The basic flaw with the funding methodology is that it tries to treat all colleges in the sector the same. Yet FE has evolved over more than a hundred years to meet local need. There is little similarity between inner-city colleges and those in rural areas, or those in a tertiary system compared with those surrounded by large numbers of grant-maintained sixth-forms.
Can you imagine the uproar there would be from schools if they were funded the way FE is? If we taught the same number of students at our college next year as we did this year, we would be Pounds 240,000 worse off and would have no money for pay increments, non-pay inflation or any pay award.
In effect, we have to cut Pounds 800,000 for doing the same work as this year. This is the fourth year of such a system. That is the economics of the mad house.
The funding system was devised by FEFC officers influenced by their experience of HE funding, which catered for universities operating over the whole country. Regrettably, the present chief executive has not realised the inadequacy of the system, possibly because his background is in HE, too.
The FEFC has failed the sector. The recent fiasco of the Demand Led Element (cash for growth) - whereby the FEFC found half way through the academic year that it had no commitment from the DFEE to pay the monies owed to colleges - highlights how far out of touch it is.
One of the council's aims is "to ensure that the achievements, contributions and potential of the sector and its financial needs are properly represented at national level".
It has manifestly failed to achieve this aim. Why was the DFEE unaware of the impending demand-led claim? Why has it taken so long to make a claim? Is it because the individual student record system (ISR) is so complex that the council had no confidence in its own ability to present a properly audited claim?
Another aim requires the FEFC to secure adequate and sufficient facilities for FE. What is the benchmark for adequacy and sufficiency? Surely it should be the Government's national training and education targets, in which case the FEFC should have a strategy to achieve them.
But no, the FEFC's approach is to scour the strategic plans of colleges to look for course closures. Strategic plans are notoriously unreliable for predicting student numbers. The FEFC's own analysis shows that across the regions the percentage difference between projected numbers (from strategic plans) and actual student numbers showed a discrepancy of 20 per cent.
One of the biggest beefs colleges have had with the FEFC is its ludicrously complex system of counting students - the ISR. The council conducted an independent review, but failed to ask the consultant to undertake a cost benefit analysis.
By avoiding this issue the council was able to whitewash this debacle. I had to laugh when I read the press release that quoted one of the reports findings that "Council's strategic planning for the ISR was sound"! I wonder if Hitler said likewise to his troops on the Russian front.
It costs our college more than Pounds 100,000 a year to count students. This is a ridiculous waste of public money, especially as another of the report's findings was "only a few (colleges) were currently using it as a management tool".
So where are we after four years of incorporation? Half the sector ran a budget deficit last year, courses are being cut and staff are being sacked in unprecedented numbers. Our academic staff are on lower pay scales and poorer conditions than their colleagues in schools.
Perhaps most damning for the FEFC is that colleges are paid significantly less than schools for providing the same qualifications. So much for a national system and for properly representing our financial needs at a national level.
Why has this situation come about? One prime reason has to be that the FEFC employs no one in a senior position who has been a principal or vice-principal at a college since incorporation. Quite simply the council is out of touch. In addition we, as college managers, have not spoken out with sufficient force.
Now is the time to argue for radical change. We need a standstill budget (plus inflation) for 18 months while a thorough review of the funding methodology is undertaken. I would argue for a return to local strategic planning of post-16 education with a local influence on the level of funding, but that would be for the review to determine.
In the meantime we cannot continue to be ineffectually led by the FEFC. Perhaps now is the time for those council members and senior officers of the council who have been in post since incorporation to resign. Professor Melville is relatively new and may provide the leadership we need.
College principals have been silent for too long. If you feel as I do will you join with me in writing to the FEFC at this critical time?
Allan Crease is principal of North Lincolnshire College