The SFA can adapt to CSR challenges, says CEO Geoff Russell

The dust is beginning to settle on the Comprehensive Spending Review but its ramifications will be with us for some years to come. It will touch all our lives, not least for those working in the further education sector.

A reminder of the figures: £1.1 billion – or 25 per cent of public funding will come out of adult further education in the next four years. That’s on top of the £240 million reduction this year. These are significant numbers and no college or provider should fail to recognise the inevitable consequence that they must change the way they do business. I say “should” because the recent forecasts we have received from the sector as a whole predict revenue increases for next year. I shall leave readers to draw their own conclusions from this.

But for those that have spotted them, the reductions do not mean that we simply accept delivering less because we have less cash. We have to become more efficient – but we also must become more effective. The story is not a struggle to survive; it’s about an opportunity to raise our game even further. It is time to accelerate – not brake; we have to drive up the quality of the offer even further. To look at it any other way is to disregard and disrespect an education sector that is already the most cost effective in the country.

What I have spotted in the figures is that the Agency must respond to the challenge as well. As of this month, we have reduced our headcount by 15 per cent and we will become smaller still. We can do this because we will radically simplify the way we fund and regulate the sector. To allow you to do better for less – and to allow us to do the same, we need to get out of your way so you can respond to demand in new and innovative ways.

The Skills Strategy and Skills Investment Strategy will be published in the coming weeks. They will articulate the funding available as well as the much simpler system to allocate it and keep an eye on it. They will also explain how the funding system will incentivise delivering outcomes customers that communities want. The intention is to establish a simple system that operates successfully with minimal maintenance. The Agency’s role will be to supply funding and information and only to intervene in the hopefully rare instances when things go wrong.

The new system will leave colleges and providers to make a success of their businesses by meeting the needs of their customers and communities. So you will have the freedom but also the responsibility to make further education fit for the purposes of a tougher and more demanding world – but also a world where the opportunities have never been greater. You might ask what these may be.

I am an inveterate optimist but what is fact is that overall, the sector has the best managers of education businesses in the country. In a time of reduced funding but increasing demand, the opportunity presents itself to extend further education business acumen across the education landscape to academies, schools and universities.

For me, the commercial and education benefits for this are compelling and could be achieved as part of the process of the sector itself becoming more cost effective, i.e. through collaboration and federations.

I would also venture to suggest that the boardroom and the lecture room could work more closely together. We have seen announced this month that a supermarket chain is sponsoring students through higher education routes. This seems to be an innovative idea that could extend beyond backing students to backing whole further education institutions and developing mutually beneficial partnerships. More collaboration leads to better education delivered at less cost.

So yes, tough times ahead, but I genuinely believe that this is the moment when the further education sector must start not only to transform to meet new imperatives, but also to demonstrate more widely what it does so well itself. Doing so will ensure it continues to serve learners of all types and in the process, perhaps establish the well deserved reputation it has long struggled to carve out.

Geoff Russell is chief executive of the Skills Funding Agency, part of the Business, Innovation and Skills Department