Examination of witnesses (Questions 60
- 79)
WEDNESDAY 25 MARCH 1998
MR MICHAEL
BICHARD and PROFESSOR
DAVID MELVILLE
60. Yes. Does it not make sense in fact
to do that? If one is talking of education and recognising it
is not an isolated experience, it should be looked at in an overall
context, would it not make sense? This is really for Mr Bichard
because you are limited to one area and it is a cross area problem
that no-one seems to be addressing.
(Mr Bichard) In terms of your question there is
not a full scale review taking place. What we did begin to do
under the previous Government, and we are continuing, is to look
at the relative costs of different qualifications in different
parts of the sector.
61. Yes.
(Mr Bichard) That work is continuing. It is quite
difficult to make the comparisons because of course in a sixth
form in a school you are getting things other than just the qualifications,
things that you would not get in an FE college, but we are continuing
to try and clean the data so that we can make those kinds of comparisons
that you want but it will take some time.
62. Are you also looking at the attitudes
of young people? Is there perhaps an increasing tendency for youngsters
to want to be at a college rather than still at school, have you
looked at that?
(Mr Bichard) Given that there are more 16-19 year
olds in colleges or in the FE sector than there are in the schools
sector you must be right. We all know, do we not, that at the
end of the day it comes down to the individual and there are some
young people who will be more comfortable in a college setting
than they will be in a school setting.
63. Can I ask you, I recognise the constraints
and difficulties of the work that you did partly under the previous
Government and you have been continuing that work, is there any
preliminary information you could let us have a note on?
(Mr Bichard) I certainly would be glad to let
you have a note.[3]
The preliminary conclusions were that there were not significant
differences in cost terms between the sectors.
64. Really.
(Mr Bichard) Exactly. Your surprise is the same
surprise that those within the sectors expressed which is why
we are continuing the work. There was not a significant difference,
particularly if you took into account some of the additional overheads,
if you like, that existed in the school rather than an FE college.
I can certainly let you have a note on that.
65. Thank you very much. Then turning the
page to page 42 it says that at individual college level the highest
achievement rate is 99 per cent and the lowest 24 per cent. Just
as a matter of interest which was the college which had only 24
per cent?
(Professor Melville) Hackney Community College
in London.
66. What have you been doing to assess the
reasons and the solutions to the problem?
(Professor Melville) Clearly we have, with the
college, analysed the whole range of achievements. I referred
earlier in answer to a previous question that it does represent
a rather complicated situation. For instance, at Hackney as far
as their GNVQ Level 3 and pre-cursors they have an 80 per cent
achievement rate, 69 per cent at higher level qualifications.
Where they have the low levels of achievement which bring them
down, is at entry level and Level 1, the most basic qualification.
Here achievements are only 18 per cent. Everything else is at
least 40 per cent. Whilst this is no excuse one has to say that,
of course, the proportion of students coming out of Hackney schools
who are ready for further, higher or intermediate levels of qualifications
is extremely low.
67. I can understand that.
(Professor Melville) Clearly they have a lot of
students within the highest deprivation area, if we look at what
we call the Kennedy postcodes of Hackney college, over 95 per
cent of their students are in this group. However, we have required
the college to assess their achievement levels and to look at
what the needs for improvements are. One of the points is the
one that Mr Bichard made earlier and that is they have a lot of
their students on their entry and Level 1 qualifications, they
may have achieved units towards those qualifications but of course
the Funding Council is only able to fund by law whole qualifications
and therefore these units do not count in the achievement data.
68. So in terms of value added they may
have done far better than their achievement figures by your criterion
would demonstrate?
(Professor Melville) Certainly that is a very
important point. I must say however that any college with achievement
levels less than 50 per cent is a matter of serious concern.
69. How many have less than 50 per cent?
(Professor Melville) Just under 40 colleges.
70. Really.
(Professor Melville) Around ten per cent of colleges.
71. How easy is it for you—it is a
large number of colleges—to monitor that many?
(Professor Melville) We have been monitoring very
closely. It is very easy for us to monitor. Let me just give you
some indication. Hackney College in fact has increased their achievement
by 11 per cent. They appear as 24 per cent in the report. They
have gone from 22 per cent to 33 per cent over a period. We are
encouraging, requiring, colleges to come up with plans, helping
them to understand the particular areas where they need improvement
and of course benchmarking them against others.
72. Do most of the 40 colleges have extenuating
circumstances as strong as those you have just put forward or
are some of them just plain inefficient?
(Professor Melville) I would say that the extenuating
circumstances are only part of the story but, yes, there are colleges
when you benchmark them against similar college types, if you
like to take account of all of those factors, that we find are
under-performing.
73. What can you do about them?
(Professor Melville) As I have said before, when
this shows up as it does in the inspections we require specific
action. We inspect them, we re-inspect them a year later and every
college that we have re-inspected, and we have done this with
something like 52 colleges over the last three years, 52 colleges
62 courses, we have found all but one of the colleges actually
improved their performance. We require them to come up with specific
action plans that relate to improvement. As I have said, from
this autumn we will be setting targets for every college, even
those colleges with 80 per cent achievement rates.
(Mr Bichard) I think one of the things that might
help is if the FEFC is able to focus its attention more on the
colleges that really need it. One of the things we have not touched
upon this afternoon but which I think is an important development
is the concern about what is called the accredited status and
where they have identified colleges that have good quality systems
in place, where they have strong self-assessment and therefore
will be able to step back a little from those colleges, spend
a little bit more time on those and focus their attention on those
that really need it.
74. I am page hopping, I am afraid. If we
can go back to page 29 we are now looking at financial health
instead of academic health. You said 93 colleges, which is one-fifth
of all colleges, are in poor financial health. Is it conceivable
for any of them that it could be a terminal state? How serious
is it? We have had universities in very, very severe financial
situations.
(Professor Melville) If I could just clarify what
we mean by our category C. It is a college which is dependent
on others, either the banks or ourselves, to continue fulfilling
their strategic plan, that is that making some exceptional circumstances
or they are dependent on the bank. I think the question of are
colleges going to go under has always been an interesting one.
Corporations have a responsibility for solvency and therefore
they work very hard and they begin to work even harder when they
get into that situation. We do find that colleges start to pull
themselves out. The answer to your question is yes, it is possible,
and in those circumstances the Council would have to take action
to ensure the provision. We have had one example of a college
in the North West which because of poor inspection reports we
found that students were voting with their feet, the college finances
went down, and therefore we managed a closure of that college
and effected a merger that enabled the provision to be taken on
by another college.
75. You do have powers to move quickly with
this independence that has been given to colleges. We have come
across it again, including my own local higher education college.
Do you feel that as the Funding Council you have enough direct
power to act quickly to minimise the damage done?
(Professor Melville) If a college is in that situation
then certainly when they become dependent on the Council we move
very quickly and we are able to apply conditions to any waivers
of the financial situation that we might need to make to ensure
provision for the existing students of adequacy and sufficiency.
76. You have not come across any instances
of sheer bloody mindedness such as we have found in higher education
where some principals with puppet governors have been able to
get their own way despite all the evidence?
(Professor Melville) We apply a fairly stringent
financial regime on the colleges and of course we are able in
a number of ways to ensure that they follow what we recommend
to them. It becomes easier for us to impose that as they get into
a more difficult position and become more dependent on our funding
and we apply conditions to the continuation of that funding.
77. Thank you. I am sorry if it looks as
though I am not fully listening here, it is just that I want to
finish with one final point within my time. If we go to page 35
and the footnote I see that in fact most of the growth since 1994-95
has been through the expansion by the colleges of Funding Council
funded courses franchised out to private and voluntary sector
providers. Why has that been the case? How far have you been able
to deal with the pitfalls that were revealed in the Comptroller
& Auditor General's report of the Further Education Funding
Council for England in February 1997, a year ago?
(Professor Melville) Why was that the case? Franchising
was introduced as a particular mechanism, first of all in response
to the Competitiveness White Paper in that year which required
the Council to try to ensure that there were not any undue barriers
to funding flowing to private training providers, that is effectively
that training could take place away from colleges. Many colleges
realised that this was a means of doing things that previously
they had hoped they might be able to do and that is to take learning
to the learners. They franchised community groups involved in
learning and used private training providers as the arm to deliver
training where it was needed. The answer to your question as to
why did the growth take place in that particular area, it was
a new mechanism and a mechanism which was potentially very powerful
because it did open up new avenues for colleges.
78. And pitfalls, particularly the payment
for ineligible training?
(Professor Melville) If I can outline two important
issues there. I indicated earlier we do require a specific form
of contract that colleges enter into with the franchise partner.
It requires a certification by those franchise partners that it
is a new form of training and not simply a substitution. At the
Education and Employment Select Committee recently two of the
major franchisers actually testified that was the case in the
case of their industries. One of them was from one of the industries
where there had been some assumption of concern. Clearly it is
not possible to test totally simply because, as the C&AG indicated,
one does not know precisely what a firm would have done before
the agreement was put in place. We have extremely stringent controls
in place. As far as eligibility for the funding is concerned,
there is a requirement that all colleges have their funding claims,
this is the claim to us to fund what they have provided, first
of all audited by external auditors so it is certificated and
we check that audit process through our own auditors. If there
is an ineligible claim in there we simply do not pay the money
and there is no transfer of public funds. If we find that money
has transferred during the year for something that we regard as
ineligible we claw back that funding.
79. You have not been unable to get it back
from anybody?
(Professor Melville) No. There is no difficulty.
Claw back is simply a reduction in the grant.
3 Note: See Evidence, Appendix 2, pages 19-20
(PAC 261). Back
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