The government has set out its plans for reforming college funding, including a new skills fund for directly funded adult education and a simpler funding formula. It also proposes new “accountability agreements” to improve accountability while also giving colleges more freedom.
A consultation launched by the government today states that, as highlighted in the Augar report, the current system of adult skills funding is “complex with confusing funding and eligibility rules that hamper providers’ ability to respond effectively to changing skills needs”.
“The allocation of overall budgets a year at a time also makes it difficult for colleges to plan provision strategically,” it adds.
The government says the overall approach to FE funding incentivises providers to secure volumes of learners rather than focusing on outcomes, equipping learners with meaningful skills and supporting them into sustainable employment.
It adds: “The accountability system in turn compounds this, as while it rightly focuses on the quality of provision and proper use of public funding, there is little incentive to ensure the mix of provision leads to sustainable jobs for individuals and meets labour market needs.”
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Its new approach, the government says, would be “simpler, outcome-focused and more effective”. It is proposing a new skills fund to bring together all direct funding for adult skills, a simpler funding formula, and moving to a lagged funding system and a multi-year funding regime. The consultation also considers how funding for independent training providers and other non-grant-funded providers would work in a reformed system.
DfE proposes ‘simpler’ funding formula for FE colleges
To reform accountability, the government says it plans to “specify the outcomes we expect colleges to deliver through a new performance dashboard”, and introduce a new skills measure that will capture how well a college is delivering local and national skills needs.
The consultation sets out how a new “accountability agreement” will “reinforce colleges’ autonomy while providing a clear sense of mission”. The government says these agreements will “articulate priorities and colleges will set out their plans, outlining how they will achieve these priorities”.
The consultation also considers:
- Exploring an enhanced role for Ofsted to inspect how well a college is delivering local and national skills needs.
- Enabling the FE commissioner to enhance their existing leadership role, with a renewed focus on driving improvement and championing excellence.
- Improving data quality and reducing the requirements that the government places on providers through student data collection and financial reporting.
- Retaining the necessary regulation and oversight to ensure the effective operation of the market, including providing assurance on the use of public funds.
Education secretary Gavin Williamson said it was essential for the government to design a funding and accountability system that enabled providers to “deliver and deliver well”.
“Over many years, multiple funds, policies and rules have bogged providers down, creating complex and frustrating systems,” he said. “I want to tackle this head on and give colleges a renewed sense of autonomy so they can focus their attention on supporting their students into good jobs and meeting this country’s local and national skills needs, delivered through a new skills fund.”
“This consultation is a first step for a funding and accountability system that will maximise the potential of further education and help us build back better.”
