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Education briefing – Skills for jobs: further proposals and consultation on FE funding and accountability

  • United Kingdom
  • Education - Briefings



On 15 July 2021 the Department for Education (DfE) commenced consultation on its proposals for delivering the Further Education funding and accountability reform, set out in the ‘Skills for Jobs’ White Paper published in January 2021. This consultation (which closed on 7 October 2021) was split into two chapters covering funding and accountability respectively. On 21 July 2022, the DfE published its response to the consultation together with a further consultation - Skills for jobs: implementing a new further education funding and accountability system. This second consultation (which closes on 21 September 2022) sets out the latest thinking from the DfE and asks a number of further questions.

The aim of the reforms is to deliver a system which is simpler and more effective, that spreads opportunity across England in a fairer way, and is focussed on delivering good outcomes for learners, employers, and the taxpayer.

Like its forerunner, the consultation is split into two parts with chapter one setting out how the government will take forward proposals to reform adult skills funding and chapter two setting out its approach to improving the FE accountability system. In this note, we will focus on chapter two and how the proposals will seek to make colleges accountable.

The government sets out its approach to improving the FE accountability system by shifting the system towards measuring good outcomes and delivering on the ambitions in the Skills for Jobs White Paper and the Skills and Post-16 Education Act.

To do this it will develop and introduce: 

• Accountability Agreements - setting clearer requirements and expectations for FE providers, incorporating new national skills priorities, and inviting colleges to develop a strategic plan;

• an FE Performance Dashboard – a new tool setting and measuring high-level outcomes for FE providers;

• improved data quality through better collection, storing and sharing, creating a digital record for FE learners and cloud-based services across the sector to reduce reporting burdens on providers;

• Ofsted enhanced inspections - increasing Ofsted’s focus on how well FE providers are responding to local and national skills needs, as part of full inspections;

• an expanded FE Commissioner role – with greater focus on identifying and sharing excellent practice; tailored support, and a Single Improvement Plan;

• simpler audit and assurance, reflecting the move to a single adult Skills Fund; and

• applying the system to other post-16 providers, setting out how the reforms will apply to the non-statutory FE sector in a fair and proportionate way.

 A point to note under the accountability proposals is that although the funding reforms focus on the adult funding system, the intention is that the new accountability system should apply to all DfE-funded provision that colleges deliver, namely its 16-19 study programmes, apprenticeships, adult skills provision, and academic provision.

Accountability Agreements

These will come in two parts. The Funding Framework (Part 1) will apply to all providers that the DfE grant funds directly and will replace the Funding Agreement - it will set out national priorities, as well as the essential terms and conditions that providers need to meet in return for funds. The Strategic Plan (Part 2) will initially only apply to the statutory FE sector, but the DfE is using its pilot to test whether it would be appropriate to ask local authorities to produce a plan too. All colleges will be asked to own and develop a strategic plan, setting out a small number of outcome targets focussed on curriculum changes and adaptations to provision planned for the coming year.

In the last consultation, the government said that we would set a limited number of national skills priorities that should be considered alongside local skills needs when planning provision, whilst recognising that colleges will need to strike a fine balance between delivering priorities at the national level and supporting the particular skills needs of local labour markets, and that these may not always align. The national skills priorities are still developing and more detail will be published at a later date, but for now some sectors have been identified as playing an important role in the growth of the UK economy and are subject to increasing government and industry focus, including construction, manufacturing, digital and technology, health and social care, and haulage and logistics.

It is expected that guidance on developing a strategic plan will be issued in the 2022 autumn term so that colleges can develop their first Accountability Agreement for the 2023/24 academic year.

Performance dashboard

The intention is that this will help FE leaders benchmark their performance against key outcomes to help them drive improvement from within their institution, as well as inform Annual Strategic Conversations, the FE Commissioner’s work and Ofsted inspections.

It is proposed that the dashboard, which will sit alongside other types of published FE performance data, will contain two core performance measures - a Skills measure (the percentage of learners moving into employment/higher level learning) and one on quality (the latest Ofsted inspection rating) and six performance indicators:

• the percentage of learners achieving a qualification (or non-qualification) who start it;

• English and Maths measures - how well 16-19 learners taking English and maths GCSE and equivalent qualifications do;

• learner progression - the percentage of learners attaining their highest qualification level by achieving their FE qualification;

• the percentage of learners moving into priority industry sectors based on the national skills priorities set by the DfE;

• learner employability - how well a provider is enabling learners to achieve wider outcomes which improve their ability to get a job; and

• employer experience - how well a provider is working with employers to respond to skills need.

Although in the first consultation the DfE asked whether it was agreed that the dashboard should include ESFA ratings of a college’s financial health only 29% thought it should, so this will not be taken forward.

Support and intervention

In the first consultation the DfE asked for views on giving the FE Commissioner a renewed focus on driving improvement and championing excellence, and to create a simpler three-stage approach to improve college performance. 75% agreed on the FE Commissioner but responses were evenly split on the three stage approach.

The government still believes that the approach set out in the first consultation is the most effective division of responsibility. Ofsted is the inspector of quality, judging whether a provider is contributing to meeting skills needs. The FE Commissioner is the champion of excellence, responsible for helping spot and resolve issues early, and being the primary agent for improvement when a college is in intervention.

The Government thinks that the proposed three-stage process would bring much needed clarity where the college is in intervention and encourage improved engagement and effective working within the system as follows:

• step 1 would be an assessment with the FE Commissioner determining the steps to improve;

• step 2 is a single improvement plan where the FE Commissioner works with the leadership team and governors to agree priorities, actions, and milestones; and

• step 3 contains the last resort powers where the Secretary of State can remove or appoint members of the governing body, can give the governing body directions that the Secretary of State considers expedient regarding the exercise of the governing body’s powers and performance of their duties (including requiring them to make collaboration arrangements), or to resolve to dissolve the governing body.

The DfE recognises that performance improvement does not happen overnight and that it may take successive attempts from the FE Commissioner to support and that the Secretary of State powers will only be used where it has not been possible to achieve the required improvement by other appropriate means.


The content of this consultation should come as no surprise to those in the sector – these are policies which have been considered since the Skills for Jobs White Paper.

Accountability Agreements and Performance Dashboards are clear attempts to make sure that colleges deliver provision which central government and employers consider is needed. Some colleges might have preferred greater freedom to pick the provision which the College considers appropriate.

On a technical level, many will hope that Accountability Agreements bring simplicity to the FE funding system. Colleges are subject to hundreds of pages of funding rules and agreements – it would not be sustainable for Accountability Agreements to add to these and must instead reduce the compliance burden on colleges.

A continued limiting of college autonomy seems to be the current direction of travel. This must increase the chances that the ONS will deem colleges to be public bodies for accounting purposes. Such a decision from the ONS could well lead the Government to impose further restrictions on colleges, potentially further limiting colleges’ ability to act independently!

The new role for the FE Commissioner does not appear that new at all and probably brings welcome clarity for the sector. There are no new powers here for the Commissioner and most will welcome a Commissioner’s office which is increasingly providing support to colleges.