U-turn on independence greeted with open arms

2nd March 2012 at 00:00
Colleges are to be given back their private-sector freedoms

In October 2010, FE colleges received some unwelcome news. They would, the Office for National Statistics (ONS) announced, be reclassified as part of central government, rather than part of the private sector.

The move caused "considerable alarm" in the sector, according to the Association of Colleges (AoC). As well as being at odds with the government rhetoric of increasing "freedom and flexibility", the loss of independence would have had practical drawbacks, not least in forcing colleges to follow onerous - and expensive - new accounting procedures.

But this week, the ONS announced an unexpected U-turn on its decision, with colleges to be given back their private-sector freedoms from April.

The Department for Business, Innovation and Skills boasted that the switch would boost "the government drive to cut red tape and give organisations greater freedom", and said it reflected its work "to ensure that FE colleges have the freedom to manage their own affairs as independent bodies".

"I am delighted at this very positive news, which we have been working hard to achieve over the past year," said FE minister John Hayes. "The government is committed to cutting red tape so that further education colleges have the freedom they need to make their own judgements on how to manage their affairs for the benefit of learners, employers and wider communities."

Sixth-form college corporations, which were classified as local government entities by the ONS, will also be moved back to private sector classification.

"We are extremely pleased that the government has succeeded in getting this decision reversed and has delivered on its promise to afford further education colleges greater autonomy," said AoC chief executive Martin Doel. "Allowing colleges to maintain their own affairs is not only beneficial to the institutions themselves, but it also brings more clarity to the way public money is spent."

Lynne Sedgmore, executive director of the 157 Group of colleges, welcomed the "constructive decision" by the ONS. "Clearly the voice of colleges and our business communities have been listened to, and responded to, on this critical matter to good effect," she said.

The change came about after the Education Act 2011 outlined the removal of several central government-imposed restrictions and controls on FE and sixth-form colleges. It will be regarded by some observers as a technicality, but it will have significant consequences for colleges. It also forms part of a wider range of freedoms from central government that are to be granted to colleges, including greater freedom to borrow money (see panel, left).

The move also looks likely to be welcomed within the Skills Funding Agency, which last July was chastised by the National Audit Office. The office refused to sign off the agency's accounts because it had not included the financial details of all 258 of England's colleges. As a result of the ONS's decision, it appears unlikely that, come this summer, the agency would be expected to include them again.

It has been a long time since a government announcement has been greeted with universal warmth within the FE sector. Mr Hayes would be well advised to enjoy it while he can.


Other freedoms afforded to colleges by Education Act 2011:

- Colleges no longer need the consent of the secretary of state (or a funding body) to borrow money.

- The consent of the Skills Funding Agency is no longer required to run a college through a company.

- Colleges will be able to dissolve themselves - prior to merger, for example - without the approval of the secretary of state.

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