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Dash for cash `punishes bold'

Ian Nash examines the winners and losers in the latest round of FE college funding. The Solihull College is to cut back on a massive expansion programme planned in work-related training for industry, after failing to get more than half of its Pounds 6 million bid for extra Government cash.

Barnsley, a larger college, was more cautious in its claims on new money for 1995-96. It ended up with 91 per cent of the Pounds 3.7 million it asked for. The principal, David Eade, said: "I can live with that."

There are inevitably winners and losers in the Further Education Funding Council's latest budget allocations to FE and sixth-form colleges - what one principal described as the annual "dash for cash". There is 4 per cent extra available next year in return for 6 per cent growth in student numbers nationally.

Last year, principals said the funding formula "punished the cautious". This year, many argue that it punishes the bold. Roger Maclure, FEFC finance director, said those who would probably feel most aggrieved with the budgets were those going for "super-big" rises.

Sir William Stubbs, FEFC chief executive, said: "This has been a difficult funding round as colleges applied for considerably more funds than were available." They collectively bid for 24 per cent more than was available, compared with 6 per cent last year. But, overall, the budgets published today for 430 colleges under the FEFC reflect last year's awards: 21 per cent will get more than 10 per cent extra, 61 per cent will get rises of up to 10 per cent, and 17 per cent (65 colleges) will face cuts.

But of those with less cash than last year, 60 have the budgets they asked for, having decided not to go for growth. Only five colleges in England were penalised for failing to hit their targets last year.

Many other colleges failed - but for reasons beyond their control such as a sudden cut in local education authority discretionary awards forcing students to leave college. Where good reasons were given for failing, no penalties were levied.

The largest funding increases have been given to those colleges with the strongest track records in meeting targets. The efficiency drive to cut costs of high-spending colleges continues.

Colin Flint, principal of Solihull, does not blame the FEFC for a disappointing budget, though he does argue that the funding formula is too mechanistic and "too insensitive" to differences between real growth and poaching from other colleges. "The fact is there is not enough money in the pool."

This is not the gripe of a loser. Others, including David Eade, agree. His unit costs are similar to those of Solihull and his is likewise a college with a strong technological tradition.

But with the surge of new lower-cost service industries replacing the Yorkshire coal mines, he is pressing for growth elsewhere. Regardless of the individual college targets agreed with the FEFC, there is extra cash available for those who recruit beyond them. The trouble for many colleges is that it needs an incredible efficiency drive to manage it.

The national funding formula divides all the cash up into units. Colleges then bid for a number of units to meet their needs. Extra funds are available to those who exceed their targets, but at a far lower rate per unit.

Barnsley bid for 280,000 units and was given 258,000 at Pounds 15.49 a unit. If he goes over target, he will receive Pounds 6.50 for each extra unit, without limit.

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