Extract from Further Education Council Circular 9801 (to be published January 1, 1998).

Introduction

This circular announces a change of heart.

Background

The council has noted the events of the past year in which Labour and the Conservatives exchanged roles and Michael Portillo transformed himself into Michael Foot at the Tory party conference. Consequently, the council has reviewed its own position and concluded that its actions have been needlessly principled and unfashionably consistent and that this rigidity of approach may not always have worked in colleges’ interests.

The council has decided to modernise itself and is considering a new, fresh approach to a number of issues, set out below.

Consultation

The council now wishes to consult colleges on the form consultations should take. In the past the council has determined its preferred position on an issue and consulted colleges in such a way as to ensure an appropriate response. This pragmatic approach was seen by some as failing to fulfil the spirit of openness and involvement.

In future the council will ensure that responses to its consultations are informed. An informed response will show due awareness of the council’s intentions in instituting the consultation. Future inspections will accredit colleges as “informed” or “misinformed” and only informed colleges will be consulted. Informed status will have a limited lifespan and will be withdrawn if any response to a consultation indicates that a college has moved into the misinformed category. The council is sure that colleges will welcome this new, fresh, modern approach, as it will relieve many, if not all, of the burden of responding to consultations.

Funding

The council has decided that the majority of its funds shall be distributed through the National Lottery. For most colleges this will mean little change. Others can expect to receive additional funds as a result, especially London colleges. The twice-weekly draws will mean that the excitement associated with annual enrolment and the annual application for funding can be enjoyed by colleges on an all-year basis.

Light-touch audit

The council places colleges in one of three financial health categories. Category A includes colleges which, in the view of the council, have enough money to rub along with. Categories B and C are for colleges with incompetent managers who have wasted the council’s money and deserve all that’s coming to them.

In future, only those colleges in category B or C will be subject to external audit. The level of audit in category B and C will be increased to ensure that the ratio of audit visits to days when the college is open does not fall below 1:1. This important new measure of financial health has been introduced so that the chief executive can sleep at nights knowing that none of his Pounds 3 billion is being used for purposes other than those for which it was intended: providing an inspection and audit service.

The council is aware that there will be an increased cost associated with this level of audit. It is confident that the benefits of the lighter touch experienced by colleges in category A will be worth the increased cost. The cost will be met by those colleges in category A. Unfortunately, this additional charge will mean that both colleges currently remaining in category A are relegated to category B and will thus be eligible for the new audit arrangements. The council is particularly pleased by the freshness and modernity of its new measures and before implementation will consult all “informed” status colleges in category A.

Adequacy and sufficiency

The council has a duty under the Further and Higher Education Act (1992) to ensure that provision in England is both adequate and sufficient, whatever that means. The council is concerned that it is open to a challenge through judicial review and may be caught in the Act. The council looks to its colleges to support it in this matter. Consequently the council has decided that, in future, all colleges shall do everything, for everybody, at all times. Colleges will be relieved to know that there will be no additional bidding burden for the extra resources needed to fund this measure as they will be found through further efficiency gains on existing college revenues. The removal of this additional bidding burden is in line with the council’s new, modern, fresh “lighter touch” approach.

The council is confident that colleges will approve this move by the council which removes inequities at a stroke and should unify the sector as never before.

Council tax

The council is aware that it has provided its services to colleges free of charge. It was not the intention of the Secretary of State that this position should continue indefinitely. The council is minded to introduce a system of progressive taxation on colleges. The tax will be student numbers based and colleges will be pleased to note that existing systems of data collection will need little extension to collect the tax. This should satisfy those principals who wrote to the council asking what was the point of the individualised student record.

The precise level of charging will be the subject of a consultative circular to “informed” category A colleges in the near future. To assist the council’s drive for value for money the consultative circular (9803) will be issued simultaneously with the circular showing the responses to 9803 (9802). Despite this fresh approach the circular will still contain the usual well-concealed open-ended statements which will allow matters to be interpreted in whatever way the council considers to be in its interests if the contents of the circular are challenged.

Obviously the rate of the new council tax will reflect the volume and quality of service the council provides, including the new receivership assistance service planned for April 1998, or earlier if the Department for Education and Employment has another new year surprise initiative like last January’s. I am sure colleges are aware how severely the loss of demand-led element damaged the council’s pride. Colleges should see the new tax as an opportunity for further efficiency savings and be suitably thankful.

The council wishes all its colleges a prosperous and successful New Year.

Graham Jones is principal of Sutton Coldfield College