As colleges get to grips with the area review process that could end in merger for many of them, as well as ever tighter budgets, they are now up against increasing competition from a new direction: universities.
TES can reveal that at least one university is looking into the “acquisition” of FE providers, as well as opening its own school for level 3 provision.
The news comes as figures from the Higher Education Statistics Agency (HESA) show growing numbers of students enrolling on foundation programmes at universities – provision traditionally offered by FE institutions to prepare learners for a degree.
And TES can also reveal that universities were awarded more than £14 million from the Skills Funding Agency in 2015-16 – up by almost a third from two years earlier (see panel, right). This has prompted concerns that universities are looking to bolster their income by turning to the FE market.
Whereas public grant funding for FE colleges has been cut by 16 per cent since 2010, universities have been able to offset grant reductions through other sources, including tuition fees.
In 2013-14, total HE sector income came to £30.7 billion, up 5.7 per cent on the previous year. A report published by thinktank Policy Exchange in October said that universities held reserves of £12.3 billion. Yet TES research suggests that universities are increasingly turning to traditional FE provision. Figures from HESA show a 17 per cent rise in foundation course enrolments at universities between 2012-13 and 2013-14, from 13,265 to 15,615.
In its strategic plan for 2015-20, Southampton Solent University says it intends to build on its collaborative work with colleges to ensure it positions itself to “gain from any proposed new developments” brought about by a review of provision in the area.
It adds: “Strategic collaboration, or indeed acquisition, could enable the university to become a national lead with regard to the higher level skills agenda, employer engagement and applied learning.”
This could involve creating a “separate school for foundation year and other level 3 provision”, according to the plan.
Jonathan Simons, head of education at Policy Exchange, said competition between the FE and HE sectors was increasing. “It is really sharp practice of [universities], but they are seeing an opportunity here,” he added. “I am generally in favour of competition and plurality of provision. But you have to have colleges in a sustainable enough position that they can either work in collaboration with the university or private training provider, or compete with them.”
Nick Hillman, director of the Higher Education Policy Institute, said that, for colleges, Southampton Solent University’s plans “might set alarm bells ringing, because FE has a lot of challenges facing it at the moment”.
The seven FE colleges in the Solent area are currently undergoing an area review.
At last week’s Association of Colleges (AoC) annual conference in Birmingham, the principal of Brockenhurst College, one of the institutions in the review, raised concerns about additional competition for colleges.
Speaking of the proposed institutes of technology the government wants to see in every local enterprise partnership area, Di Roberts told delegates: “We have got to collaborate to come up with an FE system, and if we throw something into the mix that is going to distort that, it is not going to enable us to take the opportunity we have not just to financially save the FE system, but to structurally and strategically make a fundamental difference.”
‘Let’s work together’
Sarah Stannard, principal of Southampton City College, told TES it was important for colleges and universities to collaborate.
“Progression into HE by Southampton residents has been substantially lower than the national average for many years,” she said. “This is something we are striving to change and we believe we can have more impact by working together.”
Nick Davy, higher education manager at the AoC, said that colleges were concerned about the quality of lower-level provision offered by universities.
“Our view would be that the history of universities delivering level 3 has not been very successful, and that is supported by Ofsted reports. We see ourselves as experts in this area,” he said.
A spokesman for Southampton Solent University said that, in spite of the comments in its strategic plan, the university was “not intending to begin the delivery of new areas of FE courses and will not be competing with existing providers”.
He added: “Our approach is one of collaboration with our FE partners. Our plans focus on delivering various routes to work-based learning to create better progression routes from FE to HE level. We want to enable FE students to have the opportunity to consider a range of programmes and qualifications to support work-based learning and their vocational career choices.”
The university’s plans for a level 3 school were at an “early stage”, and would be funded through HE streams, he said.
FE colleges which offer higher education programmes could be disadvantaged by the introduction of a teaching excellence framework, shadow skills minister Gordon Marsden, pictured, has warned.
In an exclusive interview with TES, Mr Marsden said it was essential that any framework, outlined in the government’s HE green paper published this month, should factor in the background of the cohort of learners at an institution.
“If the framework is not one that takes account of the particular type of people who get taught HE in FE, then it’s entirely possible that if you set a traditional framework for judging teaching excellence of a well-established red brick university with the cohorts that normally go with that…HE delivered in FE will be disadvantaged,” he said.