FEFC is told to get tough

August 7, 1998

The public spending watchdog has blamed "weak management" in colleges for further education's financial crisis and has called on the Further Education Funding Council to be more "proactive".

In a report published today, the all-party House of Commons Public Accounts Committee called for greater intervention by the FEFC.

The call echoes that of the House of Commons Education and Employment Select Committee, which said in May that the FEFC's "duty to intervene" in cases of mismanagement should be strengthened.

The demands come as the government reviews the functions and remit of the funding council, which has only limited powers to safeguard the Pounds 3 billion of public money that is spent in the 443 autonomous colleges.

The Public Accounts Committee said that it was "worrying" that the FEFC judges more than one-fifth of colleges to be in poor financial health and added that the proportion was likely to rise. It said that in many colleges, despite the steady reduction in unit costs, the financial difficulties "can be attributed to weak management at college level".

"We urge the funding council to take a more proactive role regarding any college that they consider needs improvements in its financial management," the PAC report said. "It is not acceptable that decisive action (from the FEFC) has to wait until a college is in financial difficulties."

The PAC welcomed additional funding provided for colleges in 1998-99, and plans to restrict future efficiency gains.

Other concerns included:

* "The variability in the levels of student achievement is very disturbing," said PAC chairman David Davis. More than 10 per cent of colleges have achievement rates of 50 per cent or lower.

* The rapid expansion of franchised provision "gives rise to serious risks as regards regularity and financial control," the report said.

* "We are particularly concerned about the low rates of growth nationally within the construction and engineering programme areas," the report added.

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