Spending review: Colleges need £1bn boost, says AoC

Association of Colleges urges chancellor to give FE injection of more than £1bn in revenue plus £240m in capital funding

Autumn spending review: The Association of Colleges has presented 10 funding recommendations to the chancellor

As the summer holidays come to an end, the government's autumn spending review edges closer. The new chancellor has already announced that, in light of Brexit, it will be a one-year, rather than a three-year, plan. 

But what could this review mean for further education? According to the Association of Colleges (AoC), it's a chance for Sajid Javid – and prime minister Boris Johnson – to honour his promises to address the long-term lack of investment in colleges. 


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Opinion: What will the spending review mean for FE?


In a seven-page document, the AoC has set out 10 recommendations for the Treasury and the DfE. The proposals add up to a one-off injection of £1.1 billion in revenue and £240 million in capital.

Increase 16 to 18 funding

Estimated cost: £450million

The AoC says that the national base rate should be £5,000 per student, not £4,000. It  recommends that for 2020-21, the DfE should:

  1. Introduce a college pay grant at the same value as the current school sixth-form teacher pay grant, so that colleges can offer a 5 per cent pay rise.
  2. Roll forward the teacher pension scheme employer contribution grant introduced in 2019-20.
  3. Increase the 16-18 base rate by 5 per cent to support an increase in student teaching hours, and wider personal development opportunities. 

Fund 18-year-olds to complete their courses

Estimated cost: £94 million

Just two-thirds of young people reach level 2 standard by age 16, and there are 100,000 18-year-olds taking technical courses at level 2 and level 3. The AoC says that these courses – as well as the new T levels – should be fully funded for 18-year-olds. 

Student premium for 16- to 19-year-olds

Estimated cost: £80 million

The AoC points towards the Social Mobility Commission, which recommended a post-16 student premium for students who receive free school meals – but it says that another way could be to pay a £750 supplement for students who don’t have English or maths at grade 4. 

Introduce a 10-year education funding plan

Estimated cost: nothing

A 12-month spending review doesn’t go far enough – three issues make it imperative that the DfE starts work on the years to come, say AoC. These are: the introduction of T levels, the rising numbers of students, and the rates and cost of education in line with inflation. 

Increase adult education budget 

Estimated cost: £250million  

Adult learning numbers have halved and, according to the AoC, there are more than a million fewer learning opportunities every year for people to access. An increase to the adult education budget would help adults in the following priority areas: 

  • The new digital skills entitlement that comes into effect in 2020.
  • Additional English courses for those who speak other languages. 
  • Support for enrolment of low-paid workers. 
  • New places at level 2 to support progression into apprenticeships. 
  • Training and skills in hard-to-recruit sectors, particularly those that rely on migrant labour paid below the new wage threshold, which comes into effect in 2021.
  • Training for those engaged through the National Retraining Scheme.

A longer-term basis for funding adult education

Estimated cost: nothing

The AoC says that the government should work across departments to develop a new lifelong learning strategy, but also that it needs to work through associated funding issues.

The report says: "At the very minimum, the adult education budget needs to increase in line with inflation, the size of the working-age population and some measure of economic need. With apprenticeships as the main vehicle for training full-time workers; the Adult Education Budget (AEB) should be focused on those who are part-time, self employed, not-in-work or needing to retrain whilst in work."

It also recommends that the DfE start working on a new AEB funding formula with the aim that growth funds be directed more to lower funded areas (including towns in coastal areas, and away from the big cities).

Apprenticeship funding reform

Estimated cost: £200million  

The non-levy budget should increase by £200 million and all 16- to 18-year-olds should be funded through the education budget. The AoC also says that apprenticeships at level 6 and above should be funded from the higher education budget, regulated by the Office for Students, and operated with the same rules on equivalent and lower qualifications as loan-supported programmes. 

Other options suggested by the AoC include increasing in the levy rate from 0.5 per cent to 0.6 per cent and restricting the training credit for levy-paying employers from 110 per cent to 90 per cent. 

Development fund for higher technical education

Estimated cost: £40 million 

The AoC says that the government needs to enhance the funding offer for students and help colleges to develop the capacity, capability and demand. Students should be offered the same tuition fee cap, student finance rules and teaching grant funding as is offered for degree-level study – colleges need a modest fund to support set-up costs. 

A new capital budget

Estimated cost: £240million 

The DfE plans to spend £4 billion on school buildings in 2019-20, but just £200 million for further education – and this is almost all for new buildings. More money is needed for workshop space, machinery and equipment. The AoC says that a capital safety net is needed to support the technical education reforms, to help all colleges extend the lives of their buildings, to support expansion of 16 to 18 student numbers, and to provide buildings and IT infrastructure for high-quality courses. 

Regulating to protect students and employers

Estimated cost: None 

The AoC says that there needs to be a thorough review of the support and accountability system for colleges. “There are obvious concerns about the sustainability of colleges because a small number have run out of money, and the National Audit Office and a forthcoming DfE review will both be looking at the oversight of the college sector," he said. 

“There is a case for the DfE group to consider whether there are ways to focus regulation more clearly on activities that benefit students and employers, to cut compliance costs and to place simpler duties on college governing bodies to account for the public investment they receive,” the report says.

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