THE MANAGEMENT OF GROWTH IN THE ENGLISH
FURTHER EDUCATION SECTOR
PATTERNS
OF
GROWTH
30. Although 90 per cent of colleges achieved growth
in total student numbers between academic year 1992-93 and 1995-96,
there has been considerable variability in the patterns and trends
of that growth. For example the greatest growth in total student
numbers by programme area between 1993-94 to 1995-96 was in health
and community care (80 per cent). The lowest rates of growth included
construction (13 per cent) and engineering 8 per cent).[44]
Also, numbers of part-time students have grown faster than full-time.
There has been a particularly rapid increase in the number of
part-time students on education and training programmes franchised
by colleges on a collaborative basis to private training providers,
employers and other. Franchised provision accounted for 72 per
cent of the growth in Funding Council funded students in academic
year 1995-96.[45] We
concentrated our examination on the sufficiency of construction
and engineering training, and on franchised provision.
31. We asked the Funding Council how they were ensuring
that colleges continued to provide sufficient opportunities for
students in construction and engineering. They told us that they
had in place a robust process to assess sufficiency and adequacy
on an annual basis. At national level this was undertaken through
advice from the Funding Council's regional committees. These committees
in turn received advice from regional and sub-regional groupings
made up of representatives from Training and Enterprise Councils,
Government Offices and Funding Council staff. They used national
labour market intelligence, soon to be augmented by the new Skills
Task Force. Any college that was about to withdraw provision was
required to inform the Funding Council, who analysed whether it
was appropriate for them to do so.[46]
32. The Funding Council informed us that there had
been a relatively small number of cases where the level of courses
had not been sufficient and adequate. If the Funding Council found
that a particular college claimed that it was not economically
viable to sustain a particular provision, then they could provide
the college with supplementary funds. The Funding Council told
us that they had not found any cases where by working with the
colleges they had not been able to ensure the adequacy and sufficiency
of provision. Asked whether they had come across a case where
there should have been a course provided that had not been, the
Funding Council said that colleges had put in courses where there
was a demand from local students. Where employers had a perceived
demand for more employees, the Funding Council could ensure that
funds flowed very rapidly to particular colleges as demand increased.[47]
33. The Funding Council told us that a number of
regional committees had indicated concerns about the lower rate
of growth in engineering and construction, particularly in the
London region and the South West. However, whilst construction
and engineering as a whole had low rates of growth, parts of it
were expanding much more rapidly, for example, civil engineering
to National Vocational Qualification level two.[48]
Also they were finding a time-lag between what major employers
were seeing and what was being realised in terms of the market
on the ground.[49]
34. The Committee asked the Funding Council whether
there was any mechanism by which students were directed or advised
towards areas where there were employment prospects. The Funding
Council replied that there were two things that determined growth.
First, there was student choice—what the students actually
wished to do, which was informed by employment prospects. Secondly,
many courses were put on in relation to specific local industries.
The new Skills Task Force was also going to help in this respect.
The Funding Council also told us that they inspected colleges'
responsiveness to their local employment scene.[50]
35. Turning to franchised provision, the Funding
Council told us that this was introduced in response to the Competitiveness
White Paper which required the Funding Council to try to ensure
that there were no undue barriers to funding flowing to private
training providers. Many colleges realised saw this as an opportunity
for them to take learning to the learners. They franchised courses
to community groups involved in learning and used private training
providers to deliver training where it was needed. Franchising
was a potentially powerful mechanism because it opened up new
avenues for colleges.[51]
The Department added that franchising could be of real benefit
in bringing employers and colleges together. It gave colleges
access sometimes to state of the art equipment that they would
not be able to access in any other way. Also, because a significant
proportion of franchised provision was basic level training, it
was getting people back into learning and training who would have
otherwise remained excluded.[52]
36. The C&AG's report on the Further Education
Funding Council for England said that there are a number of regularity
and control risks relating to franchising. Colleges may experience
difficulty in achieving high quality in franchised provision which
is remote from the college. There is also a risk that organisations
may attempt to use Funding Council funds as a substitute for their
existing expenditure on training. And there is an increased risk
of funding training which does not take place or which is ineligible
for Funding Council funding.[53]
In answer to our questioning the Funding Council told us that
significant legal controls were introduced in 1996 in relation
to sub-contracting and the payment of contractors. The Funding
Council also required colleges to enter into a specific form of
contract with the franchise partner. Colleges required franchise
partners to certify that they were providing a new form of training
and not simply a substitution. However, the Funding Council acknowledged
that it was not possible to test totally for substitution because
colleges did not know precisely what the firm would have done
before the agreement was put in place.[54]
37. As regards eligibility for funding, the Funding
Council told us that there was a requirement that all colleges
have their funding claims certified by external auditors. The
Funding Council checked that audit process through their own auditors.
Where a claim was found to be ineligible they simply did not pay
the money and there was no transfer of public funds. If they found
that money had been transferred during the year for something
that was subsequently regarded by the Funding Council as ineligible,
then funding was clawed back through a reduction in the grant
in the subsequent year.[55]
38. The Funding Council told us that in 1996 they
had instigated an Inspectorate investigation of franchising at
14 colleges involved in extensive franchising activity. The report
of this investigation very broadly indicated that there was nothing
inherently wrong with the franchising process.[56]
The Funding Council had taken action in relation to colleges where
they had found problems as a result of inspection.[57]
The Department thought that they had done sufficient to take account
of the Comptroller and Auditor General's recommendations and said
that they and the Funding Council would monitor franchising closely[58].
39. Subsequent to our taking evidence the Funding
Council informed us about problems at Halton College, a general
further education college in Widnes. They had commissioned a firm
of auditors with forensic and further education experience to
carry out an investigation of complaints that they had received,
including allegations of irregularities in connection with the
college's extensive franchised and out-reach course provision.
The College had also decided to undertake various reviews, including
an examination of funding claims they had made to the Funding
Council. Pending the outcome of these reviews, the Principal and
Vice-Principal had been suspended.[59]
Conclusions
40. The Committee observe that there are considerable
variations in the patterns and trends of growth in student numbers
both across the sector and across programme areas. This reflects
student choice and response to the demands of the market. We note
that the outcomes of the work by the new Skills Task Force will
provide clearer information on the specific needs of local industry.
We recommend that the Funding Council encourage colleges to make
use of this information in their strategic planning, thereby bringing
colleges' provision closer in line with local needs.
41. We are particularly concerned about the low rates
of growth nationally within the construction and engineering programme
areas and the doubts raised by a number of the Funding Council's
regional committees about the sufficiency and adequacy of such
provision. We recommend that the Funding Council review the sufficiency
and adequacy of construction and engineering training provision
and work with colleges to ensure that industry's needs for trained
personnel are fully met.
42. We note the rapid expansion of franchised provision
to deliver off-site training and that franchising amounts for
a large proportion of the recent increase in student numbers.
We are concerned that franchising gives to serious risk as regards
regularity and financial control. We urge the Funding Council
to maintain tight oversight over franchised provision, and ensure
that the highest standards of financial control and accountability
are applied to expenditure incurred in this way.
43. Our concerns about the financial control of franchised
and out-reached programmes were brought into focus by the situation
that developed at Halton College subsequent to our hearing. We
will wish to be fully informed about the outcome of the Funding
Council's investigations into the funding claims of that college
as they relate to franchised programmes; and we will wish to be
assured that the lessons from this case have been promulgated
throughout the sector.
44 C&AG's report (HC 259 of Session 1997-98) paras
3.5 and 3.13 Back
45
ibid, para 3.51 Back
46
Q4 Back
47
Qs 81-82 Back
48
Q4 Back
49
Q46 Back
50
Q29 Back
51
Q77 Back
52
Q89 Back
53
C&AG's Report (HC 223 of Session 1996-97), paragraphs 2.13-2.23 Back
54
Qs 51, 78 Back
55
Q78 Back
56
Q1 Back
57
Q80 Back
58
Q89 Back
59
Evidence, Appendix 3, pp 20-21 Back
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