With the time approaching when the Learning and Skills Council is to be scrapped, anxieties are growing over just how capital funding will be allocated or how local authorities will deal with a system for a million teenagers, 350,000 of whom travel across borough boundaries. The time for answers is running out.
An FE Focus analysis of last year's consultation on changes - described as the biggest to affect FE in a decade - showed that, despite support from many outside the sector, colleges were seriously concerned about the abolition of the council next year and the division of its funding functions between local authorities and a skills funding council. Most feared their independence could be compromised, that the funding system could be biased towards schools and that introducing yet more bodies was far too complex.
This week, the Apprenticeships, Children, Skills and Learning Bill, which paves the way for the changes, had its second reading in the Commons. At the same time, college leaders met in London to discuss the changes and how they might have an impact on their operations.
Rob Wye, national director of the LSC, which is preparing for the handover, said that in many ways, colleges should expect it to be business as usual.
"The aim is to make it as simple as it can possibly be for colleges. We will make sure they have a single point of contact," he said. "The preferred course is that there will be a single local authority, in the same way that they deal with the LSC."
He said colleges will be funded on the basis of students they recruit according to a national formula, ensuring a level playing field with schools. Just as with the LSC, they will be set targets; under- or over- recruitment will be corrected in the following year's funding.
Mr Wye said there was also a desire to correct any changes to the plan in- year, so that colleges could be compensated more quickly if they had more students than expected or funding could be clawed back more promptly if they had fewer. But it was not clear how that would be achieved.
Julian Gravatt, assistant chief executive of the Association of Colleges, who spoke at this week's AoC conference on the funding changes, said the planning process, which has 17 steps at five levels of government, was so complex that it risked compromising student choice.
"We have got almost two models now," he said: "a top-down model laid out in Delivering 14 to 19 Reform*, a complicated framework for how budgets would be allocated. It would take about 12 months to filter through each year. On the other hand, we have a model where local authorities allocate money in line with learner choice, where students are enrolled. It's difficult to see how they will merge. What happens when the plan says one thing and students say another?"
London is one area where local authority co-operation is advanced. Bodies such as the London Skills and Employment Board have been hailed as an example for the nation.
Helen Johnston, head of children's services at the London Councils umbrella body, said it would make dealing with a single local authority a reality.
"Travel-to-learn plans don't show any clear pattern - everyone travels out of borough. But for London colleges it (funding) shouldn't be too difficult, because they should just deal with their home local authority, the way that they did with the LSC," she said.
The London councils also propose a highly planned college recruitment system. The thinking is that they can reconcile this with funding following the student, because they will have detailed knowledge about the job market and an advice service that will steer people to colleges and into courses with careers.
Ms Johnston said there was a demand from colleges for more certainty over funding, and they hoped to extend the financial planning period to three years.
Tim Jackson, principal of Sparsholt College, near Winchester in Hampshire, said the model of colleges dealing with a single local authority could hardly apply to all. His college has specialist land-based courses that mean it attracts students from about 50 local authorities nationwide.
"I am absolutely sure that it will be more difficult for college finance departments. The more separate bodies that we have to discuss those income streams with, the more difficult it is to balance the needs of one with the other," he said.
There was some discussion of a national body to help fund colleges with a national catchment area, Mr Jackson said, but it risked merely recreating the LSC.
Already, there are questions about the staffing of the new, adult-oriented Skills Funding Agency. There are proposals to retain 1,800 of the LSC's 3,300 staff, although it would handle only just over a third of the budget.
It will also handle capital funding for general FE colleges, but Mr Wye admitted that no one knew how buildings for sixth form colleges would be funded.
"Sixth form colleges are the most difficult area. They could be funded out of the young people's pot, but that raises all sorts of questions," said Mr Wye.
The Building Schools for the Future programme is Pounds 10 billion over budget and two years behind schedule, according to government auditors.
Colleges do see the potential for improvements under local council funding. "It might well be that local authorities will take decisions which national government has ducked, like fair funding for all students," Mr Gravatt said.
It is vital that MPs get the legislation right, he said, because colleges could find themselves in a more litigious world.
So far, it has often been possible for negotiations between colleges and the LSC to be conducted fairly informally, with parties agreeing a trade- off if, for instance, teenage student numbers were too low but adult numbers too high. Now colleges are concerned that local authorities may insist more on adhering to the letter of the statute.
"The LSC employs two lawyers," said Mr Gravatt. "There isn't a single college I know that has a lawyer on its staff. But most councils have a reasonable number of lawyers on the staff. We will be moving into a slightly more litigious arena."
He said the crux is clause 40, which gives local councils responsibility to provide for education from 16 to 19. Colleges will be lobbying for this to be strengthened, saying they must treat students equally, regardless of setting.
"Local authorities will be the purchaser in this new world, and schools and colleges are providers, so some of the providers are effectively a part of the local authority.
"What we're talking about is having safeguards," he said.
Ultimately, the question of how much change colleges face may come down to how well they have served their communities.
Local authorities see their role as identifying and filling gaps in provision, Mr Jackson said. The level of intervention in college working may depend on how many gaps have been left.
Mr Jackson said he hoped that local authorities would be reluctant to dictate to colleges what courses they should provide.
"Many colleges are incredibly demand-led. If there is demand, someone is likely to have dived in and started fulfilling it," he said. "If there is a gap, it may be because it's not economically viable."
FE AND THE NEW BILL
Sets up national apprenticeship services for England and Wales.
Gives statutory right to an apprenticeship for all those with the right qualifications. Careers education in schools to include advice on this. All employees have right to time off for training.
Gives local authorities control of education and training for all 16-18s, all 16- to 25-year-olds with learning difficulties and those in youth detention.
Sets up the Young People's Learning Agency for England with strategic and national budgetary control for 14-to-19 education and training. Local authorities will fund and deliver this. The agency will arbitrate in any disagreements between, say, schools and colleges.
Creates post of chief executive to run the Skills Funding Agency, with control over adult learning, including apprenticeships.
Authorises the dissolution of the Learning and Skills Council.
Removes local-authority powers to create sixth form schools.
Establishes the Office of Qualifications and Examinations Regulation (Ofqual). It will have regulatory powers over both academic and vocational qualifications.
Establishes the Qualifications and Curriculum Development Agency (formerly the QCA) to develop and advise on academic and vocational qualifications.
Extends the powers of school and college staff to search for weapons to include searches for stolen goods, alcohol and drugs.
Further education corporations must pay attention to promoting the economic and social wellbeing of the local area.
Closes a loophole that allowed people to wipe out their student loan debts by declaring themselves bankrupt.
Extends the powers to award foundation degrees to Welsh colleges.