Skip to main content

Further education and skills sector: implementing the Simplification Plan

A plan by the Department for Business, Innovation & Skills to reduce complexity and administrative burdens in the further education and skills sector, despite improving some processes, has had only limited impact on providers’ costs, according to a report by the National Audit Office.

Education providers receive around £7 billion of funding each year, mainly through the Department for Business, Innovation & Skills, the Department for Education and the Department for Work & Pensions. This supports around 4.2 million learners. Funding is complex, because different bodies fund different types of learner.

In 2012, in the light of reports by the National Audit Office and Public Accounts Committee, the Department for Business, Innovation & Skills developed a plan to simplify the administrative burden on the sector. The National Audit Office had estimated that the cost to the sector of complying with funding, qualifications and assurance requirements could be around £250 million to £300 million a year and that substantial savings could be made by reducing bureaucracy. In today’s report, the National Audit Office estimates that changes subsequently overseen by the Department have produced quantifiable savings of only around £4 million a year.

Today’s report finds that the Department for Business, Innovation & Skills has not done enough to streamline funding and assurance arrangements. Much of the cost to providers stems from having multiple funding routes. The two main funding bodies, the Skills Funding Agency and the Education Funding Agency, apply different funding principles, potentially to learners on the same course.

The Department for Business, Innovation & Skills does not know the overall cost to providers of dealing with funding and assurance requirements, and therefore cannot say whether compliance costs are rising or falling. The Department has also done little to estimate the likely costs of complying with forthcoming changes, which may make funding and accountability arrangements more complex.

Education providers acknowledge that there have been some positive steps to streamline processes, but most providers felt that the overall administrative burden was either worse than, or no different from, that experienced before the Simplification Plan.

 

“We and the Public Accounts Committee have highlighted before the over-complexity in the further education sector and the unnecessary burden this places on training providers. This diverts money away from students. Despite some progress there is still too much red tape. While initiatives to reduce the levels of bureaucracy have generated some good ideas, putting them into practice has not significantly cut the cost incurred by hard pressed providers. The Department for Business, Innovation & Skills, working with the Department for Education, needs to consider more radical ways to simplify complex funding arrangements.”

Amyas Morse, head of the National Audit Office

Notes for Editors

£250m–£300m

Our previous (2011) estimate of the cost to providers, to comply with funding, qualifications and assurance requirements

42

Discrete actions in the 2012-13 Simplification Plan

£4m

Estimated sector savings from those Simplification Plan actions whose impact can be quantified

4.2 million

People learning in the further education and skills sector annually

£7 billion

Annual funding from the two main funding bodies

10

Bodies given actions to implement in the 2012-13 Simplification Plan

219

General further education colleges in England

689

Publicly funded commercial and charitable providers

1. Providers receive around £7 billion of funding each year, mainly through the Department for Business, Innovation & Skills (BIS), the Department for Education and the Department for Work & Pensions. This supports around 4.2 million learners. The Department for Education funds 16- to 19-year-old students via the Education Funding Agency. BIS funds learners aged 19 and over through the Skills Funding Agency and higher education students through the Higher Education Funding Council for England. Additional funding is available from the European Social Fund, which is administered jointly by the Department for Work & Pensions and BIS. From 2015 onwards, local enterprise partnerships will begin to take responsibility for allocating local capital budgets and the latest programme of European monies.

2. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained by using the relevant links on our website.

3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 820 employees. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.1 billion in 2013.

PN: 67/14