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Colleges can't do more with less

Just as accountants handle mergers and acquisitions in boom times, and receivership and administration in a recession, so education will prosper whatever the economic climate. Or will it?

Sixth-form and FE colleges that have mainly full-time 16-18 provision should be fine: students will need qualifications to compete in a shrinking jobs market, and higher education should also benefit.

But what about large general FE colleges and private providers that have knuckled down to address the adult skills agenda and the Government's apprenticeship priorities?

Apprenticeship numbers seem to be in decline. Where public sector and large firms choose to make provision in-house, college and private providers are left with the fragile small and medium enterprise (SME) sector. Higher minimum performance benchmarks and threats of tendering work to other agencies raise the pressure, while redundancies lead to non- completions.

The Government is loath to budge on the requirement that all apprenticeships be done in the workplace. But unless that is relaxed during the recession, we will have skills shortages just as we need to rebuild our manufacturing and construction base.

Adults will soon be expected to pay half their course fees. How many firms and individuals will be able to do so? Colleges that have been shouldering some of these costs may be forced to make cuts. The most costly provision is with small and medium enterprises that need bespoke provision for small numbers - the same group struggling to get credit from the banks. There is the chance, in approved cases, to fund in full second level 2 qualifications and some part-qualifications, but this is bound up with local red tape and delays.

And what about individuals? Ministers should, if only in the short term, allow colleges to issue skills accounts on a much wider basis than is now envisaged.

Colleges have been working with local stakeholders for decades and are keen to help their local communities - the Government and the Learning and Skills Council need to treat colleges as grown-up players and recognise the talent of their managers to respond to local need.

We can lead the skills regeneration that our economy will need in order to come out of this crisis, but only with the resources to play that crucial role. We still have complex funding rules and an unhelpful partitioning of the adult budget. Underperformance on the employer-responsive budget leads to clawback, while over-performance on the learner-responsive budget is capped. How can colleges respond quickly and effectively in such circumstances?

The college and private provider funding profiles will lead to more income at the end of the year, rather than during the year, placing more strain on liquidity. Private sector trainers are going out of business; in the college sector, the pressure is to borrow more or seek LSC support, but the council has transferred Pounds 200 million to higher education to meet miscalculations and has no room for manoeuvre.

The LSC is delaying payments until after April 1 and all capital approvals have been halted for three months. These are projects that are often ready to go and would bring work to a hard-pressed construction sector, in line with government priorities. Other projects in the chain are being asked not to incur further costs until April.

FE is known for its responsiveness, and we are ready and able. Give us the responsibility and funding, and we can make a real difference.

Graham Moore OBE, Chairman, 157 Group.

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