Investors for FE

October 13, 1995

The private sector is expected to revitalise cash-starved further education by investing in colleges for profit and importing management expertise from business.

Launching the private finance initiative, Gillian Shephard, Education and Employment Secretary, last week told leading financiers that FE colleges are ripe for refinancing and reorganisation: "Many buildings are in poor condition, or expensive to run, or scattered across several sites, or the wrong size, or simply unsuitable for today's needs."

She said that Government funds are "limited" and so too is the sector's ability to generate income through trading activities. This leaves the way open for private business to flourish. The fact that FE is expanding by nearly 30 per cent in student numbers over the five years to 1997/98 is also seen as attractive.

Many of the 450 FE colleges, as well as tertiary and sixth-form colleges, have already developed an entrepreneurial outlook since April 1993, when they moved out of local authority control and became independent and self-governing.

A sector with an estate worth Pounds 4.2 billion and a turnover of Pounds 3.5 billion has attracted around Pounds 100 million of private capital investment. The FEFC has a register for potential projects and some 172 colleges have nominated 488 joint ventures with a value of Pounds 650 million. They range from small projects like a boiler conversion at Barnsley College worth Pounds 51,000 to a Pounds 3.7 million library resource centre at Bedford College.

Private sector facilities management could include provision of cleaning and catering, or a facility run by a private company, or where the facility is owned by the private company.

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