Fears of mega funding quango

December 4, 1998

The government has taken a serious look at the pros and cons of merging the English further and higher education funding councils, writes Tony Tysome.

Treasury chiefs put pressure on Department for Education and Employment officials to consider the move as part of a five-yearly review of the two bodies. Sources say possible cost cutting was the prime motive for extensive and detailed analysis and consultation in both the further and higher education sectors.

But it is expected that a report on the conclusions of the review, due to be published before Christmas, will say there is little to be gained from a merger in the immediate future. Instead, the government may opt for extending the FEFC's role to cover post-16 education and training, excluding higher education.

Funding council, university and college heads have made it clear to the DFEE that they would not support a move to create a mega-quango responsible for both further and higher education.

In its response to the review, the FEFC said that while such a move might reduce "operational inefficiencies", and enhance the ability of the two sectors to take forward the lifelong learning agenda, it would also pose "major operational difficulties". Savings were likely to be outweighed by the immediate costs of relocation and reorganisation, it added.

The Association of Colleges has said that both funding councils spend less than 1 per cent of their overall budgets on running costs - much lower than Training and Enterprise Councils, which spend about 10 per cent of their budgets on administration.

The Committee of Vice-Chancellors and Principals suggested that present arrangements were working well enough to make a merger undesirable. Even heads of new universities with close FE links thought it was too early to create a single funding body.

Christine King, vice-chancellor of Staffordshire University, said:

"Although we should keep the doors open to this idea, we must wait to see how the widening participation agenda develops first.

"Otherwise the merger will drive our future direction, rather than it happening the other way around."

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