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 that growing numbers of students are 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. This has prompted concerns that universities are looking to bolster their income by turning to the FE market.
While 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”. The 13 colleges in the Solent region are currently undergoing an area review.
The plan 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”.
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”.
Nick Davy, higher education manager at the Association of Colleges, 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”.
This is an edited version of an article in the 27 November edition of TES. Subscribers can view the full version of this story here. Read the full coverage of universities’ expansion into FE provision in this week’s TES magazine, available in all good newsagents. To download the digital edition, Android users can click here and iOS users can click here
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