Cash crisis triggers budget delay

Ben Russell reports on colleges' angry response to the Government's threat to withdraw expansion funds.

Budget planning for hundreds of colleges could be thrown into confusion because of an FE expansion fund crisis, principals warned.

The deadline for colleges to produce their budget plans falls at the end of the month, but principals said the crisis over expansion cash had thrown their forecasts into disarray.

They are still trying to absorb the impact of ministers' threat to withdraw demand-led (DLE) funding, which pays for colleges to expand beyond their recruitment limits.

Senior officials at the Association of Colleges warned that few colleges would be in a position to provide the Further Education Funding Council with forecasts.

Principals say budgets drawn up under existing guidelines are rendered almost meaningless by the current crisis over DLE funding, estimated to be worth Pounds 86 million this year. In a letter to colleges, the funding council warned principals to consider the implications of cuts to demand-led funding in their applications for funds and provide an assessment of the impact on their strategic plans.

A spokeswoman said the crisis would cause difficulties for the 1997-98 budget round, but insisted that the council aimed to produce budget decisions in March. Principals were due to be briefed on the crisis at the FEFC's annual conference on Thursday.

Nick Brown, principal of Oldham Sixth-Form College and an AOC board member, said colleges would not be able to provide forecasts given the current uncertainty. "They won't be getting mine," he said. "Quite frankly, I would rather go back with the LEA. This makes a mockery of the whole funding mechanism."

The warning came as colleges lobbied the Government and back-bench MPs as they intensified their campaign against cuts in cash for expansion. Funding chiefs and college leaders were in frantic talks with the Department for Education and Employment and Treasury officials to try and save the budget, which pays for colleges to expand beyond their recruitment targets.

As The TES went to press there were signs that ministers were preparing a compromise deal which might save expansion funding for this academic year.

The Association of Colleges has pressed for demand-led funding to continue at least until the summer. But colleges are still deeply concerned about the possible consequences of removing the funding next year, a move which the Association of Colleges estimates would cost the sector Pounds 100 million and raise serious questions about the continuation of many courses.

AOC officials said their lobbying campaign was gathering pace, with colleges across Britain bombarding MPs and Department for Education and Employment officials with protests.

Roger Ward, AOC chief executive, said: "We have given up counting the telephone calls and letters which are coming from across the country. Colleges are writing to the DFEE and lobbying their local MPs."

More than 75 MPs have signed a Commons motion condemning the Government for threatening to axe DLE funding. The motion, by shadow education minister Bryan Davies, "deplores the concern and confusion throughout the further education sector".

Labour leaders plan to keep the pressure on ministers, although they have pointedly made no commitment to restore any cut the Government may make.

Meanwhile, John Akker, general secretary of the lecturers' union, NATFHE, called for an urgent meeting with Education and Employment Secretary Gillian Shephard to discuss the crisis.

He said lecturers felt "great anger and betrayal" and warned: "The country's education and training infrastructure will be irrevocably weakened and the national education targets made unachievable."

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