Colleges facing ‘bigger cuts than universities’

4 Feb 10
Universities should stop ‘bleating’ about funding cuts because squeezed budgets will have a worse impact on further education provision, college leaders have said.
By Lucy Phillips

4 February 2010

Universities should stop ‘bleating’ about funding cuts because squeezed budgets will have a worse impact on further education provision, college leaders have said.

The debate over university funding cuts was reignited this week after the Higher Education Funding Council for England revealed that universities’ £600m budget reduction would hit teaching, student numbers and capital projects.

Universities UK warned the cuts put a ‘real additional pressure on universities’ ability to plan effectively’.

But Ioan Morgan, principal of Warwickshire College, told Public Finance that cuts facing the FE sector were ‘proportionally much bigger’ than in HE, where leaders were ‘bleating’ on about cutbacks. He said this was unfair since colleges were better positioned, practically and economically, to carry out the government’s skills and social mobility policies.

‘The idea the country needs thousands more graduates is not the message we are getting from industry,’ Morgan said.

In December, it was announced that colleges are to have their spending cut by £300m, while this week it emerged they are facing further cuts of up to £200m for adult courses.

Association of Colleges chief executive Martin Doel told PF that some of the shortfalls would be ‘mitigated’ if colleges were given more flexibility over funding. Without allowing FE institutions to transfer money between budget streams (which they are not currently allowed to do), courses and student numbers would be hit from September, he warned.

Morgan and Doel were speaking to PF after giving evidence to an inquiry by the Commons business, innovation and skills select committee on changes to FE funding. From April, the Learning and Skills Council will be disbanded, with the new Skills Funding Agency taking control of adult budgets and councils taking responsibility for 16-19 provision.

Both witnesses told the MPs that the new arrangements would make the funding system more complicated and less flexible. Doel added that it was ill-timed ‘to throw the whole organisational structure up in the air’ during a period of spending constraint.
 
He warned that the new structure would not prevent a repeat of the ‘capital fiasco’ last year, which saw the LSC leave colleges with a £3bn funding shortfall in rebuilding projects.

Colleges are also worried that local authorities will face ‘competing interests’ with schools when it comes to allocating funds. 

This was denied by David Sparks, chair of the Local Government Association’s regeneration and transport board. However, he agreed the new funding structure was too complicated and criticised the SFA for its lack of engagement with councils so far.  

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