£7bn 363 colleges 4.2m learners 263,257 staff

Don’t Panic – Opportunities in the Age of Austerity

We may have overspent by £175 billion or so this year, so that austerity looks like the order of the day until that deficit is reduced, but “Don’t Panic” is the policy-savvy theme of “Opportunities in the Age of Austerity”. Each contributor looked at one area of public spending to identify opportunities for reducing the deficit that would not damage progressive aims, rather than coming up with a ‘top ten’ list of spending cuts.

Paul Lawrence heads up the national KPMG FE Unit, and contributed “Further Education – making smart cuts and improving efficiency”. Every couple of years, I come across something which acts as a road map for the future, and I think in this I have found the outline of where we are heading.

His view is that “smart cuts” will result from

  • attitude and behavioural changes
  • efficiency gains
  • reorganisations and partnerships

and that they will catalyse better practice.

On reorganisations and partnerships, he starts from the premise [or is it a consensus?] that there are too many small colleges. In the context of savings, small colleges can’t, and he proposes that merger should be seen as a pro-active and positive business arrangement rather than a rescue package. And “modern mergers” encompass a range of formal collaborative partnerships and sub-branding – one existing model would be HE in FE, where University HE provision runs as a separate brand under the FE college umbrella.

If attitudes change so that mediocre and under-performance are not acceptable because they cannot be subsidised, colleges should be allowed to fail [ ie “recover quickly or not at all”].
On this, FE is some way behind the schools sector, where it seems to be a commonplace that schools close, often to be re-opened as a new institution.

“There is scope to make the most efficiency gains from the most inefficient providers” is another of his messages which piles on the pressure.

In all, considerable head of steam building up for fewer colleges, and for life getting very tough for any college which is considered to be struggling, in terms of Ofsted quality, financial outturn, funding performance and learner numbers. Only the best will be favoured, and can survive confidently.

Now = 350 colleges, just coming to the end of a good period of capital and revenue funding.

Soon = probable that about 100 sixth form colleges will return to the schools / local authority / academy sector, so 250 colleges to remain.
My figures would be 250 @ £20m = £5 bn funding, and they would be expected to save 10-20% through efficiencies = £0.5 – 1 bn. Not a big amount when compared to a £175bn deficit, but every little helps.
Then squeeze more out, through tighter targeting of competitive funding, then re-organising 1 in 4 colleges down to 200 or so, to save on back office functions and spread efficient practice.

Clunk Click for the trip ahead! It looks like it’s going to be an exhilarating but bumpy ride.

The Institute for Public Policy Research “Opportunities in the Age of Austerity”
Chapter 8 pages 35 – 37: Paul Lawrence “Further education – making smart cuts and improving efficiency”

Available to download from http://www.ippr.org.uk/publicationsandreports/ or from my Share Box here on the sidebar


January 6, 2010 - Posted by | Uncategorized | , , ,

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