Around 4 million people attend further education (FE) institutions in England each year. Further education is formal learning outside of schools and higher education institutions, including academic and vocational courses and training for apprenticeships. In England there are around 1,100 providers of further education, including around 240 colleges.
The financial health of the FE college sector has been declining since 2010–11. In 2013–14, the sector was in deficit for the first time and 110 colleges recorded an operating deficit, up from 52 in 2010–11. In the same period, the number of colleges assessed by the Skills Funding Agency (SFA) to have ‘inadequate’ financial health rose from 12 colleges (5% of colleges) to 29 colleges (12%). The SFA anticipates that this number will continue to grow.
Responsible bodies do not understand risks
The Public Accounts Committee (PAC) published a Report on the sector’s finances in December 2015. PAC warned:
- that the Department for Business, Innovation and Skills, the Skills Funding Agency and other bodies responsible for the sector do not fully understand the risks facing colleges
- that oversight arrangements for FE are too complex
- that too little is being done to help colleges manage financial challenges at an early stage, meaning potentially preventable situations were allowed to become more serious.
The Committee highlighted the risks that a decline in further education opportunities could pose for learners' opportunities and to local economies.
The Government accepted many of the Committee's recommendations in its response to the Report. The Committee has chosen to hold a further session on this topic in order to question officials on what progress has been made since December.
