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Government 'desperately slow' to respond to 'looming crisis' in FE funding, MPs warn

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The government has been "desperately slow" to react to colleges' financial difficulties, according to a new report by an influential parliamentary committee.

A new report by the Public Accounts Committee concludes that the government is not doing enough to prevent a "looming crisis" in further education.

The report, published today, says that although the declining financial health of many FE colleges has potentially serious consequences for students and local economies, the bodies responsible for funding and overseeing the sector have been “slow to address the problem”.

“Declining financial health in a college can affect the life chances of its students and limit skills development in the local economy,” it says. In July, the National Audit Office warned that while 29 colleges had been found to be financially inadequate in 2013-14, it estimated that the figure could rise to 70 by the end of 2015-16.

Meg Hillier, pictured, chair of the committee, said the government had been “desperately slow off the mark to tackle a looming crisis in further education”. “This is deeply worrying for a sector which equips people with skills and qualifications that can transform their life prospects, and by extension those of the communities in which they live and work," she added.

She said college principals had told the committee of the difficulties they faced in recruiting quality staff, about courses being cancelled and of stalled investment plans. “There is no doubt further education is under significant pressure and it is both frustrating and sad to think of the potential going unfulfilled – particularly in cases where earlier intervention could have prevented problems from escalating," Ms Hillier added.

In response to the report, skills minister Nick Boles said the government had "protected funding for further education and will be increasing real-term spending by more than a third in the next five years".

"We recognise the important contribution the sector makes to increasing opportunity for young people and businesses, and ensuring our long-term economic security," he added. “With early intervention from the funding agencies, the FE commissioner and locally-led area reviews, colleges will become more efficient and financially resilient while ensuring the best return on investment for public funding.”

Martin Doel, chief executive of the Association of Colleges, said that while last month’s spending review provided colleges with a better than feared outcome, significant financial pressures on the sector remained.

“The committee has recognised the damage funding cuts have already done to colleges across England, as well as how these are exacerbated by late funding decisions," he said. "The Association of Colleges has called for three-year funding allocations to be introduced to allow for better planning, so the committee’s recognition of the problem is welcomed.”

Mr Doel also called for "access to resources which will support the outcome of area reviews and support colleges in difficulty”.

Neil Carmichael, chair of the Commons Education Select Committee, said funding for further education "has to match the government’s ambitious goals for the FE sector". This would "ensure colleges have the financial security to plan ahead and achieve these aims", he added.

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