FE cash boost worries v-cs

November 14, 1997

AN EXTRA Pounds 83 million for further education colleges announced this week will not mean less money for higher education, David Blunkett, secretary of state for education and employment, has claimed.

Mr Blunkett told the Association of Colleges conference in Harrogate that he had managed to find the Pounds 83 million for 1998/99 thanks to savings arising from a fall in unemployment, and by increasing employers' contributions to training courses by 50 per cent.

But he also said that some of the new money has been freed by using the same accountancy manoeuvre used to release extra cash for the Pounds 165 million higher education package.

As The THES went to press, the Department for Education and Employment could not clarify whether these changed accountancy mechanisms would mean that some of the new money for further education would come from higher education, via changes to student loans accounting.

The Committee of Vice Chancellors and Principals said it was concerned that higher education would lose out. "Our position is that the net proceeds of any higher education loans scheme should be reinvested in higher education, particularly given the present circumstances when the Dearing investment programme over the next two years is largely unfunded," said a spokesperson.

Mr Blunkett said that none of the extra FE money would be coming from savings accrued through the introduction of tuition fees for undergraduates.

He said that Pounds 25 million of the Pounds 83 million would be used to reduce the immediate financial pressure on colleges caused by the long-term cuts in the amount they receive per student. Around a fifth of colleges are in a financially weak position, according to the Further Education Funding Council.

Mr Blunkett said that the lion's share, amounting to Pounds 55 million, would go to help implement Helena Kennedy's widening participation recommendations.

Baroness Kennedy emphasised the need to improve access to FE for disadvantaged people.

Mr Blunkett said that the remaining Pounds 3 million in his package would be earmarked specifically for improving access for these people.

Further education could expect to benefit by more than Pounds 100 million in the next few years due to training opportunities created by the New Deal, Mr Blunkett added.

He said: "Further education will be crucial to meeting the prime minister's commitment at the Labour Party conference of expanding student numbers by 500,000 by the year 2002.

"Together we have a chance which I think is unequalled in the history of post-16 education. My job is to ensure that FE has the resources from 1999 onwards to fulfil that challenge."

Answering a question after his speech Mr Blunkett said that none of the Pounds 83 million would come from higher education tuition fees. He said that the estimated Pounds 150 million released by fees had already been spent on higher education, specifically in contributing to the previously announced Pounds 165 million. Roger Ward, chief executive of the AoC, said: "The Pounds 83 million is a welcome addition which goes more than some way towards alleviating the desperate financial plight of the college sector. However, it is sadly far short of the Pounds 231 million we have called for."

Gordon Hopkins, principal of Dudley College, said he was worried that the extra contributions to FE from businesses could impact badly on small and medium-sized enterprises. But the DFEE said small firms would be exempt from the increase.

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