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High area costs hamper colleges

Research says deprived 'hotspots' need cash boost. Ian Nash and Ngaio Crequer report

COLLEGE costs have risen so sharply since the mid-1990s that at least one in three should be entitled to a London weighting-style boost to funds, research for the Learning and Skills Council has revealed.

But a Department for Education and Skills source told FE Focus that the implications were "too huge to contemplate". Not only would it add an estimated pound;250 million to the bill but it would lead to a flood of similar demands from other departments.

The LSC research has identified "hotspots" from Cambridge to West Yorkshire where area costs for services from catering to auditing have risen by 5 to 25 per cent.

Colleges get a boost to their basic funding to meet area costs, the needs of disadvantaged students, rural costs, the running of high-cost programmes such as construction and for specialist college status.

Reviews of such costs were commissioned by the LSC National Rates Advisory Group (NRAG) from consultants PriceWaterhouseCoopers, Frontier Economics and Robson Rhodes. Early indications of results will be revealed at the annual meeting of the Association of Colleges in Birmingham next week.

But the full implications of the figures - which are still being analysed - will not be spelled out until later this year, when colleges receive a detailed breakdown of their budgets.

Research data also shows big increases in the cost of tackling disadvantage. It suggests a 15 per cent increase in budgets, rather than the current 10 per cent for colleges tackling deprivation. The research also reveals new deprivation hotspots in the North-east.

The LSC must restrict area weightings to London and the South-east in order to avoid political controversy over area costs, while meeting the new demands to tackle disadvantage.

In a compromise now being worked on by the LSC, the new area costs would be cut by 5 per cent and the equivalent cash would be aimed at disadvantaged learners. There would be a limited number of winners and losers.

Ken Pascoe, LSC director of operations, said no decisions could be taken until the NRG reported back. "Any changes will be handled extremely sensitively in the light of the funds available to the council. We are working extremely closely with colleges and the DfES."

If area cost weightings went up, it would help colleges iron out some local pay anomalies but still leave the national pay problem.

Ivan Lewis, minister for adult skills, this week stressed that immediate moves were planned to narrow and ultimately close the 12 per cent pay gap between lecturers and schoolteachers.

At the official opening of a new pound;20m campus for Gloscat, in Cheltenham, he said FE was every bit as important as schools and universities. It was his job to "reassert the status and value of all those who work in FE".

Afterwards he told FE Focus, that details would be revealed by Charles Clarke, the Education Secretary, at the AoC conference. "There will be significantly more resources. We are confident that the amount of money to be put into the system will allow colleges significantly to narrow the pay gap."

But he stressed that in return Mr Clarke would call for "modernisation and reform" of FE. It would be "crystal clear" what was expected of the sector.

AoC conference, 40-41


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