Colleges may be judged on value to community
studies of the economic impact of colleges that show they earn millions of pounds for their local communities could become an official measure of their success.
The news comes as a report on York College showed its work was worth pound;94 million a year in higher wages and increased productivity for businesses in its area.
The study was carried out by the US firm Economic Modelling Specialists Incorporated (EMSI). It completed a report on Warwickshire College last year, and is due to produce similar studies on another 40 UK colleges with the aim of calculating the value of the qualifications produced, and their impact on society.
The colleges taking part are members of the 157 Group of large, successful institutions.
The Learning and Skills Council is examining the reports produced by EMSI to see if they could form part of the Framework for Excellence, the funding body's system of measuring performance and helping employers and students to choose the right provider.
Alison Birkenshaw, principal of York College, said the report, which cost pound;7,500, gave her hard facts to demonstrate the importance of FE to the community.
"I think there are many benefits in terms of raising the reputation of York College with local employers and the local community," she said. "Frequently, a college's contribution to the local economy is really taken for granted; accepted as normal.
"But it's very important to recognise the significant contribution colleges make in many ways; the way they stimulate economic growth and contribute to earning power."
Ms Birkenshaw added: "People are saying, `I never realised York College was so significant.' It's generated discussion, raising local understanding. It's early days, but I'm sure it's a very powerful tool in reputation-building."
York College's contribution to the local economy comes in return for a budget of pound;24.4 million from public funds, and pound;2m raised from other sources, such as training funded by employers.
It also provides a good return for the taxman, according to the report's authors. Higher earners boost tax receipts, and education reduces the social costs of healthcare, welfare and crime, giving the Treasury an 8 per cent return on its investment, EMSI has calculated.
The report said that figure was double the 4 per cent rate of return which economists typically assume on government spending. It takes into account the increased level of qualifications as a result of the college's teaching; the reduced social costs of a more educated population; and other economic effects due to the college, such as the jobs it provides and the knock-on benefit to local businesses of the people it attracts.
"I think it's significant in reinforcing the knowledge that people in FE have always had," said Ms Birkenshaw, "that we change people's lives and contribute to the local economy in many ways. To have that in figures, in a measurable form, is very important."
But she added that, as reports measuring the socio-economic impact of colleges become more common, they should not become a kind of league table whereby colleges competed to have the highest score. The variable economic conditions in each local area would make that unfair on certain colleges, she said.