College leaders are demanding emergency financial support be made available to keep them afloat during the Coronavirus pandemic.

Association of Colleges boss David Hughes has written to education secretary Gavin Williamson today to call for “simple, rapid and clear routes” for his members to secure cashflow support.

He estimates that an average college might lose between £500,000 and £1 million per month of temporary closure or reduced capacity and “very few, if any, will be able to cope without government support”.

Colleges with low cash balances, large student fee income or employer-funded training will be at “particular risk”.

He claims that a “small number” of colleges had to partially close last week or on Monday on Public Health England instructions following positive test cases of Covid-19.

Hughes’ letter states that colleges seek assurance that adult education budget, study programme, apprenticeship and “other DfE/ESFA income, wherever possible, can be guaranteed for the coming months”.

It adds that in the absence of an instruction from the government for all colleges to close, principals “seek assurance that they will be supported in any local decisions to close a college or a campus which are taken in the light of the circumstances”.

“These will include high numbers of staff in social isolation or in vulnerable categories who require social distancing; or outbreaks of the virus amongst staff and/or students; advice from Public Health England and so on,” the letter continues.

“Given the nature of colleges, any temporary closures are likely to be time-limited and partial.”

Hughes also said the decision by Ofsted to suspend all inspections is “welcome”, but it should be “followed swiftly by assurances that data, performance tables, targets and the like will also be suspended for the next few months.

“As many colleges face up to tough decisions about closing their colleges, it may be sensible to discuss a longer Easter shutdown, starting early and/or carrying on for longer to allow for colleges to protect core services and to ready themselves for what looks likely to be a long haul.”

His letter concludes: “At times like this we need to provide as much assurance as we can to people at the sharp end to be able to make decisions quickly, often with limited information, safe in the knowledge that they will be judged for their best intentions, not for any mistakes they might make.”

The Department for Education has been approached for comment.

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  1. Martin

    What about Independent Training Providers, 3rd Sector Organisations and all who get paid on Profile, if no social contact or gatherings allowed or institutions have to close, how do we recruit and deliver, we have more chance of going bust and losing all jobs more than a college, colleges are mainly grant funded (or were) and get their funds and have to budget how to spend it, others have to deliver and earn it -its about time this industry puts us all on an even playing field as we are inspected and checked the same way and have to jump through the same hoops

      • Martin

        Colleges are independent self governing organisations but they have always relied heavily on government funding. The percentage of income from public sources typically exceeds 75% but the routes it takes to reach individual colleges are complicated and keep changing. There are some important starting points:

        Courses free at the point of use: Colleges get funding to keep education and training free or low cost
        National and formula-based: A national funding formula has been used for colleges for 25 years
        Funding is a tool of policy: Government uses funding to influence behaviour (eg. Funding is uses to ensure colleges enrol right students on the right course at the lowest cost).
        Education activity drives funding: Who students are and what they do, affects income
        Data: Vast data collection systems make everything work.
        There are several funding systems in further education and they differ from the systems used to fund schools and universities.
        16-to-18 education: The Education and Skills Funding Agency (ESFA) pays colleges based on the numbers of students they are expected to enroll using national funding rates adjusted by a weighted average calculation based on their characteristics. Colleges need to offer study programmes including A-levels. Students without GCSE in English or maths at grade 4 have to resit. National funding rates have been fixed since 2013.
        Adult education budget (AEB): ESFA uses a different formula for adults. About half of the adult education budget is being devolved in 2019. AEB is used to support courses at lower levels, including English and maths to Level 2, first full level 2 and first full level 3 up to age 23.
        Apprenticeships: ESFA is manages funding for apprenticeships. Levy paying employers get an account and contract directly with approved providers at rates determined by a formula. Colleges and providers have an allocation for non-levy paying employers using the same formula.
        Student loans: The student Loan Company administers tuition fees on behalf of HE and FE students

  2. David Priestly

    Working in a college currently, why wouldn’t the Further Education Commissioner step in with his team of deputies given how they support leaders and transform colleges. The ESFA picks it’s colleges to support, and closures will be a win surely.

    Sounds like a golden opportunity for the ESFA and FEC to ‘save colleges’ by ‘enforced closures’.

    Let the good times roll….

  3. Andrew Dunsire

    ITP’s will be hit hardest with the way they are funded . The bulk of their monthly payment comes from the numbers of learners in learning , in a job and receiving training. It’s a certainty that starts will drop, leavers from programme will increase and therefore in learning numbers will decrease at a rate that will overwhelm ITP’s . Cost cutting through staff redundancies will not keep pace with the decline in revenue and will also be counterproductive with being able to adapt methods of delivery to learners who’s working patters have been turned upside down by their own employers trying to cope . Unless ESFA come up with a plan to underpin funding soonest. I doubt whether the provision will be there in July. Faced with a certainty of rapid decline in revenues and an uncertainty of how long and how far the decline will last, do the ESFA really expect funders and stakeholders to invest and borrow to fund ever increasing losses. The Chancellor said he will do whatever it takes. Lets see

  4. Professor Bill Wardle

    All the above contributions have pertinent points. They make it clear that scenario modelling should be an immediate and transparent priority. Taking uncertainty out of the debate will be helpful to all parties: students, employer, funders and colleges.

    Scenarios range from interruption (we can re-start in Summer or Early Autumn) through to circumstances of total disruption (we are unable both to complete the current academic year and cannot commence 20-21). All have implications for colleges and funding processes and these can be quantified. At a basic level, annual accounts for each institution are required to declare how much operating cash each institution holds, calibrated in days. This is telling information and will show how soon the bail-out is needed and how deep the image will be.

    There appears to be an implicit assumption that one sort of bridging finance is necessary, providing cashflow to carry colleges over. This is perhaps misplaced, wishful thinking. Even if there is only a delay to the commencement of AY 20-21, significant numbers of students will ‘migrate’ elsewhere and may never materialise if and when the green light goes on. So, the damage to colleges will be permanent rather than transient.