Colleges nationally are failing to hit the student growth targets set by ministers two years ago. The three-year plan to expand student numbers by 25 per cent has therefore been extended by at least one year. With it goes part of the 15 per cent extra cash earmarked by the Treasury in 1993 to back growth, but unclaimed as targets were missed. Colleges which fail to meet their new targets will be given a financial penalty.
Outside money already set aside for the three-year expansion plan, there is no new cash for FE this year. The budget will rise by Pounds 58 million next year, but this is nowhere near enough to prevent job losses. Roger Ward, chief executive of the Colleges' Employers' Forum, said: "It is regrettable that in more colleges than we wish, there will be redundancies."
Ministers have ensured a 3 per cent rise in 1996-97, in part by spreading some of the expansion cash over the extra year. But there will be a cut the following year. Cash for new buildings will be pegged at Pounds 480m - far lower than hoped for - but spending rules will be relaxed to "encourage" colleges to borrow from the private sector.
Ministers will continue to demand efficiency gains and rapid growth in student numbers. Education Secretary Gillian Shephard will withhold Pounds 50m, as last year, to push through "flexible contracts" and to ensure that the required "efficiency gains" are made. In guidelines to employers, she has also warned that the future of everyone's budget is jeopardised if any college steps out on line on public pay policy.
The demand for more flexible contracts will be extended from April to include lecturers changing jobs. This year they were imposed only on new starters and promotees.
The Budget offers nothing for students caught in the poverty trap as the grants system remains unchanged. If anything, the position will worsen as the backlash of LEA cuts is expected to lead to still fewer discretionary awards for FE students. There is no prospect of a change to the 21-hour rule which limits the hours a student can study without losing benefits.
There are small gains for business links and vocational education in schools and colleges. Pounds 50m will be added over two years to protect compacts, partnerships and teacher placements. There is Pounds 23m extra for General National Vocational Qualifications. Budgets for the new modern apprenticeships will rise by Pounds 50m, benefiting colleges involved.
But those involved in the Training for Work scheme will lose out as a 20 per cent cut will mean the loss of 40,000 places. Numbers could be higher if the training and enterprise councils make a policy of protecting the costly places for trainees with special needs and those seeking high-skills training for jobs of importance to the economy.
College leaders reacted angrily to the Budget, saying it seemed to be one "designed to penalise the needy and disadvantaged". Ruth Gee, chief executive of the Association for Colleges, said: "Colleges have a good record of giving what is expected of them. Will they continue to do so if they are financially penalised in the longer term?" While many colleges would welcome some relaxation of the borrowing regulations on capital projects, "they do not expect to have to borrow to pay for work that the nation expects of them. "
The failure of ministers to tackle the grants question has "imposed an appalling dilemma on college managers," added Ms Gee. "They do not want to turn people away, but cannot take on the task of training the workforce for nothing."
Bryan Davies, Labour's further and higher education spokesman, attacked the powers Mrs Shephard was taking as "a massive degree of central Government influence that is to be deplored." Using threats and holdbacks as a lever would, he said, "demoralise the sector at a time when unparalleled increases in productivity were being demanded.
Chris Humphries, policy director for the TECs' national council, was very optimistic about modern apprenticeships. "But we are concerned that we will not be able to meet demand on Training for Work. The cut appears to be much bigger than the fall in unemployment."