Sheffield at centre of crisis in funding

Union leaders fear job losses nationally and are threatening strikes. Tony Tysome reports

Low goals: on many measures, the educational performance of Sheffield's youngsters is below the national average

An all-out strike by lecturers at one of Britain's biggest further education colleges has been narrowly averted, but union leaders have warned of more strike threats nationally unless sectoral funding problems are resolved.

A threatened industrial action backed by 500 Sheffield College staff planned for this week was called off after crisis talks with management last Friday.

The threat was made after managers tried to make up to 70 compulsory redundancies and cut about 110 other jobs to try to save Pounds 3.6 million. They said the cuts were vital in the wake of a damning report from a Further Education Funding Council review.

It found that the college was on the brink of insolvency, suffering from poor management and failing to meet the region's post-16 education and training needs.

After Friday's meeting, the college said it had agreed to explore with lecturers' union Natfhe ways of saving Pounds 500,000 without compulsory redundancies. Principal John Taylor said: "This agreement marks what I believe will be the foundation for a solid working relationship with the unions."

However, Russ Escritt, Natfhe regional branch officer, said there could still be a strike next week if compulsory job losses were not off the agenda by Tuesday. Union leaders believe the dispute has national significance, with the government about to implement big changes in further education.

"The Sheffield dispute highlights many of the financial problems in further education. People worry that compulsory redundancies here could be followed elsewhere. Natfhe would be ready to fight that," Mr Escritt said.

The college's sorry state has proved uncomfortable for David Blunkett, the secretary of state for education and employment and MP for Sheffield Brightside. Further education is at the heart of Mr Blunkett's post-school policies to widen participation and attainment levels among young people from poor families.

Former principal Ken Ruddiman, who took charge in 1992 after the college was formed through the amalgamation of six tertiary colleges, was an advocate of widening participation and of tailoring provision to student demand. His resignation last year followed management collapses at Bilston Community College and Wirral Metropolitan College, which shared Sheffield's emphasis on widening access.

Some of Sheffield College's local education partners suggest that its troubles were partly a result of sudden changes in national further education funding policy, which also hit Bilston and Wirral.

Sheffield Hallam University pro vice-chancellor Colin Hawkes said the college had been left exposed by the government's clampdown on franchising and rapid expansion in the sector. Sheffield College is one of the country's largest colleges. In 1998-99, it had 32,000 students. A year later, with reduced franchising, the numbers had fallen to ,000, of whom 22,700 were funded by the FEFC.

Professor Hawkes said: "It could be argued that (the college) had responded to the environment created by the government, which brought about a funding system that encouraged colleges to work on a wider geographical basis. It has now been disadvantaged by the sudden change in that environment."

Mr Blunkett may see the Sheffield review as an opportunity to create a blueprint for the sector's future. Such a move might be considered timely, with further education moving towards a unified post-16 sector in April. New area-wide inspections, led by Ofsted, will make comparisons between education and training providers easier and could encourage reorganisations in other regions.

The review called for immediate action to ensure Sheffield College's financial viability and to improve its management. It said a restructured federal college should be created, organised on the basis of three colleges within an overarching framework. Two colleges should concentrate on the education of 16 to 19-year-olds, and the third should be a broader-based further and higher education institution catering for adults and those in work, but with a sixth-form centre attached to it.

A confidential development plan that the college drafted in response to the review says urgent action is needed to rescue the college because it is, and will continue to be, Sheffield's principal provider of post-16 education and training.

The education secretary's home city cannot afford such an important institution to underperform. In 1998, the percentage of 16 to 19-year-olds in Sheffield staying on in education was 67 per cent - significantly below the national average of 78 per cent.

In 1999, Sheffield was well below national targets and UK averages in the attainment of 16, 19 and 21-year-olds. Just 38 per cent of 16-year-olds in Sheffield gained five or more GCSEs grades A to C, compared with 46 per cent nationally and a 2002 national target of 50 per cent; and 39 per cent of 21-year-olds gained a level 3 qualification, equivalent to an A level, against 52 per cent nationally and a 2002 target of 60 per cent.

This low attainment is reflected in unemployment figures, with 6 per cent of the population jobless, compared with 4 per cent nationally. In the disadvantaged areas where the college recruits 40 per cent of its students, unemployment rates are close to 20 per cent.

A risk analysis of the proposed reorganisation contained in the confidential development plan says that the transition to a new regime will see the college subject to "intense competition from private training providers that are not burdened by outdated working practices andI restrictive contracts of employment".

The significance of decisions made next week is clear. The analysis warns that "gesture politics" by staff could hamper financial recovery. This in turn could mean "there will be no other option but to further downsize the college with the serious implications that this has for jobs".