Taking a closer look at the FE college sector’s ‘financial meltdown’

The Public Accounts Committee next week looks deeper into the FE college sector over fears it was heading for “financial meltdown,” explains Meg Hillier.

As Shane Chowen wrote in his FE Insider column earlier this month, the government has committed to investing £411bn in national infrastructure, but we lack the right skills to deliver the projects.

Just looking at construction, we need to recruit and train 100,000 workers and up-skill 250,000 of the existing workforce by 2020 to deliver Government’s plans. This will be no small feat.

The FE sector has a vital role to play in meeting skills shortages like these and equipping young people and adults with the skills to contribute to a growing economy.

But at a time when the government is setting out its stall to create a high-skilled economy, the financial stability of the FE sector is worryingly uncertain.

Too often FE is considered the Cinderella of education. As I said when I read the National Audit Office report on the financial sustainability of the sector, I do not believe it is any exaggeration to say the sector is at risk of financial meltdown.

The number of colleges facing serious financial problems, either in deficit or having been rated as financially inadequate by the Skills Funding Agency (SFA) has more than doubled since 2010.

The financial health of colleges is only getting worse, with the SFA expecting the number of ‘financially inadequate’ colleges to double again to 70 by the end of 2015/16.

It raises real concerns about the continuation of the sector and shows us just how important it is to ensure value for money, which is where the Committee of Public Accounts comes in.

We will be examining the financial sustainability of the further education sector on Monday, October 19, questioning the Department for Business, Innovation and Skills, the SFA and the Department for Education about the challenges being faced by the sector and what can be done about them.

To do this effectively, we need to hear from those working in, or affected by, the sector. We know that the FE sector is facing some real challenges, but that there is also good work going on in response.

We want to know about these experiences — what is going well, what could be improved and, ultimately, what more could be done to put FE on a more stable financial footing?

Email pubaccom@parliament.uk with written submissions.

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One comment

  1. FE needs to realign the assets and learning design principles from those predicated on an industrial mindset to one that will support learning in an uncertain,competitive,global digital economy. Sell of underused land and buildings and reinvest in workforce skills and digital infrastructure .