Malcolm Cooper, MD, MCA Cooper Associates

The answer to this question is …………………………………………… almost always!

Colleges are required to develop a Recovery Plan when they experience financial problems, of that there is no doubt.

However, in nearly every case I have ever encountered during 20 years in the FE sector the problems are not caused by pure financial issues, but by operational issues which give rise to financial problems!

Therefore, a college’s financial malaise can be the symptom of other problems rather than the problem itself!

The way FE providers are funded means that their finances are very finely balanced, even in good times.

The funding they receive is designed to cover reasonable operating costs. It does not take much, therefore to disturb the finely balanced equilibrium between income and expenditure, causing a financial problem.

If the disturbance is allowed to persist for an extended period of time, say a few years, then the whole thing spirals downwards into a crisis. Such crises are by no means unusual!

So what are the main reasons for the equilibrium between income and expenditure in colleges being disturbed?

There are two main causes;

First, weak income forecasting leading to a consequent failure to meet income targets, and

Second, which is by far the most common reason, a lack of adequate control of staff costs. In my experience the main reason in over 90% of cases.

In the early days following Incorporation, after the 1992 Further and Higher Education Act, recovery plans were common. Those colleges which did not have adequate control systems, and there were a significant number, lost control of their finances. In the Local Authority days, prior to 1992, the key control mechanism was cash.

If there was money in the bank, then everyone relaxed. But, of course in the real, independent world, in which money was not so freely available, in order to prevent problems, more advanced financial control systems were needed.

Colleges began to recruit accountants from outside the FE sector and gradually their systems began to become more sophisticated. Managers became more interested in looking forwards and forecasting Income and Expenditure as a way to anticipate problems, rather than just perusing the bank account, for comfort.

The early recovery plans were indeed often referred to as financial recovery plans, which was a misnomer, which led to many being developed by college Finance Directors in glorious isolation from their colleagues!

Consequently, when the funding authorities asked to see supporting operational plans, in particular curriculum plans, they were not available, or even worse, were available but conflicted with the financial plans!

Then the penny dropped! Everyone realised that to develop robust, realistic and achievable financial plans, a thorough review of the college’s curriculum plans was first required.

After all, curriculum delivery is the reason for the existence of colleges. It is no surprise, therefore to put this at the heart of its planning.

A well thought out curriculum plan, in addition to providing essential operational controls, also provides the key figures to be included in the financial forecasts.These are income and staff costs, i.e. the two areas in which things usually go wrong!

Therefore, by starting with the curriculum plan and using the figures it generates for financial planning provides a closure to the loop, linking the two key control mechanisms together!

To develop a sustainable recovery plan requires in-depth analysis of the financial contributions being made by each income-earning department.

Contribution is the term used to represent the difference between income and direct costs, i.e. those costs specific to each department.

Costs that are shared by all college departments, which are commonly referred to as overheads, can be evaluated both in financial terms and as a percentage of total college income. This percentage then becomes the target for the contribution to be made by the income earners.

The way to improve college financial performance, the raison detre for recovery plans, is to focus on the low-contribution departments and identify the reason their contribution is low, enabling corrective action to be taken.

Adopt this approach, and you are on the road to developing a robust, realistic and achievable plan!

Malcolm Cooper, MD, MCA Cooper Associates

You may also be interested in these articles:

Sponsored Video

Register, Login or Login with your Social Media account:


Upcoming FE Events

Advertiser Skyscrapers

Newsroom Activity

Westminster Forum Projects (WFP) added a new event 5 hours

Next steps for SEND provision in England - the SEND...

This conference will be an opportunity to discuss the future for SEND provision in England, following the expected publication of the Government’s...

  • Tuesday, 29 March 2022 09:00 AM
  • Online
Tina Morris has published a new article: Top Digital Solutions to Help Graduates Get Hired 5 hours 50 minutes ago

Latest Education News

Further Education News

The FE News Channel gives you the latest education news and updates on emerging education strategies and the #FutureofEducation and the #FutureofWork.

Providing trustworthy and positive Further Education news and views since 2003, we are a digital news channel with a mixture of written word articles, podcasts and videos. Our specialisation is providing you with a mixture of the latest education news, our stance is always positive, sector building and sharing different perspectives and views from thought leaders, to provide you with a think tank of new ideas and solutions to bring the education sector together and come up with new innovative solutions and ideas.

FE News publish exclusive peer to peer thought leadership articles from our feature writers, as well as user generated content across our network of over 3000 Newsrooms, offering multiple sources of the latest education news across the Education and Employability sectors.

FE News also broadcast live events, podcasts with leading experts and thought leaders, webinars, video interviews and Further Education news bulletins so you receive the latest developments in Skills News and across the Apprenticeship, Further Education and Employability sectors.

Every week FE News has over 200 articles and new pieces of content per week. We are a news channel providing the latest Further Education News, giving insight from multiple sources on the latest education policy developments, latest strategies, through to our thought leaders who provide blue sky thinking strategy, best practice and innovation to help look into the future developments for education and the future of work.

In Jan 2021, FE News had over 173,000 unique visitors according to Google Analytics and over 200 new pieces of news content every week, from thought leadership articles, to the latest education news via written word, podcasts, video to press releases from across the sector, putting us in the top 2,000 websites in the UK.

We thought it would be helpful to explain how we tier our latest education news content and how you can get involved and understand how you can read the latest daily Further Education news and how we structure our FE Week of content:

Main Features

Our main features are exclusive and are thought leadership articles and blue sky thinking with experts writing peer to peer news articles about the future of education and the future of work. The focus is solution led thought leadership, sharing best practice, innovation and emerging strategy. These are often articles about the future of education and the future of work, they often then create future education news articles. We limit our main features to a maximum of 20 per week, as they are often about new concepts and new thought processes. Our main features are also exclusive articles responding to the latest education news, maybe an insight from an expert into a policy announcement or response to an education think tank report or a white paper.

FE Voices

FE Voices was originally set up as a section on FE News to give a voice back to the sector. As we now have over 3,000 newsrooms and contributors, FE Voices are usually thought leadership articles, they don’t necessarily have to be exclusive, but usually are, they are slightly shorter than Main Features. FE Voices can include more mixed media with the Further Education News articles, such as embedded podcasts and videos. Our sector response articles asking for different comments and opinions to education policy announcements or responding to a report of white paper are usually held in the FE Voices section. If we have a live podcast in an evening or a radio show such as SkillsWorldLive radio show, the next morning we place the FE podcast recording in the FE Voices section.

Sector News

In sector news we have a blend of content from Press Releases, education resources, reports, education research, white papers from a range of contributors. We have a lot of positive education news articles from colleges, awarding organisations and Apprenticeship Training Providers, press releases from DfE to Think Tanks giving the overview of a report, through to helpful resources to help you with delivering education strategies to your learners and students.


We have a range of education podcasts on FE News, from hour long full production FE podcasts such as SkillsWorldLive in conjunction with the Federation of Awarding Bodies, to weekly podcasts from experts and thought leaders, providing advice and guidance to leaders. FE News also record podcasts at conferences and events, giving you one on one podcasts with education and skills experts on the latest strategies and developments.

We have over 150 education podcasts on FE News, ranging from EdTech podcasts with experts discussing Education 4.0 and how technology is complimenting and transforming education, to podcasts with experts discussing education research, the future of work, how to develop skills systems for jobs of the future to interviews with the Apprenticeship and Skills Minister.

We record our own exclusive FE News podcasts, work in conjunction with sector partners such as FAB to create weekly podcasts and daily education podcasts, through to working with sector leaders creating exclusive education news podcasts.

Education Video Interviews

FE News have over 700 FE Video interviews and have been recording education video interviews with experts for over 12 years. These are usually vox pop video interviews with experts across education and work, discussing blue sky thinking ideas and views about the future of education and work.


FE News has a free events calendar to check out the latest conferences, webinars and events to keep up to date with the latest education news and strategies.

FE Newsrooms

The FE Newsroom is home to your content if you are a FE News contributor. It also help the audience develop relationship with either you as an individual or your organisation as they can click through and ‘box set’ consume all of your previous thought leadership articles, latest education news press releases, videos and education podcasts.

Do you want to contribute, share your ideas or vision or share a press release?

If you want to write a thought leadership article, share your ideas and vision for the future of education or the future of work, write a press release sharing the latest education news or contribute to a podcast, first of all you need to set up a FE Newsroom login (which is free): once the team have approved your newsroom (all content, newsrooms are all approved by a member of the FE News team- no robots are used in this process!), you can then start adding content (again all articles, videos and podcasts are all approved by the FE News editorial team before they go live on FE News). As all newsrooms and content are approved by the FE News team, there will be a slight delay on the team being able to review and approve content.

 RSS IconRSS Feed Selection Page