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Nimble colleges could benefit from recession

The country is in recession, possibly heading for a depression. While this will have all sorts of consequences for colleges, it is not easy to make predictions.

But does the recent past give us any clues? The last two recessions - in the early 1980s and early 1990s - transformed the environment for colleges. On each occasion, the changing job market persuaded rising numbers of young people to stay in education. Full-time student numbers grew; part-time enrolments fell.

De-industrialisation in the late 1970s and early 1980s saw off the old apprenticeship schemes in manufacturing and engineering. Ten years later, a white-collar recession ended many day-release courses. Colleges lost fee income and became more dependent on the Government just when political rhetoric focused on independence.

Decline in some areas was matched by increases elsewhere. Many colleges emerged stronger from successive recessions because they found a new role at the centre of their communities. Some colleges became full-time institutions for sixth formers; others developed their higher education courses, particularly in the early 1990s. In both recessions, demand for college courses rose.

But the subsequent recovery on both occasions was accompanied by reductions in government spending on education. In the 1980s, this caused a wave of mergers and cuts in capital spending to absurdly low levels. In the mid-1990s, the Government initiated a public sector pay freeze and encouraged the newly incorporated colleges to increase lecturer teaching hours.

Recessions also changed the nature and purpose of Government's agencies. The Manpower Services Commission was created in the 1970s when unemployment was low, but it became famous under Margaret Thatcher for its job training schemes. Likewise, training and enterprise councils fulfilled their promise to energise local businesses.

Looking back, it is possible to discern some trends. But working out where we are now is much more difficult.

So when economists disagree about the fundamentals, can we conclude anything about the issues? I think we can.

Colleges cannot insulate themselves from wider society. Changes are happening quickly and will be unexpected.

Job market changes will bring about lasting changes in attitudes to education. The last recession saw a growth in full-time higher education. Now, graduate unemployment and student debt could cause young people and their parents to rethink. As the main supplier of applicants to universities, colleges need to monitor trends closely. If they are nimble, they could benefit. The Leitch report focused on workforce skills. But with rising unemployment, self-employment and volunteering may become more important.

The plan to replace the Learning and Skills Council was conceived in economic good times. The new national agencies and local councils will take over in different circumstances. Unemployment figures may drive their planning. Public spending cuts will limit the choices of the commissioners and may force them to be more efficient.

Finally, no matter how bad it is now, it was probably worse in the past. One London college building still in use today opened in September 1931. As its first students arrived, the UK left the gold standard because of a currency collapse. Two weeks later, salaries were cut by 10 per cent.

Optimists prepare for the worst, then make sure it doesn't happen. Cheer up.

Julian Gravatt, Assistant chief executive and director of research and development, Association of Colleges.

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