More than 40 per cent of college leaders do not feel confident about the financial positioning of their college over the next 12 months, according to new research published today.

The Collab Group’s State of the Sector 2020 report - shared exclusively with Tes - points out that while 43 per cent strongly disagreed or disagreed when asked if they were confident about college finances in the next 12 months, only 38 per cent of leaders strongly agreed or agreed and almost 20 per cent were neutral. 

News: 70% of college leaders say no to public sector control

College finances: West Midlands colleges fear £22m loss

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

The findings come after widespread concerns have been voiced by FE leaders around the cost of the coronavirus pandemic. In August, Tes reported that five colleges across the West Midlands were predicting collective losses of £22 million. The five colleges recorded a loss of income of £5.4 million due to the fall in apprenticeship starts between March and July 2020.

Coronavirus: The impact on college finances

The report published today by the Collab Group also shows that 67 per cent of leaders either strongly disagreed or disagreed that colleges’ apprenticeship business would recover by 2021. No leader strongly agreed. 

The report says: “Not surprisingly, finance was most often quoted as one of the biggest challenges facing colleges. Specifically, the uncertainty of the current funding model, which means colleges only have sight of their funding for the next 12 months.

“This impacts directly on their ability to plan effectively. The consequence is that although they are keen to invest in skills, infrastructure and facilities, these investments become potentially high- risk decisions. So some instead focus on balancing the books in the short-term, described to us as ‘hitting the target, missing the point’.”

The report also reveals that 48 per cent of leaders either strongly disagreed or disagreed that they were confident with the capacity of employers to engage with education or training organisations in the next year. No one strongly agreed with the statement. 

David Hughes, chief executive of the Association of Colleges, said: “This is a tough time for us all, so it is not surprising that the college leaders Collab spoke to are concerned about finances. Even pre-pandemic, colleges were expected to deliver beyond the available funding. There has to be a long-term, sustainable funding model that allows colleges to continue to deliver for their local businesses and communities. Our recent spending review submission set out a comprehensive view of what is needed.”

And the University and College Union’s head of further education, Andrew Harden, added: “The pandemic has forced us all to think about the role colleges do and should be able to play in our society. We share some of the immediate concerns colleges’ heads have about the future, but we also have concerns about government plans to support colleges.

“The prime minister’s recent speech about skills was an encouraging recognition of the role colleges could play in our national recovery, but the sector has been decimated by a decade of cuts, and that has to be addressed quickly. Colleges have to be at the centre of efforts to come back stronger and build back better, but they cannot do that without proper resources. We need to see the funding to match the ambition.’

The Department for Education has been contacted for comment.