COLLEGES which recruit the most disadvantaged students get less than half the cash they need for the job, new research reveals.
The shortfall is around pound;100 million, with colleges in the most economically deprived areas - like Lewisham and Knowsley - under-funded by more than pound;1m each.
John Harwood, chief executive of the Learning and Skills Council, told FE Focus that the council will launch an investigation, in the light of the research, to make sure cash reaches those in greatest need.
Researchers said that up to 25 per cent extra cash was needed for colleges to reach, recruit and support students from deprived backgrounds.
But extra government grants and targeted funds added up to just 10 per cent, says JM Consulting who did the research for the Learning and Skills Development Agency, which advises the Government on the needs of the post-16 sector.
Mr Harwood admitted that urgent work was needed "to identify the additional people coming forward and the criteria for funding them".
As colleges became more successful in widening participation, it was all the more costly and difficult to reach those at the extremes, he said.
The research the LSC was now commissioning would build on the LSDA's research report, The Costs of Disadvantage, and come up with a clearer picture of where needs were greatest.
However, college managers have warned against falling deeper into the "costly trap" of targeting cash from the centre. Wendy Forest, director of learning services at Lewisham College, said: "There is a danger in discrete and targeted funding that the cost of identifying actual need is greater than the funds we receive.
"It can also be counter-productive. If it is more intrusive, it is not helpful as it increases anxiety among the very people we are trying to reach."
Two-thirds of Lewisham's 12,000 students are in poverty, come from broken homes or deprived ethnic minority backgrounds, are unemployed, school failures, single parents or live in homes where no adults have jobs. But it receives only half the pound;2m it needs to tackle disadvantage.
"We can't simply select students on GCSEs because that's not the nature of our intake, so we have to draw up other criteria," Ms Forest said.
The most common criteria for funding disadvantage is the postcode analysis, introduced by the Further Education Funding Council. Mr Harwood said: "It has the merit of being a very simple and effective system, but it is not accurate enough."
The FEFC had received hundreds of complaints about people losing out simply because they lived on the wrong side of the road. "The FEFC, almost as a stab in the dark, worked out a percentage increase for young people who fell into that (disadvantaged) category," he said.
It was largely driven by the postcode analysis but included other categories such as homelessness, and students studying basic skills.
Instead of a blanket increase, there was a scale of support, from 5 per cent to 20 per cent extra cash for the most deprived. But, the LSDA report suggests few of the colleges in need are able to meet the full cost of support.
Mick Fletcher, the LSDA's development adviser, said: "Our report is not just an indication of the needs of the most disadvantaged. It has advice that every college should heed."
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