Pounds 700 million up for grabs

January 30, 1998

Welfare to what? Phil Baty on what the government's New Deal has to offer to colleges and students

COLLEGES will be able to bid for a slice of Pounds 700 million over the life of the current parliament under the government's New Deal scheme.

The deal, aimed at getting more than 100,000 18 to 25-year-olds off welfare and into work, offers further education a great opportunity, according to Association of Colleges director of development John Brennan. But he warns:

"There are a great deal of uncertainties and anxieties."

From April the young, long-term unemployed will be driven down one of four paths: up to a year in full-time education and training; a subsidised job; a place on an environmental task force; or voluntary work, with an entitlement to part-time training. The alternative is withdrawal of benefit.

Planners estimate that up to 30,000 people will opt for education and training. From June the scheme will be extended to over-25s who have been unemployed for more than two years, with 10,000 full-time study places on offer.

The government wants colleges to bid for the new business, alongside the training and enterprise councils, private providers and voluntary organisations.

Contracts for the delivery of full-time education and training in the 14 pilot projects launched this month have almost all been awarded to consortia including "a strong college presence", according to the AoC.

"There seems room for cautious confidence that ministerial assurances on the opportunities open to colleges will be fulfilled," said Mr Brennan. But the emphasis is on caution. "It is not possible to draw firm conclusions at this stage about the extent of college involvement in the programme." In the two short months before the New Deal is launched nationally, there is still a lot to play for.

Dangers in the New Deal

Job Seekers' Allowance

Figures from the Further Education Funding Council show that in 1996-97 69,000 unemployed 18 to 25-year-olds receiving the Job Seekers' Allowance were enrolled on FEFC-funded college courses. A further 212,000 over-25s on JSA were enrolled on college courses.

The AoC fears that these students will be siphoned off, either into a less valuable educational experience or out of the college system into a non-educational New Deal pathway.

"But there are some colleges, especially some inner-city colleges, with substantial numbers of JSA students. It could be a considerable problem for them to find replacements. These colleges could suffer," said Mr Brennan. He is also concerned that even those students who move from one further education course under the JSA to another under the New Deal full-time education option may end up worse off.

Significant numbers of students on the JSA take access courses for higher education. "It may be that under the New Deal, an access course will not be deemed to be improving shorter-term employability. It is a real anxiety that significant numbers of students will be denied the chance of higher education," Mr Brennan said.

The Employment Service

The government chose the Employment Service over the training and enterprise councils, the Local Government Association and the Further Education Funding Council to run the New Deal last year. The ES awards the contracts for education and training and organises guidance and counselling.

But the further education sector has concerns. Last year, Graham Mackenzie, chairman of the Schools Curriculum and Assessment Authority, said the choice of the ES to run the New Deal would undermine the project. Its "bums on seats" approach, and the "disgraceful quality" of its work, could ruin the New Deal, he said.

"There has been a change in the atmosphere with the New Deal, but it is still not clear whether the ES's requirement to move people as quickly as possible into employment will override other considerations, like the option of full-time education," said Mr Brennan.


Indicated funding levels on offer from the ES are, on average, lower than the already tight levels available for the same categories of students and courses on offer from the FEFC for students outside the New Deal. Funding could be forced down further by competitive tendering.

"There is a real concern that the funding levels will make it difficult to properly meet the needs of the client group," said FEFC assistant director of education and institutions Geoff Daniels. "But the government and the Employment Service have made it clear that the contracts will be awarded on the basis of quality, not just price. The evidence so far is that colleges are beating cheaper providers to the contracts. We will be monitoring how the situation progresses."

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