The famously complex formula behind the funding of FE colleges is adding to bureaucracy and instability, and has eclipsed achievement as the number one priority in colleges, according to research by the lecturers' union NATFHE and the Institute of Education.
In interviews with 68 staff at 12 colleges, the Further Education Funding Council's methodology was also criticised as over-complicated, misunderstood and misdirected, favouring full-time over part-time students and leaving FE at a disadvantage over school sixth forms.
Despite its intention to provide the sector with stability, frequent changes in the formula had "presented colleges with a constantly moving platform", the report notes. The understanding and implementation of funding units was patchy, and the software needed to process FEFC data demands was "problematic and very expensive".
Housekeeping arrangements varied considerably, with individual colleges developing their own ways of working within - and sometimes around - the formula. One head of curriculum described how two-year GNVQ foundation students were registered for Open College Network accreditation during their first year, thereby registering 12 times the number of units. Another complained that access courses were funded for each credit achieved, whereas GNVQ students had to pass the whole package to qualify.
The study found that course hours were being cut to meet the funding requirements. With FEFC funding defining full-time as between 12 and 15 hours a week, many courses shrank - sometimes by more than one-third - to fit the formula.
The report concludes that a "pre-occupation with finance and funding overshadows the sector". Many college managers agreed with the basic principle of the funding formula, but felt that it had been over-complicated in an attempt to make it fairer. "The FEFC has created a monster that is hungry for units and hungry for data. Clearly there must be simpler ways," one vice-principal said.
However, the funding formula was deemed a success in terms of student retention, although this sometimes had the side effect of keeping disruptive or unmotivated students on course.
The allocation of additional support for students with special needs was another praiseworthy aspect of the formula, leading one college equal opportunities coordinator to remark: "It's no longer the Cinderella in this department."
Franchising was viewed with suspicion by some college managers, who saw it as diverting resources away from local provision. "We have a big, big problem with the amount of that is going to private sector franchising," one finance director said. "We here in the college are livid about the amount of money that is pouring out."
But some staff believed the real problem lay with the overall level of funding, rather than the way it was allocated. "Many colleges, especially on low average levels of funding, are being stretched to a critical point," said one associate principal. "Look at the number of colleges that operate on deficit now. It's crazy, you can't continue with the sector like that. Yet the FEFC reports that very few colleges are badly managed."