FE Loans: Going Away? On Hold? Or Just Biding Their Time?

by Mike Cooper

24+ Advanced Learning (‘FE’) Loans have been around for several years; they approach their third annual start. Last summer, BIS proposed (amongst other things) to expand their scope ‘downwards’, in age and levels.

After long silence, the government response has come. Several proposals were resolved (e.g. removing the cap on the numbers of concurrent Loans, and transferring Higher Nationals to BIS/SFA funding and thus bringing those into scope – the first got a ‘yes’, and the second got a ‘no’), but the ‘downwards expansion’ decision is delayed until the autumn’s planned Comprehensive Spending Review, to align with a major review of Adult Education.

Not long before the response was published, a Campaign for Learning seminar explored the proposals; some wider mysteries were considered, too. In fact, those matters may well be rather bigger, wider and more significant.

In a nutshell, the Adult Skills Budget has been and is shrinking – rapidly, substantially and probably for some years to come. The Treasury’s Loans budget is expanding in response – not equally, but nevertheless significantly. So: why has Loans take-up (allocations requested by and given to providers, numbers of applications and amount of spend) been so low, and so slow to grow? If indeed ‘FE loans are a failed policy’, as some like David Hughes of NIACE would maintain, then – in what way? And for what reasons?

The latest ASB reduction (average 24%) follows many years of regular and substantial cuts. Provision, staffing and other capacity has been lost; more will follow – with considerable impact on learners, provider organisations, staff, communities and others.

Howls of outrage, protest and despair about this have to be seen against an often lukewarm and sometimes downright hostile FE sector attitude to Loans, though. Since they can legitimately be used as a significant mitigating factor in many cases, this is puzzling. Here are some salient points.

• The first year’s ‘use it or lose it’ Loans budget of £130m was badly underspent, with no roll-over. Awkward – for everyone bar the Chancellor.
   
• More awkward still, a this year’s tripled Loans budget (£400m) seems likely to be even more greatly underspent this year, with a consequent huge funding loss to the sector.
   
• Not only are fewer providers offering Loans this year, the proportion of those v. all ASB-funded providers has dropped, too.
   
• Tellingly, despite most providers’ Loans facilities increasing significantly (as SFA tries to close the gap), the proportion of that against ASB allocation is actually slightly down, on average, nationally. In other words, managing Loans funding to plug provider ‘funding gaps’ is even less successful now.
   
• And perhaps most tellingly of all, contrasts between individual providers in their approaches to Loans (e.g., requesting or growing Loans facilities, sensibly adjusting provision patterns, and effective marketing/IAG) are more and more striking. Some are forging ahead, some are falling further behind.

That last point is particularly piquant. There are striking examples of imaginative, genuine success – amongst both colleges and independent training providers. Yet many other providers remain slow on the uptake, rather reluctant, or plain resistant. Overall, it seems clear that FE overall isn’t always capitalising on Loans as a partial replacement funding-stream for ASB, or taking steps to allow them to do so. They may not be a like-for-like replacement; but they’re certainly ‘not to be sneezed-at’, either.

Will FE Loans disappear altogether (as did their use for Apprenticeships)? Unlikely, considering the economy, and the fact that they’re a Labour idea just like HE loans. The picture of ASB funding decline against a rising Loans budget is both clear and stark. Even if the ‘downwards expansion’ doesn’t actually happen – still a long shot, in my book – there’s still a lot to play for.

So, why are so many FE providers behind the curve, with cries of “Learners won’t like the idea!” and “No national marketing campaign!” As the figures for, and practice of, some providers (of all sub-sectoral types) show, the former assertion is untrue, where Loans IAG is properly handled – thus also largely invalidating the latter explanation.

In short, then: Loans are here, and are growing in response to shrinking ASB. Envisioned positively, they can provide a valuable counter-measure against rapidly shrinking adult learning funds (and thus vanishing provision, staff cuts, site closures, etc.). Implemented properly, learners like them, take them up and make good use of them.

The sector as a whole needs urgently to understand this, accept it and act on it – as some signal success-stories have already done.

Mike Cooper attended the CfL seminar on FE Loans as part of the Strategic Development Network. He is also a member of the Policy Consortium, which is a Friend of the Campaign for Learning. The views expressed in this post are the author's own and do not necessarily represent those of the Campaign for Learning.