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Minds full of money worries

Ian Nash meets Sue Dutton, deputy chief executive of the Association of Colleges, to discuss some fraught questions of future finance

Lecturers' pay and the funding of adult skills training are two of the main issues on the minds of college principals in the run-up to the biggest education conference in the FE calendar.

In the boom days of 2003 - after what appeared to be a record rise in cash from government - there was a rare opportunity to do something radical to the pay structures, says Sue Dutton, deputy chief executive of the Association of Colleges. Indeed, a two-year framework to help to close the gap with schoolteachers was agreed with the unions.

But pensions, national insurance and other costs swallowed the cash, and now public funding prospects are gloomy again.

"It was a once-only opportunity," she says. "We have finished up with a stop-start financial model. Funding in 2005 will probably prevent us putting the full framework in place."

In adult skills training, too, promises of cash bolstered budget plans and hopes - but they seem more distant now, and a tight financial future beckons.

Other imperatives are also pressing - the 14 to 19 partnerships between schools, colleges and industry, and the Tomlinson committee's recommendations on assessment of wider education and training for this group.

All these issues sit together like a set of dominoes, yet they could collapse like a fragile house of cards for want of what Ms Dutton says is only a modest claim on resources compared with the funding that has been injected into schools and universities.

In the run-up to the AoC's annual conference in Birmingham in two weeks'

time, 130 principals recently gathered for a policy symposium to consider these issues. They interrogated national officials on all fronts - from the Learning and Skills Council to the Regional Development Agencies and the Department for Education and Skills.

At the heart of their concerns - particularly on pay and adult skills training - was the need not for an absolute commitment on an ever-open Treasury purse, but for stability.

"We need steady state funding - we need consistency," says Ms Dutton. "What came through most urgently from members was the need for the LSC to hit its deadlines for the business cycle.

"Timing is everything in terms of planning and predicting what your organisation does in the future. It did not hit the deadline last year but we understand that things are now better organised."

Having the cash guarantees in place, the next pressing question had to be pay.

"Affordability is a major thing - but issues around recruitment and retention are critical, and how we measure up to the wider public sector," she says. "But the contexts in which we operate conspire together to force an issue."

Chancellor Gordon Brown's edict of "something for something" as well as further improvements in schoolteachers' pay and looming public spending constraints took flexibility away from colleges and prevented them from being "creative rather than reactive", says Ms Dutton.

She adds: "We have the full framework - but because year three is so uncertain, it has made people more cautious about implementing change in year two than they would be if the funding stream was more consistent."

There is also deep concern in colleges that provision for adult skills training will be badly hit - partly as a result of the funding tensions and because of shifting government priorities. Something may have to give, she insists.

"We think the employer training pilots are a very good model and support the way they have developed." But her members fear that other skills training will be hit badly without extra cash.

This is not a question of free access to leisure classes, but of the impact of new regulations that restrict state cash to the funding of level 2 (GCSE-equivalent) courses.

"Without additional resources there is a risk that it will be detrimental to urgently-needed skills training at level 3," she says.

Ivan Lewis, the adult skills minister, says there should be local flexibility to fund other identified needs. But principals say that too many national guidelines become local edicts.

"There is real concern that we are shifting priorities too quickly," says Ms Dutton. "The cut-off at level 2 is too soon because skills shortages tend to be around level 3 - technical and supervisory."

That is where local learning and skills councils should show their strength, but many principals remain sceptical. "While you have limited resources behind national priorities, freedom at local level becomes a misnomer," she says. "Government recognises the need for state funding at level 3 in some industry sectors and areas of the country, but the question is whether there is sufficient slack in the system to allow it to happen.

"In principle, the Government has found arguments compelling, but in practice it is not easy to do."

At the symposium, there was strong criticism of the idea that everything should be geared to the needs of the "employer as customer".

Ministers stress the need for the employer to pay more for skills training, but too few firms are willing to do so, she says.

"If what Digby Jones (director general of the Confederation of British Industry) says about the lack of skills among the young is right, why do employers give insufficient opportunities for them to do apprenticeships?"

She says colleges were left to supply the training, adding: "It is the responsibility of employers to make more of a contribution to training.

Partnership works only when both partners are engaged."

There has been significant growth in skills training through colleges. More than 250 are providing work-based learning - that accounts for more than one-fifth of the volume nationally - often in partnership with other big providers. And the extent to which it saves the state purse is not always appreciated.

"Much of it is fully-costed with the employers," she says. "It is a strong strand in the Government's priorities, and critical to the interface between colleges and employers, and to Tomlinson, and to the local community - and it is rapidly moving up the policy agenda."

Questions of "trust", "bureaucracy" and "less control" through the regulatory framework still preoccupy principals. As well as lighter-touch inspections, they want more freedom to control their own affairs.

"Can we get away from this lack of trust that still underlies the framework?" asks Ms Dutton.

In the AoC's last annual conference before next year's general election, the debate will focus on six strategic priorities: shaping a single voice for FE; funding; curriculum and education values; control and the regulatory framework; regionalism; and employer engagement.

"The symposium was not a one-off but the start of moves to re-engage with our membership on policy and take longer-term strategies beyond Birmingham and the general election," she says.

The AoC's annual conference 2004 is at the Birmingham International Convention Centre, November 16-18

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