What does the Labour Government want from the Lifelong Learning Entitlement?

This HEPI blog was kindly authored by Prof Deborah Johnston, Deputy Vice Chancellor at London South Bank University (LSBU).

The Lifelong Learning Entitlement (LLE) has once again been delayed. From September 2026, learners will be able to apply for LLE funding for courses and modules commencing from January 2027. The Government’s decision in the Budget to push it back is not entirely surprising given so many aspects of the policy remain unfinalised and most higher education providers do not have the infrastructure and processes in place to take full advantage of this new flexibility.

Labour has previously spoken warm words about the importance of lifelong learning but the new Government is yet to provide any details on their priorities in this space, so it was opportune that LSBU brought together a range of stakeholders working across the sector to discuss the future of the system in September.

The need for both the Department of Education and the Office for Students to provide more information prior to the launch is clear. In the short term, institutions need to understand the necessary changes they will have to make to course structures and their student records system to facilitate more frequent student transfers while learners require information and guidance to ensure they don’t waste their entitlement by attempting to build incoherent qualifications.

The fundamental question, however, is what role should the LLE play in Labour’s ambitions for the skills system? There has been a political vacuum in this space for the last 18 months; the previous Government’s post-16 priority was the Advanced British Standard, and while in opposition the new Education Secretary appeared more focused on early years and primary schools. Now that their post-election honeymoon draws to a close, Labour needs to recognise the opportunity of the LLE and provide more clarity on what it wants the policy to achieve.

Due to its staggered introduction from Government, much of the focus since the LLE was recommended by the Augar Review half a decade ago has been about the shift away from traditional degrees to modular learning. A credit-based system undoubtedly provides more flexibility for learners, but the demand for it remains uncertain. LSBU took part in the Office for Students’ £2 million short course trial and, like all the other participating institutions, found very limited interest from learners to undertake individual modules of learning with no award or qualification attached to them. Further, the specialised curriculum in England makes moving between institutions difficult and 14% of English providers have no ‘recognition of prior learning’ policy. Focusing on this aspect also raises the question about the level of regulation required to ensure that the modules eligible for funding meet the required standards to ensure public funds are protected.

What frequently gets overlooked in the discussions about modular-based provision is that it will necessitate a complete reform of the student loan system. The basis on which courses are funded will be changed from academic year to credit-based allocation for the majority of institutions. This comes alongside the abolition of advanced learner loan funding and equivalent level qualification (ELQ) rules.

Removing ELQ restrictions will provide prospective learners with a genuine opportunity to reskill throughout their careers and open a new market of in-work learners to institutions. Assuming bureaucracy doesn’t erect unnecessary barriers to the development of in-demand courses, this will be an opportunity for universities to be more innovative and will help Government to address long-term stagnant productivity and growth challenges. Although coming with an element of the unknown, this will encourage institutions to act creatively and develop initiatives akin to foundation degrees. The underlying intention was to create a new flexibility in the education system that would transform opportunities for learners of any age. Of course, for the policy to accurately live up to its title, the Government may want to reconsider the 60-year-old age limit.

Another thing Labour needs to consider is how the LLE is going to fit in with their Skills and Growth Levy. While it should enable a few employers to contribute more, there is also a risk that it makes the landscape even more complex. Once the Government decides what training will be in scope for Levy funds, there is a real possibility that employers could be funding a learner to undertake a university-provided course alongside students who are self-funding through their LLE entitlement. This siloed approach would be wasteful; instead, employers and providers should be encouraged to work in genuine partnership to identify skills gaps and build meaningful qualifications through Skills England.

There is also a risk, as the OfS themselves have recognised, that without introducing safeguards to the system as currently formulated businesses could further reduce their direct investment in the skills system by encouraging employees to fund their own training through the loans system.  The contribution of UK employers to the skills system is already woefully low – training spend per employee has fallen 28 per cent in real terms since 2005 to £1,530 per year, half the EU average. Many businesses claim the reason they are underinvesting is because the system feels inaccessible, and infrastructure and research and development interests take priority.

Increasing the demand for Level 4 and 5 qualifications and creating a truly tertiary system was undoubtedly a central aim of the LLE as devised in the Augar Review. Five years later this goal has been neglected and the missing middle remains largely unfilled. In England only 10 per cent of adults aged 18 to 65 and 4 per cent of 25-year olds hold a Level 4 or 5 qualification as their highest qualification. One way for the sector to address this would be to begin giving out intermediate awards at the end of the first and second year of typical undergraduate degrees as a matter of course (another recommendation of the Augar Review). This would raise their awareness and create a market for Level 4 and 5 qualifications, avoid the riskier prospect of engaging with microcredentials, and provide more flexibility for learners.

There is a risk that the problems associated with the LLE become the defining issue and the Government might then become tempted to kick this down the road. Instead, they should decide if they see the LLE as playing a central role in their mission-led Government to unlock opportunity and boost long-term economic prosperity, and so then commit to work with the sector to build the LLE.