FE Commissioner warns of college solvency risk and the danger of reclassification

Shelagh Legrave also reflects on the 'positivity' of her first year in post

Shelagh Legrave also reflects on the 'positivity' of her first year in post

pandemic

Shelagh Legrave completed her first year as FE Commissioner last month. But, while she is keen to focus on positivity in the sector, she tells Billy Camden how budget pressures could force a handful of colleges into insolvency, why she is firmly against reclassification, and reveals her most “worrying” concern

Reducing the number of colleges in intervention was one of Shelagh Legrave’s key priorities as FE Commissioner when she came onboard – and it appears she has achieved that goal in the short term.

Just three formal intervention reports were published over the past 12 months, with Legrave revealing that nine colleges have exited the process in that time, while 15 remain in intervention.

She puts the low numbers of colleges receiving formal FE Commissioner intervention down to good Ofsted performances since the pandemic, but also says colleges are learning how to make “every efficiency they possibly can to live within the means of their income”. Leaders are also “being good with their resources” and apprentice numbers in colleges are “going up”, she claims, which adds to the income.

But, looking forward, the picture is “less rosy”. This is largely because of rocketing energy bills – with increases of up to 500 per cent for some colleges, huge inflation, and also the pressure from unions on leaders to give staff adequate pay rises in the face of the cost-of-living crisis.

Going under still a risk

So, could we see more colleges going into administration? “There are a small number of colleges where it will threaten their solvency,” Legrave admits.

“There are some that will struggle to maintain sufficient cash. The government has always been clear that it will support colleges where it possibly can, to help deliver to its students and meet the local needs. But I’m worried about the state of colleges finances.”

The commissioner, who won’t name those most at risk of going bust, says the “bigger” problem for her is that some colleges are having to stop delivery of priority courses because they can’t find the staff to deliver them, particularly in engineering, construction and digital.

“There is a real concern that skills needs will not be met just because they can’t find the staff.”

Public versus private

Another live issue concerning colleges is their future as private or public sector organisations. The Office for National Statistics is currently reviewing the classification of colleges and is expected to announce its decision on November 29.

Legrave wants colleges to retain their current private sector status.

“I’m not in favour of reclassification,” she says, “but I totally accept it’s not my decision or indeed anyone in the government’s decision.

“I think staying the same brings less bureaucracy and less complications in the current state, and more able to operate on a level playing fields of universities and private training providers. But I’m equally pragmatic about this. If we are reclassified, we make the very best.”

FE Week understands that colleges will be able to continue to operate subsidiaries and retain their reserves if they are reclassified to the public sector – which should alleviate some concern among leaders.

Legrave doesn’t anticipate the role of the FE Commissioner to change if colleges are reclassified. “I will still continue as an independent adviser with a team of practitioners supporting colleges and it won’t affect intervention position.”

‘Active support’ visits

Despite only three intervention reports having been published over the past year, Legrave says she feels her team has been as visible as ever to the sector through their “active support” visits.

Under this scheme, any college can request help and support from the FE Commissioner through a diagnostic assessment – a process that was previously only open to colleges where a new principal had been appointed.

The concept of Active Support includes a new “curriculum efficiency and financial sustainability” (CEFS) programme, which builds on the cost-cutting school resource management adviser programme.

Legrave, who has conducted over 50 active support visits herself this year, explains: “The whole tenor of my work this year has been ensuring that we do our very best to support every college not just those colleges in intervention.

“And we’ve also worked hard on CEFS, rolling out now to over 20 colleges. This is just helping them to ensure they’re getting the most effective way of delivering their curriculum and other commercial courses.

“There’s a whole range of different active support that’s been provided, from me speaking to governing bodies to position policy and make certain that the governing bodies are aware of the support we can provide to myself, to advisers or deputies going into support colleges who needed a bit of help around strategic positioning.

“It is wide-ranging. A significant majority will have benefited from something. And I’m still passionate that the more we can share, the better we will be as a sector.”

Subcontracting concerns

However, the area in colleges that Legrave worries about the most is subcontracting.

FE Week has reported on several scandals in recent years, such as one ongoing case involving Brooklands College where seemingly poor subcontracting oversight led to the government demanding £20 million be repaid.

“There tends to be legacy contracts that haven’t been overseen sufficiently in order to make certain that the subcontractors are delivering,” Legrave says.

“It’s only in a few cases, but it’s still causing a problem. And I think that’s frustrating given that the message to the sector from some time ago was reduce your subcontracting.”

The “danger”, in Legrave’s view, is that subcontracting is seen as a way of “bolstering income” through management fees. Some colleges also use it to use up allocations that they are struggling to spend at the last minute – known as tactical subcontracting.

She adds that colleges are struggling to use up their adult education budget contracts partly because “some of the rules around eligibility of learners have continued to tighten and therefore seeing the opportunity to subcontract to somebody to deliver it for you is obviously advantageous to the college, but not always well controlled”.

Not fear, but support

Legrave’s predecessor Richard Atkins’ four-year tenure as FE Commissioner was seen as adversarial by many. His visits were sometimes followed by the departure of principals and chairs, with his no-nonsense approach dividing the sector’s opinion.

When FE Week spoke to Legrave last year as she took over the role, she said she wanted to change the perception of the position to one of “fear” to one of “support”.

Does she feel she has achieved this mission yet? “I think I am making progress but that is more anecdotal than hard evidence,” she says.

“I feel very welcomed when I go to see colleges. I’m not having colleges say to me well we don’t want to talk to you.

“For me, it’s all about positivity, selling the sector successes, and there are some colleges doing some really wonderful things.”

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