Select committee: Public Accounts Committee
Recommendation 7
Thirty-Eighth Report - Managing colleges’ financial sustainability
Published 27 Jan 2021
Addressed to HM Treasury
Public Accounts Committee Managing colleges’ financial sustainability All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
Students are losing out as colleges cut mental health and other support services in response to financial pressures. The Department’s funding for colleges fell by 20% in real terms over the six years from 2013/14 to 2018/19, and the ESFA rated the financial health of 35% of colleges as ‘inadequate’ or ‘requires improvement’ in 2018/19. The ESFA emphasises that the sector’s financial position did not decline as much as had been feared in 2015, but we consider this detracts from the continuing financial fragility. More colleges will face financial difficulties as a result of the COVID-19 pandemic and, when we took evidence, the ESFA had concerns about the cash position of 64 colleges. Many colleges have responded to their increasingly tight financial position by cutting back on enrichment activities designed to improve students’ wider learning experience, and on welfare services such as mental health support. The Department believes that colleges are good at prioritising their activities in response to financial pressures, but accepts that this is an area it needs to monitor. Recommendation: The Department should undertake research into the extent to which college support services are meeting students’ needs, including canvassing the views of students themselves. In its Treasury Minute response, we expect the Department to give a firm commitment to taking this action, and details of the timetable for the research. 8 Managing colleges’ financial sustainability 1 Financial pressures
From: Public Accounts Committee, Thirty-Eighth Report - Managing colleges’ financial sustainability (HC 692), 27 January 2021
Government response
The government responded to the whole report on 26 March 2021.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it "agrees with the Committee's recommendation" on each of the seven recommendations in the response, with target implementation dates given for several.
- On VAT, it agrees with the recommendation and says the department will "explore the potential routes and efficacy" of it with HMRC, and will engage HMRC/HM Treasury "to gauge ministers' appetite" for changing or implementing legislation (target date: August 2021).
- On funding based on student numbers, the department says it is "currently developing a consultation" on how a change to the college funding formula could help, and is "considering the advantages, disadvantages and possibilities" of a system based on real time activity.
- On intervention, it will consult sector stakeholders to "review and publish an update" to its college oversight support and intervention policy in May 2021, and the Committee will be provided with a copy.
- On T Level work placements, the department will write to the Committee in July 2021 setting out what assurances it has that there will be enough industry placements, and the impact of COVID-19 on their availability.