Output funding under review

Ministers could be ready to scrap the "cash for results" funding system in which further education colleges are funded, according to exam performance. The system has been criticised for encouraging colleges to recruit only those students likely to succeed, at the expense of widening participation.

The Department for Education and Employment this week published a consultation paper on how the forthcoming post-16 education and training superquango, the Learning and Skills Council, will allocate its Pounds 6 billion budget. College leaders were pleased to see a willingness to question the received wisdom of output payments.

College funding is currently split into three elements: student recruitment, retention and achievement. In the paper, Learning to Succeed: Post-16 Funding and Allocations, ministers suggested that this system could be retained, but said: "There need be no presumption that there would always be a payment for every element of the funding system. The range (of funding elements) would need to reflect the diversity of provision and the policy intentions.

"In the case of outcome payments, too high a percentage can affect the quality of the programme provision ... and in cases like adult and community learning, or provision for unemployed adults, it may be inappropriate to limit outcome payments to the acquisition of conventional qualifications."

The Association of Colleges welcomed the review.

"We have always been sceptical about the high proportion of funding related to output," said director of further education development John Brennan, who was in the group which drafted the paper. "It has meant that colleges play safe and go for people they know will succeed."