Warning FE finance probe ‘may not go far enough’

Warning FE finance probe ‘may not go far enough’

A National Audit Office (NAO) probe into FE and skills finances may not go far enough in looking at how the sector has been hit by “multiple funding cuts,” National Institute of Adult Continuing Education (Niace) chief executive David Hughes has warned.

Mr Hughes, a former national director of the Skills Funding Agency (SFA), told FE Week of his concerns about the purpose of NAO review in looking at the work of the SFA and Department for Business, Innovation and Skills (BIS) to monitor the financial health of FE providers and intervene.

The review, launched last month (February) and due to conclude this summer, has a “particular focus on colleges” and comes with FE and skills providers facing a national budget cut of up to 24 per cent next academic year. Apprenticeship providers are expected to escape the worst of the cuts.

Mr Hughes said: “I think the issue of the multiple funding cuts colleges have faced and the increasingly narrow margin they are expected to operate in is putting the sector into a really difficult situation and I would hope that would be part of the context for this review.

“It is almost impossible to make every college in the country financially viable given all the funding changes that have been made, and the NAO may not want to ask about that, but it’s certainly something the next government is going to have to answer.

“The NAO has to be apolitical, and given the decisions that have been made concerning the most recent cut, just looking at how the BIS and the SFA work to identify financial difficulty and intervene is a very narrow purpose.

“They have to do this review in the context of all of the cuts which have happened, including the one most recently announced, but I don’t think it will deliver quite what some of us might like it to, which is a proper review of the financial future of the sector, particularly for colleges. That is a much bigger political debate, and one which the NAO is not going to start.”

And while Stewart Segal, chief executive of the Association of Employment and Learning Providers, called for the financial situation of his members to be taken into account as well as colleges’, the Association of Colleges, University and College Union and Association of School and College Leaders have already called for the 24 per cent cut to be considered by the review.

Meanwhile, Dr Lynne Sedgmore, executive director of the 157 Group, said: “It will be important that the NAO examines all aspects of the future sustainability of our skills system, including the responsibility of government in this area.”

Dr Mary Bousted, Association of Teachers and Lecturers general secretary, said: “Following the government’s announcement that it would cut FE funding for 2015-16 by up to 24 per cent, we hope the NAO evaluates the government’s unnecessary focus on apprenticeships.

“We believe this focus on apprenticeships will limit colleges’ usual operations, and reduce the options for learners because colleges will have to cut many other courses to be able to fund apprenticeships.”