Labour: Ney report exposes ministerial unawareness of financial crisis ‘engulfing’ colleges

Dame Mary Ney’s report into college financial oversight exposes a “decade of austerity” and a lack of ministerial awareness of the financial crisis “engulfing” the FE sector, Labour’s shadow apprenticeships minister has said.

Toby Perkins added that the failure in oversight has been “exacerbated by the Tory cuts to the civil service”.

He was responding to the long-awaited independent Ney report, which was completed in October 2019 but only published by the Department for Education today.

The review was commissioned after Hadlow and West Kent and Ashford Colleges became the first colleges to be placed in education administration last year – a shock collapse that revealed failings by the funding body to spot warning signs.

Ney’s overarching recommendation was that there needs to be a shift to a new nurturing and “strategic” relationship with the sector. She warned that significant staff cuts to the Education and Skills Funding Agency have been a key factor in their inability to find early signs of weakness (full story here).

Perkins said: “Dame Ney should be thanked for an excellent report which demands government action to address a widespread failure that is allowing our FE sector to drift towards bankruptcy.

“The report exposes in detail the appalling consequences of a decade of austerity, the failure of the government’s FE reforms and the lack of ministerial awareness of the financial crisis engulfing our crucial FE sector.

“The failure in oversight has been exacerbated by the Tory cuts to the civil service and reforms that have weakened the oversight that government provides.”

The shadow minister added that Ney is “correct” that the current mechanisms and reforms are “inadequate to address this failing and for all the government’s rhetoric about the importance of the sector the truth is that colleges are collapsing and young people are being let down by these failings.

“Labour hopes that the Secretary of state will be making a statement to parliament to confirm that he will address the failings identified and confirm if he will adopt the recommendations in full very soon.”

James Kewin, deputy chief executive of the Sixth Form Colleges Association, said that Ney’s report makes some welcome recommendations, such as three year funding settlements, a “more joined up approach” to intervention, and strengthened governance.

However, the “scope of the review did not allow Dame Mary to focus on what actually causes financial instability in the first place – not least the decade of underinvestment in post-16 education,” he added.

“Reconfiguring the departments and agencies involved in intervention or refining the financial information provided by colleges will, in isolation, have a limited impact.

“There is certainly a need to reform financial oversight, but there is a more pressing need to ask if colleges are receiving the funding required to provide students with a high quality education”.

Deputy chief executive of the Association of Colleges, Julian Gravatt, said: “It’s helpful that DfE have finally published Dame Mary Ney’s review on the financial oversight of colleges. She concluded her work in autumn 2019 at a time when many colleges were on an improving trajectory but she describes a system which is complex, backward-looking and not really focused on the key tasks.

“The Covid-19 crisis has stopped the financial improvement in its tracks, caused deficits in 2019-20 and opened up large financial problems for colleges in 2020-21.

“Government and colleges should take her recommendations seriously and work out which of them still make sense nine months on. We do not agree with the suggestion that Ofsted should join the long line of regulators assessing college financial health but we do think that the existing arrangements require improvement.”

You can read the government’s response to the Ney report here.