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FErret: the urge to merge to save a few quid

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Assimilate – or exterminate?

Ahead of the impending structural overhaul of the FE sector, most of the attention has been on college area reviews. But as 25 November – the date of the government’s spending review – creeps ever closer, staff at the government-funded bodies on the peripheries of the Department for Business, Innovation and Skills (Bis) are getting increasingly twitchy.

While FErret is naturally suspicious of anyone from the wrong side of the Pennines, he can’t help but admire Lancastrian-born business secretary Sajid Javid’s zeal for saving a bob or two. A document leaked earlier this month suggests he is apparently keen to see the number of Bis partner organisations, which currently stands at 45, slashed by more than half by 2020. As colleges pile in with merger proposals before more outlandish reforms are foisted upon them in the area reviews, FErret wonders whether Bis’ perturbed partners are also planning for the worst.

Further, higher, cheaper

Calls to merge the Skills Funding Agency (SFA) and Hefce, the higher education funding body, have been getting louder in recent weeks. In September, adult learning body Niace made the proposal in its submission ahead of the spending review. And employers’ organisation the CBI has weighed in with the same idea.

Just last week, Policy Exchange – yes, that is the thinktank skills minister Nick Boles helped to establish, before you ask – also suggested it might not be a bad move. Its Higher, Further, Faster, More report argues that combining the agencies would help to “streamline the general regulatory architecture around HE and FE”. At the very least, sharing a few back office services would save a few quid.

Sweet FA

There can be few individuals who have paid as high a price for the government’s efficiency drive as poor old Peter Lauener. Happily beavering away as chief executive of the Education Funding Agency (EFA), in November he was given the dubious promotion of heading the SFA at the same time – and without a pay rise to sugar the pill. Since then he has been patiently repeating the official line to anyone interested – not least Meg Hillier, chair of the parliamentary Public Accounts Committee, earlier this month – that no, there really aren’t any plans to merge the EFA and the SFA.

Given the substantial savings expected of Bis, the fact that the two agencies are already operating shared services (and the small detail that they are already run by the same person) would seem to make it a pretty logical next step to take.


And what about the UK Commission for Employment and Skills (UKCES)? The non-departmental public body describes itself as a “publicly funded, industry-led organisation that offers guidance on skills and employment issues”. It received £63.2 million from Bis in 2013-14. The commission has confirmed that chief executive Michael Davis, who has been at the helm since 2011, will step down in March 2016. Coincidentally, this is the month in which UKCES’ funding for 2015-16 will come to an end. Perhaps the spending review will shed some light on whether the two issues may be related.

Sign of the times

But when it comes to efficiency, at least Bis is leading by example. While on a surreptitious stroll past the Department’s Victoria HQ last week, FErret couldn’t help but notice a striking sign emblazoned with the words: “Business. Innovation. Skills.” By omitting the words “The”, “Department”, “for” and, erm, “and”, Bis has achieved a 57 per cent reduction in word count – and sign production costs – right there. That’s what we like to see from our government: leading by example.

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