Thank you, Deputy Presiding Officer.

The Welsh Government is seeking to build an economy that works for everyone. Now, more than ever, we need to ensure that we do all that we can to boost living standards, encourage growth and productivity, and also address deeply ingrained regional economic and social inequalities.

The FE sector is at the heart of this agenda, yet over the past five or six years it is also one of the sectors that has been hardest hit by the austerity measures imposed on us by the UK Government. With this in mind, I commissioned a review of the FE funding methodology to ensure that it is fit for purpose to deliver what learners need and what employers want, and also to ensure fairness across the whole of Wales, not just for full-time learners but also for part-time learners.

The changes introduced in 2014 have achieved their objectives. We no longer deliver isolated qualifications, but we have in place a comprehensive, skills based, learning programme, courses that have a defined purpose and outcome, and a redesigned and sharpened curriculum offer. Generally, our institutions are financially stable. However, in 2017, a Wales Audit Office report recommended that we should review the funding methodology to reflect the changes in demography and local need.

To deliver this recommendation, the Welsh Government has been working with the FE sector to align funding for full-time learners more closely with the approach adopted around sixth-form funding, thus reflecting relevant demographic changes. While the current programme approach to funding delivers the main qualification and underlying skills that employers in each sector require, learner choice remains the main driver for which programmes are delivered at each college. The choices that learners are currently making do not necessarily chime with the needs of local employers or the economy, and therefore it’s possible that some people choose courses where there is no clear progression pathway, which could lead to people being trapped in low-paid jobs. 

To bring change to this position, and to move towards a situation that closer aligns the needs of our economy with the training delivered, officials have worked to align college courses with the recommendations of the regional skills partnerships. The aim of these partnerships is to ensure that employer needs are considered in the recommendations. These are used to influence the planning processes provided at every college. If colleges introduce plans that do not reflect the RSP recommendations, they will not be approved. Furthermore, my officials will ensure that delivery is in line with those plans and will adjust funding when appropriate.

I intend to appoint an independent advisor to review how we can enhance the current arrangements in terms of the partnerships and their ability to have an impact on skills provision in their regions that meets employer need.