We all know that the UK economy is facing considerable challenges. UK productivity falls well behind other major European nations, our skills gaps in key sectors continue to grow and the uncertainties surrounding our exit from the European Union has produced an inherently unstable political environment.
Leaving the EU poses unique challenges. It comes at a time when the UK is faced with an unprecedented skills crisis as key sectors such as construction, technology, engineering and advanced manufacturing, all report massive skills shortages. Take, for example the 2016 Education and Skills Survey in which 69% of businesses expressed concern about the supply of skilled workers. Or the fact that the cybersecurity workforce gap is on track to hit 1.8 million by 2022, according to reports from Frost & Sullivan for the Centre for Cyber Safety and Education. Or consider the challenges faced by the Energy and utilities sector which will need 221,000 new recruits by 2027 to keep up with the pace of demand.
Our national economy was facing significant issues before the referendum, but now the decision to leave the EU will create added pressure on a skills system already confronted with the dual challenges of an aging population and widening skills gaps in key industries.
Taken individually, these are great challenges; taken in combination, they pose a major threat to our future economic prosperity. As a nation, we need to meet these challenges head on. To do this we will need an agile, responsive and highly skilled workforce. We know how important the skills system is to stimulate employment, extend opportunity and generate value for business and industry.
But we are still a long way off from having a truly world-class skills system.
Part of the issue is cultural. Many of our European neighbors have highly developed TPE systems, where undertaking an apprenticeship is considered a valid option to people from all walks of life. We, however, do not have this cultural instinct. There is an inherent bias in the system towards academic education as the primary route to achieve employment and career success.
So, what the UK needs is a cultural shift—away from the notion that technical and professional education is for “other people’s children.” We need to move towards a positive vision; one where technical education is accepted as an option open to all.
It must be credible for learners, employers—and perhaps, most importantly, for parents! Technical education provides a ladder of opportunity; a way to ensure that people from all walks of life can get on and develop successful and meaningful careers.
This is not to say that there has not been progress. The introduction of the apprenticeship levy and the Sainsbury reforms have the potential to deliver real and impactful change. But we are not there yet; it is an ongoing process.
I would argue that FE colleges need to be front and centre of this process. As Chief Executive of Collab Group, a member association that represents many of the UK’s largest college and college groups, I see every day how our colleges are equipping learners with the skills that will make a real difference to the productive capacity of the UK economy.
Our colleges deliver 50,000 apprenticeships annually, have a collective student population of over 600,000 and add £32.3 billion into the UK economy each year. FE Colleges are all about employability and creating strong working relationships with a range of employers, both large and small. It is this focus that makes them ideal to deliver the kind of reform that we need.
An often-cited mantra of the Sainsbury reforms is the need to ensure that these new technical qualifications are “employer led.”
Ensuring employers engagement is vital…but employers can’t design curriculum. Even when they can articulate what their skills needs are, they need the expertise of curriculum leaders to design course content that will entrench the knowledge, skills and behaviours that will allow learners to transfer seamlessly into the world of work.
Further education with its focus on developing and delivering high quality curriculum combined with its deep-rooted employer relationships, is best served to bring this new system into existence.
Because the fact remains the Sainsbury reforms present the most significant opportunity to bring about a true technical and professional education revolution. The Sainsbury reforms could deliver a step change in productivity as part of a renewed focus on industrial strategy. It can ensure that the employer led mantra of Government becomes a reality, with a curriculum specifically designed to meet their needs.
But when we talk about the primacy of FE, we also must look at the kind of colleges that will be best placed to truly deliver. The area based review process, for all its good intentions, has not delivered the kind of change that the sector needed. Where there have been mergers, they are likely to have occurred anyway. But if the Sainsbury recommendations had been implemented prior to the Area based reviews we might have emerged in a stronger position. Sainsbury, with its emphasis on 15 sector specific specialisms leads naturally into a conversation around how you best structure local provision to deliver this kind of employer focused curriculum.
What’s needed are locally embedded institutions that offer specialist provision tailored to give both learners and industry the skills to drive growth and productivity. This will require institutions with strong links to industry and an ability to respond to local and regional labour market demand. It leads to an inevitable question: is the notion of a general further education (GFE) college best placed to realise the potential of these important reforms?
Perhaps we need are new operational structures that can best facilitate a locally designed and delivered curriculum that leverages a broad spectrum of meaningful employer relationships. Perhaps it is now time to look at group models as the best means to provide individual services that support the local economy and the local community.
College group structures would provide an innovative way to leverage the community and social ties of individual institutions, within a wider network of colleges. At the same time, it would allow individual colleges within the group to focus on specialisms, and for other colleges to focus on providing different levels of provision.
Recently announced Institutes of technology would then have a natural home in the FE sector within a college group delivering level 4 and 5 STEM provision. A “hub and spoke” model could be applied, where “spoke” colleges train new recruits at level 1 and 2, perhaps as part of the transition year, and the “hub” institution could then provide progression onto T-level courses at level 3, leading on to an apprenticeship, university or even degree apprenticeships.
It is these kinds of institutions that are most relevant to the rapidly evolving environment. Curriculum planners no longer need to focus just on providing the skills in today job market, but increasingly they also need to anticipate the skills needed 5 or 10 years down the line.
But we also need to look at how the whole sector is reformed. This goes beyond just what FE colleges need to do. But how the whole sector needs to change.
The apprenticeship levy is fundamentally changing the business model for skills and training in the UK. Large employers are looking to get value from their levy but they are still faced with an unresponsive and difficult to navigate system. Take, for example, the fact that there are over 2,000 providers on the register of approved apprenticeship and training providers, and the list will get longer. National employers need to access providers with sufficient breadth and depth to provide the agility and flexibility that they need.
Collab Group, for example, has adopted a unique managed service model, where we, as a consortium of colleges bid for contracts for large, national, levy paying employers. The model has proved to be successful as our colleges, with their focus on high quality curriculum, combined with the depth and breadth of a UK-wide network, provide an appealing offer to large national employers.
So now there are larger questions for the entire sector to answer: how do you adapt your business model to provide industry with the skills and training that it needs? Only by asking this can we really get to grips with some of the wider challenges that our economy faces.
Consolidation in the FE Sector is one thing. But perhaps we have now reached a point where private providers also need to think about how they adapt their business models to take advantage of this new world.
Education and training providers know that they need to respond flexibly to the needs of employers and the demands of learners. This will involve a move away from the traditional ‘seller and buyer’ relationship towards broader partnerships that are founded on – and built for – mutual long-term benefit.
The training needs of large employers are complex— some have brought their training operations entirely in house, partly as a means of efficiency, but also because individual training providers are not fully equipped to meet their needs.
Large and medium sized employers are looking for a single point of access, wide geographical coverage, and a varied curriculum that covers the entire spectrum of their training and workforce development requirements. For any one provider, this may pose a challenge, but this is where the benefits of a partnership model come into play.
Partnership models offer a unique way for providers to take advantage of the opportunities brought about by the introduction of the apprenticeship levy.
Working in partnership has distinct advantages, not least the fact that individual selling points can be combined into a collective offer. This kind of package appears more attractive to employers who are assured of a wide curriculum and comprehensive geographical coverage through a responsive national delivery network, giving employers the chance to fill their skills and training needs, simplify their contractual arrangements and buy into a consistent delivery model. Consequently, employers are assured of a consistent service regardless of geographical location, and an assurance of quality, customisation and flexibility.
There is a widespread commitment, both inside and outside the technical education sector, to see a new and improved system developed to deliver maximum benefit for learners, industry and the economy. But beyond the reforms themselves, there are still fundamental questions that education and skills providers need to ask themselves, about how well they are aligned with employers and industry.
The changes to apprenticeship funding and the Sainsbury reforms provide an important opportunity for providers to come together; to plan strategically about the training they offer, and to work in partnership to boost the competitiveness of the UK economy. To deliver on this ambition, a change in mindset is needed. The move will be away from the traditional GFE and towards new types of organisational and legal structures. It will need private training providers and further education to work in partnership to deliver the kinds of training that the economy needs.
It is only through the adoption of new-ways of thinking and new approaches that we can really get to grips with the challenges facing this country. But I am confident that we can rise to the occasion and create the skills system that we as a nation need and deserve. Thank you