Problems with new Skills Funding Agency (SFA) software continue to trouble FE staff as they prepare to attempt submitting key recruitment information by 6pm tomorrow (Thursday, December 5). Known as the R04 submission, the data could be used by the Education and Funding Agency and SFA for both funding and performance management purposes. Ian Pryce explains the headaches the Learning Aim Reference Service (Lars) and the Funding Information System (Fis) are causing in preparing to submit the data.

If at the end of your supermarket run the barcode scanner didn’t recognise half your items and overcharged you for the rest, you’d be forgiven for doing your Christmas shop elsewhere in future.

This summer and autumn, colleges have unfortunately found an unexpected item in their bagging area — financial uncertainty. And this is causing new and troubling operational problems for many.

FE is complex and, unlike supermarkets, the same product generates different income depending on the age and nature of the purchaser (the student).

But the current problems with funding software are outside our control and can have serious ramifications.

We should however put it in perspective. We know the students we have enrolled. We know their programmes of study and qualifications. We even know where they live.

We can track attendance and performance and we can use that data to inform marketing, staffing and rooming decisions.

What we can’t do is get an accurate handle on the income they generate.

To an outsider this may not seem too serious. After all, government is paying to profile so our staff get paid, but it causes two important problems.

First, we are an ultra-low-margin service. Typically, colleges generate surpluses of only 1 per cent of income.

We lose funding if we fall short of target, and rarely gain if we overshoot.

Forecasting income from your own records is a very inexact science, made harder by funding and tariff changes. If we get our forecasts wrong by even 5 per cent (and the current picture looks much less accurate than this) it could mean a financial crisis. We operate in a “just-in-time” funding system with almost no room for error.

Things are complicated further by subcontracting. Do we guess what we owe them? Err on the cautious side? Play hardball and wait until the problems are fixed?

All three options are problematic. You may need to claw back later, or might tip your partners into insolvency and damage your success rates.

The second issue is operational rather than financial.

The funding system errors inevitably mean rework, revisiting enrolment data, re-inputting, re-validating.

This significant duplication of effort has a real cost, and a human cost as no one likes wasting their time.

In addition, it has an impact on the next set of priorities.

At a time when data staff should be focusing on setting up next year’s curriculum, focusing on attendance and retention processes, and concentrating on enquiries and applications, their capacity is reduced by these problems.

At a time when finance staff should be planning adjustments to the cost base (up or down) for next year they are fretting about whether the governors will forgive an inaccurate income forecast.

These are subtle in their impact, but they have an effect on the quality of outcomes and our medium term resilience.

We know the culprits are Lars and Fis — our 2013 pantomime villains.

We know the Skills Funding Agency is sympathetic and will seek to help anyone who makes the wrong calls.

We know that under the excellent Kim Thorneywork, the agency has been received more and more favourably by the sector, and their financial management, in very difficult circumstances, has been exemplary. We know everyone is focused on resolving the problem.

And maybe it is these things that will be a blessing in hindsight?

Colleges live in a very unforgiving world — Ofsted, data validity error reports, allocations that must always be achieved, success rates that must never go down.

We should resist the urge to lash out in our frustration. Instead, let’s learn from mistakes that could have been foreseen and managed, let’s resolve to change data requirements slowly (especially in the wake of the closure of the gatekeeping Information Authority), and let’s resolve always to have a Plan B.

A sincere apology to our management information systems teams wouldn’t go amiss either.

Ian Pryce, principal of Bedford College