Radical overhaul sees FE in England veer away from Scottish system
Significant changes have swept through further education in England from this month, which will see it take a diametrically different path from the sector in Scotland.
The most critical, in terms of its direct impact on colleges, will be that the responsibility for funding 16-19 provision will fall to the local authorities after 17 years under the Learning and Skills Council (LSC).
The council itself has undergone the most dramatic of all changes - it has been consigned to the dustbin of history. From April 1, it was replaced by the Skills Funding Agency (SFA), which will be responsible for post-19 education, and the Young People's Learning Agency (YPLA), which will fund the authorities in their new role and ensure that there are enough places for 16- to 19-year-olds throughout England.
The authorities south of the border are now gearing themselves up for a key date - April 20, which is when they are due to distribute millions of pounds into college bank accounts. There is some experience in the system of doing this, since the councils previously had responsibility for distributing post-16 money from the LSC to schools.
The LSC had gone through torrid times prior to its abolition. It faced a major scandal over the college rebuilding programme in England, leading the Public Accounts Committee of the House of Commons to describe its handling of the programme as "catastrophic mismanagement."
This resulted in a pound;2.7 billion debt, with 144 college building contracts having to be terminated abruptly and some colleges facing financial collapse.
In March last year, LSC chief executive Mark Haysom resigned from leading "Britain's largest quango", which at one point had a budget of more than pound;10 billion and around 4,000 staff in 51 offices scattered around England.
He was replaced by Geoff Russell who, significantly, came from accountancy firm KPMG and now heads the SFA. He candidly admitted, in an interview with our sister paper The TES, that the LSC had "screwed up the capital pipeline", but he said the main enemy of colleges remained the recession.
The new agency is a lean machine compared with the LSC, having a budget of merely pound;3.5 billion and just 1,800 staff - of whom 400 belong to another new organisation, the National Apprenticeship Service - in 21 offices.
Mr Russell's vision, in tune with many throughout FE, is that providers, employers and learners should have more influence on what is studied, where and when. "It's about moving away from manpower planning," he says. "We will stimulate the demand side of the market through subsidy."
He continued: "We will move away from a top-down approach towards a much more market-driven position where our role will be simply to do three things. We will provide funding, we will manage quality and we will try to empower the customer and free the employer to respond to customer demand."
This vision, if it is realised, represents a radical shift in the way education and training is delivered anywhere in Britain. Employers and students, armed with learning or skills accounts, would buy the courses they want from providers. The funding agency would confine itself to distributing the money in accordance with demand.
While the Scottish Funding Council makes similar noises about the importance of colleges and universities responding to the needs of the economy, its cash allocations are driven by the demands of the Scottish Government's economic policy rather than the open-ended demands of the labour market.
In England, however, Mr Russell's brave new world could come unstuck, because there is another new set of bodies complicating its work: regional development agencies which will be responsible for devising skills strategies around England and passing them to the Government. Ministers will use them to create a national skills strategy, which is then to be given to the SFA to implement.
How long these plans will last is uncertain: the Conservatives have pledged to revive a simplified FE funding body in England if they win the election on May 6.