Further education: ready to meet the challenge

Funding cuts have not halted the amazing rise of further education, says David Melville.

As the Further Education Funding Council comes towards the end of its life, it is time to look back over the post-incorporation period of the sector.

Seven years ago, the further education sector was a disparate collection of colleges, sixth forms and adult centres. It is now preparing to enter a new era. The importance of further education - or perhaps its most notable subset, the college sector - cannot be underestimated.

Within the Learning and Skills Council's ambit, colleges will deliver more than 70 per cent of the students but constitute just 10 per cent of the LSC's institutions.

The new combined Adult Learning Inspectorate-Ofsted operation will undertake more than 4,000 inspections in its four-year cycle and just over 400 of these will be college inspections.

Instead of having a funding council of its own, the college sector will be funded and planned by a body whose responsibilities span all things post-16 other than higher education. The LSC is an organisation that covers work-based training as well as publicly funded school sixth forms. The significance of the wider remit of the LSC compared with the FEFC goes beyond function.

Because the sector was created from disparate institutions at incorporation, the council has been obliged to take on a much wider leadership role for the sector than the higher education funding councils and their predecessors.

It is only in the past couple of years that a leadership has begun to emerge that starts to match that in higher education - the Association of Colleges. This is essential if the voice of further education is to be heard amid the clamour of interests that the LSC and government will need to consider.

The key question is whether the sector is in good shape and has sufficient drive and flexibility to respond to a significant new funding and planning regime. I believe so - and the headline figures tell the story.

Student numbers have grown dramatically since incorporation, despite a small recent decline. The increase is from about 2.5 million in 1993-94 to 3.5 million in 1999-2000.

This means that 860,000 more lives are changed by further education each year. This remarkable expansion has been carried out while unit costs have plummeted and retention rates have remained constant. Achievement rates have made a steady year-on-year improvement rising from 70 per cent in 1994-95 to 77 per cent in 1999-2000.

The expansion target set in 1993 of 25 per cent more students in little more than three years was said by many to be over-ambitious. However, this was achieved and even surpassed.

But the catch was what were euphemistically called at that time "efficiency gains". This meant, in effect, a 5 per cent cut in real terms, every year for several years.

Funding per full-time student has fallen in cash terms by 5 per cent since incorporation - 35 per cent in real terms.

This has largely been achieved by reducing student-guided learning hours and increasing teaching hours while restraining staff and other costs.

The sector coped with this, and with a methodology that used three funding rates, with remarkable flexibility.

It took its toll and the financial health of the sector declined, with colleges in the lowest health category rising to a maximum of 96 in 1996-97. It was only the new government's restriction of the efficiency squeeze to 1 per cent in 1997 that produced a turn-around. Today, there are 69 colleges in this category.

One of the most striking changes since incorporation has been the transformation of the physical environment. Colleges have risen to the challenge - despite having inherited mostly either appalling postwar buildings or dilapidated Victorian edifices. They have transformed these into bright, modern, high-quality buildings.

The development and modernisation of information technology in the sector has been a major preoccupation. Colleges have embraced the learning revolution with huge investment and are well advanced in ensuring high-speed connectivity to the National Learning Network through "Janet".

The English further and higher education funding councils were created from the same 1992 act of Parliament. Many provisions for the two sectors run parallel, enabling the councils increasingly to work together, particularly where they have common goals.

We now have parallel approaches to widening participation through postcoding and we have followed up the Kennedy partnerships - regional collaborations aimed at meeting local economic and skill needs. This jointly funded and managed three-year programme is aimed at helping students from traditionally underrepresented groups progress from further to higher education.

The social mix in colleges is significantly broader than that in higher education. The key to widening participation in many universities lies in close links with colleges that guarantee progression.

The two funding councils have found broad agreement on the foundation degree as a means for collaboration. They have also worked together on funding - in both the post-Dearing transfer of responsibility for higher national certificates and higher national diplomas, and in bringing common approaches to further education in higher education institutions and vice versa.

The semantic shift from the FEFC to the LSC is not without significance. There has been a shift of emphasis from education and funding to learning and skills signals. This shift accounts for an increasingly local focus and the need for many more staff. These staff will be predominantly engaged in the 47 local offices with the business of workforce development and local planning of all provision.

It is in the planning function that major changes will affect higher education. It is pleasing, therefore, to see higher education involvement not only in local leading partnerships, but also in the national and local LSC arrangements.

I would hazard that during its lifetime, the local LSC will become a very important feature in the partnership and planning considerations of most higher education institutions.

David Melville is chief executive of the Further Education Funding Council.

Further education in England: facts and figures