Martin Doel CBE, Visiting Professor, UCL Institute of Education

It was the French Century sociologist and philosopher Auguste Comte who allegedly first coined the phrase ‘demographics is destiny.’  Although Comte was referring in the 19th Century to real estate investment, his statement can be seen to have particular relevance to further education in the 21st Century.

As Julian Gravatt at the AoC, pointed out last year, after a pronounced demographic trough with the UK birth rate being at a low point in 2001, the rate has been rising for the past 15 years.

As a matter of simple logic, the impact or either falling or rising birth rates works through to further education in deferred way with a pronounced trough in 16-18 year olds from 2010 that is now reversing.

And the number of 16-18 year olds has become an increasingly important to further education, and to colleges especially, for inter-related reasons.

Proportion of 16-18 year college income now close to 60%

First, the proportion of their income that colleges derive from 16-18 year olds has been steadily increasing up by 9% in the period from 2010 to 2018 when it stood at 55%; given this trajectory it is now likely to be close to 60%. That this is so is largely due to the fact that 16-18 income is relatively ‘safe’ compared to other sources of income for colleges.

Though the rate per 16-18 year-old student is disgracefully low, at about £4500,* being almost 20% lower than the rate for 11-16 year-olds, and half of the average tuition fee for HE students, it is relatively predictable.

If a college, or other provider recruits and retains a 16-18 year-old, the funding follows. As a result of the ‘lagged’ funding methodology whereby reductions or increases in funding for under-recruitment or increased student numbers are deferred to the following year, income levels are also more predictable at least within a 12-month period.

The increased dependence upon 16-18 recruitment has also been accentuated by successive cuts in funding for adult non-HE provision which used to be a mainstay of many colleges’ provision. The returns associated with adult provision have become too low and the risks too high to counter the relative security of 16-18 funding.

Though the returns from apprenticeships in sectors and at levels that are incentivised by government are higher they remain high risk for many colleges, in terms of a departure from their primary delivery mode; clearly the pandemic will not have helped in this regard.  

Failure to adapt to falling 16-18 numbers at the heart of many financial difficulties

Somewhat obviously, however, during a demographic downturn increased colleges, schools and independent training providers have been competing for a share of declining market, with the inevitable consequence that there have been few winners and many losers. In my experience with a number of colleges in financial difficulty, it is a failure to adapt to falling 16-18 numbers that has been at the heart of their problems.

In this context, the rebound in the number of 16-18 year-olds should offer the prospect of relief to colleges across the country. There are, however, a series of ‘buts’ that might prevent the cavalry arriving.

The aggregate demographic changes are not even across the country and understanding when and where demographics will change will be critical to aligning supply with demand. The inadequacy of the funding rate will continue to make margins in 16-18 year-old education very slim, meaning that a cost effective curriculum offer will be critical (ie having class sizes that are viable), whilst still delivering high quality learning.

Reducing attrition in the chain between generating student interest and confirmed recruitment

But perhaps the most important and immediate predictor in success in a highly marketized system will be in retaining or increasing market share by attracting, recruiting, and retaining 16-18 year olds. Every college receives substantially more expressions of interests than applications, more applications than confirmed enrolments and more enrolments than course completions.

Whether this market approach is the best way to run a system is an open question; the recent FE White Paper hints at the prospect of a more co-ordinated, and possibly more sustainable, response to increasing numbers through colleges collaborating across contiguous areas.

For now, however, the key to benefiting from the demographic rebound looks likely to be in reducing attrition in the chain between generating student interest and confirmed recruitment.   

Martin Doel CBE, Visiting Professor, UCL Institute of Education

*The precise rate of funding for 16-18 year olds is difficult to define since there are uplifts for various factors including economically disadvantaged areas and for particular courses or students. In my experience, however, most colleges when looking at broad return on investment decisions and estimates of income work on a figure or £4500 per student capita.


18th May 2021: To future proof post-16 provision, DfE have launched a new £83 million Post-16 Capacity fund.

Providers are invited to bid for a share of the fund, which will support projects to create more space for areas where there is due to be a demographic increase in 16-19 year olds in the 2022/23 academic year.

This could include building more classroom space or technical teaching facilities, so providers can continue to offer places to every young person who needs one.

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