The full transcript of the Minister's address on 28 November at the IHE Annual Conference 2023:
Hello everyone. I’m sorry that I can’t be with you– but I’m delighted to have the opportunity to speak to you today.
IHE members are among the most innovative providers in higher, and further, education. Much of your provision has grown out of industry, from the ground-up. Where no one was providing the training needed, you set it up yourselves. Your diverse specialist courses and degrees appeal to groups that other industries and institutions find hard to reach. A far greater proportion of your undergraduates are over 30 compared to traditional providers. Many of your students are returning to education mid-career, to gain practical, job-applicable skills. The reach and breadth of IHE provision is incredible. From Sotheby’s to the National Motorsport Academy, you develop world-beating courses to equip the skilled professionals of today and tomorrow.
And importantly, your work seeds further innovation. I’m told over 90% of members are SMEs, and that your graduates often go on to work for similar small, specialist companies – or found one themselves. This is so important for creating growth and diversifying the economy. But it also distributes opportunities wider, demonstrating that workplace training is not just something done by big business.
We live in exciting times for vocational and technical education, with the government investing £3.8 billion over this parliament in a skills revolution to drive economic growth. Revitalising skills education is about creating a Ladder of Opportunity for people to climb to improve their prospects. Everyone in this country should be able train to gain sought-after skills, which in turn boost their career and earning power. This is something I know really matters to IHE members - providing a path for people to progress in the work they are passionate about.
Many of your institutions emerged from industry to serve training needs not being met elsewhere. Being market-driven gives IHE members a unique ability to respond to local needs. This bespoke insight makes you vital partners in the new Local Skills Improvement Plans, which I’d urge you to get involved in. Supported by the £165 million Local Skills Improvement Fund, LSIPs bring together businesses, providers and local leaders to help technical education and training to respond better to the local labour market.
It’s really important that IHE members lean-in to make sure their industry’s needs are not overlooked or squeezed-out by louder voices. The Skills and Post-16 Education Act that underpins LSIPs places duties on specific providers to contribute, including Higher Education Institutions. But regardless of whether you’re covered by the duty, I would encourage all providers of post-16 technical education to engage in the process. This will help to ensure that the technical training delivered is responsive and relevant to the locale, and, crucially, delivers good employment outcomes for local learners.
While I’m focussing on IHE members’ unique insights into emerging skills, I want to thank you for being among the first to work with our new Unit for Future Skills. Announced in 2022, its purpose is to improve the quality of jobs and skills data. That way everyone can be better informed on which courses lead to great careers - replacing outdated assumptions with real data.
The UFS works proactively, across Government and beyond, to make its jobs and skills research available to all. That includes better data on skills gaps. I have lots of anecdotal evidence of companies telling me they can’t get the staff to fill skilled vacancies. The Unit is building an accurate picture of where those gaps lie. This will help decision-makers inside and outside government to move resources to where they’re needed, and invest in the right skills locally and nationally to support economic growth.
As many of you will know, the Lifelong Learning Entitlement is coming in 2025. I think it is difficult to overstate how much this will transform further and higher education. It will place financial choice in the hands of many potential new students, allowing them to consider courses they could not previously afford to take, at a pace that suits them.
The entitlement loan will be equivalent to four years post-18 education (£37,000 in today’s fees) to use over a working lifetime. It will be available for full years of study at higher technical and degree levels - as well as, for the first time, shorter modules of high-value courses. And these courses can be provided by colleges, universities, or specialist providers such as yourselves.
I believe the LLE will present a whole new way to think about post-18 education. People will be able to build qualifications over time, using both Further and Higher Education providers. They will have real choice in how and when they study to acquire new life-changing skills. Like getting on and off a train, learners will be able to alight and board their post-school education when they wish, rather than being confined to a single ticket. As you’ve seen from the training you provide, learners gain so much from the opportunity to capitalise on their potential. Sometimes they have better insight into that potential later on in life, when they may already have other commitments. The LLE will allow them to fit study around work and family, allowing them to retrain as both their circumstances and the labour market changes.
As you’ll know, we’ve previously set out that the OfS will regulate all providers offering LLE-funded provision. Following extensive consideration and to give unregistered providers sufficient time to prepare, the Government has decided to ask the Office for Students to consult on introducing a third category in 2027. This will mean there is no transitional period between 2025-27, and instead we will ask the OfS to introduce a full regulatory approach for any third category from 2027-28.
To be clear, to support this change – we are extending Level 4-6 Advanced Learner Loan funding until 2027. This will apply to unregistered providers delivering those Advanced Learner Loan-funded courses designated for LLE funding. It will allow more time for providers delivering these courses to make a decision on whether to register with the OfS in order to access the LLE. For providers that do wish to deliver LLE funded provision from 2025, they will be able to apply to register in either of the existing OfS categories at any stage.
My priority is to give the LLE the reach it needs to effect positive change, so that as many students as possible can benefit from high-quality flexible learning to improve their job prospects. With this in mind, we will set out further details on any future third category next year.
Higher Technical Qualifications are at the forefront of our drive to substantially increase the number of people getting qualified at this level. We have reformed these courses to give employers a voice at the heart of the skills system, by informing the occupational standards that HTQs are assessed against. This gives students confidence that choosing a quality-marked HTQ is a good investment in their future prospects.
Skills at this level lead to high-quality, sustainable careers in areas including nursing, cybersecurity, construction and lots more. Earlier this year I was delighted to announce 66 new courses have now been approved, making a total of 172 HTQs that span key sectors. And we are also delivering over £100 million of funding to support delivery across the country, making sure that students get the best possible support. HTQs will be a key part of the Lifelong Learning Entitlement offer, with HTQ modules being amongst the first available in 2025.
I know that IHE members have some concerns about the powers teaching institutions need, in order to award HTQs to their students. Unlike other student finance-linked provision, HTQ providers are able to deliver them in partnership with an Ofqual-registered awarding organisation. I'm keen to involve IHE members in our HTQ reforms, and have asked my officials to reach out to your organisation.
As with the LLE, my priority is to reach as many learners as could benefit, whilst ensuring that course quality remains high. Only this year we changed the Student Support regulations, so that HTQs provided by an Ofqual-regulated awarding organisation are now eligible for student finance. This, I believe, strikes the right balance between high quality and accessibility. With the advent of the LLE, we will continue to review the situation and listen to the sector on how best to proceed.
I know members are also awaiting our response to the House of Lords Industry and Regulators Committee Inquiry into the Office for Students. Its recommendations point to feedback I have received on the amount of regulation you have to contend-with from arm’s-length bodies. This is stifling new provision – something we really want to build. I also recognise the
importance of diversity in the HE sector, which means better support for smaller providers such as yourselves.
We have now submitted our response to the House of Lords, which they will publish in due course. While I do not want to prejudice publication, I can say that we have considered their recommendations carefully, seeking ways in which our shared goals can be achieved. I made clear to the Committee in my evidence that one of these goals was to continue to reduce regulatory burden and duplication in the HE sector. I am determined to do this, building on steps taken in recent years. This includes hosting the first Provider Data Forum last month for further education colleges who provide HE, to address specific data burden and duplication issues. A longer-term piece of work will follow next summer, to identify the full scope of data burden across HE. Its findings will allow government to act more quickly to reduce unnecessary regulations and maximise cost-reduction to the sector.
None of what’s been achieved in skills education - or our ambitious plans for the future - would be possible without your collaboration.
Thank you, and I hope you enjoy today’s conference.