Managing Finances in Further Education in England
The further education sector in England provides learning opportunities to
students from the age of 16 upwards, offering over 12,000 qualifications from degree level to vocational training. The sector consists of 429 further education colleges with an income of over £4 billion a year, mostly provided by the Further Education Funding Council (the Funding Council), which also has responsibility for overseeing the sector and assessing the quality of education being provided by colleges. The Government sees the further education sector as a crucial part of its overall strategy to combat social exclusion, unemployment and skill shortages and sees widening participation in further education as critical to its economic and social agenda.
The proportion of colleges in poor financial health grew rapidly between
1993-94 and 1996-97. More recently, the proportion has started to decline but still stands at about 13 per cent. In the light of this and concerns expressed by the Committee of Public Accounts (63rd Report of session 1997-98), we examined the reasons why colleges have financial problems and how these could be improved.
We have three overall findings:
some external factors play a significant role in determining whether a college will be in good or poor financial health, such as financial problems inherited at incorporation and the type of students it has. Some factors, like differences in funding, are diminishing with time. Others, such as the type of college or type of student tend to apply to restricted groups of colleges rather than right across the sector;
the way in which colleges are managed and governed plays a large role in deciding their financial health. In particular, there are certain key elements of best practice in management which can do much to ensure a college’s financial health. Our survey and visits showed that there are some managerial practices more...