Introduction/About this guide
College funding can be complex and the prospect of looking at allocations and
accounts can be daunting, especially if you don’t deal with them in your everyday
role. Have you ever asked a question during negotiations and been presented with
figures or data that you have not been able fully understand or interpret? Have you
suspected that you haven’t been given all the figures, but not known what’s missing?
If the answer to either of these questions is yes, this guide is for you.
In the current economic climate, with the further and sixth form college sectors being
subject to unprecedented Government cuts, it is more important than ever for
workplace reps on the frontline to be equipped with the tools needed to fight job
losses. This guide should ensure you can determine whether or not your College is
using the current climate to make deeper cuts than can be justified by their financial
position.
This guide will begin by looking at where colleges get their income from and how and
when they are allocated it, looking at what we know about government spending on
further education over the next year. Once you understand where the income comes
from and how much there is, it helps you when looking at college accounts.
The main purpose of this guide though is to aid workplace reps with future
negotiations and redundancy situations. It will therefore explore in greater detail
college accounts and what to look for. It is vital when fighting any cuts to understand
what the bottom line is. We’ll look at income and expenditure; where to get accounts
and key data from; how to understand them; things to watch out for and the
terminology used in them.
Finally, there is a useful glossary of many of the acronyms used in the FE sector and
what they stand for.
Even though every effort has been made to make this guide as user friendly as
possible, you may need advice and support from your branch or regional officials,
when deconstructing your College’s accounts and fighting job losses. So most
importantly, don’t be afraid to ask for help.
Colleges are self-governing corporations with charitable status and 20 years of
financial independence. They are multi-million pound organisations – the average
further education (FE) college has a £25 million budget and the average sixth form
college a budget of £8 million. Colleges obtain 80% of their income from Government
departments and agencies, enabling them to offer free education to young people or
adults with lower skills or on a subsidised basis through schemes including
apprenticeships. At the end of February, SFA’s Chief Executive for England
announced that the budget for the 2015-16 academic year for adult further education
is 24% less than this year’s Budget. Similar cuts were announced in Scotland and
Wales.
Where do Colleges get their funding from?
In England FE Colleges and School Sixth Forms receive funds from many different
sources. The majority of income comes from Government funding grants. However,
there are many other income sources that are becoming increasingly important as
government funding decreases and many Colleges attempt to reduce their reliance
on it. It is vital, as a workplace rep, that you understand where your College gets its
income from, as this will enable you to understand and identify any decrease in it
and the impact on the college and potential job losses.
England
YPLA (Young People’s Learning Agency)
The YPLA is responsible for regulating and funding for young people, known as 1619 education. The YPLA also funds 19-24 year olds with Learning Difficulties and
Disabilities (LDD). It should be noted that from April 2012 the Education Funding
Agency (EFA took over YPLA for the funding of young people’s education and
training.
SFA (Skills Funding Agency)
The SFA has the responsibility of regulating and funding adult education, known a
19+. From 2012/13 this is a single pot of money, combining the Adult and Employer
responsive budgets of old, giving colleges more freedom in how they meet this
target.
The SFA have shifting priorities and have already identified changes in what they are
willing to fund over the next few years. They have announced that from 2013/14 they
will no longer fund level 2 UNISON (equivalent to 5 GCSE’s) or level 3 (equivalent to
2 A-Levels) qualifications for adults age 24+. These learners will be required to take
out a student loan to fund their education. The SFA have allocated £129 million in
the 2013/14 budget for FE loans.
The amount of funding ring fenced to apprenticeships is planned to increase by
12.7% between 2011/12 and 2013/14. However, with unemployment rising, it is
becoming increasingly difficult to meet this growth.
Higher Education (HE)
An increasing number of colleges are claiming funding directly from the Higher
Education Funding Council for England (HEFCE), but the majority of colleges
running HE programmes still do so in partnership with HE institutions. Where a
college is in partnership, the HE institution claims the funding from HEFCE and
distributes this to partner colleges, based on allocated learner numbers. HE
institutions may be in partnership with more than one college. The amount of HE
income allocated to a College depends primarily on the HE institution and this can
change from year to year. HE budgets have been cut severely over the last year and
many colleges have seen the numbers they are allocated reduced as a result,
though recently the government allocated some additional HE places to FE colleges.
European Social Fund (ESF)
The European Social Fund (ESF) was set up to improve employment opportunities in
the European Union (EU). ESF funding is spread across the EU, although most
money goes to those regions where economic development is less advanced and
unemployment is highest. The main priority is to give unemployed and
disadvantaged people the training and support they need to enter employment.
Colleges have the opportunity to bid for ESF funding to support provision in line with
EU priorities e.g. unemployed, those working at below level 2, NEET young people.
ESF is increasingly being used to support mainstream provision where SFA or YPLA
funding is not available. The ESF budget was £2.5 billion for 2007-13.
Adult Safeguarded Learning (ASL)
Colleges receive ASL funding from either the SFA directly or Local Authority (LA), or
both. The ASL budget is specifically for funding community and outreach
programmes in Personal and Community Development, Family Literacy, Language
and Numeracy, Wider Family Learning and Neighbourhood Learning in Deprived
Communities. Although only a small pot, £210 million nationally, this income stream
has been protected for the last few years.
Offender Learning and Skills Service (OLASS)
This is funded through the SFA, but is only available to colleges with contracts to
deliver provision in prisons. Many colleges will not be able to access this funding, but
a few will receive a significant percentage of their income via OLASS funding. The
OLASS pot is planned to decrease by 2.4% between 2011/12 and 2013/14.
Fees
Fee income from students and employers has increased as a percentage of income
in many colleges, as the SFA have reduced the levels of funding and number of
qualifications that they will fund colleges to run. There are a number of different
types of fees that Colleges collect and in 2009/10 they amounted to over £0.5 billion:
International fees are paid by students who do not meet the residency criteria for
the funding bodies (e.g. not resident in the UK or EU for the 3 years) and therefore
not eligible for government funding. Some Colleges generate substantial amounts of
income from overseas fees. In 2009/10 over £52 million was collected in
international fees.
Full Cost fees (referred to as commercial fees in some colleges) are paid by either
students or employers for courses that a College does not claim funding. Full cost
courses tend to be branded, specialist or statutory (Apple Computing, Health &
Safety, First Aid etc). It is an income stream that colleges can grow if there is
demand. In 2009/10 almost £70 million was generated in full cost fees by the sector.
It is expected that this will only go up as the SFA reduce the type of qualifications
they will fund and target specific priorities.
Student fees are paid by adult (19+) students (or their employers), on SFA funded
courses, who are not eligible for fee remission (i.e. free tuition). These students are
known as ‘co-funded’ learners, whereas students who are eligible for fee remission
(i.e. those in receipt of JSA) are called ‘fully funded’. The SFA expects colleges to
collect 50% of the funded rate from co-funded students. The percentage contribution
from students has risen considerably from 12.5% 7 years ago. This gradual increase
has resulted in higher fees for learners and in part forced colleges to change their
curriculum offer in line with government priorities and target fully funded learners.
Education contracts are when a college delivers learning on behalf of another
education establishment or training provider and receives payment for doing so. An
example of this is where apprentices are sent from a training provider for part or all
of their learning. When we look at accounts later in the guide you will notice for
accounting and income purposes Education Contracts are combined with tuition
fees, due to the college not claiming any external funding for them.
Additional Learner Support (ALS)
This money funds additional support to enable learners to access education and
achieve their learning goals and progress to either further learning or employment.
The majority of this income is for supporting learners with learning difficulties and/or
disabilities (LLDD), but some is also ring fenced for providing initial advice and
guidance (IAG). It is one of the few income streams that is planned to increase for
both 16-18 and 19+ learners over the next two years.
Funding Allocations
It is vital as work place reps that you understand when your college is allocated
funding for the forthcoming year, as this will be when the College gets the first
indication that there may be a shortfall in income and starts putting plans in place to
deal with any deficit.
Colleges received an indicative allocation at the end of December. Colleges are
given the opportunity to put forward any business cases for a change to their
allocation if necessary. The EFA and SFA will then consider all business cases and
issue final funding allocations by the end of March.
College Accounts deconstructed
Looking at accounts can be a daunting prospect and the accounts on the SFA
website can appear overwhelming when you first open them. However, with this
guide you will be able to pick out the columns and data that are of use when
opposing job losses from a financial perspective. The spreadsheet does contain
every College’s accounts, but each College is only shown on one row, so find your
College, highlight its row or hide the others (excel allows you to hide columns and
rows on a spreadsheet for ease of reference) and concentrate on just one. Once you
are familiar with what you are looking at, it is interesting to see how your College
compares to others (particularly within the same region or colleges of a similar size),
but at first it is recommended you stick to your own institution.
The spreadsheet and columns referred to in this guide can be found on the SFA
website. These spreadsheets contain a full breakdown of every FE College and
School Sixth Forms accounts . You will need to click on the specific year’s accounts
that you are interested in viewing. https://www.gov.uk/government/publications/sfafinancial-management-college-accounts The accounts for 2013/14
https://www.gov.uk/government/publications/sfa-financial-management-collegeaccounts
Income & expenditure
Income is the amount of money a college has generated in a financial year. We have
already looked at funding grants (column T1.1 on the SFA spreadsheet) and tuition
fees (column T1.2) already, but there are other smaller income streams that
contribute to a college’s total income (T1.6). The data below is an example from the
2009/10 accounts on the SFA spreadsheet, but you can also look at previous year’s
accounts to see if overall college income has been increasing or decreasing.
College
Name
Abingdon
and Witney
College
T1.1
Funding
Body
Grants
T1.2 Tuition
fees &
education
contracts
T1.3
Research
grants and
contracts
T1.4
Other
income
T1.6
Total
Income
£000
T1.5
Endowment
and
investment
Income
£000
£000
£000
£000
16232
1972
0
405
24
18633
£000
Accrington
&
Rossendale
College
13395
2410
0
Amersham
11100
2592
0
and
Wycombe
College
Aquinas
9970
95
0
College
Ashton
8903
522
0
Under Lyne
Sixth Form
Aylesbury
10902
880
88
College
Barking and 27647
3767
0
Dagenham
College
Extract from SFA spreadsheet – college income 2013/14
438
27
16270
135
5
13832
749
749
10883
116
15
9556
1138
4
13012
3382
13
34809
Expenditure is the costs incurred by a college during a financial year. The biggest
expense to a college is its staff costs (T1.7). Colleges spent an average 65% of their
income on staffing. To see what percentage your college spent, look at column
T4.8A. Please not however that just because a college spends more than 65% of it
income on staff it doesn’t mean that they are justified in cutting staff. Schools for
example on average spend in excess of 80% of their income on staffing also not all
colleges are the same and some will carry higher overheads depending on the
programmes they run. Other expenditure (T1.8) includes exam costs, building
maintenance, heating and lighting etc. Then there is depreciation of fixed assets
(T1.9) which is an estimate of the cost of diminishing the value of buildings and
equipment, or spreading the cost of an investment over its useful working life. All
these, along with interest and other financial costs (T1.10) give you the total
expenditure (T1.11).
Now you have the income and expenditure you can work out what the operating
surplus was for the financial year; total income (T1.6) – total expenditure (T1.11) =
operating surplus (T1.22). In the spreadsheet there are a number of different
operating surplus figures that take different categories into account, but you should
use column T1.22.
Whilst we are looking at expenditure, there are some columns of interest further to
the right relating to Principal’s pay (S2.1A) and benefits in kind (S2.1B). In the
accounts for the years previous to 2010/11 this information can be found on the
second tab of the SFA spreadsheet ‘Schedules 1 to 4 (tabs are found at the bottom
right hand side of the spreadsheet) where some of the figures in ‘Tables 1 to 4’ are
broken down into sub categories.
College Name
S2.1A
Principal’s
salary
£000
S2.18
Principal’s
benefits in
kind
£000
S2.1C
Principal’s
pension
contribution
£000
Abingdon and
Witney College
126
0
18
Accrington &
Rossendale College
108
0
15
Amersham and
Wycombe College
Aquinas College
96
0
15
100
0
14
Ashton Under Lyne
Sixth Form
Aylesbury College
116
0
16
137
1
20
Principal’s Pay England
A separate schedule of Principal’s pay is available from d.bertuchi@unison.co.uk
This covers the last 5 years. Below is the latest high earners. The 2013/14 college
shows that a dozen colleges handed over more than £200k in salaries to principals
— up from just four colleges the previous year. The college accounts seem to show
that 152 or circa 370 colleges made a loss and the sector nationally was in deficit for
the first time ever, given that these figures are almost a year old, and before the
recent 24% cuts to the adult skills budget.
Assets & Liabilities
Assets are items the College owns or monies it is owed. These are divided into two
categories:
Fixed Assets – items with a life span of more than one year bought by the College
e.g. buildings, computers, vehicles and long term investments. The columns relating
to fixed assets are T2.1A to T2.1D with the total fixed assets in T2.1E.
Current Assets – items with life span of less than a year, that are needed for the
everyday running of the College e.g. stock and consumables. Current assets also
include cash in the bank, short term investments and money owed to the college as
a debt, which is payable within a year. Current assets are funds that are easy to
access. The columns relating to current assets are T2.3A to T2.3Eii with the total
current assets in T2.3F.
Liabilities are items that the College owes (has to pay). These are categorised into:
Long term (non-current) liabilities are repayable over a period of more than 12
months e.g. bank loans, mortgages etc. The columns relating to long term liabilities
are T2.7A to T2.7C with the total long term liabilities in T2.7D.
Current liabilities are items that need to be repaid by the college in fewer than 12
months e.g. bank overdrafts and money owed to suppliers. The columns relating to
current liabilities are in columns T2.4A to T2.4H with the total current liabilities in
T2.4I.
The important column for you to look at is net current assets (T2.5). This is the
College’s current assets (T2.3F) minus their current liabilities (T2.4I). If they have a
minus figure in the net current assets they owe more than they own or are owed, this
would be cause for concern if it was a trend over a number of years. On the flip side
however, if your college has a plus figure in the net current assets it may, depending
on its overall financial position be able to use these assets (money etc) to soften the
blow of government cuts. By using its current assets in this way a college would give
itself more time to identify longer term savings rather than simply being rushed into
making cuts over just a matter of weeks that will hit their ability to attract students
and compete with other providers.
College
Name
T2.1E Total
Fixed
assets
T2.3F Total
current
assets
T2.4I Total
current
liabilities
T2.5 Net
current
assets/liabilities
£000
26809
£000
1238
£000
2908
£000
9920
Accrington
&
Rossendale
College
16887
3573
2632
Amersham
and
Wycombe
College
Aquinas
College
Ashton
Under Lyne
Sixth Form
22932
14051
14051
38751
Abingdon
and Witney
College
T2.6 Total
assets less
current
liabilities
£000
T2.7D Total
long term
liabilities
36729
5814
1121
18008
5857
5156
698
12861
11
3871
928
-1190
42372
3770
16835
785
3621
17396
1395
£000
Aylesbury
College
31209
1751
1560
411
39113
5841
Capital Expenditure and Depreciation
Capital Expenditure often causes confusion when looking at accounts and is often
used as justification for spending money by finance directors. It is expenditure on
fixed or long term assets e.g. new buildings or vehicles, installation of equipment,
improvements to premises (but not repairs) etc. Colleges receive capital grants and
monies from the Government and other agencies. Capital money is ring fenced for
spending on fixed assets and can’t be spent on just anything e.g. staffing. If your
college is proposing campus improvements, you should ensure that the monies
being used come from the capital budget and are not coming from the revenue
budget that is used for general running cost e.g staffing. So colleges should not cut
staff so as to divert money into capital budgets.
Capital expenditure is not directly taken into account when looking at a specific
year’s profit or loss. If the cost of new building was shown as an expense in the
accounts for the year it was built, this would mean that a huge loss would be
recorded for the year. Instead fixed assets are depreciated over a number of years,
to spread the cost. The number of years a fixed asset is depreciated over relates to
the useful life of it. If your college buys a new mini-bus and considers it would need
replacing after 5 years, the cost of the mini-bus would be depreciated/spread over 5
years. Depreciation for a year is identified in column T1.21F of the spreadsheet and
T1.9 on spreadsheet.
College
Name
T1.21F
Operating
position
adjustments
T1.9
Depreciation
£000
Abingdon
and Witney
College
-381
£000
1432
Accrington
&
Rossendale
College
-265
907
T1.22E
Other
related
capital
adjustments
2013/14
£000
0
T1.14 (2012/13)
Continuing
Operations
After
depreciation
0
70
£000
24
If the college sells a fixed asset before the end of its useful life, the money it receives
from this sale will in most cases be classed as capital money and again ring fenced
for capital expenditure. If the fixed asset hasn’t been fully depreciated the College is
required to accelerate the depreciation, this is shown in T1.22E (2013/14) and T1.14
(2012/13).
Staff Expenditure and Ratios
We have already looked at overall staffing costs in the expenditure section (page
12). However, these staffing costs are also broken down into the different categories
of staff (e.g. teaching and administration) in columns S1D.1A to S1D.13 of the
spreadsheet (see table below). The total staffing costs used for expenditure
purposes is ‘Total staff costs after restructuring’ (S1D.13).
College
Name
S1D.1A
Teaching
Abingdon
and Witney
College
5396
S1D.1B
Contracted
tuition
services
£000
0
Accrington
&
Rossendale
College
5374
691
1293
2089
10607
10860
Amersham
and
Wycombe
College
Aquinas
College
Ashton
Under Lyne
Sixth Form
Aylesbury
College
4621
260
1585
2384
8534
8880
5223
0
582
661
6885
6885
4033
77
666
1004
6130
6136
6033
371
1822
1338
7391
7692
£000
S1D.2
Teaching
and other
support
£000
1957
S1D.3
Administration
and central
services
£000
2876
S1D.10
Total staff
costs before
restructuring
£000
10939
S1D.13
Total staff
costs after
restructuring
£000
11288
There are also some columns which will be of great interest to most work place reps;
total Senior Management Team (SMT) salary cost (S4.1J) and average SMT salary
(S4.1Ji).
The columns S4.1K to S4.1Qi relate to total staffing costs and average staff salaries
for each staff category.
If you find trends within these figures (for example, total spend on administration has
decreased over the last 3 years) these are potential arguments against future cuts.
This is where looking at organisations of a similar size and with an income profile
similar to your college will help.
In the columns on the far right on the ‘Tables 1 to 4’ tab it shows staffing costs as a
% of income (T4.8A and T4.8B) and you can also see what proportion of the staffing
costs are attributed to Administration/Business Support.
College Name
T4.8A Staff
Costs as %
of income
(inc contract
tuition
services
£000
T4.8B Staff costs
as % of income
(excl. Contract
tuition services)
T4.8C Admin costs
proportion
£000
£000
Abingdon and
Witney College
60.61%
59.93%
23.97%
Accrington &
Rossendale
College
67.57%
66.27%
20.87%
Amersham and
Wycombe
College
Aquinas
College
Ashton Under
Lyne Sixth
Form
Aylesbury
College
63.95%
62.64%
2.64%
70.64%
70.64%
8.59%
64.65%
64.59%
20.57%
It is important when comparing your college to others, that you remember not all
colleges have the same structures. Some contract out some of their business
support functions.
The accounts spreadsheet contains many more columns and much more detail than
we have looked at, but if you have made it this far, you have looked at the important
financial information that will help you oppose job cuts. You should now have an
understanding of the financial stability of your college and be determine if it is
growing or shrinking.
Obtaining Key Data
As a work place rep you will need to be prepared if you are going to oppose job
losses. It is vital to obtain the key documents that contain the information you need
to do so. The documents and data you should be looking at/asking for are:
The college’s latest financial budget statement and forecast for 2011/12. If you aren’t
happy with the level of detail you have been given, don’t be afraid to ask for a more
detailed breakdown.
The college’s funding allocations for 2014/15 (available from 30-Mar 15).
The strategic financial plan for the next two/three years.
You can access all college accounts from SFA website
https://www.gov.uk/government/publications/sfa-financial-management-collegeaccounts
Look on your college website or ask for copies of the last couple of Corporation
Board (Governor’s meetings) minutes. These are also public documents and often
contain valuable information about when the college first knew about funding
shortfalls or financial issues.
Are the cuts too deep and are there alternatives?
Once you have all the information above, you should now be able to build a clear
picture of what the issues are. This guide will help you with opposing cuts from a
financial point of view, but you also need to look at the wider implications of the
proposals. Ask for impact and equality assessments to be done. If you and your
members think the cuts are too deep and don’t know if the college will be able to
provide the level of service it does now, make it clear that you think this is a high risk
strategy and request the risk is assessed properly.
The College should be looking at non-staff expenditure and trying to reduce real
costs this way. Get involved in this and get members involved too. There is nothing
wrong with asking members for any ideas they have about how the college could
save money or even how to generate additional income. This will help get them
involved and you never know, someone out there might just have that million pound
idea!
If your college has financial reserves, could it weather the storm over the next two
years and make changes gradually, re-training staff and reducing the workforce
through natural wastage? Many colleges tend to have a knee jerk reaction to funding
cuts and often reduce the workforce by more staff than they need to. Often when
cuts are too deep, the work doesn’t go away, so the college soon ends up appointing
someone new to a post they have cut only months ago. This can end up being a
false economy, as it increases real costs as they have had to pay redundancy pay to
the member of staff who was cut, spent money on advertising and recruiting again,
but most importantly they have lost the experienced member of staff.
The following are some examples of alternatives to job cuts and course closures:
Reduction of staff levels by natural wastage
Redeployment to other parts of the organisation (this may include conducting skills
audits and, where necessary, providing training)

Reduction or elimination of overtime working

Restricting or freezing of external recruitment

Restricting or freezing the engagement of external contractors and agency
staff

Reducing working hours (by agreement with staff)

Considering volunteers for part-time and flexible working

Considering volunteers for job sharing

Sabbaticals and unpaid leave, or secondments (by agreement with staff)

Seeking alternative funding, e.g. where funding for a particular project has
expired

Rescheduling of any loans – i.e. to reduce monthly repayments

Rescheduling capital works (i.e. planned building and maintenance) – if
condition of existing buildings allows
Use of ‘financial reserves’ and ‘net current assets’ to give the college a longer period
of time over which to make the necessary financial savings – See questions 10,11
and 12.
Improved strategy for the collection of fees and other money owed to the college
If your college still claims it needs to make further cuts then it could seek applications
for voluntary redundancy from across the college. Reps should oppose any moves to
implement compulsory redundancies.
Reps should also ensure that their college has a ‘redundancy avoidance and
handling’ agreement in place. UNISON has negotiated a national agreement with the
Association of Colleges (AoC) for colleges to adapt and improve upon locally. You
can obtain this agreement from education@unison.co.uk and it will be in the
resources section of the Education and Children’s Services webpagess. Information
and advice for reps campaigning against redundancies and cuts can be found on the
UNISON website . Fighting job losses is probably the most difficult thing work place
reps face. Please remember to ask your branch or regional officials for assistance.
Model questions to ask locally
Raise the following questions with college management.
1. What is the college’s total 16 – 18 funding allocation for 2014/15 and how does it
compare to the allocation received for 2013/14? (in both cash and percentage
terms). Has it increased or decreased?
2. What is the college’s total adult skills funding allocation for 2014/15 and how does
it compare to the allocation received for 2013/14? (in both cash and percentage
terms). Has it increased or decreased?
3. Has the college’s final 16 – 18 funding allocation for 2014/15 increased or
decreased compared to its indicative allocation?
4 How does the college’s overall total funding settlement for 2014/15 (including all
grant income and funding streams e.g. Additional Learning Support, HE funding,
OLASS etc if applicable) compare to 2013/14? Ask for a breakdown for all individual
funding streams.
5. If any part of the colleges funding allocations is better than originally anticipated
has the college revised its budget plans accordingly – i.e. reduced the size of
planned job cuts etc?
The following questions will help you assess your college’s ability to cope
with the government’s funding cuts. The information you get back may
strengthen your hand in terms of opposing compulsory redundancies.
6. Did the college make an operating surplus in 2013/14? (I.e. did it generate more
money than it spent) – If yes how big was the surplus in cash terms and as a
percentage of its overall income?
7. Is the college expecting/budgeting for an operating surplus in 2014/15?
8. What assumption is the college making about the total amount of income it will
generate from other non government sources for 2012/13? e.g., from fee paying
students (known as full cost recovery), fees from employers, research grants,
investment opportunities etc.
9. How has the Skills Funding Agency graded the college’s financial health?
10. How much money does the college hold in its financial reserves?
11. What is the college’s ‘net current assets’?
12. Has the college looked into the option of rescheduling any of its longer term
liabilities i.e. long term bank loans?
Note
The college could negotiate with the bank to reduce the size of its monthly loan
repayments.
13. If the college is in serious financial difficulty has management approached the
funding body, Skills Funding Agency (SFA), for assistance?
Note
We understand the SFA has in the past paid funding allocations to some colleges
earlier than scheduled, to help them with any cash flow problems. They have also
paid the allocation in one hit rather than in smaller payments spread over the year.
This again would help with cash flow and give the college more time to look for
potential savings.
14. How much money did the college spend on fees to employment agencies in
2013/14 and to date for 2014/15?
Note
A survey by UNISON and UCU in 2009 found that 79 colleges alone had spent
between them £30m on fees to employment agencies in just twelve months. One
college had spent over £2 million. Employment agencies routinely charge more than
50% on top of what they pay their staff. Colleges also have to pay VAT on the
employment agency bill – it is much more cost effective to directly employ staff.
16. How much money did the college spend on hiring external consultants in
2013/14 and to date for 2014/15?
15. What percentage of fee and other income owed to the college was actually
collected in 2013/14 and to date for 2014/15?
Note
Colleges overall do not have a good record on collecting the money owed to them in
fees from employers and individuals. It is estimated that in 2008/09 alone £113
million of fees owed to colleges actually went uncollected.
The government is demanding that colleges act on the scale of non collection.
So if your college is owed a considerable amount of money in fees, but at the same
time is planning jobs cuts, you need to be asking questions about the overall
management of the college’s finances i.e. debt collection procedures. You should
make the point that an improved collection strategy may allow the college to revise
upwards its projected income for 2014/15 and hence reduce the scale of cuts.
Things to watch out for and oppose
During your negotiations with management watch out for the following:
1. Your college cutting deeper than they need to.
2. Your college making job cuts to put money into their reserves.
3. Your college sub-contracting any of its courses/ programmes (i.e. contracting
another provider to deliver courses/programmes that the college will receive the
funding for). Ask management if this is the case in your own college. If so then ask
what cash/percentage of the colleges total funding allocation was sub-contracted in
2012/13 and 2013/14, and what is planned to be for 2014/15.
Note
An increase in sub-contracting or partnerships will increase real costs and is likely to
put jobs at risk.
Scotland
Scottish Funding Council – Main Grant
The majority of college funding comes from the Main Grant provided by Scottish
Government and distributed through the Scottish Funding Council (SFC). The
amount for each year is detailed within the individual Outcome Agreements that are
agreed between the SFC and each region. Outcome Agreements were introduced in
academic year (AY) 2012/13 and are intended to enable SFC and colleges to
demonstrate the impact of the sector and its contribution to meeting Scottish
Government priorities. Outcome Agreements set out what colleges plan to deliver in
return for their funding from the SFC.
For 2015/16 onwards, the Main Grant will be determined using a revised funding
model. The new credit based system will mean that colleges are now paid for the
activity they deliver and there will be a clear relationship between these credit targets
and learning hours. The credit targets will also be much more closely aligned with
the awards that the students have enrolled to achieve.
The credit based system uses a demographic model to inform the Outcome
Agreements and help ensure each region receives an appropriate number of college
places to serve the local population. Other pieces of evidence that are taken into
consideration to determine the number of places required will include the regional
skills assessments, historical performance against activity targets and evidence of
demand.
Previously, the Main Grant had been determined by a system based on weighted
student units of measurement (WSUMs), but this has been replaced by the simplified
credit based system described above.
In December 2014, SFC published a newsletter explaining the new model.
http://www.sfc.ac.uk/funding/colleges/college_funding_allocations.aspx
Funding allocations can be found from this link
http://www.sfc.ac.uk/web/FILES/Circulars_SFC152012/SFC.15.2012.pdf
http://www.sfc.ac.uk/web/FILES/Funding_Outcome_Agreements_201516/Ayrshire_College_Outcome_Agreement_2015-16.pdf
Colleges are currently undergoing significant changes in relation both to funding and
governance. The main outcome of recent policy developments has been the
reorganisation of colleges into 13 regions and a significantly increased focus of
college activity on young people’s employability.
The Scottish Government objective was for mergers would to deliver £50 million of
efficiency savings each year from 2015-16, along with other benefits, such as
reduced duplication and better engagement with employers. While mergers have
contributed to significant efficiency savings, the Scottish Government and the
Scottish Funding Council (SFC) have not specified how they will measure some of
the expected wider benefits. This makes it difficult to assess whether the reform
programme is achieving all of its aims.
The SFC and the Scottish Government provided a range of support to merger
colleges. This included dedicated staff for advice and guidance, and SFC staff
attending partnership board meetings. The SFC also provided over £52 million
between 2011-12 and 2013-14 to support college mergers. It plans to provide a
further £6 million in 2014-15. Merger colleges used most of this funding to pay for
voluntary severance.
Between 2009 and 2013 there were 7000 job losses. The decision by the Office for
National Statistics (ONS) to reclassify colleges as public bodies has led to greater
accountability for the use of public money in the college sector through additional
financial reporting and reduced autonomy for colleges. Reclassification also led to
the formation of arm's-length, independent foundations (ALF’S) to protect colleges’
financial reserves. Colleges transferred £99 million to these foundations in 2013-14.
Of the £99m, £38m was transferred to the Arms Length Foundation and £61 to local
ALF’s. The largest ALF is City College of Glasgow College with an ALF of £21.7m.
Five Colleges transferred funds of over £6M into ALF’s.
Colleges Scotland supports the sector by ensuring that its views are heard and interests represented.
This is a useful source of information http://www.collegesscotland.ac.uk/
They have produced a guide to college income
http://www.collegesscotland.ac.uk/briefings-and-publications/briefings/312-collegeincome-a-quick-guide-april-2015/file
http://www.collegesscotland.ac.uk/briefings-and-publications/briefings/129-collegesscotlands-paper-on-the-draft-budget-2015-16-09-october-2014/file
http://www.auditscotland.gov.uk/docs/central/2015/nr_150402_scotlands_colleges.pdf
http://www.scottish.parliament.uk/ResearchBriefingsAndFactsheets/S4/SB_1418.pdf
Link to college websites to access financial statements from here
http://www.scotlandscolleges.ac.uk/about-us/website-address
10 Key Facts about Colleges in Scotland
1. Colleges have been in existence for almost 150 years; the first college was
established in 1865.
2. College students will contribute £1.2bn to the Scottish economy by 2020 – the
equivalent to 1% of Scottish GDP.
3. By the end of the Post-16 education reforms, 25 colleges will have undergone
merger.
4. The largest college has 139 times as many students as the smallest.
5. 63% of college students have no qualification on entry.
6. The vast majority of Modern Apprenticeship starts are delivered by, or in
partnership with, colleges.
7. Colleges deliver around 80 million hours of learning each year.
8. The oldest learner to enrol in college last year was 85 years of age.
9. 3,200 students left college last year and articulated directly into a university
course.
10. Studying an HND course at college can boost an individual’s pay by up to
80%.
Wales
There are 15 further education (FE) colleges / institutions in Wales. They vary
considerably in size, number and type of students and the range of programmes and
services offered. The majority offer both academic and vocational programmes.
Some have developed specialisms in particular vocational sectors, such as landbased, marine engineering, food technology. Some have steered a strong direction
towards engaging particular sections of the population, for example, adults returning
to learning, international students, or training for businesses.
Two-thirds of all 16-18 year old learners in Wales choose to study at colleges. Even
more adults (by far) study at college. 80% of students in colleges are adults over the
age of 19. Most study part-time.
The draft budget was published on 30 September 2014. It is available from the
Welsh Government website: http://wales.gov.uk/funding/budget/draft-budget-201516/?lang=en The Welsh Government’s Draft Budget 2015-2016: Strategic
Integrated Impact Assessment, is available at:
http://wales.gov.uk/docs/caecd/publications/140930-impact-assessment-en.pdf
http://www.walesonline.co.uk/news/local-news/college-staff-courses-face-axe8771977
College accounts can be obtained from the college website.
1. Coleg Gwent
2. St David's Catholic College
3. Cardiff and Vale College
4. Coleg y Cymoedd
5. The College Merthyr Tydfil
6. Bridgend College
7. Grwp NPTC Group
8. Gower College Swansea
9. Coleg Sir Gâr
10. Pembrokeshire College
11. Coleg Ceredigion
12. Grŵp Llandrillo Menai
13. Coleg Cambria
Example
Grwp NPTC Group – accounts and annual reports Principal and Senior Staff pay
page 37 Principals Pay 37 156,452 inc pension
http://www.nptcgroup.ac.uk/en/about/governance/governance-reports.php
ColegauCymru / CollegesWales is a national educational charity that represents all
15 further education (FE) colleges and institutions in Wales. Its mission is to raise
the profile of further education with key decision-makers to improve opportunities for
learners in Wales. For further information about ColegauCymru / CollegesWales,
and the colleges it represents, visit www.colegaucymru.ac.uk or
www.collegeswales.ac.uk
FE Acronyms
Further education seems to acquire a new acronym weekly and these are often littered throughout
management reports, without explanation as to what they stand for. Therefore, to help you, below is a
list of just some of them:
Description
Acronym
Description
Acronym
ACL
ALI
ALP
16-18 Learner Responsive
Adult Community Learning
Adult Learner Inspectorate
Assessment & Learning Plan
IAG
ILR
JCP
JOIP
Information Advice & Guidance
Individualised Learner Record
Job Centre Plus
Job outcome incentive payment
ALR
Adult Learner Responsive
LARA
Learning Aims Reference Application
AoC
Association Of Colleges
LLDD
Learners With Learning Difficulty or Disability
APL
Accredited Prior Learning
LLUK
Lifelong Learning UK
ASL
ASN
BIS
CF
CPI
DCSF
Adult Safeguarded Learning
Additional Social Needs
Dept for Business, Innovation and
Skills
Co funded
College Performance Indicators
LR
LSF
LSIS
MCV
MIS
Learner Responsive
Learner Support Funds
Learning and Skills Improvement Service
Minimum/Maximum Contract Value
Management Information Systems
DFE
DLF
DS
DWP
Depart for Children Schools and
Families
Department for Education
Demand Led Funding
Data Service
Department for Work and Pensions
MLP
NAS
NEET
NFR
NSA
Minimum Level Of Performance
National Apprenticeship Service
Post 16s not in eductn, employmt or training
National Funding Rate
National Skills Academy
EFA
Education Funding Agency
OFSTED
Office For Standards In Education
EMA
Educational Maintenance Allowance
OLASS
Offenders Learning and Skills Service
ER
ERDF
ESF
ESOL
FE
FF
FFE
FL2
FL3
PF
Employer Responsive
European Regional Development Fund PW
QAA
European Social Fund
QCA
English for speakers of other
languages
QCF
Further Education
SAR
Fully funded
16-18 LR
FLT
FTE
GLH
HE
HEFCE
HEI
HESA
IA
IAG
ILR
Framework For Excellence
Full Level 2
Full Level 3
Foundation Learning Tier
Full-Time Equivalent
Guided Learning Hours
Higher Education
HE Funding Council For England
Higher Education Institute
Higher Education Statistics Agency
Information Authority
Information Advice & Guidance
Individualised Learner Record
SFA
SFC
SIR
SLN
SSA
SSC
SSF
TP
TPG
TTG
ULN
WBL
YPLA
Provider Factor
Programme Weighting
Quality Assurance Agency
Qualifications and Curriculum Authority
Qualifications Credit Framework
Self Assessment Report
Skills Funding Agency
Sixth Form College
Staff Individualised Record
Standard Learner Number
Sector Subject Area
Sector Skills Council
School Sixth Form
Training Provider
Teachers' Pay Grant
Train To Gain
Unique Learner Number
Work Based Learning
Young Peoples Learning Agency