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Leaders gear up for cash demands

Colleges want at least pound;1 billion more in next spending review. Ian Nash reports.

COLLEGE leaders are likely to demand at least pound;1.45 billion extra from the Government in next year's spending review to meet growth targets set by ministers.

If the Learning and Skills Council is to find this level of funding, it would need a guaranteed pound;1.9bn from the Treasury to cover its wider commitments to private training providers and schools.

John Brennan, further education development director of the Association of Colleges, is drafting proposals, which he expects to have by late autumn, for the comprehensive spending review to cover the years 2005-8.

One of his first challenges when he becomes AoC chief executive from September 1 will be to argue the case for considerably more cash with ministers and the LSC.

"We have no estimate yet but we have got to be ready to make the case for the next phase of the funding review that takes us to 20078," he said in an interview with FE Focus.

But Dr Brennan and David Gibson, the outgoing chief executive, have made it clear that increases must be high enough to maintain the Government's FE expansion programme.

College finance directors carried out an analysis for FE Focus of the implications of existing policies. They estimate pound;800 million will be needed just to keep the skills investment running at current levels.

They have worked out three scenarios for the next spending review. The rosy scenario forecasts a continuation of current trends and sees the FE sector budget rising to pound;6.6bn in 20078. The gloomy scenario forecasts no real-terms growth and sees the FE sector budget rising to pound;5.8bn.

A middle option, based on a "real terms" increase in LSC spending of 2 per cent a year over three years, would give FE pound;921m more in 2007 - compared with 20034.

But neither of the lower forecasts would meet the needs of the sector, according to the finance directors. And Dr Brennan is concerned that even the record pound;1.2bn increase announced by Education Secretary Charles Clarke last November is too little to meet demands.

He is concerned that in interpreting policy, the Government and the LSC are making unreasonable demands by asking colleges to increase the number of adults with level 2 qualification by 1 million by 2006, with further demands for adult achievement at level 3.

"Even the Department for Education and Skills acknowledges that some targets will not be hit and admit that it is a question of resources," he said.

Dr Brennan is aware that he will have a tough battle on his hands to wrest significantly more cash from the Government and the LSC. The rest of the public sector (apart from health and schools) has been restricted to 2 per cent growth per year.

Also, given the current pressures on the Government and the current spending to maintain higher education spending in 20056, when top-up fees start, the Treasury may tell colleges to wait.

Moreover, other bodies competing for LSC cash, such as private training providers, received less than expected in the current spending round after college commitments were met. They will be expecting more.

One college finance director said: "The only way out is to find more fee income or for ministers to take the flak for making cuts to colleges."

Interview, 42

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