Exactly a week before the Autumn Budget, the latest assessment of FE College finances dropped into my email inbox, this time from the authoritative economic Think-tank, the Institute for Fiscal Studies, entitled “The state of college finances in England”. It makes grim reading.
The report rehearses the main facts, which are no surprise to any working in the FE sector.
Since 2010/11, overall college sector income has fallen by a third.
Between 2010/11 and 2019/20, funding for 16-19 education fell by 28% and although there have been recent increases, it remains 10% or more below pre-2010 levels.
37% of colleges ran deficits in 2022/23, and 16% have been in deficit for three or more years.
Schoolteachers now earn on average 15% more than college teachers and the recent pay award to schoolteachers will increase this to 18%, the highest gap on record.
I know exactly what this feels like on the ground. As well as working for the Lifelong Education Institute, I’m Chair of Governors of a medium size FE college serving a disadvantaged area of London. Let me share some insights from this typical institution, which delivers a wide range of 16-19, adult, special needs and apprenticeship courses, as most colleges do.
At a recent governors meeting, we celebrated our first surplus in years – a small but hard-fought victory after three successive years of deficit. Despite a rise in enrolment of school leavers, the steep fall in adult student numbers means that overall income has flatlined for the past six years and the college has only managed to avoid financial disaster by running a very tight ship. Digging the college out of deficit has meant regular downsizing of our staffing base, with frequent reorganisations accompanied by a steady trickle of redundancies.
Not surprisingly, this has had an impact on staff morale, which is now reflected in the difficulties we’re experiencing in recruiting to vital teaching and support roles. The college is currently carrying a high number of vacancies – 48 at the latest count, over 10% of our staffing establishment. This includes teaching vacancies in Electrical Installation, Plumbing, Science and maths, amongst others. With FE lecturer pay steadily declining in relation to school and university teachers, and a continued sense of job insecurity after successive rounds of cuts, this is predictable. It means that in many of the priority subjects colleges are being urged to deliver – Engineering, Construction, Health, Care – any expansion is constrained by the difficulties of recruiting appropriately skilled staff, and in many areas there is a looming problem as experienced staff reach retirement age.
This bleak picture is replicated across the FE sector, which is still operating in a Scrooge-like budget straitjacket. With Scrooge funding, you get Cratchit colleges. Overworked, underpaid, constantly fighting for financial oxygen. Trying to do their best, but able to offer less to the community, employing fewer people and struggling to attract and retain expert vocational teachers.
So what can be done? There are some helpful steps that could be taken straight away, like exempting colleges from paying VAT. But just as with the higher education sector, the fundamental problem is the inadequate value of per capita student funding. This needs to go up by at least 10%. Sadly, this is highly unlikely in today’s economic climate.
Will the new government ride to the rescue? The record shows that FE funding tends to rise under Labour governments, but not straight away, especially when public finances are under strain. But the financial problems of the tertiary education sector, across FE and HE, are not going away. If a successful economy needs more skilled employees and families need better paid jobs, then someone is going to have to pay for an education system that delivers skills.
There are no easy answers. The Ghost of Christmas Yet to Come is, well, yet to come. Here at the Lifelong Education Institute we’re going to be working on some new ideas this year, in close consultation with our member institutions, in advance of the three-year Spending Review due in 2025. The aim is to find solutions which work across the Tertiary sector that strike a fair balance between money from government, employers and individuals. Watch this space.
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