From education to employment

Beyond Area Reviews: Growing the pie

If there was one vibe above all others that I picked up from this year’s AoC Conference, it was of a sector that is somewhat nervous about the future, expectant of great changes to come. Although the subject of Area Reviews somewhat dominated many of the conversations I had, I got the sense that they are viewed by many colleges as a necessary evil to get through. Many of those I spoke with were looking beyond the reviews to start thinking about what the sector might look like in a year or two (those colleges that want to take a proactive approach to ensure that they are ready for their Area Review might find our free guide helpful).

There is a clear expectation that there will be a good many mergers in 2016, and that the colleges emerging (no pun intended) at the other end will need to start thinking and doing things very differently in order to grow outside of the traditional funding stream. For example, there was much talk about the need to exploit higher education in the sector, of capitalising on adult loans, of more fully embracing the devolution and localism agenda, through forging better partnerships with LEPs and Local Authorities in order to increase growth and productivity in local economies.

But undoubtedly the biggest issue is apprenticeships. In one of those “what did he say?” moments, the Skills Minster, Nick Boles told his audience the following: “As your friend, I have to ask you this: why on earth are you letting these guys [Private Training Providers] nick your lunch?” A cynic might suggest that he was just playing political games, setting colleges up as the fall guy when the Government misses its 3 million target. Maybe, but it was also a classic tactical move, playing colleges off against the PTPs to stoke up a sense of competition and get those in the sector to up their game.

This leads to a question: Who do you see as your competition? Another local college, perhaps? Or maybe you don’t see things in terms of competition. Until now, many colleges might have given these answers. However, as we move beyond Area Reviews, I think Mr Boles was hinting that this is going to have to change. How about universities? Are you competing with them? Or the PTPs that Nick Boles alluded to? Do you see them as competition?

If I can continue the food theme introduced by Mr Boles, what we are talking about is two types of pie. The college that sees itself in competition only with other FE Colleges, or the college that doesn’t see itself in competition at all is one which is going after a limited slice of an already fixed pie. It’s like saying the FE pie in my area is this big – hands outstretched like a man describing the size of the fish he caught – and we get this percentage of it. If we see ourselves in competition with another college, we might try to increase our slice of the pie, but the pie stays the same size.

But is there a bigger pie to be had? I believe there is, and so too does Nick Boles. One measure of this is the issue he alluded to, which is that the biggest providers of apprenticeships are the PTPs, not the FE sector, which presently runs only about 30%. Doesn’t that indicate that there is significant room to grow the pie? I think so, but the question is how.

The answer – or at least part of the answer – is to get smarter and more business-like about how you approach an issue like apprenticeships. The day before AoC, I had the privilege of being involved in a roundtable FERDI panel session, along with six Principals from a broad mix of colleges across the country. One of the highlights of that session was a really candid discussion about apprenticeship provision, in which the general consensus was that there was huge scope to improve in this area. Employers aren’t exactly “falling over themselves” to approach colleges for more apprenticeships, and the Principals admitted that they needed to employ a more scientific and commercial approach to increasing their provision. How can this be done?

The key is for colleges to better understand where the industry growth is likely to be in their area, what occupations are driving that growth, and who the employers are in those growth sectors. This is bound to lead to a far more targeted and effective method of going after employers in the growth sectors than simply picking up the phone and contacting every electrical company in the area. In fact, this sort of more targeted approach can help to grow the pie in three different ways:

  • You can use this strategy to play off your existing strengths. For example, you may find that there is set to be big growth in an area in which you already offer apprenticeships, and you can use this knowledge to target employers you already have ties with to put a business case for them increasing the number of apprenticeships
  • You can use it to diversify from your existing strengths. For instance, you might already be offering construction apprenticeships, but if construction demand is set to increase, not only might the demand for bricklayers increase, but also the demand for accountants to work in the industry.
  • You can use it to really think outside the box, whereby you let forecast demand drive your college into opening up new areas where you don’t currently offer apprenticeships

This approach seemed to get a very enthusiastic reception in the session, and those who would like to find out more can do so here.

There is no doubt that the sector is moving on, and the challenge of the future will not be how can we get a bigger slice of the existing pie, but rather how can we grow the pie and get a bigger slice of that. We have some ideas around this, as do some of our most valued clients and contacts, which is why we are holding a National Conference in London in March next year – Beyond Area Reviews: New Approaches to Growing Local Economies – which will look into many of the themes mentioned above. We are lining up some great speakers for this event, and we will also have some interesting panel discussions. You are all welcome to this free event, which you can find out more details about here.

Let me finish in this way: “As your friend, I have to ask you this: are you going to let Nick Boles’ challenge go unanswered?”

Andy Durman is the Managing Director of Economic Modelling Specialists International UK (EMSI UK), the labour market information firm

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