Win or lose, colleges face penalties

The Learning and Skills Council deserves a frosty response from colleges for its attempt to set targets for growth in income for fees from non-publicly funded courses.

If colleges refuse to set targets - or fail to meet them - the LSC only has one sanction available. It would have to penalise them financially, almost certainly by reducing the level of post-19 funding.

Particularly frustrating for many principals will be the fact that, while they face penalties for failing to meet targets outside the council's funding remit, they are already suffering financially for over-achieving in an area which is within the quango's responsibility - the recruitment of 16- to 18-year-olds. Many colleges have attracted so many that they have been forced to provide for some without LSC funding, or turn them away at the gate.

So, perversely, as colleges are penalised for success in activities which fall within the LSC's domain, they face the possibility of being hit again for "failing" to achieve in an area which they have always been told is an optional extra, unworthy of public funding.

What we are seeing are the consequences which can flow when the state attempts to give the market a helping hand with a large dose of centralist control.

The logic of providing full-fee courses is that, assuming colleges make a surplus, they end up with cash they can use in other areas of activity. This incentive alone should be enough. In the end, the market - students' and employers' ability and willingness to pay - will set the level of fees and the rates of enrolments, based on principals' unique understanding of local demand.

Of course, with the economic climate as it is, this is the worst possible timing for colleges to be put under pressure to extract more cash from the public. No amount of central planning is going to take away the fact that many private individuals are going to be spending less money - a lot less money - on extras such as adult education in the coming months, and possibly years.

One potential effect - or, as ministers prefer, "unintended consequence" - of this target could be that poorer adults, including many of the Prime Minister's beloved hard-working families, could be priced out of further education as colleges compete to see who can raise fees the most.

A spectacular own goal in the drive to widen adult participation.

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