Franchising threat to funding

May 2, 1997

FRANCHISING could destroy further education unless funding follow students rather than qualifications, according to one college principal, writes Alan Thomson.

Adrian Perry, principal of Lambeth College, has attacked the present funding arrangements in his new discussion document A Pencil Instead: Why We Need a New Funding System for Further Education.

Mr Perry's pencil refers to the United States space programme which spent millions of dollars developing a pen that would work in zero gravity while the Soviets simply used pencils.

His criticism centres on units of funding which colleges accumulate and submit to the funding council in return for cash. But funding units do not equate directly to students. A college can accrue funding units, and income, by including more "higher value" qualifications in its programme and encouraging its students to do more courses.

Mr Perry said: "Careful attention to adjusting the course offer means you can increase your funding substantially without actually increasing student numbers or work. Indeed it is an imprudent college that does not have a manager hoovering the portfolio for more lucrative qualifications and load bands."

Franchising - buying in training from external providers - is a popular way to boost funding units. Mr Perry said that this further distorts the sector because franchised courses are cheaper than those in-house. Colleges with more franchised provision appear more efficient and have lower average levels of funding (ALFs). The others appear inefficient and are liable to financial penalties.

He said: "If franchising carries on as it is, it will destroy FE as we know it. We would all be obliged to enter the game: anyone not doing so would appear slow growing and high ALF, and thus would be crushed by allocation criteria."

Mr Perry's suggested college budget would comprise three components: first, a standard national rate per full-time equivalent student; second, weighted compensation adjusting for the programme and student mixes plus the extra costs involved in running colleges in certain areas like London or rural areas. Third, there would be a development premium reflecting justified growth and also collaborative and partnership arrangements.

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