Teaching and learning in further education is being damaged not just by funding cuts, but also by the way the money is delivered, according to research to be submitted to the House of Commons select committee on education by lecturers' union Natfhe.
Students are being enrolled onto courses "beyond their capability", and "demotivated and disruptive" students are being allowed to stay on courses, Natfhe will say in a report due out later this month.
The report, Funding the Future, by the Institute of Education, will call for a change in how Further Education Funding Council cash is administered and distributed, alongside Natfhe's longer-term campaign to reverse cuts estimated at Pounds 233 million, in real terms, by 2000-2001.
The research will show that curriculum planning and development are increasingly being driven by financial priorities.
FEFC funding allocations are closely linked to a three-stage, student-centred process - enrolment, retention and achievement - and each stage attracts separate cash allocations. But Natfhe's research finds that teaching and learning priorities are being dangerously skewed by that methodology.
Student retention, which is a prerequisite of FEFC funding, has become too great a priority to many colleges, the study found. In some colleges it outweighs attention to the students' achievement.
The pressure to retain students, the report said, was forcing some colleges to keep on "demotivated and disruptive" students to the detriment of others. One senior lecturer said: "I do not think it helps students knowing whatever they do or whatever they achieve, they are not going to be asked to leave." The report said: "With widening participation, this (retention) problem may become more serious."
Colleges also felt they should not be penalised for losing students due to circumstances beyond their control. "The funding council can put on all the pressure it wants, but it cannot make students stay," said one manager. "It is because of their circumstances and not because of our courses (that students leave)."
Money awarded to colleges for their students' achievements - currently based on the number of students obtaining full qualifications - was less important to colleges than the other cash sources.
"Surprisingly," the study found, "most of the managers and teachers interviewed considered that the achievement element forms a relatively minor component of the funding mechanism in practice."
One college finance director interviewed said: "Student numbers are the first aim, retention is the second. There is no incentive for achievement."
It had been feared that the pressure to win achievement-based funding would encourage colleges to allow students to sit courses that are too easy so that the students' success rate, and consequently the cash awards, would be higher.
"We found no evidence that this was happening," the report said. Because recruitment and retention funding were so crucial, colleges were more inclined to allow students onto courses "beyond their capability" to avoid losing students to rival institutions and to secure the enrolment funding units.
The FEFC's bureaucratic burdens, such as tracking and recording students' activity, also distract staff from curriculum priorities. "The data and bureaucratic requirements of the FEFC and its funding regime is perceived as leading to waste and unnecessary administration," the report concluded. "It was strongly felt that this is diverting resources away from teaching and learning."
The report found more evidence that the general squeeze on funding was damaging teaching and learning. There is worry about cuts in course hours and concern about quality, it said. And, contrary to FEFC findings, class sizes are rising "steadily".
To compensate for funding cuts, more and more colleges are turning to "resource-based" learning methods, such as open learning centres. As a result, many students who need extra support, the very students targeted by widening participation initiatives, were being disadvantaged.
Natfhe's findings were echoed by FEFC research published late last week, which found that lecturers believe funding councils are "remote and unsympathetic to real educational problems".
Natfhe is discussing its findings with the sector and will make policy recommendations when the report is published and submitted to the select committee at the end of this month.
The report concluded: "Whatever the problems with the funding methodology and the diversion of resources from teaching and learning into bureaucracy, the amount of resources that the sector receives from government is still seen as a fundamental problem."
WHAT INTERVIEWEES TOLD NATFHE ABOUT:
"If students leave for reasons that are not necessarily to do with the college, you get no funding at all. That process has to be looked at."
"I do not think it helps students knowing that whatever they do or whatever they achieve, they are not going to be asked to leave."
Main grade lecturer
"Everybody is much more aware of the documenting of students, attendance patterns, reasons for absence. The auditor is in the background the whole time: 'Are we going to keep so and so another week, because they'll get counted on the November 1 courses even though we know they will disappear at any time?'"
"The more we can do to grab the students and keep them the better. We even give them Argos Premier Points. We give students a card, and they get credit points for each term they attend."
"Retention, mycrime statistics! The problem we have with retention is that it does tend to penalise the best record-keepers."
"We exist on our volume, not on our achievement. If they suddenly switch to an achievement-basedsystem, it would totally modify our curriculum overnight."
"The achievementlevels are so small, so does it really matterin terms of funding?"
Head of faculty
"Retention is themain point.Achievement is more about professional pride, not funding."
"You look at thefunding methodology and then develop your courses to maximise the funding rather than for the benefit of the students."
Main grade lecturer
"The funding methodology has destroyed a lot of successful curriculum development."
Head of curriculum