Welfare to work may benefit colleges

WHEN Gordon Brown sits down at the end of next Wednesday's Budget speech, will universities know any more about their financial futures? Probably not. It seems they will have to carry on preparing financial forecasts for the beginning of July and wait for Sir Ron Dearing's report to be published a few days later.

Any key changes sparked by Sir Ron's report, concerning student funding, credit accumulation and transfer, or changes in student numbers, could be dealt with by a white paper in early autumn. Student loans could get a mention, if only because the former Chancellor, Kenneth Clarke, said in the November Budget that the sale of the student debt would go ahead.

Civil servants are operating on the assumption that this is still true, although there has as yet been no clarification from ministers. Mr Brown may want to say more.

Given the government's determination, repeated this week, to keep spending within departmental limits, universities will have a keen interest in how much cash is going to other areas of education. They are fighting a tough battle for money with schools, which are threatening wide redundancies, and further education colleges which expect to play a key role in the welfare to work programme.

Colleges want to find out how much the windfall tax is expected to deliver and how much of the money will go towards welfare to work. Ministers warn that the Pounds 3 billion windfall levy they first suggested may have to rise to Pounds 7 billion to plug gaps left by their predecessors.

Will all this money move seamlessly into training or will it prove a handy way of increasing revenue in other areas when money is short? Second, colleges will be looking to see if Mr Brown gives any more detail about how the welfare to work programme will operate.

The welfare to work programme involves four routes to employment: private sector employment with a subsidy to the employer; full-time training or education; voluntary work; and jobs connected to the Millennium volunteers' environmental task force.

Colleges expect to be the main providers of full-time education and to play a large role in part-time, off-the-job training. They want to know what exactly this will mean, but are unlikely to receive more than a general picture since the emphasis will be on schemes designed for local needs, handled by employment offices. These schemes will determine the detail of different contributions from voluntary groups, and from colleges and work-based employer training.

It is understood that the government's plan is to have the worst unemployment black spots covered in January and the full scheme running by April. Many specialist colleges and those catering for 16 to 19-year-olds will be unaffected by the welfare to work programme.

However, colleges could gain from a replacement of child benefit with an educational allowance, which could also appear in the Budget. Any extra money colleges receive from any of these schemes will have to pay for more numbers.

Even so, colleges will see it as a welcome chance to expand, particularly with the ending of demand-led element money. They will also want to know where training and enterprise councils fit into this scene since they could find themselves in competition.

At first, TECs feared they could be sidelined by the new government, which suggested in its manifesto that some of their money could be better used.

But relations appear to be warming now. Speaking at the launch of the Heart of England TEC's learning strategy this week, employment minister Andrew Smith said: "TECs' close understanding of the business, labour market and training sectors ensures they will have a key role in meeting our manifesto commitment to deliver a new deal for 250,000 under-25 year-olds."

David Blunkett, secretary of state for education and employment has also written to Sir Garry Johnson, chairman of the TEC national council, assuring him that TECs have a key role to play in the future.

But, the welfare to work programme may take cash from the Training for Work and Youth Training programmes which provide most of TEC business and have budgets of Pounds 540 million and Pounds 800 million respectively.