UCU in financial turmoil

Urgent action is needed to prevent the University and College Union (UCU) being plunged into debt, a letter from a UCU Trustee to all the National Executive Committee members reveals.

The letter, seen by FE Week, describes “a staggering loss to the union, something in the region of £3m – £4m” after the UCU Congress was “misled” into believing the sale of one of its buildings would raise enough to pay off debts.

However, the UCU insists it is “unwise” to gauge what the financial situation is with the union, until the sale, which is ongoing, has been completed.

Britannia House, in North London, was proposed for sale at an estimated price of £12 million after the merger of the National Association of Teachers in Further and Higher Education (NATFHE) and the Association of University Teachers (AUT) to form the UCU in June 2006.

However, in the letter, Fawzi Ibrahim, the former NATFHE national treasurer and now UCU Trustee, says: “I’m taking this unusual step of writing to you regarding an important aspect of the union’s finances.

“Congress 2011 was told that ‘the money received from the sale of Britannia Street property will be sufficient to pay off the existing debts. There will be some left over to add to the capital replenishment fund’.

“This is incorrect. Congress was misled.”

Mr Ibrahim says that following Congress, he wrote to the General Secretary, Sally Hunt, asking for clarification, leading to an exchange of ten emails.

In none, Mr Ibrahim’s letter added, did she approach the subject “let alone answer my questions” so he went to the union’s auditors.

The letter continues: “According to the auditors, at the time when the audit was carried out, the union owes a total of £12.45m in loans.

“The estimated cost of the sale of Britannia St. property (including agent’s commission, consultants and legal fees) is £2.03m.

“It follows that, if Britannia St. was sold at the agreed price of £12m, far from that being ‘sufficient money to pay off the existing debts’, there will be a huge shortfall.”

When approached, Mr Ibrahim refused to comment on the leak but he did say: “UCU’s finances are fundamentally sound.

“All we need is a long-term plan to pay back the existing debts over say the next ten or so years regardless of Britannia St.”

When pressed on the fact he had been openly critical of the union’s dealings in the past, he said: “It is no secret that I have, over the past few years, expressed my concern at the attitude towards the union’s finances which borders on complacency.”

One UCU source went further, saying the attitude had been that once the Britannia Street building is sold, “all our problems will be over”.

The result was a fragile financial situation, leaving the UCU at the mercy of the banks. His further concern was that any change in bank rates could see interest payments rocket and services would inevitably be affected.

These concerns are echoed in the rest of Mr Ibrahim’s letter, despite his assurances.

In November 2009, contracts were exchanged on the sale of the former NATFHE HQ in Britannia Street after the UCU bought a central London building in Carlow Street and a bridging loan to cover costs while the sale was completed.

The following year the UCU paid £145,862 in interest on the loan, which carried liabilities of £12.3 million.

The letter continues: “If you add the £2.27m advanced in cash when Carlow St. was purchased and a bridging loan was obtained, the outcome of the decision to buy Carlow Street, a decision that was taken in haste without a meeting of the Strategy and Finance Committee, is a staggering loss to the union, something in the region of £3m – £4m.

“Such an outcome was not hard to foresee at the time when property prices were beginning to decline. This is why, when it came to the Trustees, the decision to go ahead with the purchase was not unanimous.

“As a National Executive member you are charged with looking after the union finances and take decision on how the union’s money is spent.

“You cannot do that without the full knowledge of the true state of these finances. I hope this letter has helped to do that.”

A UCU spokesperson said: “The impact of recession on the property market is well-documented.

“It would be unwise to try to gauge what the financial situation with Britannia Street is until a sale has been completed.”

As disputes rise so do the costs

As icy draughts and the impact of budget cuts blow through further education, tensions among staff are rising. Small wonder, perhaps that college managers are increasingly looking for outside help.

There’s now a growing demand for the services of outside human resources (HR) consultants – some costing £800 a day – to help sort out a variety of conflicts.

There are grumbles aplenty. According to a recent members’ survey by the lecturers’ union UCU, 84 per cent of respondents admitted to finding their job stressful last year.

Two thirds reported ‘unreasonable expectations’ from colleagues, students and managers’ as a principal cause. Even allowing for those who enjoy a good moan, this sounds like an unhealthy situation.

So outsiders are being hired to help sort out disputes: redundancy; breakdown of staff relationships; rows over unannounced lesson observations; and wrangles over contracts. But are they value for money – and why employ them when colleges have their own personnel teams?

Sue Clyne, executive director of HR Guildford College has seen things from both sides of the fence – she worked as a freelance herself until earlier this year. “Conflict mediation is a growing area,” she says. “Sometimes an internal HR person can be heavily involved; and disputes get to a very emotive level.”

One college where an outsider may have helped broker a peace deal is Westminster Kingsway. Lecturers there have boycotted unannounced lesson observations by managers for almost four years. Keen to break the deadlock, principal Andy Wilson hired Martin Rosner head of HR at FE Associates, to help find a compromise.

The practice of managers dropping in on lessons and monitoring lecturers without notice has severely strained relationships at several colleges in London and beyond. One lecturer, who asked not to be named, said: “It’s like ‘we’re going to catch you out – we know you’re lazy and cut corners, and we’re going to prove it’. I’d say this is probably the most stressful thing for any teacher, and the most common reason people are getting out.”

Neither Wilson nor Rosner wished to discuss the current situation at Westminster Kingsway now that dialogue between lecturers’ representatives and management is underway. “It wouldn’t be proper to talk to the press or undermine things,” said Rosner. “It’s a sensitive issue.”

Rosner says FE Associates get called upon ‘as honest brokers’ to resolve all sorts of issues. “It can be over anything, such as a complaint of harassment,” he says. “There’s more of this work now – we’re building it up. Things are very difficult for colleges at the moment – the last thing they want is to be involved in a protracted dispute.”

He declined to say how much he charges but, according to Clyne, outside HR consultants’ fees range from £300 to £800 a day. But, amid recession and in a competitive field, charges ‘have come down over the last 12 months from a minimum of £450’, she adds.

Clyne’s work ranges from resolving conflicts between individuals to delivering training advice.

She sees a steady growing demand for HR consultancy, especially to deal with the workload created by re-structuring and redundancy.

But if college management is paying the bill, can outside HR help be even-handed? “When you’re being paid by the college they want you to deliver results,” Clyne says. “Although they’re likely to accept independent advice, if you say ‘I think management have got everything wrong’ you won’t be popular.” Rosner says the aim is for a ‘mutually agreed outcome’, to sort out disputes but admits that’s not always possible.

From the union perspective, outside HR consultants are a mixed blessing – ‘a curate’s egg’- according to Chris Powell, London regional official for UCU. “Increasingly in the last year or two in London, I’ve found myself dealing with them,” he says. “Some I have a great deal of time and respect for.

“They know their job; they’re focused and professional.

“But others I have a less positive view of – I’ve a number of experiences where, in my view, their intervention was unhelpful and exacerbated the situation. Some end up telling the senior management what to do rather than providing advice and options.

“In some places they seem to become the HR department – they hover around far too long. That baffles me – they don’t come cheap. Proper permanent staff should be appointed instead.”

Ministers call for a Royal Society of Apprentices

A Royal Society of Apprentices should be established to help promote vocational training, according to the All Party Paliamentary Group for Further Education, Skills and Lifelong Learning.

The call is one of five reccomendations published in the ‘Apprenticeship Inquiry: Autumn 2011’ report, and would be used to improve the branding of apprenticeships, as well as addressing issues around apprentices aged 25 and above.

Conservative Co-Chair Robert Halfon MP said: “Ever since I was elected MP for Harlow, I have campaigned for a Royal Society of Apprentices.

“This report is the foundation of such a society.

“As a first step, I have also worked with the NUS to launch an Apprentice Card, giving apprentices the same discounts and benefits as university students.

“Apprenticeships are not just about economic efficiency; they are about social justice as well.”

The Group took evidence earlier this year and concluded that there was a danger the term ‘apprenticeship’ would become too generic as the number of apprentices increases.

The report adds: “A Royal Society may help to guard against a devaluing of the term.”

Other recommendations in the report include a government led-review into the impact of reduced bureaucracy on employers, as well as the creation of ‘apprenticeship champions’ to take part in a national awareness campaign for schools.

The call for evidence also highlighted a lack of understanding and awareness about apprenticeships among both young people and the general public.

Simon Nathan, Senior Policy Advisor, Education and Skills, at CBI, said: “From a young person’s point of view there is probably quite poor careers advice around apprenticeships and around vocational learning.

“There is perhaps an over-stereotype of a young person at 16: a person who has done well in his GCSEs gets nudged towards university; a person who has done poorly gets nudged towards vocational learning or an apprenticeship.

“I think we’ve got to break that cycle and young people have to see the apprenticeship route as the equivalent of HE in terms of getting a successful career.”

(The APPG Report can be downloaded here.)

David Travis, head of learner support, Lewisham College

At 25, David Travis is certainly one of the youngest college senior managers in the country – not bad for a guy who fell into working with young people almost by chance. As Head of Learner Support at Lewisham College, he is responsible for getting learners into the college and making sure they stick around.

Ironically it was his own difficulties in education that led him down his current career path. A conscientious student, Travis flew through his GCSEs and started A levels in English, psychology, law and history, but found the pace of work much faster and the content “much drier” than GCSE. By the end of his first term in sixth form, he had dropped English and history, leaving a gaping hole in his timetable.

As it was too late to pick up any new subjects, his head of sixth form suggested he get involved in a project helping younger students with literacy and numeracy issues. From the first session, he was hooked.

“I started working with them [the students] at Christmas and one of them sat GCSEs in July,” he recalls. “Being there at the end, and knowing that I had helped to build their confidence and self-esteem and helped to contribute towards them getting a decent grade, was fantastic.”

The experience led him to volunteer with his local Connexions, as part of a youth advisory board. When a paid position came up, as a peer mentor for young people using the service, he was encouraged to apply.

Leaving school at 17 was a tough decision, but having “never really wanted to do A-levels in the first place” (Travis had wanted to study performing arts at college but a careers advisor steered him into A-levels instead) he felt it was the right move.

After spending most of his formative years in the sleepy county of Staffordshire, working in Stoke city centre – where unemployment was high and drugs problems were common – made him realise how sheltered his own life had been.

But what surprised him more, was moving back to work in Staffordshire as a schools-based careers advisor a few years later and finding that these problems – and drugs in particular – could be just as much of a problem in the “sleepy suburbs.”

He recalls working with one thirteen-year-old who was addicted to crack and heroin and ended up being placed in local authority care. Mental health issues were also common, particularly amongst those with complex home lives.

“You can keep them [learners] safe while they are in school or college, but you don’t know what’s going on outside of the gates or at home,” he says.

What Connexions tried to do was bring together the standard universal careers advice and the intensive work on barriers to education and employment – something Travis always believed “made sense.”
And while he recognises that “careers advice does always seem to get a bad reputation,” having had a bad experience himself, he was determined to make sure “no one ever left unhappy with what they had heard” from him.

At 23, having qualified as a Connexions personal advisor at just 21, Travis was looking for a new challenge. He was keen to move back to London, having spent some of his childhood there, so when a Connexions job came up in Kensington, supporting people with learning disabilities, he decided to go for it.

Having discovered that there was no college course in the area for people with severe learning disabilities, he set about creating one, working alongside the local authority, college and social workers and the education funding body the Young People’s Learning Agency (YPLA). It was an experience that stood him in good stead when he decided to apply for his current role at Lewisham College.

He admits that when he applied, at the age of 24, he thought he wouldn’t stand a chance of getting it. “I was really nervous being at the interview because people there already knew each other and were talking about people that they knew together and that they all had a history of line managing,” he recalls. “I have to say, being a twentysomething, it looked like a toughie.”

Fresh in his mind was a speech given by a senior person at Connexions, who had said that young people in their early twenties were not “emotionally mature enough” to cope with full-time work – never mind senior roles. “I know 40-year-olds who I don’t think are ready for full-time work,” he says, laughing. “Everyone is so different, I don’t think you can ever make a blanket statement.”

In the year he has been in post-Lewisham College, there have been many changes to contend with, not least the scrapping of the EMA and the introduction of a replacement bursary fund. One of the biggest challenges has been letting the most vulnerable learners who are guaranteed a payment from the new bursary (children in care, those with disabilities, care leavers and teenage parents, amongst others), know that they are guaranteed funding.

Identifying who those students are can be difficult as local authorities can be reticent to share sensitive information about young people, says Travis.

Making decisions on how to allocate the discretionary fund has also been tough. As Travis points out: “There are other members of our cohort that are just as vulnerable as care leavers and looked-after children…so deciding how much you are going to offer them as a reasonable incentive to pay for the things that they need to do their course is really tricky.”

“You can keep them [learners] safe while they are in school or college, but you don’t know what’s going on outside of the gates or at home”

The college has put in an application for funds from the government’s ‘contingency budget’ (available this year only to help with the transition from the EMA to the bursary fund), but not knowing whether they will receive funding next term means many students are in limbo, unsure whether they will be able to go back in college after Christmas, something that can have an impact on their achievement. “If you are worried about everything else that’s going on outside your college life, it’s going to be hard to buckle down and focus,” says Travis.

Changes in the visa requirements for students wishing to study in the UK have also impacted on the workload of Travis and his team, including “complex negotiations with the Home Office, things like that,” to make sure learners don’t miss out on their chance to study at the college.

Housing is another key issue for students and something Travis says he is “not expecting to get any better over the Christmas period.” The college works closely with local homelessness projects and charities; staff go into local hostels to talk to residents about college courses and can help them through the enrolment possible if necessary.

One issue that might rear its head in the New Year is the matter of how to support young parents. A consultation on the government’s Care To Learn programe, which provides support for childcare and related transport costs to help young parents further their education, has recently ended and the outcome could well be less money to go around for young parents who want to combine parenthood and study.

For the first time in his career Travis says he hasn’t got his eye on the next rung of the ladder – he is too busy with his current role. But he is ambitious and wouldn’t rule out a more senior role in education – perhaps as a principal – in the future.

What continues to motivate him is doing his best for the learners. “There is a real history at the college of being as inclusive as we can and tapping into peoples’ raw potential, getting them through the courses and getting them to progress.

“Unlocking someone’s potential and giving them opportunities is what makes it all worthwhile.”

Three per cent drop for colleges, survey reveals

Colleges have suffered an overall drop of three per cent in 16-18 year old learners, a new survey has revealed.

The survey, conducted by Lsect, funding consultancy and the publisher of FE Week, also showed that more than 60 per cent of further education (FE) and sixth form colleges are concerned that learners will not return after Christmas.

The statistics, from 88 who responded, are similar to those from a previous Lsect survey compiled in September.

It is also similar to the recruitment survey conducted by the Association of Colleges (AoC), released in October, which showed that 49 per cent of 182 colleges reported falling numbers of 16-19-year-olds compared to last year.

However, it showed a national drop of only 0.1 per cent.

These up-to-date figures, collected as colleges submitted R04 data returns last week, show a target total of 182,914 – but an actual recruitment of 177,228 learners, meaning a three per cent loss overall.

Sixth form colleges performed slightly better than FE colleges, with a performance decrease of one per cent, compared to four per cent.

However, the sample of FE colleges was much larger, with 68 responders and 20 for sixth form colleges.

The survey also revealed 64 per cent of those who replied are either “a little concerned” or have “very big concerns” that 16-18 year-old learners may fail to return to their colleges after Christmas.

A number of reasons have been blamed for the decline in learner numbers, including the loss of the Education Maintenance Allowance.

However, the survey also threw up a different line to the exclusive ‘employer poaching’ story in FE Week last week.

Jon Carr, assistant principal funding and planning at Tameside College, said four learners had been poached by a “private training organisation” after enrolling.

He said: “Somehow they got hold of the details for a learner, persuaded that person to join on their course and three others have gone as well. It was after the first six weeks so it acts negatively towards our success rates. We don’t know if anything was offered, but somehow they managed to persuade the learner and then they may have spoken to the other three.”

He added: “Success rates are the main currency in our performance and how it’s measured. We were clearly very angry.”

The college is yet to report the incident to the AoC, nor to the Skills Funding Agency, but they have spoken to their local authority for guidance.

Teresa Frith, policy manager for the AoC, said: “It’s another example of poor practice that would not appear to be in the interest of learners in the long term.”

Meanwhile, a spokesman for Association of Employment and Learning Providers (AELP) added: “This is a practice that AELP would discourage.”

A spokesperson for the Skills Funding Agency said: “The Agency hasn’t been made aware of any individual cases of learner poaching.

“Should a case be brought to the attention of the Agency by a learner, we will review accordingly.”

The survey also revealed that 42 per cent of the colleges who responded say they suffered some difficulties when they submitted their R04 data return.

UPDATE: The Skills Funding Agency (SFA) has confirmed that R04 data returns were submitted on time.

A spokesperson for the SFA said: “The Data Service would like to thank providers for their hard work and efforts in ensuring that their R04 ILR return was submitted on time.

“This has resulted in a successful close of R04, where we have received data from 1,171 providers totalling 3 million learner records and 8.7 million learning aims records.”

Funding of adult basic skills to be overhauled in new pilot

The funding of basic numeracy and literacy is to be completely overhauled following little improvement in adult basic skills during the last decade.

The government will pilot a new funding scheme next year which allocates provision based on the ‘distance’ a learner has ‘travelled’ on a programme, rather than the end qualification.

The pilot, announced in the ‘New Challenges, New Chances: Further Education and Skills System Reform Plan’, will incentivise providers to deliver better skills gains for learners on basic skills courses.

The report states: “Building on Lord Boswell’s report on adult literacy we have undertaken a major review of how provision is delivered to improve the economic and personal returns to this investment.”

The pilot will be introduced despite the Skills Funding Agency’s (SFA) existing plans for a new, simplified funding system for adult skills, which will be ‘dual running’ next year and fully implemented in 2013/14.

The report adds: “Despite considerable efforts over the last 10 years to improve the basic skills of adults, our new national survey shows that 24 per cent of adults (8.1 million people) lack functional numeracy skills and 15 per cent (5.1 million people) lack functional literacy skills.

“This is unacceptable.”

The new funding pilot is one of 15 recommendations set out in the ‘Review of Research and Evaluation on Improving Adult Literacy and Numeracy Skills’, published by BIS but produced by John Vorhaus, Jennifer Litster, Michael Frearson and Stuart Johnson.

The review states: “Inspections and programme evaluations should include attempts to assess whether and how far learners retain skills over time, and how far qualifications are geared towards promoting underpinning literacy and numeracy skills.

“It should be a priority to gather longitudinal evidence on skills retention and loss over time.”

The new funding scheme is a response, in part, to the 2011 Skills for Life Survey, published by BIS, which shows a decrease in the number of adults acquiring basic maths.

Toni Fazaeli, the Chief Executive of the Institute for Learning (IFL), said: “We agree strongly with the government’s focus on numeracy and literacy and its proposals to ensure that proficiency in maths and English is embedded throughout the FE and skills system.”

The 2011 Skills for Life Survey found that 24 per cent of respondents failed to achieve an entry Level 3 or above in numeracy – a three per cent increase in the last eight years.

Joy Mercer, the Director of Education Policy at the Association of Colleges (AoC), said: “One of the problems with the qualifications for adults literacy and numeracy is that they didn’t produce people that could actually enter the workplace with functional literacy and numeracy skills.

“You therefore get teaching to the test, because colleges are measured very definitely on the attainment of qualifications, rather than here’s individual A, what do they really need to become functionally literature.”

The survey also found an increase of 13 per cent in the number of people achieving a Level 2 or above in literacy, with “no significant change” in respondents achieving at least a Level 1.

Carol Taylor, Director for Research and Development at the National Institute of Adult Continuing Education (NIACE), says there are too many adults with “very poor basic skills” learning in a system which “isn’t working for them.”

She said: “It’s alarming that 15 per cent of the adult population are performing at entry level 3 or below in literacy and 24 per cent in numeracy at entry Level 2 or below.

“Put simply, around one in six of the adult population has difficulty with aspects of reading and writing, which means they are seriously disadvantaged as employees, citizens and parents.”

NIACE has recommended that BIS improve the quality of teaching by working more closely with the Department of Work and Pensions (DWP), as well as local authorities, further education colleges and training providers.

“The Treasury has quite rightly shown an interest in the impact of the Government spend and the fact that, despite an enormous and welcome investment in skills for life over the past decade, there are simply far too many people who have not been helped,” Taylor said.

“NIACE suggests that making learner qualifications the all-important target for providers means teachers have been encouraged to teach to the test, thereby ‘plucking only the low hanging fruit’.

Ms Fazaeli added: “We are concerned that too few literacy and numeracy teachers have the specialist subject teaching qualifications they need, and this is borne out by Ofsted’s observation that literacy teaching is better when teachers are properly qualified in the subject.”

Cash incentive places for smaller businesses doubled

Fresh details have been revealed on the awarding of 40,000 cash incentives to smaller businesses to take on apprentices.

Business Secretary Vince Cable announced on November 16 that 20,000 incentives places of £1,500 would be provided to companies with less than 50 employees.

It would be handed to employers who had not engaged in the programme, but were keen to take on a 16 to 24 year old apprentice.

The initial number was then doubled little more than a week later – on November 25 – when Deputy Prime Minister Nick Clegg announced that up to 40,000 incentive places would be offered as part of the £1 billion of funding through the Youth Contract.

However, no further details were released on the mechanism of the payments or when they would be made available for during the 2012/13 financial year.

The Department for Business, Innovation and Skills (BIS), though, has said it expects more details to be announced “soon” by the National Apprenticeship Service (NAS), with a criteria currently being put together.

A spokesperson for BIS said: “Vince Cable announced on November 16 that 20,000 incentive places would be provided for small businesses, not previously engaged in the programme, to offer apprenticeship places for 16-24 year olds.

“As part of the £1 billion of funding provided through the Youth Contract to help young people, it was announced by the Deputy Prime Minister on November 25 that additional funding would be made available to increase the number of incentive places to up to 40,000.

“The incentive scheme will continue to be targeted at small businesses. The NAS are currently developing the precise eligibility criteria.

“The NAS will provide full details on their website shortly.”

However, BIS has also revealed the payments will be balanced against completions and the future employment of the apprentice.

The spokesperson added: “Businesses taking part in the scheme will receive two payments for each apprentice they take on.

“The first payment will be made soon after the apprentice has started their framework. The second payment will be timed to incentive completion and ongoing employment.”

When Mr Cable announced the cash incentives, he also revealed a host of other measures to make it easier for companies to take on apprentices.

He said processes will be simplified to make it quicker to take on apprentices, including streamlining health and safety requirements, and a focus on targeting the programme where apprenticeships deliver greatest value.

Apprenticeship providers, will also be required to offer training in English and maths to the standard of a good GCSE (level 2) for all apprenticeships.

For more on the plans, businesses can contact the NAS on their hotline for employers, which is 0800 150 600.

PRCA and Pearson in Practice announce 600 PR apprentices

PRCA and Pearson in Practice has announced plans to create 600 apprentices in public relations over the next three years.

The programme, developed in partneship with Edexcel and CfA, follows a successful application to the National Apprenticeship Service (NAS) worth £1.2 million over two years.

The new scheme, set to start in September 2012, will target learners who have chosen not to pursue a degree at university.

Francis Ingham, Chief Executive of PRCA, said: “The PR industry contributes £7.5bn per year to the UK economy.

“It’s about time we had an apprenticeship scheme to ensure a steady stream of high calibre candidates for our industry.”

PRCA and Pearson in Practice will spend the next 12 months working with employers and practitioners to develop the programme for employer and employee needs.

John Hayes, Minister of State for Further Education, Skills and Lifelong Learning, said: “This new partnership is great news for the public relations industry, and for ambitious young people who want to forge a career in this vital sector.”

Fiona McBride, CEO of Pearson in Practice added: “We welcome the emphasis that is now being placed on higher level apprenticeships as a true and credible alternative to university education.

“It reveals what we believe is a sea change in public opinion about the value of vocational learning and demonstrates a widespread understanding of the important role that apprenticeships play in setting young people on the path towards not just a job, but a sustainable and fulfilling career.”

Senior leaders concerned about college finances

A survey has revealed a high proportion of senior leaders are concerned about the college finances.

Conducted by Capita’s further and higher education business last month, it found that 87 per cent of 36 principals and vice-principals questioned are concerned about the short to medium-term financial viability of their college.

It was undertaken for the launch of their white paper, The Vice Principal’s Guide to Efficiency: How Technology Can Help Cut Costs for FE Colleges, which reveals where up to £2 million of savings can be made in further education (FE) colleges.

The white paper looks at the role of using management information and data to improve efficiency in various areas.

Detailed areas where colleges might be able to make savings or increase income, include £1 million saved from improved student management, £750,000 saved from using staff and facilities to their maximum efficiency, £500,000 gained by maximising income and £25,000 saved from streamlining management and administration.

There are also potential savings to be made from shared services and introducing new business models.

The survey revealed that colleges already recognise that savings can be made by making better use of staff and facilities, with more than half  (52 per cent) believing this has the greatest potential for reducing costs in their organisation.

This was followed by administrative processes (23 per cent)and new business models (16 per cent) such as mergers and shared services. In fact, 61 per cent of those questioned were already actively investigating the possibility of shared services.

George Layfield, UK sales manager of the firm, said: “Each student drop-out can represent between £5,000 and £10,000 of lost funding and recruitment costs yet, despite this, some rates remain as high as 20 per cent.”

John O’Callaghan, assistant director of information services at Hackney Community College, added: “There can be practical hurdles to overcome for leadership teams to make the most of the data collected on the management of their college, and it can be a challenge to foster a positive culture of data ownership.

“However, it’s worth persevering as data provides the only way to get true picture of how efficiently your college is running and if improvements can be made.”

When it comes to quantifying the reductions colleges need to make for 2012/13, the survey revealed that 61 per cent estimate they will need make savings of up to 10 per cent off overall college budget, 19 per cent believe it will be between 10-20 per cent and 13 per cent will be looking to make 20 to 40 per cent savings.

Mr Layfield added: “The survey reflects colleges’ on-going concerns over budgets and the need to make savings while protecting the student experience.

“The white paper sets out how relatively straightforward strategic changes such as increasing class size and having easily accessible, accurate date can have a huge impact on the bottom line without having a negative impact on learning.”