Costs review ‘a waste of time’

Costs review ‘a waste of time’

A review of the costs of running FE institutions has been branded a “waste of time” and in need of “further work”.

The Department for Business, Innovation and Skills, Department for Education and The Treasury have published a 17-slide presentation on their joint review of FE costs, which was commissioned in February and was carried out over six weeks from March.

In February 2015, the Treasury, BIS and DfE commissioned a ‘Joint review of Further Education (FE) cost drivers’ to understand the funding, cost drivers and outcomes of the FE system in England, with a particular focus on teaching costs, E&M provision and financial management.

The study analysed financial health metrics for 1,232 FE institutions and cost breakdowns for 341 colleges, using Association of Colleges information and carried out 20 “deep dive visits”.

The review found, among other things, that there was a “significant difference” in profitability of individual providers and that providers with the best financial management drew their senior managers from the private sector and education sector.

It also found that the overall FE system operates at a 1 per cent profit, meaning any future reduction in funding “would need to be offset across the system by a reduction in costs, additional income generation or reduction in outputs”.

But the review has been criticised by Steve Hewitt, a college funding manager and expert, who took to Twitter to complain.

He said: “Anyone else asked for the Joint Review of FE Costs thing…? I have and it is a laugh riot!

“Apparently there is no link between spend and outcome, so the whole thing is a waste of time. Key point is they claim Academies spend 11 per cent on ‘admin’ whereas FE spends 17 per cent. Clearly we know why that is and that it’s all the government’s fault but it’s the sort of stat that doesn’t go away.”

Mr Hewitt also told FE Week: “You can’t compare a general FE college admin spend to an academy’s admin spend, academies don’t have to put up with 90 per cent of what we do.”

A spokesperson for the Association of Colleges said: “The ‘joint review of FE costs’ was carried out in March and focused on English and maths.

“The slides have only just been published and while some of the analysis is helpful, some conclusions need further work.”