Oxford Brookes University Jane Mansell

PGCE Post-compulsory

Module 7

The Impact of Government Funding Policy on Further Education

Colleges
The way FE colleges are funded has changed dramatically over the last two
decades from funding being a resource enabling the provision of education to
funding being a method to control what, how and to who education is offered.

Hillier (2006,p3) defines policy as follows: ‘A policy is simply a process by which

the problem is defined, solutions identified and action taken.’ This is a very
simplistic view and does not take into account the agenda of the policy setters.
For my purposes Parson’s (1995,p11) definition is a better fit: ‘Public policy is
really about defining what counts as public, who provides, who pays, how they
pay and who they pay.’

Lumby (2001) sent a questionnaire to all the Further Education (FE) colleges
asking them to rank what they saw as their threats and opportunities. Funding
was both the most significant threat and the most significant opportunity.

Methodology

In order to give a balanced view, the methodology I have used to research this
topic has been to use Brookfield’s lenses. Brookfield (1995) recommends the
use of different lenses to critically reflect. He recommends using our own
experiences, our students’ eyes, our colleagues’ perceptions and experiences,
and literature.

I have included my own experiences and interviewed colleagues and students

at my placement college. For the literature lens I have used texts from the

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library and websites. I have included opinions from the differing viewpoints of
government, unions, teachers and academics.

History

The Technical Instruction Act of 1889 gave county and borough councils the
power to establish Technical Instruction Committees and permitted local
authorities to levy per rates to aid technical and manual instruction. Additional
financial aid was provided by the Local Taxation (Customs and Excise) Act 1890
which diverted ‘whisky money’ from publicans to local authorities for assisting
technical education or relieving rates. It was administered through the Science
and Art department which was absorbed into the Board of Education in 1899.
(National Archives 2009)

The 1944 Education Act established that LEAs had responsibility for adults too.
As each local LEA was responsible for provision there were wide variations in
the type and amount of technical education available (Hillier 2006).

The Education Reform Act in 1988 removed control of the colleges from the
LEA and financial responsibility was delegated to FE colleges with more than
200 full-time-equivalent (FTE) enrolments (Hillier 2006).

In 1991 the government produced a white paper entitled ‘Education and

Training for the 21st Century’ which proposed establishing a single body to fund
provision. The main objectives of this paper were to raise levels of
participation and achievement; to create a more integrated FE sector; and to
force colleges to be more dynamic and efficient by placing them in a
competitive market situation (Leney et al 1998). Survival of the colleges would
depend on recruiting students and achieving outcomes on which their funding
depended.

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Leney et al (1998) point out that it is hard to see how colleges can compete in a
market in the classic economic sense as the vast majority of students are not
paying for the course. For my placement I have been at a college in a county
where there is still a grammar school system. On questioning the students I
found out that they were at the college because their results were not good
enough to enable them to go to one of the grammar schools or one of the
state schools and this was the only local college. They were not prepared to
travel to a different college even if the results of another college were
significantly better – they were not in a financial position to be able to do so.

Fischer and Forester (1993) see policy decisions as complex exercises of

agenda setting power, that attention is focussed selectively and deliberately on
some alternatives and others are excluded from consideration altogether. This
policy was proposed by a Conservative government. It was in their interest to
remove control from the Labour controlled local level.

This white paper led to the 1992 Further and Higher Education Act which led to
the incorporation of colleges in 1993. A new funding council (FEFC) was set up,
responsible to the Secretary of State for Education (Hillier 2006).

Impact of the 1992 Further and Higher Education Act

It was with the introduction of this Act that funding changed from being a
resource, to enable the provision of education, to being a means of achieving
their aims of increased levels of participation and achievement, higher
standards and increased efficiency.

Previous models of funding were based on FTE student enrolment. However

this new method of funding was based on units. Units would be allocated for

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‘Entry, ‘On-programme’ and ‘Achievement’. The bulk of the units are earned
by the ‘On-programme’ element.

Hence funding can be increased by entering students for extra courses.

Several of the students on my level 1 numeracy course have been coerced to
join by the college. They have been told they cannot attend their chosen
course, for example Travel and Tourism, unless they attend level 1 numeracy
as well. This means the college can claim units for the same student on both
courses. This has a negative impact on the class as they are demotivated and
disrupt the rest of the class. However it has had a positive benefit to the
learners as their basic levels of numeracy have improved. As could have been
expected, by students who do not wish to attend a course being coerced onto
it, retention has been poor. This has meant that the college has only been able
to claim entry units for these students and hence this course will not run next
year as it has not been profitable enough.

Leney et al (1998) found that in their review of twelve Further Education

Colleges a disproportionate amount of time and effort was going into the
process of devolving of budgets to the detriment of education and training
programmes. They found that there was a trend of cuts in courses and contact
hours as has happened at my placement college.

The colleges receive funding for entry tests from FEFC (Leney et al 1998). This
has resulted in my placement college continuing to use an initial diagnostic test
for numeracy that is not working. The test stops if a user gets three
consecutive wrong answers so if they get the first three wrong they receive
zero points. As the test is arranged in topics as soon as they hit a topic they do
not know they cannot score anymore points. For the level 1 numeracy course I
was teaching the students should have had a minimum of 15 points but as the

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test was not suitable for purpose everyone was enrolled onto my course (only
one of the students had the required 15 points). The test was still conducted,
as the college received funding for it, but the results were ignored.

Leney et al (1998) report that in one of the colleges, in their research, learner
identification numbers are changed if they progress from GCSE to A level so
that entry units can be claimed again. This must pose an ethical dilemma for a
lot of colleges as they wish to maximise funding but these students are not
new to the college. It will also mean the progression of the students can no
longer be measured.

FEFC (1994) found that, when they investigated the level of guidance being
given to 16 – 19 year olds on entry, in some instances students were being
recruited onto GCE A level without adequate qualifications. They
recommended that records of achievement should be used more effectively at
enrolment to ensure all students were enrolled onto appropriate courses.

However when colleges are being partly funded by enrolments they are always
going to try and maximise the numbers on a course. The GCSE Mathematics
course at my placement college started the year with thirty on the course.
They could not fit properly into the classroom. The lecturer felt compelled to
keep disruptive students in the class in order to maintain his retention figures
but his achievement figures suffered. Leney et al (1998) also found this in their
research with lecturers reporting that they felt they had to retain students
whose disruptive behaviour and poor motivation was affecting the learning of
others.

The funding methodology distinguishes between schedule 2 programmes that

lead to an accredited qualification that are to be funded by the FEFC and non-

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schedule 2 programmes that are non-accredited and non-vocational that are to
be funded by the LEA (Hodgson 2000). This has had the biggest negative
impact on the Further education colleges. As Hillier (2006, p41) says ‘By July
2005 colleges were being forced to pulp their adult learning prospectuses as
they could no longer sustain provision, given the massive decrease in funding
for this area of their work’. This has resulted in my placement college now
only running courses that have an external qualification that can be taken.
This has meant that the learners on my course all have to take a level 1
numeracy course. For some of them their starting level was below entry level
3 and although they have made significant progress over the year they are not
yet at level 1. The need to do the qualification has left them feeling like
failures when in reality they are now at a level that if they do another year they
will pass level 1 at the end. They are not able to do this course again, however,
as there is only funding for the one year.

Not all students, for example ESOL, want to do tests to earn a qualification;
they are more concerned about learning useful information. The government
sees achievement as earning a qualification whereas the students are looking
for more than that. I agree that teachers should be accountable but other
ways of measuring achievement need to be investigated, for example student
satisfaction could be used as a measure. As Lumby (2001, p44) says ‘Students
would not stay and would not achieve if the teaching and learning were not of
a quality and appropriateness to meet their needs.’

The funding methodology discriminates against part-time learners where, in

the case of A levels, a college receives only a quarter of the units allocated
compared to a full time student (Leney et al 1998). This has had a huge impact
on the A2 level Mathematics course as all the students this year were part time

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so they were only given three contact hours a week. This is significantly less
than the 4 – 4.5 hours recommended by AQA (2004). Over the recommended
36 week course this is 36 – 54 hours less than they could be receiving
elsewhere. Despite this the majority of students pass but their grades are low.
However the funding received for ‘achievement’ is a lot lower than for
‘recruitment’ and ‘on-programme’ so it has been decided that, next year, A
level Mathematics will not run at all, in my placement college, as it not
profitable enough.

Further evidence of the government’s use of the funding methodology to

control the colleges is the fact that FEFC would withhold 2.5% of a college’s
income until the college met the year’s annual requirement to implement
government policies (O’Connell 2005).

Policy to date

In 1997 the Conservative government was replaced by a Labour government.

This has resulted in increased involvement at local and regional levels as
according to Hodgson (2000, p12) ‘New Labour believes in planning at local
and regional levels and thus in a degree of market regulation that would have
been unthinkable under the Conservatives’.

The Learning and Skills Act (2000) came into force April 2001 replacing FEFC
and Training and Enterprise Councils (TECs) with the Learning and Skills Council
to fund all post-compulsory education with the exception of higher education.
The Learning and Skills Council was instructed by the Act to create local
learning and skills councils which are given budgets and objectives for the
financial year (Learning and Skills Act 2000, p2).

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The Learning and Skills Council was closed on 31 March 2010 and replaced by
the Skills Funding Agency (SFA) to fund and regulate adult skills training in
England and the Young People’s Learning Agency to support Local Authorities
to commission suitable education and training opportunities for all 16 – 19
year olds in England (Govt 2010a). The SFA proposed allowing colleges to earn
autonomy so that they would have control of their budgets (Govt 2010b).
However we have had a change of government again in May 2010 so we are
waiting to see the impact of that change.

Literature Review

The government policies I have reviewed are very influenced by the political
party that has produced it. The Conservative government prefers an open
market approach with power held centrally. The Labour government prefers
power at a local and regional level with greater regulation. The changes in
government and agencies meant that in some cases it was hard to track down
white papers and acts as they create new websites with each change of power
and agency.

The joint report on 16 – 19 guidance by FEFC and Ofsted could have been
biased as FEFC would need to justify their role so they would need to show an
improvement. However the fact that this was a joint report with Ofsted should
minimise this risk.

The evidence from twelve Further Education Colleges by Leney, Lucas and
Taubman was funded by the union NATFHE. Leney and Lucas are lecturers
employed by the University of London but Taubman was NATFHE’s National
Educational Official at the time. Hence there is a possibility of political bias to

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this report. Only twelve Further Education colleges have been chosen so
material could have been selected to portray their point of view.

Sir Bernard O’Connell’s book on creating an outstanding college is about the

college (which is named) he was principle of. Hence there is a sense of ‘selling’
the college – everything is put in a very positive light. However he has
firsthand experience of the methodology from a college management point of
view.

Yvonne Hillier is an academic. Her book was more factual and less political.

When writing her book Jackie Lumby was a Professor at the University of
Southampton. She has worked in schools and FE but she has also worked for a
TEC and she is an executive member of British Education Leadership and
Management Association. Her book contained a variety of different opinions
and it was difficult to detect any political bias. Her research seemed to have
been conducted without any preconceived ideas or agenda.

Ann Hodgson has worked as a teacher, lecturer, editor, civil servant and LEA
advisor so her book gave a very wide view of the subject. However I would be
very surprised after reading her book to find out she was not a Labour party
supporter. The choice of words used when discussing the political parties
definitely gave an impression of bias.

Conclusion

Before researching the government’s funding policies I was very negative

about the statistics management sent me in my placement college and their
demands that I should improve them. However now I have completed this
research I realise the aims of the funding mechanism and I feel they are very
valid. I believe the main aim is to encourage students to stay on courses. In

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1993 the Audit Commission produced a report claiming that 150 000 16-19
year olds either failed or dropped out of courses each year in colleges and this
amounted to a waste that cost £330 million per year (O’Connell 2005).

There is also investment in information and guidance to ensure that they are
on the right course in the first place. Although there is reward for
achievement, to encourage the improvement of standards, this is less than the
reward the college receives for the student staying ‘on-programme’ which is
where I would agree the priority should lie. Students learn far more on a
course than just what is required for a qualification. In addition to improving
their numeracy skills the learners on my level 1 numeracy course improved
their language, literacy and ICT skills. They also developed skills to deal with
conflict and to interact with others. All left the course with a greater level of
self esteem and confidence than when they had started. At the start of the
course they would not have been employable whereas now, whether they
passed the qualification or not, they all have better employment prospects.

The problem would seem to be with the internal management of the college as
the reasons for the policy have not been explained in a positive light to the
staff so that everyone could be working together for the same purpose.
Theodossin (foreword in Elliott 1996) points out that it has been left to college
managers to operationalise the central vision at local level even though many
of them lack the background and experience to do this. A possible solution to
this would be for the government to provide management training when
implementing a new policy.

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