Tag Archives: the Treasury

Taxing our schools

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What started out as a ‘good idea’ has now become a tax on schools, and especially primary schools: at least in Oxfordshire. The apprenticeship Levy doesn’t seem to work as intended, as the following information provided by the Council to a Lib Dem question clearly shows.

The Apprenticeship Levy started in May 2017.

The levy is funded via a monthly charge against our payroll bill of 0.5%. This equates to approximately £100k a month. The money charged to our payroll is put into an OCC digital apprenticeship account and is drawn down by apprenticeship training providers on a monthly basis. For example, if 1 apprenticeship costs £4,800 and has a duration of 2 years, the provider will draw down £200 a month for 24 months.

Each month’s levy is treated as a separate pot of money with the oldest pot of funding being used first.   The first allocation of £100k (May 2017) was used to pay providers until it was exhausted. For example, if our total training bill was £10k a month, it would take 10 months to use the first month’s levy. In the meantime, we would have accrued a further £900k over the following months which would not have been spent as there was sufficient in the first month’s pot to cover the costs. Once the first month’s levy was spent, future expenditure was taken from month 2 until this was exhausted and so on.

Since May 2017, Oxfordshire has accrued a total of £4,047,490 to spend on apprenticeships.

However, Oxfordshire can only keep the accrued levy for 24 months. So, we had until May 2019 to spend May 2017 allocation, June 2019 to spend June 2017 allocation etc.

Any money remaining in a pot that is more than 2 years’ old is returned to the treasury (i.e.The Government at Westminster – my addition). This means that any funding added to our levy pot before October 2018 and not spent was returned.

Our first repayment was September 2019. To date £611,788 has expired and has been repaid to The Treasury. This equates to approximately 37% of the levy we accrued between May 2017 and October 2018.

Levy accrued between November 2018 and October 2020 has not yet reached an expiry date so we have approx. £2,326,543 available to spend.

Spend on apprenticeships is increasing every year which indicates that the level of levy we will need to repay should reduce over the coming months and years.

Levy Spend per calendar year was:

 2017£18,225.54
2018£144,403.85
2019£435,201.48
Jan – Sept2020£511,227.38

It is anticipated that 2020 final spend will be approx. £700k as we have recently started a number of degree level apprenticeships that will draw down large monthly amounts.

For information, school contribution and spend for 2019 is:

  • Contribution to the levy: £405,596
  • Spend: £232,858

The county team continues to promote apprenticeships (both employed and CPD) where ever possible throughout the organisation whilst recognising further work needs to be done.

If this lack of spending the cash raised by the levy from schools, and MATs have the same problem, is common across the country then it is time to seek reform.

We need more apprenticeships, so making use of the cash to train teachers would be one possible change. Creating two non-teaching posts with substantial training elements might be another low cost approach that might also help reduce unemployment if linked to other programmes.

Whatever approach is taken, schools should not see any of their hard fought for cash being returned unspent to government. Just as they should not now be wasting cash on expensive recruitment advertising.

To ask for more funds must run alongside making the best use of the cash already in the system.

Action for local government: Apprenticeship funding needs radical change. If the Government increased Levy flexibilities, including allowing public pooling of funds, Treasury pausing its expiry policy, and devolving non-levy funding, local government could support local businesses in a much more targeted and coherent way, including by allowing them to target sectors, address local supply / demand side issues, widen participation to disadvantaged groups and specific cohorts. A proportion could be spent on pre-apprenticeship training / administration of programmes. This could support the development of the Opportunity Guarantee. Alongside these measures, we call for a levy payment holiday (up to 6 months) for businesses struggling with cashflow problems and allow employers to collaborate on transferring / pooling. DfE should also pause the switch-off of frameworks until March 2021.

Portents on pay

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Will today’s announcement on teachers’ pay end the shortage of teachers in some of our schools? Not this year, as the announcement has come too late to affect recruitment on to teacher preparation courses, except possibly at the margins. The latest UCAS data should appear on Thursday and will provide a good guide to the supply side of the teacher labour market in 2019, at least as far as new entrants are concerned. A decent pay settlement may tempt back some leavers from the profession, but, again, probably not enough to make any real difference.

The big change in response to the pay settlement may come on the demand side of the labour market equation. Let’s assume that the Treasury won’t fully fund the pay settlement, leaving either the DfE to find more cash or schools to decide how to make use of the cash they have. This could mean a reduction in demand for teachers next year as a funds are directed towards paying the remaining staff more and those leaving are not replaced.

In passing, it is worth noting that leaving the outcome of the Review Bodies Reports until July is really unhelpful in terms of making meaningful budgets for both academies with their new financial year starting with the new school term and even local authorities where maintained schools still operate their budgets on the April to March financial year.

Since academies and free schools can set their own pay and conditions, it is entirely possible that some schools or MATs might choose to ignore the Pay Review Body Report and try to go it alone, by not paying the proposed increase. The Secretary of State has to approve the recommendation of the Pay Review Body – not doing so seems highly unlikely, especially if the pain can be passed to schools to deal with in human terms.

However, this will be the first big test of the Secretary of State. How far will he be able to stand up to the Treasury and gain any extra cash for schools? It is worth recalling that he was a member of the Education Select Committee that published the report: Great Teachers: attracting, training and retaining and best, so he is fully aware of the arguments about teacher supply. Indeed, I recall providing both written and oral evidence to the Committee during their deliberations on the subject.

Indeed, it is worth recalling this exchange I had with Mr Hinds during the oral questioning in November 2011 when teacher supply was less of a concern than it is now.

Howson … society as a whole has to decide where it wants to put teaching in terms of competition for graduates. (Q148 answer)

Q149 Damian Hind: Gosh – most people would say that teaching should be very near the top. McKinsey, BCG and Goldman Sachs can fight their own battles, but in society we want teaching to be very high up the list of priorities, don’t we?

Professor Howson: Then this Committee must recommend the Government takes actions to achieve that. As someone has already said, pay may well be one of those actions.

HC 1515-11 published 25th April 2012

Regular readers of this blog will know what has happened to both teachers’ pay and teacher supply since 2012.

 

What’s happening to apprenticeships?

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This blog doesn’t often venture into the world of further education and training. It is a specialist area that is generally best left to those that know more about it that myself. However, I was struck by the data on apprenticeships published by the DfE yesterday, amid a range of other statistics. https://www.gov.uk/government/statistics/apprenticeships-and-traineeships-july-2018 We are not, of course at the end of the statistical year for this dataset, but the fourth quarter is usually the quietist. As a result, the August to April data can be regarded as a relatively safe verdict on the direction of travel for apprenticeships.

It might have been thought that the introduction of the Apprenticeship Levy in April 2017 would have provided a boost for the number of new apprentices, as firms and public bodies sought to access their contributions to the Levy and the additional government support on offer. Sadly, that doesn’t seem always to have been the case. I know this from my continual questions to Oxfordshire County Council about the use, or lack of use, of the approaching half a million pounds collected from schools within the county. Sadly, if not used after two years the money goes to the Treasury coffers and not back to the schools from whose budgets it was collected: it is not as if schools have cash to spare and taxing them like this is bad government on a big scale.

Anyway, back to the data. In the period August 2017 to April 2018, some 753,300 apprenticeships were recorded. This is down from the 870,000 recorded in August t2016 to April 2017. The fall in under nineteens was from 689,300 to 592,700. Even accepting the fall in the size of the age cohort, this looks like quite a large fall in the number of young people on apprenticeships since the Levy was first raised in April 2017.

This fall is conformed in the data on new starts to apprenticeship, where the numbers seem even more dramatic, even after allowing for the possible late registration of some apprenticeships. As the DfE Bulletin notes: 290,500 apprenticeship starts have been reported so far in 2017/18, compared with 440,300 and 384,500 at this time in 2016/17 and 2015/16, a decrease of 34.0 and 24.5 per cent respectively. This doesn’t seem like a very good testimony to the creation of the Apprenticeship Levy. Surely, it was designed to increase participation and offer a route for young people that might want to earn and learn rather than pay and study at university. Under 19 starts are down in the nine month period from 122,800 to 90,300 across all of the apprenticeship routes. Even allowing for the change in size of the cohort, this is a disappointing statistic.

The drive to increase apprentice numbers has stalled. The 2017/18 numbers look being the lowest yearly total since the present record set was first collected in 2011/12. At a time when skilled labour is needed across the economy, either young people are turning their backs on apprenticeships in favour of higher education or the new system isn’t working, but is acting as a re-run of the Selective Employment Tax of the 1960s and sucking cash out of employers ad their business to eventually provide a windfall gain for the Treasury. Either way, a rethink seems necessary.

Time to smell the coffee

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A consortium of organisations involved in preparing postgraduates to become teachers have written to the Secretary of State about the state of teacher recruitment and made some sensible suggestions for steps that could be taken to attract more people into teaching. You can read the contents of their letter at https://www.ucet.ac.uk/wp-content/uploads/2018/04/DHindsNASBTTUCETTSCletter-FINAL.pdf

All the suggestions are sensible, and I would go even further and ask for a return to a training salary for all on postgraduate ITT courses. As regular readers know, I don’t believe it is equitable to offer a salary to trainee army officers at Sandhurst and not trainee teachers. I also think a trainee teacher on a PGCE is working just as hard as one on Teach First and has sacrificed the right to earn. Even if teachers were guaranteed a job at the end of their training, assuming they met the standard for qualification, I still believe that they should be paid a salary. The fact that there is no guarantee of a teaching post just places all the risk and financial burden firmly on the trainee.

As I have written on this blog before, the laws of economics tell us that you can impose what conditions you like where demand exceeds supply and then see how demand is affected. When supply exceeds demand, as it now does in the provision of training places (PE and history excepted), then looking to see what can be put in place to stimulate demand is a more sensible move. The letter above recognises this truth. The DfE has yet to convince the Treasury, a Department always concerned about the dead weight effect of paying those that would have trained anyway. With such a large number of trainees the figure for revenue spending seems massive, but compared to say purchasing a single armoured vehicle or helicopter it is not out of line with the size of the overall education budget.

However, as the National Audit Office pointed out, improving retention is the best way to reduce training costs, as you then need to train fewer new entrants. I sense some of the suggestions to the Secretary of State are also aimed at helping retention. Early entrant retention doesn’t seem to be a big issue, it is more retention after 5-7 years that is now the concern.

Interestingly, entry into the profession and retention often doesn’t fall when training numbers take a dip. This may be because a greater proportion of applicants to train as teachers are there by choice rather than because they couldn’t find anything else to do or are forced to look for a new career. Sadly, this fact helps the Treasury mandarins with their ‘dead weight’ argument. However, even potentially committed teachers can be forced out of joining the profession when the financials turn sufficiently negative.

The writers of the letter clearly see that:

 We are now in the second year of graduates completing three year degree programmes having accumulated annual tuition fee debts of £9,000, as well as significant maintenance loans. With a relatively small number of exceptions, even those trainees receiving bursaries will be expected to accumulate more debt to become qualified or, at the very least, forgo the opportunity to embark on alternative salaried careers.

These are powerful arguments that should not be ignored. As an employee of the then TTA, I spent the summer of 1997 arguing with civil servants that postgraduate trainee teachers should have their fees waived and paid by the government. That was the position until the Coalition Government changed the rules. It is now time to once again waive fees and re-introduce a training grant for all postgraduate trainee teachers.

 

 

8,000 computer teachers: Leak, pre-release or pressure on the Chancellor?

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These days I am no longer sure what constitutes either a pre-budget announcement or a leak ahead of the speech. The £100 million for 8,000 more computer science teachers included in a Reuters report https://uk.reuters.com/article/uk-britain-economy-budget/driverless-cars-set-for-uk-budget-boost-finance-ministry-idUKKBN1DJ003 fall into this category of uncertainty. Is it a response to the recent Royal Society Report and does it cover the whole UK or just England since education is a devolved activity. Is it an inspired pre-release a leak or even just speculation on the part of commentators? It might even be a red herring put up to encourage a response to the recent Royal Society Report. We will all still have to wait until Wednesday to be absolutely certain.

Dividing the sum mentioned by 8,000 brings up a figure of £12,500 per teacher. Nowhere near enough to train that many new teachers, especially if they were all to be offered a bursary. So, perhaps a large number of the 8,000 are either teachers destined for the primary sector and expected to train at their own expense or the money covers the cost of re-training existing less than adequately qualified teachers already working in schools.

What is an absolute certainty is that there will never be 8,000 vacancies for his type of teacher in any one year in the secondary sector without mass redundancies of existing teachers. Even spreading the programme over four years, assuming that enough recruits could be found to enter teacher preparation courses each year, would mean a high risk of unemployment for the newly trained teachers unless schools were mandated to recruit these teachers.

Now the DfE knows how many teachers there are working in state schools and teaching computing in some shape or form through the annual School Workforce Census, and through the annual working of the Teacher Supply Model can estimate demand each year for training places. Indeed, it doesn’t do too bad a job at the estimation bit; recruiting them into training is another story entirely.

When the DfE has its own version of TeachVac’s National Vacancy Service that has been fully operational for a year it should know the demand profile from state funded schools. Whether, like TeachVac, it will know the demand from the private schools sector is another as yet, presumably, unresolved matter.

If the 8,000 number does make it into the budget, then so as not to look as if the Treasury doesn’t talk to the DfE there will have to be some form of explanation. Personally, I would add 10% to the Teacher Supply Model and split the rest between for professional development for existing teachers: spending 40% on those on professional development for secondary school teachers already teaching computer science and not fully qualified; 40% for lead teachers in the primary schools, starting with a programme for MATs and dioceses and the allocated the remaining 20% for programmes for teachers of other subjects to embed areas such as geographical information and other subject-related techniques into curriculum development. I might keep a small pot of cash back for new methods of preparing teachers that don’t rely upon face to face contact.

What isn’t needed is a vast hike in training places.