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Whither the three-year plan?

Finance directors are waiting apprehensively to discover what effect the new Learning and Skills Council is likely to have on college funding and strategic planning. A consultation document on funding and allocations, published in January by the Department for Education and Employment, suggests many of the new system's features will be familiar to FE colleges.

Funding looks certain to be based on a national tariff with four types of unit. These would cover entry, retention, achievement and disadvantage. While colleges may not necessarily be required to produce rolling three-year strategic plans in the same way as they do at present, all training providers have been promised some form of stability.

Experience in the FE sector, the document says, "has shown that stable relationships between providers and their funding body have created the right conditions for the expansion required by national targets".

Annual contracting, as is common for programmes funded by training and enterprise councils, has sometimes been a majorconstraint on stability and long-term viability, the document adds. "While public funds can never be subject to absolute guarantees for years ahead, we do see the case for allocating volumes of provision on an indicative basis for up to three years ahead."

Michael Blagden, principal of Southgate College in north London, believes colleges do not have anything to fear - provided all training providers seeking funds from the Learning and Skills Council (LSC) have "to jump through the same hoops".

Recently, he explains, the DFEE has begun referring to a "common framework" instead of a common system. This could open the way for providers to receive money without them being subject to the same forecasting and reporting procedures.

"Mst colleges are well set up to produce three-year strategic plans and annual updates," says Mr Blagden, who represents the Association of Principals of Colleges on an external partners' working group set up by the department to look at funding under the new council. "If there is going to be competition, it must be on a level playing field."

The national council will be responsible for funding adult and 16-19 education in FE colleges, as well as work-based training and school sixth forms. Further details of the proposed funding framework should emerge when the DFEE publishes a second consultation document next month. Though the council becomes operational in April 2001, new funding mechanisms will not take effect for at least a further 12 months.

Mick Fletcher, who sits on the working group for the Further Education Development Agency, believes the emphasis on planning may be greater under the LSC than with the Further Education Funding Council. Colleges will need to reconcile their strategies with both regional and national training targets.

"The likelihood is they are going to plan in a little more detail. That's a continuation of current trends under the FEFC," says Mr Fletcher, pointing to new tariff proposals for 2000-01 which aim to reflect the new post-16 curriculum and wider college activities.

Peter Lennard, chairman of the College Finance Directors' Group, says colleges have no wish to move away from a three-year planning cycle. He isdisappointed that financedirectors are not directly represented on the DFEE working group.

"We offered our services as we have wide knowledge andexperience. Until we know the new funding mechanism and can run a model, we do not know what the implications will be for individual colleges," he adds.

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