Gareth Davies, the head of the NAO

#FEReform - Today (16 Sept), the National Audit Office (@NAOorguk) reports that while the Department for Education (@EducationGovUK) has spent significant amounts of money aimed at helping individual colleges in financial difficulty, core funding for the sector as a whole has fallen and its financial health remains fragile.

The financial health of the college sector has fluctuated in recent years. Between 2013/14 and 2018/19, the sector’s overall operating position went from an £8.5 million surplus to a £45.7 million surplus, which followed a £70.3 million deficit in 2017/18. The proportion of colleges reporting an operating deficit fell from 37% in 2013/14 to 34% in 2018/19.

Area Reviews

Between September 2015 and March 2017, government oversaw a programme of ‘area reviews’, partly designed to improve colleges’ financial stability. The reviews, which led to 57 college mergers, are likely to have helped limit the financial deterioration of the sector.

Between 2015-16 and 2019-20, government provided 45 colleges with £431 million to help cover the costs of mergers and other structural changes, mostly in grants rather than loans. 46% of this funding (around £197 million) was used to help colleges reduce their commercial borrowing.

New Insolvency Regime

In addition to this funding, the Education and Skills Funding Agency (the ESFA) has paid £253 million to 36 colleges with serious cashflow problems, much of which will not be repaid. The ESFA has categorised £99.9 million (39% of the total) as non-repayable and, at March 2020, £61.6 million (just less than a quarter of the total) had been repaid.

Between April 2019 and May 2020, the ESFA also spent another £26.6 million dealing with two colleges going through a new insolvency process, although it expects to recoup some money from the sale of assets no longer required for educational provision.

The NAO found that, at February 2020, government was intervening in nearly half of colleges with the aim of preventing or addressing financial difficulty, and intervention often takes a long time.

Up To 35% Fall In Funding

In recent years, core funding to colleges has fallen. DfE funding per student aged 16 to 19 fell by 7% in real terms between 2013/14 and 2018/19.

Although the national basic funding rate for learners aged 16 to 17 has remained at £4,000 per student since 2013, in 2014/15, DfE reduced the rate for students aged 18 to £3,300, even though the basic cost of teaching 18-year-olds is likely to be the same as for 16- to 17-year-olds.

Total funding for adult education and support services (excluding apprenticeships) fell by 35% in real terms over the same period.

Narrowed Curriculum

Despite the financial pressures, at August 2019 more than four in five colleges were graded as good or outstanding by Ofsted.

However, financial constraints have meant that colleges have narrowed their curriculum and reduced broader support for students, such as careers advice and mental health services. This is likely to have detrimental effects on students and the development of skills.

Most of the fieldwork for the NAO report was undertaken between November 2019 and March 2020 before the COVID-19 pandemic. Although government has put in place measures to support colleges, more colleges are expected to face financial difficulties following the pandemic.

10-Year FE Reform Programme

DfE is currently drawing up a 10-year reform programme to address a range of challenges in the further education sector. The NAO recommends that this programme should set out a clear vision for the role, structure and funding of the college sector.

DfE should also assess systematically the extent to which colleges have dealt with financial pressures by narrowing their provision and reducing support services.

Sector Response

Gareth Davies 100x100Gareth Davies, the head of the NAO, said:

“Colleges play a crucial role in many people’s lives and are vital in the development of the skills and knowledge the country needs.

"While there has been some progress in improving financial security in the sector, this has cost a lot of money, and systemic long-term weaknesses remain unresolved.

“DfE needs to seize the opportunity presented by its 10-year reform programme to set out what it wants from the college sector and ensure it is funded accordingly.”

david hughes 100 x100Chief Executive of AoC, David Hughes said: 

“Today’s NAO report provides detailed insight into the complex financial system colleges operate within and the funding changes over the a decade of neglect. It shows that colleges have done a remarkable job to cope with real terms cuts whilst focusing on the quality of the student experience. They should be applauded for that, but it has to change. The government has made clear that it appreciates the vital role colleges play in every community, but to deliver on that, colleges need a stable, long term and fair funding settlement.

"That’s why I am pleased to see recommendations for DfE to evaluate the intervention regime and the impact on students and breadth of offer. The cuts have hit colleges hard, but even more importantly, they have resulted in the most disadvantaged students in our society bearing the brunt of austerity. Drops in pastoral support, enrichment opportunities and teaching hours have meant colleges have had to do their best with ever-shrinking resources.

"The improvements in college finances in the last few years were positive steps, but the pandemic, lockdown and the aftershocks will mean colleges find themselves in a much more precarious situation now and for the next few years. That comes at the same time as colleges being front and central in the recovery effort. Skills shortages will need to be filled quickly and those made redundant given access to re-training. Young people will need even better education, skills and support to enter a tougher labour market. Colleges can deliver on all of that with the right resources. 

"With college resilience at an all-time low, the white paper and spending review will be critical in turning that around over the next few years and allowing colleges to play their full role in the country’s recovery. The Government and DfE must make the white paper a real turning point for colleges and create a stronger, more resilient and stable education and skills system that works for everyone.”

Andrew Harden 100x100Andrew Harden, Head of Further Education, UCU said:

"This study shows the current college funding system is not fit for purpose. Severe cuts to further education have led to job losses, course closures and fewer learning opportunities. 

"We need a radical overhaul where colleges are brought back into national ownership and funded properly.

"Colleges must be a vital part of our national recovery plan, but they can only do that with proper funding and support."

You may also be interested in these articles:

Advertisers

Upcoming FE Events

Advertiser Skyscrapers

Newsroom Activity

George Robson has published a new article: Barton Peveril Student Earns England Call-up 1 hour 44 minutes ago
FE News: The Future of Education News Channel had a status update on Twitter 2 hours 40 minutes ago

The latest podcasts from FE News for 10/28/2020 - https://t.co/J9QDDwF0Lp
View Original Tweet

Latest Education News

Further Education News

The FE News Channel gives you the latest education news and updates on emerging education strategies and the #FutureofEducation and the #FutureofWork.

Providing trustworthy and positive Further Education news and views since 2003, we are a digital news channel with a mixture of written word articles, podcasts and videos. Our specialisation is providing you with a mixture of the latest education news, our stance is always positive, sector building and sharing different perspectives and views from thought leaders, to provide you with a think tank of new ideas and solutions to bring the education sector together and come up with new innovative solutions and ideas.

FE News publish exclusive peer to peer thought leadership articles from our feature writers, as well as user generated content across our network of over 3000 Newsrooms, offering multiple sources of the latest education news across the Education and Employability sectors.

FE News also broadcast live events, podcasts with leading experts and thought leaders, webinars, video interviews and Further Education news bulletins so you receive the latest developments in Skills News and across the Apprenticeship, Further Education and Employability sectors.

Every week FE News has over 200 articles and new pieces of content per week. We are a news channel providing the latest Further Education News, giving insight from multiple sources on the latest education policy developments, latest strategies, through to our thought leaders who provide blue sky thinking strategy, best practice and innovation to help look into the future developments for education and the future of work.

In May 2020, FE News had over 120,000 unique visitors according to Google Analytics and over 200 new pieces of news content every week, from thought leadership articles, to the latest education news via written word, podcasts, video to press releases from across the sector.

We thought it would be helpful to explain how we tier our latest education news content and how you can get involved and understand how you can read the latest daily Further Education news and how we structure our FE Week of content:

Main Features

Our main features are exclusive and are thought leadership articles and blue sky thinking with experts writing peer to peer news articles about the future of education and the future of work. The focus is solution led thought leadership, sharing best practice, innovation and emerging strategy. These are often articles about the future of education and the future of work, they often then create future education news articles. We limit our main features to a maximum of 20 per week, as they are often about new concepts and new thought processes. Our main features are also exclusive articles responding to the latest education news, maybe an insight from an expert into a policy announcement or response to an education think tank report or a white paper.

FE Voices

FE Voices was originally set up as a section on FE News to give a voice back to the sector. As we now have over 3,000 newsrooms and contributors, FE Voices are usually thought leadership articles, they don’t necessarily have to be exclusive, but usually are, they are slightly shorter than Main Features. FE Voices can include more mixed media with the Further Education News articles, such as embedded podcasts and videos. Our sector response articles asking for different comments and opinions to education policy announcements or responding to a report of white paper are usually held in the FE Voices section. If we have a live podcast in an evening or a radio show such as SkillsWorldLive radio show, the next morning we place the FE podcast recording in the FE Voices section.

Sector News

In sector news we have a blend of content from Press Releases, education resources, reports, education research, white papers from a range of contributors. We have a lot of positive education news articles from colleges, awarding organisations and Apprenticeship Training Providers, press releases from DfE to Think Tanks giving the overview of a report, through to helpful resources to help you with delivering education strategies to your learners and students.

Podcasts

We have a range of education podcasts on FE News, from hour long full production FE podcasts such as SkillsWorldLive in conjunction with the Federation of Awarding Bodies, to weekly podcasts from experts and thought leaders, providing advice and guidance to leaders. FE News also record podcasts at conferences and events, giving you one on one podcasts with education and skills experts on the latest strategies and developments.

We have over 150 education podcasts on FE News, ranging from EdTech podcasts with experts discussing Education 4.0 and how technology is complimenting and transforming education, to podcasts with experts discussing education research, the future of work, how to develop skills systems for jobs of the future to interviews with the Apprenticeship and Skills Minister.

We record our own exclusive FE News podcasts, work in conjunction with sector partners such as FAB to create weekly podcasts and daily education podcasts, through to working with sector leaders creating exclusive education news podcasts.

Education Video Interviews

FE News have over 700 FE Video interviews and have been recording education video interviews with experts for over 12 years. These are usually vox pop video interviews with experts across education and work, discussing blue sky thinking ideas and views about the future of education and work.

Events

FE News has a free events calendar to check out the latest conferences, webinars and events to keep up to date with the latest education news and strategies.

FE Newsrooms

The FE Newsroom is home to your content if you are a FE News contributor. It also help the audience develop relationship with either you as an individual or your organisation as they can click through and ‘box set’ consume all of your previous thought leadership articles, latest education news press releases, videos and education podcasts.

Do you want to contribute, share your ideas or vision or share a press release?

If you want to write a thought leadership article, share your ideas and vision for the future of education or the future of work, write a press release sharing the latest education news or contribute to a podcast, first of all you need to set up a FE Newsroom login (which is free): once the team have approved your newsroom (all content, newsrooms are all approved by a member of the FE News team- no robots are used in this process!), you can then start adding content (again all articles, videos and podcasts are all approved by the FE News editorial team before they go live on FE News). As all newsrooms and content are approved by the FE News team, there will be a slight delay on the team being able to review and approve content.

 RSS IconRSS Feed Selection Page