From having been, in some people’s eyes (including, er, mine), set for axing or major restructuring, BIS finds itself in an unexpectedly strong position today, with a fresh ministerial team made up of high profile and influential MPs within this majority Conservative administration. But now the new Secretary of State has been clapped in, and has given his inaugural interview to the Today programme, he will return to his desk with a series of tricky decisions to make and priorities to decide upon.
It will surprise no one, not least the ex Treasury Minister and banker Sajid Javid, that the Spending Review will dominate everything in BIS for the next few months. The IFS suggest that as an unprotected Department, BIS will need to take somewhere between 20%-30% out of its baseline spend. As Julian Gravatt has pointed out on this site, HE, FE and science between them take up 85% of BIS budget. Even if – perhaps optimistically – 70% of spend was taken out of everything else BIS did, the total of HE, science and FE would still need to have a 22% cut to make the overall Department total fall by 30%.
Complicating this further is the fact that the Conservatives have made some new policy commitments in this space. 3m more Apprenticeships, for example, are estimated by the government to cost £255m a year, and extending student loans to postgraduates will also have budgetary implications. It may be that some of these are covered by additional funds to BIS (for example the Apprenticeships are paid for by a reduction in the benefit cap to £23,000), but it risks making the overall settlement even messier.
But overall spending aside, what will the priorities be for Sajid Javid, Jo Johnson as HE and Science Minister and the returning Nick Boles with the skills brief?
Higher education
The one agenda which dominated HE in the last Parliament, undergraduate tuition fees, will be mostly silent, despite continuing noises-off from some vice chancellors and a possible hardening of Labour’s position in opposition towards a further cut below £6,000. I expect there to be limited appetite to seriously consider the overall funding mechanism of HE absent an immediate financial crunch (which is different from 30 year RAB projections) which could push HMT to demand changes. Having just recently lifted overall student number controls, the Conservatives will be reluctant to reintroduce them, but there will be interest in diverting full time £9k places into cheaper qualifications potentially delivered in FE, online, in shorter periods of time, or to an expansion of new high level technical places including degree Apprenticeships (more below).
This shift will be informed by a radical expansion of data for students, including employment data disaggregated down to individual courses at universities. The Conservatives will also increase some of their rhetoric against what they see as lazy or archaic practices in some universities not responding to students as consumers.
Aside from fees, the biggest discussions will be over international students and the UK’s place in the world. I expect the university sector to mount a vigorous campaign to keep Britain in the EU when the referendum comes in 2016 or 2017. And there will be continued robust discussions on what numbers of foreign students universities can take and the length of time they can stay in the UK after graduation. We may finally see the much-delayed HE bill tidying up elements of regulation, and which could see a greater role for alternative and private universities, though BIS institutionally have cooled on these significantly since the PAC inquiries into value for money and student support funding at some of these.
Science
The UK spends around £4.6bn a year on publicly funded science, distributed via the research councils. This has been relatively protected in the last Parliament, with revenue spending held at flat cash and regular increases in capital, but it remains below the G8 average. The biggest thing that science has in its favour is that the Chancellor is a big fan of spending money on high visibility projects (google previous Budgets for ‘graphene’ or ‘supercomputers’ or ‘rockets’). The only explicit manifesto commitment is around the ongoing Nurse review of research councils, but I’d expect the government to also think hard about how science funding can be deployed more broadly outside universities into wider regional economic partnerships and be used to support wider economic growth and job creation.
FE and skills
Just before the last election, BIS launched an interesting looking consultation on a ‘dual mandate for adult vocational education’, covering both high level professional and technical education and second chances for those who have not succeeded at school. It is likely that the outcomes of this will be crucial in shaping what the FE system looks like. At present, immediate student number pressures and financial incentives tend to tilt many colleges towards the latter, and recent policy announcements such as the Tech Bacc, the resitting of GCSEs for those not achieving a C, and the requirement to study maths to 18 if on a vocational pathway will further extend that pressure.
I would expect BIS to make countervailing policy announcements to support technical and professional pathway, including revitalising Level 4 and Level 5 qualifications, supporting more degree Apprenticeships (and perhaps even appropriating Liam Byrne’s ideas of Technical Degrees). We will also see as noted above a significant continued expansion of Apprenticeships – where the government may try to curb the growth in older workers and reorient it towards younger starts – as well as the moving of almost all post 19 FE courses to a loan system. Government will continue to try and secure employer engagement either through funding or approval of qualifications, and the myriad of work underway via Trailblazers, sector skills councils, industrial partnerships and the like will continue, which should please both BIS and the sector. But as well as this sectoral approach, it isn’t beyond the bounds of possibility that the entire skills budget could be taken out of BIS and given to new city regions and combined authorities like those being set up in Greater Manchester, as a demonstrable commitment to devo max and skills being linked to economic growth.
The FE and HE sector therefore finds itself in perhaps its strongest position within Whitehall and within political circles since Peter Mandelson became BIS’ inaugural Secretary of State. If it can surmount the Spending Review, we can expect a more rosy future.
3 million more apprenticeships for £255 million looks like a bargain – at £85 they would each be about an afternoon in length. In any case its not 3 million extra – just an ambition to reach 3 million over 5 years which is in itself an ambitious target given that anything that looks like an apprenticeship has been in decline for the past couple of years. The sad fact however is that BIS will continue to throw large sums of money in a fairly old-fashioned statist way chasing a popular soundbite & the price will be paid by courses that ordinary people choose for themselves
The £255 million is the figure quoted in October 2014 when the promise was made to remove housing benefit from 18 to 21 year olds on JSA and to reduce the welfare cap to £23,000. I don’t remember seeing any costing to demonstrate that £255 million would be enough to fund a 50% expansion in numbers. Government spending on apprenticeships in England is currently £1.6 billion so it will be probably be necessary to lever in other funding – either from the Treasury or from employers or perhaps from local government. Option 4 would be a return to apprenticeship loans which were introduced in September 2013 and cancelled in January 2014 so this would need a U-turn on a U-turn. A Z-turn?