FE Market Size & Funding Decline
1. The size of the FE College landscape
Further Education (FE) in England is typically viewed as the study individuals take after the age of 16. FE is delivered by a range of public, private and voluntary sector providers. The core role of FE is:
to equip young and adult learners for progression and career opportunities e.g. Higher Education or for employment;
to collaborate with employers to develop industry led qualifications and courses;
to democratise access to learning to communities and individuals for whom learning may not have been an option e.g. through flexible courses, evenings and weekend programmes, pastoral support and IAG.
Diagram 1: Current operational landscape
| There are currently 257+ colleges in England:
| Collectively they engage and educate 2.2 million people:
|
2. The income profile of FE Colleges
FE College income is largely derived from Government funding – 83% of total funding comes from a combination of ESFA 16-18 education, AEB, Apprenticeships and Student Loans.
Diagram 2: FE income profile
3. The top 10 performing FE colleges by satisfaction and destination
NICDEX is an annual league table of colleges published by FE Week, a leading specialist publication for the further education sector. The 172 colleges are ranked in the league table which is compiled using a point-based system, with points awarded against a number of key criteria published by the Department for Education (DfE). The index includes scores for student and employer satisfaction, as well as taking into account information on 16-18 and adult progression, and Ofsted ratings.
Diagram 3: NICDEX FE league table
| College | Learner satisfaction | Employer satisfaction | 16-18 destination | Adult destination | Total points |
|---|---|---|---|---|---|
| 1. Kendal College | 9 | 10 | 10 | 8 | 37 |
| 2. Newcastle & Stafford Colleges Group | 9 | 10 | 10 | 6 | 35 |
| 3. Abingdon & Whitney College | 8 | 10 | 10 | 6 | 34 |
| 4. Exeter College | 8 | 10 | 10 | 5 | 33 |
| 5. Nelson and Colne College | 10 | 10 | 9 | 4 | 33 |
| 6. Truro & Penwith College | 10 | 10 | 9 | 4 | 33 |
| 7. Bath College | 8 | 7 | 9 | 7 | 31 |
| 8. Boston College | 9 | 10 | 7 | 5 | 31 |
| 9. Bridgewater & Taunton College | 8 | 9 | 8 | 6 | 31 |
| 10. Cambridge regional College | 9 | 10 | 6 | 6 | 31 |
4. Is there a decline in FE funding?
FE Colleges are struggling with limited budgets and squeezed revenues. Compared to HE (which in the last year received £8 billion in Government funding to support 1.2 million undergraduates), FE is being asked to deliver more for less (£2.3 billion Government funding to support 2.2m students).
Between 2010/11 and 2018/19, real terms funding per student in school sixth forms, sixth form colleges, and further education (FE) colleges declined substantially, by 16 per cent, from £5,900 to £4,960. Additional funding decline includes:
in the further education sector (sixth form colleges and FE colleges), funding declined by 18 per cent per full time student;
Despite funding being shifted towards disadvantaged students over this period, students in all institutions have experienced real terms funding cuts;
16-19 education has been the biggest casualty since 2010/11, and is now lower than secondary school funding.
This funding decline has impacted the FE sector, most notably: students in 16-19 education are receiving fewer hours of learning: learning hours with a teacher for students in all institutions fell by 9 per cent between 2012/13 and 2016/17;pay for teachers has fallen across 16-19 institutions by 8 per cent from 2010/11 to 2016/17 (from £33,600 to £31,000); the financial health of 16-19 providers has significantly deteriorated since 2010/11: the proportion of those with in-year deficits has increased across all institutions.
5. Are there reasons to be optimistic?
In August 2019, the Chancellor announced that providers of 16-19 education such as further education and sixth form colleges will receive £400 million additional funding to train and teach young people the skills they need for well-paid jobs in the modern economy.
The boost is the single biggest annual increase for the sector since 2010. The core components of the funding pledge are summarised below.
£190 million to boost access to high quality courses for more than a million 16-19 year olds.
Colleges and school sixth forms will also get £120 million to help deliver expensive but crucial subjects such as engineering which lead to higher wages and, ultimately, a more productive economy.
£35 million more for targeted interventions to support students on level 3 courses (A level equivalent) who failed GCSE Maths and English
An extra £25 million to deliver T-levels. The new qualifications start rolling out in September 2020 and will transform vocational education with two-year courses in subjects as varied as accounting, digital production and onsite construction.
The advanced maths premium, which adds £600 to college budgets for every additional student who takes on A- and AS- level maths, is also funded with £10 million additional funding
A new £20 million investment will also help the sector to continue to recruit and retain brilliant teachers and leaders, and provide more support to ensure high-quality teaching of T Levels.
The Augar Review’s recommendations have the potential to address deep-seated imbalances in post-18 education and put colleges on more equal footing with universities, both in terms of prestige and funding. The report recommends:
that government should provide FE colleges with a dedicated capital investment of £1 billion over the next spending review period, in addition to funding for T-levels, allocated in line with Industrial Strategy priorities;
that government should commit to providing an indicative AEB which lets colleges plan and budget over a three-year period;
that a lifelong learning loan allowance should be available in modules, an employer-focused suite of higher technical qualifications and free intermediate education for ‘second chance’ adults delivered through a strengthened FE college network.
