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

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

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.