It is less than nine days to go before the end of the college financial year and ESFA has just published new information on how it will settle 2019-20 adult education budget allocations. Most colleges have already set their budgets for the new academic year. This latest announcement combined with uncertainty on several other issues makes it inevitable that some governing bodies, principals and finance directors will make mistakes and find themselves forced into quick decisions in autumn 2020 to keep their colleges afloat.
The announcement on the adult education budget confirms that colleges will retain their 2019-20 allocation if they delivered 80% of activity in the whole year. This may seem like a low threshold but the unprecedented closure of buildings for more than four months has meant that some colleges won’t reach this threshold. Colleges made a successful shift to remote learning but this does not work for all types of courses and proved unmanageable at this late notice for some adult learners, particularly those who would normally start courses in the summer term. ESFA will ask colleges below the 80% threshold to declare their costs but guidance won’t be out until August and the settlement is unlikely to be finalised until November 2020.
There are three more sizeable budget uncertainties for colleges:
- Capital - There is still no firm news on how the Department for Education will distribute the £200 million in college capital funding announced by the Prime Minister on 30 June 2020. Colleges normally schedule construction work for holiday periods and will find scheduling a challenge in the next seven months because of social distancing. Hopefully the delay is a sign that DfE will allow some flexibility in how this money can be spent.
- Funding in 2021 - The delay to the spending review means that colleges have no firm information on funding after April 2021. In recent spending reviews, DfE has sometimes made short-notice savings which reduce funds in summer terms. A particular area of doubt is the Teacher Pension Scheme Employer Contribution Grant. Schools were told this week that they will have this money for 2021-2 as part of core funding to “provide schools and local authorities with greater reassurance that this funding will continue”. Yet again, DfE has acted to assist schools but not colleges.
- Uncertainty about recruitment - The difficulties predicting apprenticeship, higher and adult education recruitment mean that colleges can only guess what their income from these sources will be in the 2020-1 academic year. They have updated their tried and trusted systems for managing and predicting admissions but student decision making may change for any number of new reasons, including local lockdowns, transport and parent views (for younger students). Those colleges who enrol significantly more students are hoping that ESFA provides funding for exceptional growth but there is nothing written down.
Julian Gravatt, Deputy Chief Executive commented:
“This year has created challenges for everyone. Including both Department for Education decision-makers and college leaders. Although this is unavoidable, it really doesn’t help that information is coming out so late. In the AoC Rebuild strategy launched in June, we suggested that DfE and ESFA focus on and continue stabilisation measures in 2020 so that a more considered approach can be taken in 2021 following the publication of the FE White Paper.
Our latest survey shows that 45% of colleges anticipate making redundancies before Christmas. There is nothing new in this – colleges have restructured continually for more than ten years because of changing demands from government, employers and students – but there is still much unnecessary instability and, despite positive words from Ministers, college leaders still do not know if regulators have really moved on from the blame first approach of recent years towards a collective solving of the very big problems that institutions face in meeting local, education and business need.”
You can read the agreements here.