If FE is to play its full part in the country’s recovery from the pandemic, it must be funded realistically, argues ASCL Senior Advisor Anne Murdoch.

Change must be sustainable

When left alone by Ofsted, the Education and Skills Funding Agency (ESFA) and the Further Education Commissioner during the first lockdown, colleges demonstrated resilience, working hard for their communities hit by Covid.

The fact that the government confirmed that money would be available for FE to cover lost funding during the first lockdown really helped, as did the furloughing of staff.

Colleges were able to operate knowing that, while they were going to lose significant income generated from other sources as well as demand-led funding, their core 16–19 financing was relatively safe. Even adult education, the poor relation of education funding, was protected by combined authorities (the collective decision-making mechanism allowing councils to join forces to share some powers and responsibilities).

It was, therefore, a blow when funding restrictions and clawback were re-introduced in September 2020, especially as many colleges had over-recruited against target and were unable to claim the full funding rate. Some funding to cover staff costs in November and December was announced but the criteria for take up was very specific and too little, too late.

Cashflow issues

Since September, colleges have found themselves in even more difficult financial situations. The Further Education Commissioner announced in July 2020 that about 30 to 40 colleges would face severe financial difficulty from 2020/21 onwards.

A survey by the Association of Colleges in May (tinyurl.com/yy6zjbyw), found that four in ten institutions predict cashflow issues and 13% fear cashflow could be a ‘significant threat to insolvency’. More than 25 colleges were undergoing formal intervention.

By November, nine more received financial notices to improve and the ESFA told MPs on the Public Accounts Committee that 64 colleges were at risk of running out of cash. This, all against a background of an insolvency regime that was reviewed in 2020 but remains brutal for those who seek emergency funding.

Government response

There are rising concerns about the fact that FE is free to ‘go bust’ amid annual funding cuts and pressure to find ways to supplement their dwindling finances. The Education Act 2011 allowed borrowing without government consent but encouraged even more borrowing to improve poor estates.

FE debts, often built on growth plans that didn’t materialise, created greater financial problems and mergers seemed to be the only answer with Area Reviews in 2015–19.

Faced with many colleges in financial difficulty, even before the pandemic, attempts to put the FE sector on a stable financial footing led to the intervention regime and tighter ESFA controls as the government looked to technical education and skills to kickstart the economy.

What should a FE White Paper seek to achieve?

Any change to FE and skills policy and structure will have an impact on schools and universities, and the implication of this needs thinking through. FE at its best works well with schools and universities delivering specialist technical courses for young people and adults.

There are key issues that the government needs to resolve before FE reform can be successful. Technical education is taken by about 60% of young people post-16 but is poorly understood by the population at large, while some professionals, parents and students tend to view A levels as the gold standard for post-16 education.

The quality assurance systems in colleges and universities need to be consistent and clarity is needed on funding for higher technical education, both for the learner in terms of loans and maintenance grants, and for funding rates. Until these issues are addressed, change in technical education will be very slow.

Where next?

FE should be at the centre of post-16 reform as a driver of change, a point the Independent Commission on the College of the Future promotes, but change must be sustainable and fit for purpose.

The Education Secretary, Gavin Williamson, has already said that reforms will strengthen the work of the FE sector at the heart of the community and the Prime Minister, speaking at Exeter College in October, emphasised that the government is looking at adult skills and growth in post-16 technical education to help the country post-Covid.

Since the start of the Covid crisis we have seen a changing economy, greater youth unemployment, a collapse in apprenticeship starts, growing mental health needs and more working and learning from home. We have also had announcements on the skills entitlement, consultations on level 2 and level 3 qualifications and the government’s vision for growth in level 4 and 5 provision but with little more than rhetoric concerning the funding of these measures.

FE must be given the opportunity and support to deliver the skills agenda. To do so, it needs a clear strategic purpose, sufficient funding and a recognition by all of the significance of technical education to the economy and society.

Dr Anne Murdoch OBE
ASCL Senior Advisor, College Leadership
@ascl_uk

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