Adult education class

Adult education and skills

The government has stated that reforming adult education and skills policy is key to realising long-term economic growth.

Funded by the Nuffield Foundation

In recent years, there have been a number of major reforms to skills policy, including the introduction of T levels, the roll-out of skills bootcamps and the launch of the lifelong loan entitlement from 2025.

In the 2021 Spending Review, the government allocated £900 million in extra day-to-day funding for adult education and apprenticeships as compared with 2019–20. However, over the last decade, there have been significant cuts to public spending on adult education, which will only be partially offset by this extra money.

Adult education funding system

In the remaining analysis in this chapter, we divide skills spending between classroom-based courses and apprenticeships. Public spending on classroom-based adult education is complex and comes from multiple sources, which we set out in Table 6.1.

Table 6.1. Adult education funding sources

Adult education spending table

In 2017, the government introduced the apprenticeship levy. Under the levy, large employers with a total pay bill in excess of £3 million pay 0.5% of their pay bill above that level as an apprenticeship levy. This is transferred into a digital account and topped up by 10% of public funding, which can be used to pay for the costs of apprenticeship training. There is also a generous system of public funding for non-levy-paying firms, who only have to pay 5% of the costs of apprenticeship training. As a result, apprenticeships at levy- and non-levy-paying firms receive very similar levels of public funding (up to funding caps for different courses).

Adult education spending over time

In the 2021 Spending Review, the government allocated additional skills funding across a range of different channels:

  • an extra £550 million for adult education in 2024–25 as compared with 2019–20;

  • £170 million in increased apprenticeship funding by 2024–25;

  • £560 million from the UKSPF to be spent on ‘Multiply’ to improve numeracy skills across the UK. This is to be spread over three years and so will amount to about £190 million per year on average.

Taken together, this equates to about £900 million in extra day-to-day spending in cash terms on adult education and apprenticeships in 2024–25 as compared with 2019–20. To set this in historical context, Figure 6.4 shows spending on adult education and apprenticeships since the early 2000s up until the present day, and the projected level of spending in 2024–25.

Total spending on adult skills is set to increase by 22% between 2019–20 and 2024–25. Part of this additional spending has already been realised: total spending on adult education and apprenticeships increased by almost 3% in real terms between 2019–20 and 2021–22. This is likely to be a slight underestimate of the true growth up to 2021–22 as published figures do not include spending on skills bootcamps or the Multiply programme. However, given that these programmes have only recently launched and are not yet fully rolled out, expenditure is likely to be comparatively small in 2021–22, which means the 2021–22 spending figure should not be too far from the true level of spending. Indeed, spending on skills bootcamps is likely to have been under £50 million in 2021–22, increasing to a higher figure of £150 million in 2022–23.[1]

As with spending on 16–18 education, planned increases in spending only reverse a fraction of past cuts: total skills spending in 2024–25 will still be 22% below 2009–10 levels (this includes expected spending on skills bootcamps). Spending on classroom-based adult education has fallen especially sharply, and will still be 40% below 2009–10 levels even with the additional funding.

It is important to note that we only look at direct public spending on adult education. In particular, Figure 6.4 does not include spending on Advanced Learner Loans (ALLs), which totalled around £145 million in the 2021–22 academic year.[2] The repayment terms for these loans are very similar to those for higher education. 

      These figures also exclude the effect of the Multiply programme as it is not yet clear how this funding will be distributed across the nations of the UK or by year. But, based on population shares and a constant allocation across years, Multiply could represent about £150–160 million in additional spending on adult education and skills in England by 2024–25, or about 3½% of planned spending in 2024–25. According to the Department for Education, about £80 million was allocated to local authorities in England in 2022–23, which is then likely to increase over time.[3]

      While there has been a sharp decline in public spending on classroom-based adult education, funding for apprenticeships (or work-based learning further back in time) has remained fairly constant at around £2 billion in real terms since the late 2000s. In 2016–17, the level of public spending on apprenticeships overtook public spending on classroom-based adult education. Between 2019–20 and 2021–22, apprenticeship spending rose by 10%; part of this increase is likely due to apprenticeship activity recovering post-pandemic.

      Following on from big increases between 2010 and 2015, the total number of adult apprentices has actually declined in recent years since 2016, which coincides with the introduction of the apprenticeship levy. In Figure 6.5, we show the number of adults participating in apprenticeships by level. Between 2016–17 and 2021–22, the total number of adult apprentices declined by 20%, which was mainly due to a significant fall in intermediate apprentices (GCSE-equivalent level). The number of higher apprentices, which include degree apprentices, has almost quadrupled in the same period. Since the total number of apprentices has fallen, the constant level of spending is likely to be attributable to an increase in the number of higher-level apprentices which are far costlier to fund.

      The overall impact of this change in apprenticeship composition is unclear. The increase in the number of adults taking higher-level apprenticeships could be a positive trend. However, the reduction in intermediate apprentices may represent a decline in the opportunities for low-skilled adults. One especially concerning trend is the decline in the number of young people taking apprenticeships (the number of starts by 19- to 24-year-olds has fallen by 25% since 2016–17), for whom intermediate apprenticeships often provide a route into employment.

      Future challenges

      The government has placed a high emphasis on adult education and skills policy as a key channel to achieving long-term economic growth. While the government clearly has high aspirations, overcoming the scale of cuts and decline in participation over the past decade will be a huge challenge. Between 2010–11 and 2020–21, the number of adults taking low-level qualifications halved. Even with the additional funding set out last year, real terms spending on adult education will remain well below the levels seen in the early 2000s.

      Another challenge is how the devolution of adult skills will be managed. Since 2019, skills spending has been devolved to Mayoral Combined Authorities (MCAs) and the Greater London Authority (GLA), initially to six MCAs and the GLA but now to three further MCAs. This year marks the first year in which more than half of the adult education budget has been devolved to these local administrations. A large part of the future success of skills policy will depend on how well these areas are able to use this money to address local skills needs.

      Lastly, one of the key determinants of whether the government’s skills reform package is successful is whether it can address skills gaps among non-graduates. Alongside the reintroduction of a free Level 3 course entitlement for those not qualified to this level, the main plans for helping these adults are two national training programmes – skills bootcamps and Multiply. These are new programmes which are relatively untested, but the existing evidence on the efficacy of such training programmes is mixed (for example, see Card, Kluve and Weber (2018)). It is vital that government and local providers work together to ensure these new programmes work well. Providing effective support and training for non-graduates is a significant challenge, but it is essential to realising the government’s growth and levelling-up ambitions.