We are being asked to advise increasingly on the ramifications of this, including the impacts on college mergers, borrowing and capital projects, and where colleges can become more flexible in their operations.  The ONS and NAO classification of colleges has also affected the situation.

The Education Act 2011 and the AoC Foundation Code

The Education Act 2011 deregulates FE colleges in a number of areas, for example:

• Removing of the need for the consent of the Secretary of State for colleges to borrow.

• Removing the red tape surrounding a publically funded college being run through a company.

• Giving colleges’ greater freedom to change their own instrument and articles.

• SFA power to appoint up to two additional Governors has been removed.

• Removing the power of the Secretary of State to dissolve a college.

These increased freedoms are to a certain degree balanced by the new Association of Colleges Foundation Code, which in essence gives FE colleges a set of principles to work to when regulating their internal governance. While adoption of the code is voluntary, the AoC’s hope is that most colleges will adopt it and additionally that many will already be in compliance with the code’s principles in any event. We are aware from the FE Clerks’ Network that a large number of colleges have adopted the code.

Making management easier to manage

Many see one of the significant advantages of the deregulation brought by the 2011 Act as the ability for colleges to have greater power over the way their internal affairs are managed. For example, a greater degree of control over their internal documentation stemming from their increased ability to change their own Instrument and Articles of Government.

Anyone who has conducted a disciplinary process within a college will know the familiar frustration caused by the constraints imposed on them by both their disciplinary policy and internal constitution in relation to disciplinary action. For example, often the power to suspend an employee pending a disciplinary investigation is limited to a senior post holder or the principal. In many cases, the employee’s direct line manager is carrying out the investigation and is therefore the appropriate person to suspend them, leaving the principal out of the initial disciplinary process and free to hear any appeal against disciplinary action. This may in itself cause difficulties within the constitutional framework of the college.

Similarly, it is often the case that the only person with the power to summarily dismiss an employee is the principal. This cumbersome restriction is just not practical nor workable, particularly in larger colleges where disciplinary issues may crop up on a fairly frequent basis. It also means that for internal disciplinary appeals where an employee has been dismissed, it becomes necessary to involve the Governors, which again adds a further set of procedural hoops to jump through which is not always appropriate.

As a result of the new powers, colleges will have a much freer hand to simplify their internal processes as a result of changing their internal instruments and articles.  Naturally, there will be a number of considerations in doing so (not least the fact that normally the disciplinary and grievance processes will have been agreed with the Union and incorporated into employees’ contracts of employment),  but it is certainly a step in the right direction.

College mergers

The other key area where the changes are likely to benefit colleges is in relation to college mergers. This is an increasingly common occurrence in the FE sector, and changes to make the process smoother for all concerned are to be welcomed. Instead of the power for the Secretary of State to dissolve FE colleges, the college will have the power to dissolve itself once the appropriate procedures have been followed.

The key message underlying the change is that it is for the college itself to decide on the best way of doing things whilst keeping in mind that it is accountable to stakeholders in the widest sense in justifying its decision making.

Borrowing and capital projects

The Secretary of State and local authorities have historically had the power to control college borrowing. That has necessarily impacted on approval required to effect certain transactions over a certain amount and/or greater than a certain percentage of turnover.  From 1 April 2012, this will change and that power will be removed.

To the future…

It is hoped by many in the FE sector that the changes will make things easier for those tasked with college governance. Time will tell, but the future is certainly looking promising.

This e-mail address is being protected from spambots. You need JavaScript enabled to view it is a partner at law firm Thomas Eggar, which handles a wide range of related litigation, such as issues relating to FE governance and capital projects