Purpose

Proposed decision
 
The Cabinet Member for
Education and Skills is asked to agree to:
 
(a)      APPROVE the alteration to
the CLS delivery model to align the council’s approach to fit
within the Education and Skills Funding Agency (ESFA) funding
arrangements coming into force from August 2024.
(b)      DELEGATE authority to the
Director of Education and SEN to design and implement the staffing
and asset utilisation model to support the reforms imposed by the
changes made to the ESFA funding contract.
(c)      DELEGATE authority to the
Director of Education and SEN to take other relevant actions,
including but not limited to finalising the terms of and entering
into required contracts or other legal agreements, as necessary to
implement the decision.
(d)      DELEGATE authority to the
Director of Infrastructure, in consultation with the Deputy Leader
and Cabinet Member for Finance, Corporate and Traded Services, to
take other necessary actions, including but not limited to entering
into contracts or other legal agreements, as required to implement
the decision.
 
Reason for the decision
 
Following funding
changes by the Department for Education (DfE) / Education and
Skills Funding Agency (ESFA), which will come into effect from
1st August 2024, KCC Community Learning and Skills (CLS)
must undertake significant reform if it is to continue to deliver
vital core skills to the residents of Kent and remain within the
new terms of the funding contract.
 
While much of the
provision will remain the same, it is expected that the reforms
would alter some of the types of courses offered, the customer base
and the delivery locations particularly for the Creative and
Personal Development components.
 
A decision is required in response to the Department for Education
(DfE) reforms in relation to further education funding, which will
require a change to KCC CLS service business model.
 
 
Background
 
Community Learning and Skills (CLS) is KCC’s internally
commissioned department to deliver Education and Training to adults
and young people over 16. It delivers core subjects like English
and maths, and has
a long history of a creative arts curriculum as well as languages,
fitness and humanities. CLS are responsible
for delivering the Education & Skills Funding Agency Adult
Education Budget (AEB) on behalf of KCC, which support the goals
and objectives of Framing Kent’s Future. 

 
CLS
provide and secure learning opportunities for Kent’s
residents which:

·      
engage and build confidence, preparing them for
further learning and employment,

·      
improve essential skills in areas such English,
ESOL, maths, digital skills,

·      
equip parents/carers to support children’s
learning,

·      
improve health and wellbeing to develop strong,
integrated communities.
 
From the new academic
year, starting on 1st August 2024, the DfE/ESFA are changing the
AEB to become the Adult Skills Fund (ASF) which introduces
significant alterations to the funding rules and how the funding
should be utilised.
 

These reforms refocus how funding is
used with the new focus being to reskill and upskill adults for
work, and to move funding away from courses taken purely for
leisure / pleasure purposes. The reforms will benefit learners
through the stronger link between the training available to them
and the employment opportunities in their local area. New Annual
Accountability Statements for grant-funded FE providers, like
KCC/CLS, requires them to outline their plans to contribute to
local and national skills needs.

 

Other key points to note from the
funding reforms:

 

·      
Learning for leisure and pleasure is no longer
fundable or to be subsidised via the Adult Skills
Fund.The courses impacted
include many of the creative (art / crafts) and language
courses.

·      
Learners classified as repeat learners (learners who
have attended the same type of course, completing a full level)
will be expected to progress to the next level, move to a different
type of course or move into ‘self-organised learning’
which may be at an increased cost to the learner.  This
accounts for around 41% of KCC/CLS current learners.

·      
All learning by an individual must be categorised
into a ‘Primary Purpose’ from one of the following
seven areas: Engaging and/or building
confidence; Preparation for further learning; Preparation for
employment; Improving essential skills including English, ESOL,
Maths and Digital; Equipping parents/carers to support children's
learning; Health and well-being; Developing stronger
communities.
 
KCC CLS is proposing
to make changes to its delivery model to ensure
itmeets contractual obligations and gives
even more focus to Local Skills Improvement Plan (LSIP) priorities
around skills gaps, and local needs. This would also include
qualification and non-qualification courses leading towards working
in Creative industries, as well as for example, language courses to
support work in employers who require bi-lingual skills e.g. Border
Force. Whilst learning for leisure/pleasure would not be included
in this option, Creative and Fitness courses as a vehicle to
support health and wellbeing would be delivered, and Creative and
language courses would still be included for an individual for a
defined period, as they sit within ESFA funding rules. Examples of
the learning aims possible would be provided in the report
presented to Cabinet Committee.
 
Sub-contracting
opportunities will be explored where CLS do not have existing staff
base, for example, particular vocational sectors.
 
This is
the preferred option, on the basis that this option holds fewer
financial risks for KCC long term and will also enable an undivided
focus on achieving the KCC strategic aims and those outlined within
the ESFA contract.
 
 
Options (other options considered but discarded)
 
Option 2
– Contract plus Learner Funded Business
Unit
This would be as option 1, alteration of our
business model to meet the terms of the new contract, but with the
addition of a commercial unit in the form of Learner Funded
Business Unit (LFBU). The LFBU could help replace the offer for
learners whose courses are now excluded from ESFA funding. These
learners would pay for their courses without recourse to
concessions or discounts. KCC CLS would deliver in each district
according to identified demand and building
suitability. Estimates for fees are variable, but biggest increases would be
for specialist courses requiring specialist equipment at circa 100%
higher than the equivalent subsidised course
rate.
 

Option 3 – Close KCC CLS
This
option has two variables, as KCC could a) return the contract to
DfE/ESFA or
b)
commission/sub-contract delivery to external providers. With
‘b’, KCC would still, as the contract holder, retain
the responsibility for quality, data, compliance, OFSTED
inspections etc.
 
Option 4 - Do
nothing:
CLS
would continue with the present offer including courses for
learners which will be precluded from funding but with equivalent
course pricing structures as now and in the buildings presently
occupied.
 
 
 
How the proposed decision supports

Framing Kent's Future - Our
Council Strategy 2022-2026
 
The changes will
support KCC’s ambitions by:

focussing on demographics within local communities to deliver
improvements in adult educational attainment, skills and employment
rates and economy.
forging a greater relationship and joint working with Public
Health to improve the health of the population.
supporting KCC Infrastructure in strategic planning of new
housing developments to ensure the provision of education is
available at the point of need.
supporting rural communities in their access to
education
providing opportunities for people to develop their confidence
and ability to build a stronger community.
reviewing the CLS occupied KCC freehold estate and relocate to
more carbon efficient premises.
offering more provision within local communities, thereby
reducing carbon emissions through customer travel.
continuing to deliver the highly successful Family Learning and
Response programmes which support many of the most
vulnerable.

How the
proposed decision supports Securing Kent’s
Future
 
Implementing the
proposals will contribute towards Objective 3 of securing
Kent’s future:

- The transformation of the service, in line with
the requirements of the grant funding and in response to changes in
Government priorities, will aim to return the service to a
self-funded model of delivery within 3 years and achieve financial
sustainability in the longer term (recognising there will be a
short-term pressure whilst this transformation takes place). The
proposed model of delivery was considered the most cost effective
option over the next 3 academic years. 

 

Financial Implications
 
 
The proposal involves changing
the delivery model to adhere to the changes in funding. A
restructure would be required which would result in
a financial pressure to the Council in the region of
£0.6m - £0.9m in 2024-25 financial year whilst the
service adjusts to the new delivery model, with the expectation
this pressure would be reduced in 25-26, and the service returning
to a self-funded model by 2026-27 
 
 
It is anticipated there will be
an initial reduction of enrolments but there would be future growth
across the three years to mitigate the risk of contract
reduction.
 
This model of delivery would
still expect KCC CLS to seek opportunities to attract additional
funding and additional fee income, through delivery of bespoke
courses, for example to employers. There
would be some fee income (earned outside of ESFA contract, where
courses/need aligned with the Primary Purposes) and estimates circa
£1.3m. Based on this assumption and the occupation of
buildings suited to the new offer, it is anticipated that KCC CLS
would be returning to a small surplus within three
years.
 
The Revenue Budget for 2024-25,
agreed by the Council in February 2024, expected CLS to be fully
funded from a combination of external grants and fee income with
the delivery of a small surplus of -£0.1m to support wider
indirect overheads. When assessing the different options for the
future of CLS, due to the estimated impact of the government
funding from August 2024, it is likely there will be a short-term
financial pressure on this service during 2024-25, this will be
reported in the financial monitoring report presented to Cabinet.
The Directorate will look to see what mitigating actions could be
taken to offset this possible overspend. 
 
Staffing
 
There will be an impact to the
CLS staffing base and particularly for tutors in the biggest
impacted areas of Creative/CPD courses.There would be no
implementation of staff changes prior to 1st August 2024, and
headcount changes would not likely take place until the end of the
year. This would add financial pressure which will be managed
through a programme of activity to best utilise paid
hours.
 
Property Assets
 
A reduction in set
property assets will be vital for CLS to return to financial
viability. Currently the dedicated fixed assets represent an annual
revenue cost of over £2m in addition to the ad hoc facilities
charges. Moving forward, under the preferred option, the service
would require more short-term community-based venues that will
alter based on the areas of most need. Moving to this more agile
model of delivery would free up space to be considered for other
KCC uses, and if the assets were surplus to KCCs requirements, they
could return a significant capital receipt and also avoid the
longer-term maintenance costs of those assets.
 
Equalities implications
 
An EqIA has been undertaken and will continue to be
reviewed through the decision process. The EqIA has identified
that the biggest, and most detrimental impacts to service users in
the long term would have been from Options 3 (close the service or
sub-contract provision) and Option 4 (do
nothing).
Options 1 and 2 also
identify impacts on those with protected characteristics these
being:

·      
Potential reduction
to the service offer, particularly in learning for leisure with
mitigation provided by either the introduction of a Learner-funded
offer and/or signposting to alternative learning providers and the
promotion of self-organised learning.

·      
Potential reduced
access, particularly for those who may, because of their protected
characteristic, have limited financial means. There is limited
mitigation by access to funding via tailored learning.

·      
Older people may be
more greatly affected because of their proportional representation
within CLS and because they most often use classes for leisure
purposes. Mitigation would be provided by either the introduction
of a Learner-funded offer and/or signposting to alternative
learning providers and the promotion of self-organised
learning.

·      
Those identifying as
women may be more greatly impacted, again due to the proportional
representation. For 23/24 thus far, participation is 78% female,
22% male.
 

Decision

As
Cabinet Member for Education and Skills, I agree to:
 

(a) 
APPROVE the alteration to the CLS
delivery model to align the council’s approach
to fit within theEducation and Skills Funding
Agency (ESFA) funding arrangements coming into force from August
2024.

(b) 
DELEGATE authority to the Director of Education and
SEN to design and implement the staffing and asset utilisation
model to support the reforms imposed by the changes made to the
ESFA funding contract.

(c) 
DELEGATE authority to the Director of Education and
SEN to take other relevant actions, including but not limited to
finalising the terms of and entering into required contracts or
other legal agreements, as necessary to implement the
decision.

(d) 
DELEGATE authority to the Director of Infrastructure, in
consultation with the Deputy Leader and Cabinet Member for Finance,
Corporate and Traded Services, to take other necessary
actions, including but not limited to entering into
contracts or other legal agreements, as required to implement the
decision.