations it is up to colleges to manage their own budgets including staffing numbers and what provision to offer.

Colleges are becoming increasingly responsive to employer and learner need and employers are now taking the lead in apprenticeship design so that apprenticeship training, be that in the workplace or at college, equips apprentices with the skills that employers need. We believe that our funding for adult skills through apprenticeship and further education provision can have a positive impact on learners, employers and the UK economy.