Colleges to receive nearly £500m to fund staff pay rises

Extra funding means pay negotiations can recommence

Extra funding means pay negotiations can recommence

The government will pump nearly £500 million into colleges over the next two years to help fund pay rises, it has been announced.

An agreement has been reached with the Treasury by education secretary Gillian Keegan to fund colleges by an additional £185 million in 2023/24 and £285 million for 2024/25. The new funding will be added through the 16-19 funding formula, FE Week understands.

The Department for Education announced the new funding in a blog post which said the investment will “drive forward skills delivery in the further education sector” and “help colleges and other providers to address key priorities which are of critical importance to our economic growth and prosperity”.

In a letter sent to college leaders this evening, seen by FE Week, Keegan confirmed that extra funding will be delivered through “boosting programme cost weightings for higher-cost subject areas as well as increasing the per-student funding rate” through 16-19 funding.

“We expect to revise [16-19] allocations over the summer for the 2023/24 academic year and updated payments to start in the autumn.

“I am grateful for the vital role that FE colleges, sixth form colleges, and your teachers and support staff play in delivering world class education and the critical skills learners need to progress to good jobs or continue their journey in education,” Keegan wrote.

The decision to use 16-19 funding to inject this extra cash through will leave colleges with larger 19+ student populations disappointed.

Bedford College Group chief executive Ian Pryce said the new funding was “excellent” news, but warned: “Colleges with big adult provision miss out, that’s wrong.”

Using this method also means that ministers can’t force colleges to use this cash for pay awards.

Union negotiations

The injection of cash will mean negotiations between the Association of Colleges (AoC) and the national joint forum of sector trade unions can finally recommence. Talks have so far failed to reach an agreed pay recommendation for FE staff, with the AoC refusing to make a recommendation unless the government stumps up more cash.

The new funding announcement comes on the day FE teacher union UCU issued 117 dispute notices to colleges demanding a 15.4 per cent pay increase, national negotiations on workload and “movement towards” national pay bargaining.

It also follows the government’s decision earlier today to accept a 6.5 per cent pay increase for school teachers as recommended by the School Teachers’ Review Body (STRB).

David Hughes, CEO of the Association of Colleges (AoC), said in a statement that the FE pay rise alongside schools is a “sign of the recognition at the highest levels” of the importance and contribution of colleges and college staff to the economy.

He added that in looking at the detail after the government’s announcement today, it will help the AoC to formulate a new pay recommendation to unions.

Last year, the association made a 2.25 per cent pay recommendation, and after talks with unions was consequently uplifted to 2.5 per cent, and then rejected by unions. College principals said at the time that the 2.5 per cent recommendation was “simply unaffordable”.

Hughes said: “We know how hard the secretary of state has been fighting to win new investment for colleges and how serious she is about supporting the sector, so we’re delighted that she has secured a significant win today.”

“As ever, the devil will be in the detail, and we look forward to seeing more of that next week. This will then help us to be able to formulate a new pay offer, which we hope to be able to do promptly so that colleges can put their offer to their staff and the unions, and the sector can focus on continuing to deliver for the millions of students who study and train in colleges every day.”

Bill Watkin, chief executive of the Sixth Form Colleges Association, said it was the first time that colleges have benefitted from an uplift alongside schools.

“This reflects the government’s commitment to college teachers and lecturers and follows our protracted efforts to secure a better deal for the FE sector,” he said.

“Of course, this is a step in the right direction, but there is still a need to address broader 16-19 funding which is significantly lower than other phases of education, as well as the increasing cost pressures which are the result of stubbornly high inflation rates. It is our hope that we can now enter a more settled period and that students and teachers can focus on the high quality of learning that has always characterised sixth form providers.”

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  1. Julian Gravatt

    Worth adding a couple of points:

    * this is money that was already in the DFE 16-19 budget reserved for extra students. 16-18 enrolments have been less than expected and Treasury has given DFE permission to use some of that money to increase funding rates (the price paid for every student)

    * distributing this money through the 16-19 funding formula will mean there is proportionately more for colleges who concentrate on 16-19 years and less (as a proportion of income) for those with large adult, apprentice or higher education student cohorts

    * there are no details yet in terms of what the funding changes will be or how much will go to each college and school sixth form. It might be well into August or even September before this information is confirmed.

    * budgets for government departments currently run until March 2025 with no information about whether these funds will continue in 2025-6. It all depends on who wins the next election and what they do in the terms of education spending. This sort of fund is likely to continue but politicians normally insist on savings. FE sector will need to continue to argue its corner.

    Despite this list of issues, the announcement is still good news but better for some than others.