Cabinet Member for Adults Services

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1 Cabinet Member for Adults Services Adult and Community Learning Part-time Tutors Pay Award and Fee Rates Ref No. AS19(09/10) Key Decision: Yes Part I Report by Executive Director Adults and Children and Head of Adult and Community Learning Service Electoral Division(s): N/A Recommendations That rates of pay for adult and community learning tutors are increased by 0.5% as set out in 2.1 from 1 st August 2010 That adult tuition fee rates are changed from a basic rate of 3.85 (agreed for 2009/10 but not implemented as prices were frozen in response to economic situation) to a flexible charging structure based on costs and market factors. 1. Background 1.1 In September 1998 local conditions of service were introduced for all adult education tutors following a period of consultation within the service. These were a direct response to the breakdown of the national negotiating framework, which has not been reinstated since that time. Therefore it was agreed that Cabinet Member approval would be sought annually to ratify this process. 1.2 Adult education tutors are paid on the basis of hours worked and under the existing conditions of service the hourly rate includes an element for annual leave. The rate per hour assumes an element for preparation and evaluation by the tutor outside course contact time. Progression on the scales relates to total hours worked for the Service and holding relevant teaching qualifications. Employer on-costs (national insurance and pension) are applicable to some tutors, depending on their level of income. 1.3 Under these arrangements it was agreed that the County Council would consider annually any changes to the pay scales to take account of cost of living increases and teachers salaries. Any increased costs of employing tutors fall directly upon the Adult and Community Learning Service s budget and will be met from learner fee income and Learning and Skills Council annual allocations for provision. 1.4 The proposed baseline pay rise would be in line with the expected level of increase for public sector workers. 1.5 As in recent years there is an increasing expectation from the Learning and Skills Council that learners should be asked to pay a higher proportion of the cost of courses, reflected in a potential reduction in funding of up to 13%.

2 2. Discussion 2.1 Current Tutor Salary Rates and Proposed Changes The current rates are set out below. It is proposed that these be increased by 0.5% with effect from 1 st August 2010 to take account of cost of living increases. The Local Government Employers have indicated that there will be no offer on the table this year. Teachers have a three year agreement that offers around 2.3% next year which the ACL Service cannot sustain so a small increase is proposed to support the development of the workforce whilst acknowledging the financial climate. The new rates are set out in bold to show the effects on individual points of the scales. Point Hourly pay rate ( ) Pt Pt Pt Pt Pt Pt Pt Non-teaching rate Current Fee Levels and Proposed Changes 2009/10 position The basic fee levels for 2009/10 were agreed as 3.85 per hour for Personal and Community Development Learning (PCDL) courses and 2.75 for Learner Responsive (LR) courses, which are funded at a higher level than PCDL. In Learner Responsive (basic skills and accredited courses) courses with external assessment learners are asked to pay an additional 1.10 per hour to cover examination and assessment costs. In 2009/10 a later decision was taken to freeze prices at 2008/09 levels (basic rate of 3.60 per hour) in response to the economic situation. Context for changes In recent years the PCDL funding from the LSC has not taken account of inflation and it is anticipated that it will not be maintained at current levels. In response to government proposals for Informal Adult Learning (IAL) fee income for much of this non-accredited provision will need to meet a larger proportion of costs. LR funding will also be reduced in line with the assumption that the proportion of costs paid by learners on accredited courses continues to rise. Skills for life and work courses will remain free of charge for literacy and numeracy learners working towards a national qualification. Nationally indications are that funding could reduce by up to 13%, a potential loss of up to 390,000 funding.

3 Dependence on public funding needs to be reduced and fee income raised, in order to continue to enable the Service to provide a range of courses to meet the needs and interests of learners wanting nonaccredited provision. The current practice of having fixed basic rates with minimal flexibility of pricing is no longer sustainable and does not provide the opportunity to respond to learner demands for reduced bureaucracy, specialist subjects with smaller class sizes. The service has not been able to maximise income opportunities in a way that responds to market factors. It is intended that the fee structure will remain competitive with, and in most cases lower than, other providers in the County. 3. Proposals 3.1. Fees Fee levels for courses are set at a level that is market driven and relates to the costs and funding for each type of course adjusted by related market factors. Fees for some courses, particularly non-accredited (leisure-type), will increase significantly above current levels, depending on the above factors, up to 11% on the frozen 2008/09 prices charged this year. Other courses will have smaller increases or remain at current rates. Students on Literacy and Numeracy courses, Family Learning and those on accredited courses who are on means tested benefits or are years old will not pay any fees, in line with LSC funding conditions. The concessionary fee structure will continue to support those who are not able to meet the cost of provision to access learning and flexible methods of payment will continue to enable learners to spread the costs. The fees for new types of non-accredited provision will be set at a level that will cover all costs and contribute to the financial viability of the programme. Communication of changes will be carefully managed especially to existing learners. The types of courses that would most likely be increased towards the higher end of the range are: new courses that do not meet the criteria for funding within our contract with the LSC for PCDL funding. Courses where there is a clear market rationale for charging higher prices. Specialist courses.

4 Recreational courses that are identified as outside the funding criteria for PCDL funding and should be moving towards full cost recovery. Club-type courses where students have indicated a preference to pay a higher rate to avoid the level of quality monitoring that is required to meet LSC and Ofsted requirements. The County Council has a concessionary fee policy (70% discount for those on benefits), a discount for older learners and a bursary fund to support those who cannot afford to pay fees which would apply to all levels of fees. Increases will apply to most courses but it is expected that around 20% of non-accredited courses would be at the higher end of the scale. Accredited courses are expected to increase by a minimum of 5% as the LSC fee assumption has increased by that amount with a corresponding decrease in funding. Financial modelling has been undertaken that identifies the variation in fee income following changes in fee level in recent years although there is no clear correlation as other factors also impact recruitment. National research into fee income and participation has also been considered. The ACL Service is also looking at all costs/expenditure/income as part of financial planning and working towards the development of a social enterprise. The proposal to increase fees in a flexible way is not only on the basis of a direct relationship between fees and costs but as a need to make a step change in response to the new funding context. 3.2 Tutor pay It is proposed that tutor pay awards should be increased by 0.5% with effect from 1 st August Consultation In September 1998 following a period of consultation within the service local conditions of service were introduced for all adult and community learning tutors. These were a direct response to the breakdown of the national negotiating framework, which has not been reinstated since that time. Although there is no formal consultation procedure the proposed rates have been the subject of discussion by management teams within the Service. The reasons for changes to fee levels, the options for concessionary fees and methods of payment to spread the costs over time will be explained to all existing learners. 5. Resource Implications and Value for Money Based on planned employment levels it is estimated that implementation of the proposal to increase tutor pay rates would cost in the region of 5,000. Increases in tutor pay rates of this order are being included in the Service s revenue planning for the 2010/11 academic year. All increased costs will be met from learner fee income. Flexible course fee

5 setting will contribute to meeting increased costs and maintaining the financial viability of the programme. 6. Risk Management Implications The Service is faced with managing major areas of risk: Ability to meet agreed targets within the contractual requirements for the funding received from the Learning and Skills Council. Reduction in the number of learners because of increased fees. Generating sufficient fee income to meet the costs of course delivery To address these risks decisions on the level of fees for each type of course, the programme of courses offered and on which courses to run take into account the income and costs and LSC contractual requirements. Setting minimum numbers for courses ensures courses are viable before starting. 7. Customer Focus Appraisal The screening process has been undertaken and it has been decided that a Customer Focus Appraisal is not required for this decision. The response to the screening process flowchart is attached to this report. 8. Crime and Disorder Act Implications Not applicable. 9. Human Rights Act Implications Not applicable. John Dixon Executive Director, Adults and Children Ros Parker Service Manager Adult and Community Learning Background Papers Local conditions of service papers dated September 1998 Contact: Ros Parker ext

6 CFA Screening Appendix 1 Do we have reliable data about the take up of the service or effect of the proposal on different groups of customers? Yes Analysis: database of learners, demographic data Does the data reveal an adverse impact on certain groups, or potential to overcome disadvantage being suffered by some groups of customers? Analysis: Potential adverse impact of fee increase on customers on low incomes but increases in concessionary fees and widening of eligibility address this. No CFA not needed The types of courses that we would be most likely wish to increase towards the higher end of the range are: new courses that do not meet the criteria for funding within our contract with the LSC for PCDL funding. Courses where there is a clear market rationale for charging higher prices Specialist courses. Recreational courses that are identified as outside the funding criteria for PCDL funding and should be moving towards full cost recovery. Club-type courses where students have indicated a preference to pay a higher rate to avoid the level of quality monitoring that is required to meet LSC and Ofsted requirements. We have a concessionary fee policy (70% discount for those on benefits), a discount for older learners and a bursary fund to support those who cannot afford to pay fees which would apply to all levels of fees. Increases will apply to most courses but it is expected that around 20% of non-accredited courses would be at the higher end of the scale. Accredited courses are expected to increase by a minimum of 5% as the LSC fee assumption has increased by that amount with a corresponding decrease in funding. We have undertaken financial modelling that identifies the variation in fee income following changes in fee level in recent years although there is no clear correlation as other factors also impact recruitment. We have also

7 considered national research into fee income and participation. We are also looking at all costs/expenditure/income as part of financial planning and working towards the development of a social enterprise. The proposal to increase fees in a flexible way is not only on the basis of a direct relationship between fees and costs but we are needing to make a step change in response to the new funding context.

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