This week heralds the annual gathering of college leaders in England at the Association of Colleges' (AoC) spring policy conference. It’s an important moment to reflect on how effective we are as a sector in our endeavours to influence government policy on funding and the environment we operate in. For me and for the AoC, it is also an important chance for our members to hold us to account for the work we do on their behalf. It’s not so much an inspection, but certainly a check-up.
I’m expecting a hard time, because colleges are still facing extreme challenges and leaders are worried about the prospects for their colleges. The challenges are well-known now; funding and seismic policy changes, as well as additional responsibilities forced on colleges.
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Funding has stayed static for seven years for young people (a 16 per cent real-terms cut, according to the Education Policy Institute report last week) and has dropped by 30 per cent overall in the past 10 years. It’s more difficult to quantify the policy changes and additional responsibilities, but it’s startling that the City and Guilds report today shows that we have had over 70 different ministers responsible for further education and skills in the past three decades. With that degree of change, it's hardly surprising that colleges feel they exist in a whirlwind of instability.
Other things being equal, I’d be expecting to report to members on how the spending review was going. I’d be sharing stories of the conversations, rumours and meetings we were having. We’d be launching a spending review paper, with a set of simple messages, and I’d be speculating on what the chances of success were. But it’s not like that. Brexit has trumped that process and probably delayed the "proper" spending review for a year.
With no thorough spending review likely, and Brexit sucking up government time, we have had little more than a series of smaller announcements to nourish us. There are good signs from these, which I believe show that colleges are better placed now than they have been for many years, but unless and until the funding base rates are increased, they do little to address the fundamental financial health of a sector that is precarious. I use that word carefully, not because every college is about to fall over, but because the overall funding levels are simply inadequate.
College funding levels are inadequate
Contrast the concerns in the university sector that the aggregate surplus achieved by all universities last year was "only" 3.1 per cent, or around £1,000 million. For all colleges in England, the equivalent figures are 0.1 per cent and £18 million. Add to that context the petition by the Department for Education to place a college into education administration and you might appreciate why college leaders are worried about the future.
So my role at our conference will be to show how prospects have improved and how it is possible to be optimistic. It won’t be easy but there are many positive signs that the obsession with schools and universities at the expense of colleges has changed. My top three signs come from the areas of pensions, T levels and employers, but there are many others.
Colleges are obliged to offer access to staff to the Teachers’ Pension Scheme (TPS) or the Local Government Pension Scheme. Both add considerable costs to colleges, compared with private providers, as well as carrying with them difficult liabilities which are common across final salary pension schemes.
The TPS employer contribution is set to rise from September to over 23 per cent, costing colleges around £100 million in a full year. After strong lobbying, the government has agreed to fund this increase for colleges but not for the universities who face the same increase. That’s an important win.
Positive signs on T levels
T levels are described by the education secretary as “the most significant reform to advanced technical education in 70 years”. That may be precisely why so many college leaders and staff are worried about how they will impact. We’ve chosen to be positive but critical about their introduction and are working hard to help the Department for Education get their design and implementation right.
That feels better than simply harping on about how and why they are "wrong", given that it’s difficult to imagine anyone staunchly defending all of the current technical education proposition. Recent announcements show that DfE is listening. On funding, our private conversations with government suggest that it has accepted that the current base rate makes T levels unviable.
Yesterday's announcement by the DfE offers the sorts of flexibility for industry placements which we have promoted, and we are working closely with officials to design the all-important transition phase for young people not yet ready to start a T level.
The third sign that gives me hope is the changing attitude of employers. Until relatively recently, most employers found it easy enough to recruit skilled people. Our labour market was vibrant, with EU nationals keen to work here and enough young people entering it to readily match those retiring. Brexit, demographics and technology have changed that picture significantly and the number of hard-to-fill vacancies is rising.
On top of that, the apprenticeship levy has thrust more employers into the skills arena and made them think carefully about how and who they recruit and how they develop their staff. The result is more employers wanting to partner with colleges and a recognition nationally that colleges and skills need greater government investment. It’s great to have employer organisations like CBI, BCC, IoD and FSB all acting as advocates for our sector, after too many years of neglect.
The strong influence of colleges
We’ll be covering lots of other policy areas – apprenticeships, English and maths, devolution, mental health and wellbeing, inspection and higher education – and in many there are similarly positive signs, which shows that our influence is strong.
My job is to tread a tricky line between optimism and pessimism, whilst recognising the practical here-and-now challenges. If there was a proper spending review underway, I would be confident – we have campaigned effectively as a sector to raise awareness of the needs, gathered supporters from across the political spectrum and from a rich array of influencers and made our case in detail behind the scenes. All of that will still help potentially to win some funding in the autumn budget based on the urgency and strength of our case, as well as the politics – but it’s far from certain.
In the end, though, I will try to convince our members to be modestly hopeful, and to carry on helping to make the case through every channel possible. The Love Our Colleges activities last week showed how powerful colleges are when they work together and how much they have to be proud of. That alone should offer some nourishment to leaders; It’ll be interesting to see what they have to say.
David Hughes is chief executive of the Association of Colleges