Full circle for the funding lottery
Alan Birks looks back at 10 years of change in the sector. The past decade in further education coincides with New Labour's first decade in government. In 1997, Labour inherited colleges that had been taken out of local authority control, established as independent corporations and funded by the new Further Education Funding Council.
Members drawn from businesses were required to be in the majority on corporation boards. This combination of independence and greater business involvement was intended to modernise FE and to make colleges more efficient and responsive to employer needs.
Those who thought that New Labour in power would mean a more benign attitude were disappointed. The new administration shared very much the same goals for FE as the previous one. It disagreed only about the nature of the processes required to achieve them. The Conservatives believed competition between colleges would eliminate the weak and reward the strong. New Labour favoured more planning and intervention.
The FEFC had been "hands off". Apart from allocating funds, the only real requirement was to deliver 25 per cent growth. Uncapped extra funds were made available for this but only at marginal rates. It was thought expansion could be achieved through increases in efficiency and class sizes.
Demand-led element funding, as it became called, did not lead to either. It did, however, lead to "franchising". This involved identifying training which was provided by firms and voluntary sector groups. In return for trainees filling in college enrolment forms and trainers filling in college registers, the college would pay the firm or voluntary group a proportion of the DLE funding.
But this money fuelled "overtrading" and, in some colleges, well over half their provision was franchised. Much of this took place at a great distance from the college and was of doubtful quality. The cost also reached unsustainable levels. The withdrawal of the money, combined with hugely increased levels of audit, precipitated the spectacular collapse of a few colleges.
Labour's response was to merge the FEFC with the Training and Enterprise Council to form the Learning and Skills Council. This, combined with a more stringent inspection regime and zero tolerance of college failure, heralded a new era of planning and intervention.
The LSC has now declared that it is no longer a funding body and will instead "strategically commission" provision in response to skills shortages and employer needs. This suggests the demise of annual recurrent funding.
The LSC has also declared itself to be "provider neutral" using only quality and cost as criteria for choosing between training providers. Private trainers were encouraged to enter the market. They have access to public funds on the same basis as colleges. Some of their directors have become multi-millionaires.
More recently, the Government announced that funding for 16- to 18-year- olds is to be transferred back to local education authorities. The proportion of this funding which goes to colleges relative to that which goes to schools is subject to speculation, as indeed is the long-term future of the LSC.
Which just goes to show that what goes around comes around.
The writer is principal of South Birmingham College.