Making sense of the new post-CSR funding landscape: What are the likely implications for the sector?

The CSR serves to re-emphasise that, when it comes to government funding, FE colleges fall between a rock and a hard place with funds from both BIS and the Department for Education. Whilst the DfE might be a slightly softer rock, it is certainly not comfortable.

The DfE rhetoric is about increase in participation aided by refocusing of education maintenance allowances. But what will the impact be on those young people not meeting the definition of disadvantaged but dependent on EMAs due to lack of funds from parents – there may well be a fall off as these youngsters look for a quick fix low paid job rather than college.

Further challenges on the 16-18 front are:

• planned cut in funding per individual
• demographic changes
• reduced resources in local authority funded initial advice and guidance services

Now for the hard place of 19+ funding.

Whilst there will be additional funding of £250 million per annum for adult apprenticeships, the reduced funding of £1.1billion over four years in the further education (FE) sector will leave a wide range of crucial skills provision unfunded at a time when it is essential for the economy’s recovery.

As with much of the reduction in public expenditure, there is the assumption that the private sector will fill the gap. In this case there are proposals for employer contributions and individuals taking out loans to pay for their fees.

The expectation that once individuals pass the age of 19 they will contribute financially to their own education and training has been in the system for some time but whilst there has still been money available for bursaries and fee waiver this assumption has not been rigorously enforced. Those days are clearly over. A move to fee-paying in this sector will require a huge cultural change, not only from the sector but from the learners themselves. How we will meet the additional funding required needs to be addressed urgently if we are not to see a collapse in skills provision in FE.

As my colleague Jim Clifford said yesterday: “Many colleges are beginning to think creatively about this but there are concerns about how we get learners to buy into the possibility of paying more fees.  Lord Leitch made it clear that the whole nation needs to increase its skills. You can’t tackle NEETS as an issue and not fund training. This is a significant gap and we need to resolve how to fill it.”

However, there are some opportunities here to reshape the sector to provide better, learner choice and much is already going on under the surface in discussions between providers and others that you might consider to be unlikely partners.

The move to higher fees for higher education will lead to students seeking to study nearer to home with opportunities for further and higher education providers to work together and even for schools and academies to offer higher education in conjunction with universities and colleges.

Not mentioned in the CSR but very much a matter for concern (or opportunity, depending on your outlook) is the likely move to minimum contract values for employer responsive provision. We are seeing consolidation of training providers and also purchase of training providers by colleges.

We predict the education sector will look very different in five years time. We see a polarising into community provision, at all levels, and very commercial style operations. Community provision will include cradle to grave learning alongside health and leisure provision. Commercial provision will be at all levels probably run by large organisations.

This is already happening in

• independent schools, with large groups now taking on academies
• academy federations
• learning and skills providers (including colleges) consolidating and federating
• private organisations gaining degree awarding powers.

Stephanie Mason is director of charities, learning and Skills at accountants Baker Tilly