Often the source of negative media coverage, the Adult Education Budget (AEB) was recently back in the news for more positive reasons: the Government’s announcement of increased funding flexibility for adult learners on low wages (i.e. those earning less than £15,730 per year). But what impact will this have on cities across the country?
A one-year trial will increase eligibility by enabling adults on low wages to access AEB funding to help them acquire Level 2 qualifications (equivalent to good GCSE grades). The aim of this is to improve social mobility and promote life-long learning. Under the current system, only unemployed adults and some specific categories of young people are eligible for full funding. But with the new trial, which will run for the funding year 2018-19, this will be expanded to include most individuals earning less than the Social Mobility Commission’s low pay threshold (£8.07 per hour).
This increased focus on adult learning is urgently-needed, in the face of rapid and ongoing changes in the labour market. Two-thirds of the UK’s predicted workforce in 2030 has already left full-time education, yet most of them are likely to change their career multiple times during their lives. As we examined in a previous blog, there is a positive correlation between low wages and jobs at risk of displacement, and it is welcome to see this new announcement targeting precisely those that need it the most.
And while this is good news for the whole country, it has the potential to have an even more positive impact in places in the North and Midlands. If we look at the share of jobs earning below the £8.07 threshold in 2016 (see map below), the proportion of people potentially eligible to receive full funding under the new AEB rules is much higher in cities such as Wigan and Doncaster. And not only are people in these places more likely to be on low wages, they are more likely to be low-skilled — and are therefore better placed to benefit from the types of courses offered within the Adult Education Budget, especially in relation to Maths and English.
The trial will be monitored and evaluated, and — if successful — will likely be continued past 2019, when the increased flexibility over the AEB will be passed on to combined authorities (who will, by then, have devolved control over this budget). Although the lack of engagement from the Department of Education regarding devolution has been a source of frustration for the metro mayors — as Andy Burnham recently highlighted in his contribution to the Public Administration and Constitutional Affairs Select Committee — this increased flexibility would give combined authorities further powers to improve the skills of their workforce.
But while this is a welcome step towards helping people at the bottom of the labour market, the initiative should also factor in geographical differences in terms of living costs and pay. For example, a revised threshold for London would have a more meaningful effect in the capital, where inequality and levels of poverty are high. In this sense, it was great to hear London’s deputy mayor, Jules Pipe, at the launch of London First’s Employment and Skills Commission report indicating the mayoralty’s intent to push the London’s threshold up to the city living wage (£10.20) in order to reflect these geographical differences.
Moreover, while the new initiative will help to address the financial barriers to life-long learning, improving and increasing employers’ engagement on these issues will be vital too. Opportunities to up-skill and retrain should be at the core of every employee’s experience, and one way to do so is by allocating them a number of hours to dedicate to training each year.
The Danes are working in this direction as part of their ‘active labour market policy’ which was introduced in the 1980s and which also included free training for everyone in priority areas such as health and social services and active engagement from employers in terms of training and funding. Our sister organisation, the What Works Centre, has already carried out a policy review of what works with regards to employment training. The next step for the Government should be to learn from that — and from the example of other countries — and then to develop a more comprehensive plan for life-long learning in the UK by working in close coordination with cities.
In the autumn, we will be publishing new research looking at how demand for skills is changing in the UK cities, and the implication this has for policy. Watch this space for updates.