FE funding clawback could lead to staff and course cuts

Decision to set a 90 per cent delivery target on adult education is ‘damaging’, warns shadow minister Toby Perkins
15th April 2021, 3:15pm


FE funding clawback could lead to staff and course cuts

Fe Funding: Adult Education Budget Clawback Could Force Colleges To Make Cuts

MPs have called on the government to reverse its plans for a clawback of adult education funding.

In a debate on the future of adult education at Westminster Hall today, MPs - including shadow apprenticeship minister Toby Perkins, Peter Aldous, Rachael Maskell, and Fleur Anderson - urged the Education and Skills Funding Agency (ESFA) to urgently revise the decision to claw back adult education funding from colleges that fall short of a 90 per cent delivery benchmark.

Mr Perkins said it was a “ridiculous and damaging decision”. “For those colleges who don’t offer back-to-work courses or focus solidly on Esol [English for speakers of other languages] work, that target is totally unrealistic and will inevitably cause colleges to cancel provision, and in many cases, make redundancies,” he warned.

The call came as the Association of Colleges said today that institutions may have to scrap T-level courses if the government pushes ahead with its cuts to adult education.

AoC chief executive David Hughes has written to both education secretary Gavin Williamson and prime minister Boris Johnson warning of colleges being plunged into financial intervention, or forced to make large numbers of redundancies, if the government stands by its plans.

In early April, the government announced that a 90 per cent threshold for delivery on the adult education budget (AEB) would be introduced. Last year, the threshold was at 68 per cent. 

Funding clawback: Why the DfE must reverse its plan

Background: Why the DfE funding clawback plan has left many raging

By David HughesThe adult education funding decision is a mistake

In his letter, Mr Hughes sets out three cases studies showing exactly how colleges would be impacted by the reduction in adult education budget (AEB) funding.

Adult education funding cuts: the impact on colleges 

At Leicester College, the decision to reconcile AEB grant contracts at 90 per cent means it will have to pay back around £4 million in funding, according to the AoC. This will likely impact on capital programmes and future plans for 2021-22, including for new T-level accommodation and facilities, and for expanded student numbers, which are all now at risk.

Furness College, the AoC said, had seen a striking reduction in adult participation in further education due to the pandemic, and is currently forecasting delivery at only 50 per cent of its full AEB allocation. This will result in a £640,000 clawback and the college returning a budget deficit at the end of July. Should the government’s decision not be revisited, the college will not be able to offer the same volume of training in future years. 

The AoC said Gateshead College‘s ability to deliver its adult education allocation had been severely curtailed, at a time when the impact of Covid-19 has been severe in the North East. 

‘Hampered by this AEB clawback’

In his letter to Mr Williamson, Mr Hughes says: “The announcement so late on in the year to introduce a threshold of 90 per cent is a major challenge, both in failing to reflect these challenges colleges have faced and in undermining the ability of colleges to reduce costs already incurred.

“The clawback of funding will reduce the financial strength of colleges, move a large number into financial intervention, and force colleges to reduce capacity for adult education, just as demand will be increasing. As the [Covid] roadmap opens up our economy, more people will want and need to retrain and reskill. Colleges will be in the forefront of that but will be hampered by this AEB clawback.” 

Writing to the prime minister, he adds: “Turning the tide after decades of neglect is not easy. The decision last month to claw back funding for adult education clearly showed how dysfunctional the current relationships, regulation, accountability structure and funding mechanisms are for colleges.

“I have written to the education secretary on this today, detailing the damage which that decision will do to the capacity of colleges to deliver on your ambitious agenda...This will potentially damage delivery on the post-16 education and skills which are central to rebuilding the economy and which tens of thousands of young people and adults will need if they are to find success in the labour market. The confidence of college leaders that positive change is coming has also been hit by a decision taken so late in the year and which simply does not appreciate the overall position, challenges and potential of colleges.”

The Department for Education declined to comment. Number 10 has been contacted for comment. 

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