Transparency data

Accounting officer assessment: lifelong loan entitlement (LLE)

Updated 30 April 2024

Applies to England

Accounting officers scrutinise significant policy proposals, projects or programmes and make sure the actions of the public organisation they lead meet the 4 accounting officer standards (regularity, propriety, value for money, and feasibility) as set out in managing public money.

From April 2017, the government has committed to making a summary of the key points from these assessments available to Parliament when an accounting officer has assessed a project or programme within the government’s major projects portfolio.

Background

The lifelong loan entitlement (LLE) is an important part of skills reform. It is a priority of the Department for Education (DfE). It is part of a wider set of reforms announced in 2020 as part of Skills for jobs: lifelong learning for opportunity and growth. This aims to create economic growth by building a skills system that is employer focused, high quality, and flexible enough to lead to more people completing high-quality courses that meet employers’ needs.

In addition to helping to better meet employer demands for skills at levels 4 to 6, the LLE also aims to:

• provide a single clear source of student finance for levels 4 to 6 across colleges, independent training providers and traditional higher education (HE) institutions
• incentivise and offer a clear route for adults to undertake learning at higher levels with flexibility to study at a time that suits them and enables them to reskill or upskill later in their working life
• support learners to complete qualifications that help to equip them for sustained employment that offers positive financial returns

Through the LLE, which is planned to launch for the 2025 to 2026 academic year, the government will provide eligible learners with a loan entitlement to the equivalent of 4 years of HE study (£37,000 in today’s terms), which they will be able to use for designated full and modular courses across Office for Students (OfS) registered providers. In addition, maintenance loans for living costs and targeted grants will be available in respect of all designated courses under the LLE, including part-time courses.

Assessment against accounting officer standards

Regularity

There is clear Parliamentary authority for the funding of students to undertake courses (via loans and grants).

The provision of loans and certain targeted grants to students is enabled by section 22 of the Teaching and Higher Education Act 1998 (THEA). In 2022, Parliament passed the Skills and Post-16 Education Act 2022, which amended THEA explicitly allow the loan funding of modules of courses and periods of study lasting less than one or more full academic years. Further, the Lifelong Learning (Higher Education Fee Limits) Bill, designed to establish a credit-based system of tuition fee limits, is currently progressing through Parliament. A substantial suite of regulations needs to be made under that primary legislation and DfE aims to lay these in 2024, before or early in the student recruitment cycle for the 2025 to 2026 academic year.

Propriety

Propriety requires high standards of public conduct, including robust governance and meeting the relevant Parliamentary expectations, especially transparency.

The programme has engaged with the Infrastructure and Projects Authority (IPA) Gate 2 review process. Approval of the outline business case (OBC) has been provided via the department’s investment committee. HM Treasury is being engaged on approval of the OBC during summer 2023.

Value for money

The economic appraisal shows that the LLE programme is likely to deliver value for money.

It is expected that the LLE will incentivise more people to study at levels 4 to 6, including those who would not have otherwise studied because of the barriers they face in the current system. Because of the high lifetime returns of further and higher education, DfE expects that learners will benefit from LLE and generate positive economic returns to the economy. As such, the LLE programme would only need to have a small impact on behaviours to cover the public costs and will therefore continue to deliver value for money.

However, some elements of the programme are yet to be designed, and the behavioural response of students and providers remain very uncertain. These risks and uncertainties will be kept under review as the programme is developed.

Feasibility

The main feasibility risk of LLE is meeting the 2025 delivery timescale. There is little leeway in the critical path to 2025, and there are factors outside of the programme team’s control that may delay the reform.

The design and delivery of the system is highly complex, with multiple interdependencies across the whole of the HE and further education (FE) landscape. Furthermore, the LLE attracts interest from a wide group of political stakeholders and the public. Such complexity and public scrutiny might impact deliverability of the system within the publicly announced timescales, given the need to find compromise between different stakeholders across several interlinked areas.

In addition, the programme depends on good partnership with the Student Loans Company and the OfS and their delivery of new systems and processes. It also depends on behavioural change among providers, learners and employers, as well as continued funding.

We have confidence that the programme team is managing these risks and dependencies, which are set out in detail in the business case. A recent review recognised that the programme has so far successfully managed to deliver on time, despite its complexities. I therefore assess that, though it is not without risk, the programme meets the feasibility test, though continued attention needs to be paid to the timeframe for reform.

Conclusion

As accounting officer for the Department for Education, I have considered this assessment against the 4 accounting officer standards, and I am satisfied that the LLE programme meets the standards of managing public money and accords with the generally understood principles of public life, represents good value for money for the Exchequer as a whole, and is feasible to deliver (with significant delivery challenges to meet the 2025 launch).

I have therefore instructed officials to carry out a further accounting officer (AO) assessment at full business case stage in 2024 and re-test the AO standards.

This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons, and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Susan Acland-Hood

Permanent Secretary