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Further education colleges hit by UK funding squeeze


The glass and metal rotunda at Croydon College gives the impression of a well-funded training institution, but the nearby paving stones are cracked and the ageing windows of the surrounding classrooms let in the cold and nearby construction noise.

Such dilapidation at the south London institution encapsulates the crumbling state of England’s vocational and technical training sector, which a government-commissioned review published last month said needed an urgent injection of £1bn to reverse years of funding and enrolment declines. More than 160 college leaders have since signed a letter urging ministers to follow its findings.

“When I read [the review], I thought it was my birthday,” said Caireen Mitchell, the Croydon College principal. “We’re jumping through hoops to get young people a proper education. It’s becoming tighter and tighter.” 

England’s 200 further education colleges are the backbone of the vocational and technical training system regarded as essential to meet the UK’s growing skills gap. But they are struggling with limited budgets and squeezed revenues. Just 37 per cent of men and 34 per cent of women undertake post-secondary non-tertiary education in the UK, compared with 49 per cent and 44 per cent respectively on average across the industrialised nations of the OECD, the Paris-based organisation. 

Caireen Mitchell: ‘We can’t afford to open in the evening, so we offer very few enrichment activities, although students really need them for a happy life’ © Anna Gordon/FT

As the review by businessman Philip Augar highlighted, English universities received £8bn in government funding last year to support 1.2m undergraduates, while just £2.3bn was allocated for the 2.2m full and part-time students aged over 18 in further education. While the proportion attending university has risen, the number of students in all forms of post-18 education has declined during the past decade. 

Croydon College’s rotunda, finished in 2011, is a monument to the last round of significant public sector investment, when ministers encouraged institutions to take on extra borrowing for infrastructure. Since then, cuts in government funding have resulted in colleges’ income dropping sharply. Croydon’s revenue has fallen by a third, forcing it to sell buildings to service £10m of debt while costs have risen and funding for staff and students has plummeted. 

After recently absorbing a nearby sixth-form college in an even worse financial state, Ms Mitchell said the college would have a deficit of £250,000 this year on a budget of £25.5m.

“We can’t afford to open in the evening, so we offer very few enrichment activities, although students really need them for a happy life,” she said. 

Croydon College is expected to be in deficit this year © Anna Gordon/FT

The pressures are similar elsewhere. Andy Berry, principal of Bridgwater & Taunton College in south-west England, said: “It’s an incredibly tight environment. We have been well funded for [new] capital projects but our sports hall is falling apart and the restaurant is in a terrible state.”

He has tried to meet strategic demands for future skills in the region by developing specialist courses for the nearby Hinkley Point nuclear power plant. But he is only just starting to receive income from the training after several years of subsidising the development of training materials.

New City College, an agglomeration of six further education institutions in east London that merged in recent years to save money, has sold long leases on its Poplar site to commercial developers to raise funds.

“We’ve done remarkably well as a sector given a completely unprecedented resources cut,” said Gerry McDonald, the principal. “In cash terms, income has been flat since 2013.” Legislation that came into force this year has also strengthened banks’ hands in seizing assets of colleges in debt. 

Sacked bar chart showing how colleges are funded by sector from 2006/7 to 2016/17

He struggles to recruit teachers, who are on average paid £7,000 a year less than in secondary schools. Those with technical skills are particularly difficult to hire. “You are trying to attract individuals in skilled professions like electricians and engineers. At the top of our scale, we can pay £42,000. You need £80,000 to £100,000 to get people off their tools,” he said.

The need for smaller class sizes than in schools to ensure adequate supervision also increases costs. And changes in the teachers’ pension scheme will soon require colleges to make a 23 per cent contribution of salary, which Mr McDonald estimated would cost him an additional £1.5m a year. “We can’t afford it.”

He and his peers have also faced a 17 per cent cut in government funding for each student aged over 18 staying for a third year at college. The elimination of maintenance grants and other support services has proved to be a significant deterrent to study for people on lower incomes.

Despite the difficulties, many students are persevering with their college education. Deidrea Clarke has struggled to raise her young daughter, cover the costs of childcare and pay for transport to Croydon College. But she is determined to finish her “access” course, which on completion allows her take a nursing degree.

“I’ve got a passion to give back to society and not be on benefits,” she said. “The debt is hanging over me, but I don’t want to drop out because I want to be a role model for my daughter.”

Julie Percival, assistant principal at Croydon, said she was concerned about many prospective students who find the barriers too great even to apply for courses. She also estimated that financial pressures contributed to a third of her students dropping out. “A lot of students have anxiety and depression,” she said. “Further education is a second chance for people. These are the nurses, teachers, social workers we need.”

Damian Hinds, education secretary, has supported the Augar report’s call for greater support for further education. The government position is that ministers are “considering the recommendations” of the review. But officials said no major funding decisions were likely ahead of the next government funding review, which ministers have said might be postponed until next year.



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