Overseeing financial sustainability in the further education sector inquiry
Closed
What the inquiry looked at
“Around 4 million people attend further education institutions in England each year. Further education is formal learning outside of schools and higher education institutions, covering academic and vocational courses and training for apprenticeships. In England, there are around 1,100 providers of further education, including around 240 colleges. The Education Act 2011, and subsequent policy documents, have emphasised colleges' independence, and their freedom to manage their own affairs, with external intervention occurring only where a college is failing. College sector financial health in decline The financial health of the FE college sector has been declining since 2010–11. In 2013–14, the sector was in deficit for the first time and 110 colleges recorded an operating deficit, up from 52 in 2010–11. In the same period, the number of colleges assessed by the Skills Funding Agency (SFA) to have 'inadequate' financial health rose from 12 colleges (5% of colleges) to 29 colleges (12%). The SFA anticipates that this number will continue to grow. On current trends, it could be around 70 colleges by the end of 2015–16. The financial support that the SFA offers to struggling colleges has increased significantly since 2010, but most has not yet been repaid. The outstanding balance, including new advances, stood at £45 million by February 2015, relating to 13 colleges. This inquiry will challenge government on whether it is taking responsibility for protecting the taxpayers' money invested in the sector; examine whether the balance between 'prevention' and 'intervention' is correct when responding to financial sustainability issues; and obtain assurances that government has robust plans in place for creating a sustainable college infrastructure for the future.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
The declining financial health of many further education colleges has potentially serious consequences for learners and local economies, but the bodies responsible for funding and oversight have been slow to address the problem. Too often, they have taken decisions without understanding the cumulative impact that these decisions have on colleges and their learners. Oversight arrangements are complex, sometimes overlapping, and too focused on intervening when financial problems have already become serious rather than helping to prevent them in the first place. The Department for Business, Innovation & Skills and the Department for Education appear to see area-based reviews of post 16 education as a fix-all solution to the current problems, but the reviews do not cover all types of provider and it is not clear how they will deliver a robust and financially sustainable sector.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 2 September 2015 to its close on 12 May 2016.
- Oral evidence 19 Oct 2015
- Report 16 Dec 2015
What it recommended
The committee's recommendations are not listed here yet. Read them in 13th Report - Overseeing financial sustainability in the further education sector ↗ on parliament.uk.
Evidence
Oral evidence sessions 1
- 19 Oct 2015No witnesses recordedparliament.uk ↗