Recommendation 2

DfE has not made clear what level of performance would constitute success for its skills programmes. DfE ultimately relies on measuring learners’ subsequent earnings as a proxy for the value of government-funded skills training and the extent to which that training meets the needs of the labour market. The FE Skills Index is DfE’s key indicator of the impact of the FE system on productivity, focusing on adult learners and apprentices who have successfully completed their training. DfE calculates the Index by measuring changes in the number of learners and achievement rates, and shifts in the mix of learning towards more or less economically valuable training, based on earnings. Overall, the Index fell by 46% between 2012/13 and 2020/21, although the annual change in 2020/21 was an increase of 7%. DfE has not set a target for the level that it would like the Index to reach in future years. Recommendation: DfE should set out, as part of its Treasury Minute response, what level of improvement in the FE Skills Index it is aiming to achieve and by when, so Parliament has metrics with which to monitor its performance.