A report by the Sixth Form Colleges Forum (SFCF) warns that many colleges “fear for their future” because of the government’s drive “to create a market” in 16 to 18 education.

The Sixth Sense report (see right) argues that the government promotes school and academy sixth forms at the expense of sixth-form colleges. It says that the colleges are treated unfairly in the funding, tax and support that they receive and calls for a “level playing field on which institutions can compete”.

Sixth-form colleges receive £280 less per pupil than school or academy sixth-forms, according to last year’s National Audit Office report on 16 to 18 education.

The SFCF said that the funding gap was much wider in reality. Ian MacNaughton, principal of The Sixth Form College Colchester, said that schools and academies could move resources between age groups as they had funding for 11 to 16-year-olds. Sixth-form colleges, however, did not have these extra resources to turn to.

The government needs to reconsider . . . what is emerging is just bizarre.

Unlike their counterparts, sixth-form colleges also have to pay 20 per cent VAT on goods and services. Mr MacNaughton said this cost his college hundreds of thousands of pounds a year – VAT could eat into about 2 per cent of a college’s overall resources.

Sixth-form colleges also have to pay full insurance for students, which cost tens of thousands of pounds.

“These issues have been raised with the government and yet they have done nothing about them,” he said.

A spokesman from the Department for Education said: “We’ve been clear how much we value sixth-form colleges. Their record of getting large numbers of students into top universities is outstanding, and they offer fantastic value for money.

“By 2015, we will end the disparity in funding for 16 to 18-year-olds so that all school and colleges are funded at the same rate.”

Mr MacNaughton said funding cuts could make the situation worse. He stressed that the problem was part of a bigger issue of “plummeting” 16 to 19 funding for all institutions.

“The government needs to reconsider . . . what is emerging is just bizarre,” he said.

The report described sixth-form colleges as “engines of social mobility”. Students were more likely to have received free school meals and to have had lower levels of educational attainment compared with pupils in school and academy sixth forms.

But it emphasised their strong performance records, saying that they “outperform all other providers of 16-18 education on a range of measures”.

The overall success rate – how many learners started a qualification and successfully completed it – for schools and academies was 80 per cent, four percentage points below sixth-form colleges.

James Kewin, the deputy chief executive of SFCF, said: “Why disproportionately hit the sector that does more than any other to take kids from disadvantaged areas with lower levels of prior attainment, and progress them right the way through? It doesn’t make any sense.”

Mr Kewin also highlighted how Ofsted treated sixth-form colleges differently. Colleges were judged using a higher benchmark than school or academy sixth forms. He said an academy could be graded “good” and a sixth-form college “satisfactory”, but the college was the better-performing provider. He believed that this made it difficult for parents and students to make informed decisions, as they were often unaware of the different inspection benchmarks.

None of us can afford not to be attractive to good students and that means that provision for less academically confident students is much more difficult to develop.

However, at the SFCF’s Summer Conference, Ofsted said that from September this year inspections would not present outcomes simply in relation to sixth-form college benchmarks. It also committed to moving towards using a single national average in inspections – a move that Mr Kewin described as “really positive”.

Paul Ashdown, principal of The Sixth Form College Solihull, said that an unfair approach to provision could “undermine” the ability of institutions to work in the best interests of young people.

He said: “The whole dynamic of provision [in Solihull] has changed from one where we were able to work together to promote participation and a range of options for young people, to a pretty unmanaged competitive environment where there’s a focus on getting good students.

“None of us can afford not to be attractive to good students and that means that provision for less academically confident students is much more difficult to develop.”

His college actively engages and supports students from disadvantaged backgrounds, but he said it had had to increase entry requirements. Previously, a student could enrol with four GCSEs at grade C. Now they needed five, including English and maths at grade C, and two Bs.

“It has eroded our ability to take risks with more marginal students,” he said.

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