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Brownies point the way to financial success

Part of my job involves advising regeneration projects. Working for one community-led initiative not long ago, I bought a cup of tea in the volunteer run cafe in a gap between meetings. The person serving me asked me, rather tentatively, for 60p. I wouldn't have noticed if she had charged me pound;1, or much minded if she'd charged me the extra 40p because I had a suit on and looked as if I could afford it. But my expectations of the tea plummeted (justifiably, it turned out).

Compare that with Coco A Moi, an internet company based in Ealing, whose only product is chocolate brownies, though it sells them for rather more than 60p. You can "send a little box of love" from just pound;7.50 (plus post and packing). And if you have something big to celebrate like grade 1 from Ofsted you could spend a great deal more on a three-tier display stand, covered with 200 bite-size brownies. I haven't bought any yet though my daughter will be called to the Bar next month and that looks like a good opportunity but I just know they will taste good. So do you.

What's the difference? My first example is "full-cost recovery", as we would call it in the college world and it doesn't work. The second is simple commercial pricing and a commercial approach to customers and it does work.

Yet even the Learning and Skills Council, in an otherwise rather impressive presentation recently doing the rounds, aimed at stimulating new thinking and bold visions, teasing us with the thought that maybe a third of our income would soon come from employers even that presentation refers throughout to "full-cost recovery".

"Full-cost recovery" says to me, like that volunteer in the cafe, "We're not especially comfortable with taking money off people. It's probably best if we keep prices as low as we can." This is language and thinking we must leave behind.

I'd rather be straight about it. Our accounts at Ealing, Hammersmith and West London College therefore now refer to "commercial income", not "full-cost recovery", because that is what it is and, more importantly, because that is the mindset we want the team to use when they do their pricing for employers.

In days gone by, this would look like a college putting on the cloak of the wicked capitalist and losing its soul for 30 pieces of silver. We have moved on from that, thank goodness.

Everyone wants employers to train their people. In my book, if they are willing to pay more rather than less to get quality, that is good, and we can use the surplus we make to cross-subsidise what the LSC won't, or can't, pay us to do. Everyone wins.

And we have some spectacular examples of genuine demand-led provision in colleges to guide us. Take Fleetwood Nautical College, for example, which has an international reputation for the training of merchant navy cadets and other maritime training, which means that only around 10 per cent of its income comes from the LSC.

Or Capel Manor College, London's land-based college, which also has an international reputation and relies on the LSC for two-thirds or so of its income.

When did colleges allow themselves to be squeezed into that part of the market which works only when the Government subsidises it? The lesson I draw is that we must break out, drop the old-fashioned mindset of "full-cost recovery" and recapture the ability to provide full quality at commercial prices. Employers will pay if we offer them quality. That works for training just as it does for brownies

Iain Mackinnon

chairs Ealing, Hammersmith and West London College

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