Select committee: Public Accounts Committee
Recommendation 20
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)
Colleges’ autonomy means that, for example, government does not have the power to appoint or remove college staff. Colleges can borrow commercially, and they may make financial surpluses or deficits.35 We asked the ESFA whether its intervention powers were adequate. The ESFA said that the combined efforts of its teams and the FE Commissioner ought to be enough, given the funding contracts it had with colleges, so long as they could maintain dialogue. It was, however, theoretically possible for a college to “bury its head in the sand” and to keep the ESFA away until the last minute.36 The Department stressed the importance of supporting good college leaders to make improvements and of building a sector that could sustain itself as far as possible.37
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.