A Finance Director is for Life, not just for Crisis

Colleges are struggling to recruit finance leaders. The problem is not salary, it is more to do with a lack of understanding of the aspirations of ambitious finance experts. How can we correct that?

Colleges are struggling to attract good senior finance leaders, with some reportedly making fruitless, repeated attempts to recruit.  This is despite reasonable salary levels in comparison with similar sectors like health, Universities or local government. 

Colleges are currently in a relatively benign period in terms of funding, so fewer colleges are falling into severe financial difficulty, but that could change given the medium-term pressure on public finances. The recent White Paper has many ideas that present new risks and challenges, making the need for good financial management even more important. 

So why aren’t colleges seen as attractive places for ambitious finance professionals currently working elsewhere?  

First, the structure of the college sector is not helping.  Only the very largest college groups can afford to employ a Deputy Finance Director who could realistically make the transition to the next level.  This contrasts sharply with the internal supply for top curriculum and quality roles.  It means when any finance director leaves, most are forced to poach from another or attract someone from outside the sector.  We need a regular supply of new blood from outside, because supply inside is limited in this way. 

Why would you come into a sector that seems reluctant to meet your career ambitions?

Second, large parts of the sector traditionally frown on the idea that a Principal/CEO could have a background outside teaching.  This is in marked contrast to other public services that are much more inclusive, with CEOs from a diverse range of backgrounds.  Surveys show that 61% of finance directors aspire to be CEOs, so why would you come into a sector that seems reluctant to meet your career ambitions? Why look to come into a sector where it is less a career move than a final resting place?  The Institute of Chartered Accountants reports that the proportion of chief finance officers becoming CEOs in the UK has risen from 21% in 2019, to 30% in 2023, so colleges are working against the national trend, and the aspirations of those it is looking to attract.  

Third, we don’t sell the role in an attractive manner.  When I talk to finance people outside the sector, they think of colleges as big schools, and schools are unattractive for ambitious finance people, too simple, too small, almost all money goes on staff, no assets or major projects.  Equally, pitching the job based on strong Ofsted results won’t push anyone’s buttons.  Accountancy firm Grant Thornton has found finance leaders want purpose-led careers, and the opportunity to make strategic decisions.  They want “stretch assignments” and to work well beyond their traditional accountancy skills.  As someone who discovered the sector in 1993, I was delighted to find its complexity.  Colleges were major employers with their own, considerable, estates and IT infrastructure.  They could borrow and make their own plans; they had interesting tax arrangements and intellectually stimulating technical and costing challenges.  College leaders had, and still have, far more autonomy than was normal in both the private sector and most public organisations.  This is not a message that is prominent in many recruitment campaigns. 

So how might we change things to bring in more of the talent we need at a strategic level? 

First, we could continue to push for the creation of larger colleges or college groups to create a better pipeline and career structure for finance staff that reaches all the way to the Executive suite. 

Second, we could produce case studies of non-teachers who have made the successful transition to the CEO role and look to encourage Boards to be more inclusive in their recruitment practice.  There are many examples of success here. The sector prides itself on being inclusive, so asking it to live up to that value is a reasonable request. 

Third, we could celebrate much more the work of college financial managers.  Colleges that recover from poor inspections are rightly applauded in a way we don’t report exceptional financial turnarounds.  We could also publish league tables of college capital investment; highest average teacher and non-teacher pay (rather than just the CEO pay); teacher productivity (funding generated per FTE teacher); things that are not captured in the financial health judgements. 

Fourth, we could aim not to further diminish college autonomy.  Reclassification has taken away important freedoms to borrow or set the pay of top leaders.  Innovation and novelty now need to be cleared by someone far removed from the college, dampening creativity at the very time we need fresh ideas, especially as we get to grips with the power of AI. 

The government’s recent post-16 White Paper contains an alarming sentence that “for decades this sector has been treated as second rate”. Let’s work harder to make sure talented finance leaders reach a very different conclusion and use the talent we already have to create the vibrant future our students deserve.

By Ian Pryce