On 22 May 2019, I was sat at the back of a High Court hearing room as a judge dispassionately explained that Hadlow College had insufficient assets readily available to address the “cashflow crisis” which had left it days away from running out of money. As a result of his judgement, Hadlow became the first college to be placed into “education administration”.

The case laid bare that the consequences of failure could be not just catastrophic for individual FE leaders, but for the very institutions they lead. It also shone a light on the regulatory system for colleges, raising a fundamental question for the sector: how had things been allowed to get this bad? This was addressed directly by Anne Milton, the apprenticeships and skills minister at the time, when I interviewed her the day after the court hearing for Tes. She unveiled plans for a review of how colleges’ financial issues were monitored and managed by regulators, adding: “This went on too long without us knowing about it.” 

This review, by Dame Mary Ney, is yet to be published. But it is anticipated that it will raise serious questions about the effectiveness of the current regulatory model, which are likely to feed into a planned White Paper outlining significant reforms for the FE sector.

Revealed: The scale of FE commissioner intervention

Background: 13% of colleges fear their solvency is at risk

Coronavirus: Over 40 colleges supported by the FE commissioner

But what if colleges are not in need of euthanasia, but surgery? Improvement, after all, is at the heart of the key regulators’ core missions. Ofsted’s chief inspector, Amanda Spielman, has put it most succinctly of all: “Our goal is really simple: to be a force for improvement through our inspections.” While the regulators are united in their desire to make things better, those working in the sector increasingly warn that, too often, the effect they have is precisely the opposite.

Is Ofsted a force for good for colleges?

This is the theme of a new report I have written for the Further Education Trust for Leadership, Blame or betterment? Regulation and intervention in further education. A theme that recurred in my conversations with college leaders was the wide variation in their experiences with the regulators.

To some, Ofsted is seen as a supportive force for improvement; to others, a distraction from the core businesses of rescuing a college. FE commissioner intervention was described variously as “terrifying” and “light-touch”, while the Education and Skills Funding Agency was perceived as being “inflexible” to the detriment of colleges, while also being viewed as having “erred on the side of generosity”.

What interviewees agreed on was that their experience of regulation was dependent on the inspectors, advisers or officials assigned to them. This human experience at a micro level appears to be mirrored by the trends at a macro level, as drawn out of the analysis of data on institutions in intervention. There is no typical journey out of FE commissioner intervention, for instance: while five colleges exited formal intervention in less than a year, one has remained in it since the end of 2016.

This regulatory inconsistency is by no means surprising. The direction of policy travel since 2010 has been away from regulation and state control towards deregulation and autonomy. The government’s powers to intervene in mismanaged and underperforming colleges were clipped by the Education Act 2011, meaning that governing bodies remain independent and in control of managing their own affairs - to such an extent that colleges were in 2012 taken out of the public sector classification by the Office for National Statistics. The government has limited powers to directly intervene; this has resulted in the evolution of a patchwork regulatory and intervention framework to mitigate against this, culminating in the insolvency regime created by the Technical and Further Education Act 2017.

Efforts have been made to draw these different regulatory strands together into a single coherent framework for oversight and intervention. Yet, just as too many cooks spoil the broth, the proliferation of regulatory bodies inevitably increases the risk of a lack of clarity over areas of responsibility. At worst, a lack of communication and coordination between agencies can inadvertently conspire to create overlapping or contradictory audit requirements, dragging resources and time away from frontline education.

One principal’s account offers an illustrative example:

“We were weeks away from merger, and unexpectedly we underwent an Ofsted inspection, which we were unprepared for. I’d lost my deputy at the start of that term, so I didn’t have a nominee. We got an overall grade of ‘requires improvement’. At the end of that week, it came to my attention that the manager who was in charge of putting in the application for the [Register of Apprenticeship Training Providers, an ESFA requirement in order to deliver apprenticeships] hadn’t filled the form in properly. We’d had Ofsted in that week and all of a sudden on the Friday I was writing this bloody application for the 5pm deadline. We missed the deadline by 37 seconds. I spent the next four months being told the college would, therefore, lose its ability to recruit apprentices. Our finances had been fine until that point, but things were so tight that I couldn’t really afford that loss of income. That 37 seconds could have meant my college financially failing.”

An opportunity to rethink regulation

Better communication and cooperation between regulatory bodies could have prevented this scenario. As it turns out, the college was given “exceptional” discretion to apply to the apprenticeship register outside the application window; disaster was, in the end, averted. But it could very easily not have been. Especially as the country responds to the economic crisis resulting from the Covid-19 pandemic, further education is too important for the fortunes of institutions educating thousands of young people and adults to be left down to luck.

The proposed White Paper for further education offers an opportunity to rethink what we want colleges to be, and how they are supported and held to account. An opportunity to establish clearer boundaries between, and relationships between, regulators, with support in place to enable colleges to address weaknesses in a timely fashion - and to enable decisive regulatory action if this does not happen. An opportunity to build a regulatory system with colleges at its centre, not one which has been contorted by squeezing them into the remits of bodies whose primary focus is elsewhere. If the further education sector is to finally reside within a framework of regulation set up to genuinely enable systemic improvement, this is an opportunity that cannot be missed.

Stephen Exley is a freelance writer, director of external affairs at Villiers Park Educational Trust and former FE editor at Tes

This is an edited except from Blame or betterment? Regulation and intervention in further education, a paper published by the Further Education Trust for Leadership