Still schools' poor relation

Julian Gravatt

2004 is proving to be a decisive year in the funding of colleges. For several years the Learning and Skills Council has juggled a complicated set of targets on a gently rising budget. The council has paid for more places but not at the expense of funding per place. It has spent money to help colleges deliver key social and economic goals. The council has also invested in buildings and quality.

This year's funding round shows that the LSC budget is not enough. Although it spent pound;8.3 billion in the last financial year, almost of all of it was spoken for in existing targets. The drive to expand participation at 16 and to deal with basic skills, apprenticeships and the new level 2 (GCSE-equivalent) entitlement put the budget under enormous pressure.

Take participation at 16. The numbers of 16 to 18-year-olds in education and training are at their highest level since the mid 1980s. Various government initiatives to raise staying-on rates will add more this September. The Connexions service is relentlessly focused on reducing numbers who drop out at 16. And the national Education Maintenance Allowance programme covers the whole of England. The Department for Education and Skills estimates that EMAs will encourage 35,000 more young people to stay in education, 25,000 in colleges and 10,000 in schools. The full- year cost of this expansion is pound;150 million, which will account for a large part of the growth in the LSC budget between now and 2006.

Once you account for inflation at 2.5 per cent and the growth in the number of 16 to 18-year-olds, there is very little left for anything else. The LSC can just about squeeze the money for the government commitment to real-terms funding increases of 2.5 per cent in the next two years but it has nothing left. On the current, published budgets, the LSC cannot pay for all the above while also finding new money for the plans in the skills strategy. This, more than anything else, is why there has been strong pressure on colleges in 2004-5 to accept cuts to the funding of adult courses.

The college response to this has been to try to persuade the Government to reconsider. Last week, more than 100 colleges were represented in a national Association of Colleges campaign in Parliament. Given that it was Adult Learners' Week, there was a good chance to explain where the adult money really goes. Information communications technology, foreign languages and access courses may not be a priority in the latest LSC target but are highly valued by employers and individuals. When questioned on this, the Government response has been that colleges should charge higher fees. A laudable, long-term aim but is no help for 2004-5, three months before the start of the year. Large increases in fee rates need long-term planning over several years to sustain demand. In this case, if government funding is cut for 2004-5, courses will close. Simple.

The other big issue discussed in Parliament last week was the 16-18 funding gap. This was the topic of a Westminster Hall debate involving a variety of MPs from the main parties. Three years ago, the Labour party published an education manifesto with a promise to close the funding gap between schools and colleges. Three years on, the gap is as wide as ever. The Government hasn't sat on its hands but every step forward is balanced by another step back. The LSC has taken steps each year to increase college funding rates by more than school rates. This year, the college rates went up 4.5 per cent compared to a 3 per cent increase for schools. But this progress is balanced by different treatment in other areas. Schools and colleges were forced to pay more into the teacher pension scheme in 2003. The Government compensated them. Schools got 2.8 per cent. Colleges got 2 per cent. Any college spending more than two-thirds of its budget on pay lost out. Most sixth-form colleges certainly did. And then there's capital funding.

Similar shortfalls appeared when special grants were consolidated.

Meanwhile, a large number of schools have been protected by a real-terms funding guarantee.

The combined effect is to leave the funding gap at 10 per cent. For every pound;11 that schools have to spend on their sixth-form pupils, colleges have pound;10. It may not sound much but it makes a lot of difference to pay, equipment and the support that colleges can offer their students.

Starting salaries in schools are higher and there are more allowances. An increasing number of lecturers leave college to teach in schools, shifting the vacancies from a sector with static rolls to one where numbers are growing. A couple of months ago the Tomlinson Committee recommended 14-19 reforms that will require collaboration between schools and colleges to deliver a broader curriculum. What price collaboration when people working side by side get such a different deal? The promise to close the gap has meant little in practice so far. You can't argue with the targets. But it is action that counts.

Julian Gravatt is director of funding and development at the Association of Colleges

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