Skills Funding Agency Chief Executive warns on 'money running out'

In a tough speech at the Further Education Mergers, Confederations and Shared Partnerships 2010 conference, Skills Funding Agency Chief Executive Geoff Russell warned senior sector leaders that the money was running out, and that action sooner rather than later was needed, to prevent institutions from becoming financially unstable.

Chief Executive Geoff Russell praised the work of the sector; saying it was "punching its weight". He acknowledged that there were tough times ahead, but that the sector was capable of driving through change.

Mr Russell outlined a number of ways in which the FE sector may drive through this change:

'On the private provider front, we are influencing capacity by increasing minimum contract levels. This will also have a profound impact, but private providers are already responding quickly to this change and most will adapt. Collectives, associations and mergers are being worked through as we speak.

For colleges, influencing is a bit harder as the relationship is different. I am not persuaded that all of them are responding as quickly as they need to.

Colleges and providers that are responding are considering a range of measures that divide into what we can call front office and back office. On the customer front office end I would offer the following:

Greater focus on outcomes. These could include:

  • Job outcomes both into and progress at work;
  • Self-employment/enterprise;
  • Apprenticeships and progression towards them;
  • Progress to higher education or apprenticeship
  • Progress towards a qualification to achieve the above outcomes
  • Provide only what customers want and waste not a penny on anything else
  • For those learners and employers who can afford it, they must pay their share - that may mean 100%
  • Innovative ways of teaching, with more use of work based, classroom based, experiential and virtual learning
  • Colleges might operate all year and make more efficient use of staff
  • Colleges might get better at employer engagement and delivering learning in the workplace - this allows for smaller estates

Collaborate with other colleges, providers or education bodies to rationalise curriculum.
On the back office side, I believe we are spending too much money on factories and not enough on production. Yet colleges are important community assets that it would be undesirable to shut. And private providers provide a crucial role in the FE system that we tamper with at our peril.

The fairly obvious solution that enables both back and front office improvement is strategic collaboration. That is not because bigger is necessarily better - but because it is more financially resilient and able both to withstand shocks and take advantage of the opportunities scale brings.'

To read the report on Mr Russell's speech in full, visit the Skills Funding Agency website.


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