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Making Lifelong Education Work: Skills Accounts for Bite-Size Learning

Making Lifelong Education Work: Skills Accounts for Bite-Size Learning

Funding for higher education is falling in real terms not helped by the freeze on tuition fees and record levels of inflation. With more universities reporting an operating deficit, how can the sector deliver on lifelong learning in the face of an existential funding crisis? The way institutions are funded is an essential part of this conversation, but the debate also needs to address what is on offer, as well as how and when we pay for it. Structural change is required to meet this challenge and realise a new market for lifelong education, in addition to the current offer for 18–21-yearolds, who will commit to a full-time degree.

This paper makes the case for the introduction of an Adult Skills Account – a contribution scheme that can help share the cost of bite-sized training between employee, employer, and state. We argue that such a mechanism can help stimulate participation in education and training among the working population and provide a pathway to higher education, including the take up of loans such as the Lifelong Learning Entitlement.

Image by Julien Riedel
14 March 2024
Key recommendations include:

Reforms to the current policy are needed to provide the incentives for adult participation in education, at the scale needed to make a significant difference to economic performance. Specifically:

  • Shorter, more flexible units of learning (e.g., 10 credit courses) that can build and stack credit towards full qualifications, and

  • Alternative funding arrangements to share the costs of adult education, and to incentivise lifelong learning.

This paper advocates for the introduction of an ‘Adult Skills Account’ that could be financed through a system akin to National Insurance Contributions (NICs) or workplace pensions, enabling employees, employers, and government to contribute towards the costs and benefits of skills training.

Employees and employers would need to opt into such a scheme, administered through a payroll enrolment system. An online ‘Adult Skills Account’ would then be generated, which would provide a digital record of learning and total contributions. This account could then be topped-up with additional funds, including a Lifelong Learning Entitlement, as well as other public funding, bursaries, and grants.

An annual contribution of 1% on the median wage (£26,000), matched pound-for-pound by both employer and state, would fund the cost of a 10 credit microcredential. This relatively small amount of funding could be sufficient to start building and stacking credits over time, while stimulating take-up of loans for larger units of learning.

The post-election climate will not be one where public spending is thriving. But modest investment in small units of learning that meet employer needs could provide substantial returns in productivity growth. The country needs a social, economic, and industrial strategy. Investing in higher and continued education is a strategic imperative. Now is the time to build a consensus around a new settlement in the national interest.

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