4. Fair funding for colleges would support the full implementation of the Sainsbury Review

Recommendation 4

Fair funding for colleges would support the full implementation of the Sainsbury Review. To assist this there should be investment in:

  1. a capital budget directed to colleges to improve the equipment for technical education and to create the additional education places that will be needed after 2020
  2. a new workforce development fund to support staff in colleges to develop their industry knowledge as well as their teaching;
  3. a major drive over 10 years to double the supply of maths teachers by 2030
  4. funding for pilots to run as soon as possible to highlight the benefits of the new approach.

Fair funding for colleges would support the full implementation of the Sainsbury Review, ensuring a new offer of high-quality two-year technical programmes for young people, a transformational transition year for those who need to catch-up, better support for progress in English and maths and funding for work placements. In other words, it would ensure that our education system for young people matches the best in the world in terms of hours of training and development, giving young people the very best chances in life.

The Post-16 Skills Plan sets out an ambitious plan to improve technical education which may, in the long term, secure savings as a result of increased specialisation. This, in turn, may increase average class sizes and allow colleges to support better facilities. Improvements to technical education have the potential to reduce the number of wrong choices made by young people particularly if DfE also improves the organisation of academic education and the provision of information and advice to young people. DfE estimated in July 2016 that 25% of 16-year-olds are found to be taking different courses at the same level in subsequent years[1]. There is a high level of churn both between different vocational courses and from AS Levels to other courses. The importance of reforming the current offer of careers advice is absolutely critical and will be essential to the success of any change. For the Government to realise its ambition on apprenticeships and technical education, young people need to be made aware of all their options (whether academic, vocational or technical) post-16.

We do not have a full picture of the costs associated with a better technical education system, but there are number of obvious areas for development:

In order to be high-quality and full-time, technical education programmes will need to be funded at an appropriate level. This might involve more than 20 hours teaching per week and might also involve specialist staff paid at a higher rate than the current college average of £30,000 per year.

A two-year full-time course would be the standard model under the plan, but with the expectation that some school leavers would need to take an additional transition year. This implies a full-time three-year programme. The current 16 to 18 funding system assumes a full two years and then administers a 17.5% cut in the third year. A sensible step therefore would be to maintain the full rate for three years for those students taking the transition year.

Finding and managing work placements involve additional costs because they involve a personal service to young people and employers rather than education in a group. The Sainsbury Review proposed a payment to providers of around £500 to set up placements.

Two goals of the reform are to increase the numbers being taught on technical programmes and to secure a shift towards science, technology and engineering routes. These will only be achieved with the right people in place which implies a workforce development programme to retrain existing staff and to recruit new ones.

Colleges need to continue to have industry-standard facilities so that they can provide high-quality education for young people, apprentices learning off the job and adults

The issue on capital investment and equipment needs to be understood within the context of the financial pressure on colleges. Colleges spend considerable sums on advanced machinery, laboratory equipment, workshops and vehicles but are under financial pressure to improve their operating surpluses and conserve cash. Total capital investment has fallen from £1.5 billion in 2009-10 to £1 billion in 2014-15 and continues to fall. This is directly attributable to the lack of direct capital funding for colleges but is also a result of the withdrawal of private finance. An increasing number cannot persuade banks to lend more, do not have property to sell and do not generate sufficient cash.  There is no good reason why FE colleges do not qualify for the formula grants paid by DfE to sixth form colleges and schools or why there has been a dedicated equipment fund paid by HEFCE to higher education providers (including colleges) but noting equivalent in further education[2]. This capital funding gap will become more serious as the post-16 population starts to rise. The National Infrastructure Plan records plans to spend £23 billion between 2016 and 2021 on school places[3] will be little help because school buildings are not being designed for technical education requirements. There is the case for a capital budget to unlock this issue and to provide suitable equipment and purpose-built facilities that maximise efficiency, support larger class sizes and support specialist facilities. Efficient use of space in new buildings allows other space to be released or re-used.

The technical education workforce is another case where a new approach is needed. There has been an increase in the number of pupils and students in the education system, an increase in the number taking maths and science courses and an increase in teaching time required in secondary schools. At the same time, there are shortages in the supply of qualified teachers and difficulties recruiting more. 30% of colleges in AoC’s recent workforce survey[4] reported staff shortages among maths and engineering teachers. Average starting salaries for maths graduates appear to exceed £25,000[5]. Average teacher pay in colleges for staff of all ages and experience is £32,000[6]. The maths bursaries organised by the Education and Training Foundation (ETF) provide useful incentives, but DfE needs to go further and look at the workforce supply across its whole brief. An ambitious but achievable long term goal might help concentrate minds. The target should be that, by 2030, all 18-year-olds are qualified at the current Level 2 standard and the majority reach Level 3. Planning should start now on the teacher supply necessary to make this happen.


[1] DfE Post 16 Skills Plan, the Case for Change, Appendix A, July 2015

[2] The indicative skills capital budget within this local enterprise partnership (LEP)-controlled fund is a total of £0.5 billion over a four-year period and this is unlikely to be used because of pressure from other priorities and the difficulties that colleges have in raising private investment.

[3] HM Treasury National Infrastructure Delivery Plan 2016-21, Page 76.

[4] Unpublished AoC survey, 2016.

[5] HESA Destination of Leavers in Higher Education data 2013-14 reported by Complete University Guide.

[6] ONS Labour market data.