If colleges are not careful, HE will muscle in on their territory

9 Jul 2018, 5:00

The FE sector is already beleaguered, but market forces will soon see universities trying to carve themselves out a bigger slice of the pie, writes Ewart Keep

A research project about to be published by the FE Trust for Leadership on the marketisation of further education points to the growing competition that colleges face from both schools and universities. There is a danger that the FE sector may be about to be caught in a pincer movement.

With the current demographic downturn in older pupils, English secondary education is currently suffering from local overcapacity, a situation exacerbated by the government’s school choice agenda and its sponsorship of new market entrants such as UTCs, studio schools and free schools.

Moreover, between 2011/12 and 2014/15, about 260 school sixth-forms entered the 16-to-18 arena, and the number of approved apprenticeship providers or with an AEB allocation registered as in scope for Ofsted inspections rose from 1,043 in 2011/12 to 2,543 in April 2018. The 14-to-18/19 marketplace that has been created as a result of these developments is a brutal one, with FE colleges, UTCs and other new forms of school, apprenticeship providers, sixth-form colleges and traditional school sixth-forms all fighting for “market share”.

On the other side of the fence, HE has been seen by all mainstream parties as the chief means to deliver higher technical and vocational skill and promote social mobility. It has many political allies and has attracted increased resources through fees.

However, at present there is overcapacity in HE. This is partly driven by the current decline in the volume of 18-year-olds (which is set to last until 2020), and partly by increased competition for students between the Russell Group universities which are expanding their student numbers, and lower-tier institutions which have seen applications fall.

Some universities are already searching for new markets and customers in order to sustain themselves

Empty places are not an easy option to live with, because since fees went up, universities have spent £28 billion, much of it borrowed from banks, on new teaching infrastructure, halls of residence, cafes, social spaces and refurbishment programmes aimed at attracting students. A fall in cashflow from fees is dangerous as the financial performance in many institutions is weakening. Some universities are already searching for new markets and customers in order to sustain themselves.

One route is to expand foundation years, and put tight limits on the validation of degrees in FE, particularly where the university is seeking to build its own degree-apprenticeship provision. The other is to move directly into what have hitherto been seen as part of the FE marketplace, such as access courses and level three vocational qualifications, as some universities already have. This suggests that battles will loom over who fills the gap in technician level or sub-degree courses.

These are not new problems. Back in 2005, the Foster Review noted that “FE colleges are more and more drawn and squeezed into roles that are defined by demography and policy changes and the emerging roles of HE and schools”. The issues have simply been heightened by a funding squeeze, increased marketisation of the different areas of FE provision, and the increased pace and scale of the marketisation of schools and, more latterly, HE.

What should FE’s response be? One clear message is that colleges need to stake their claim, as publicly as possible, to a large slice of the new sub-degree technician action. The virtues of HE delivered through FE also need to be publicised (not least to local MPs) – colleges, not universities, are the main provider of lower-cost degree courses, and they are the ideal provider if policymakers want to try to revive part-time and adult participation.

Finally, as a medium-term goal, it is surely not beyond the wit and imagination of a powerful mayor and combined authority to seek to bring together local FE and HE providers in some kind of more integrated local tertiary partnership or alliance, particularly in areas where colleges have themselves learned to operate more cooperatively.

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