The £500 million extra annual funding promised by the government for T levels will be almost exactly offset by cuts to FE, a new report has found.

The first annual education spending report from the Institute for Fiscal Studies and the Nuffield Foundation shows that the new money for T levels is offset “almost exactly” by the real-terms cuts to the rest of the college budget.

As most of the extra money for T levels is focused on delivering extra teaching hours, it is unlikely to ease the resource challenges for the sector, the report adds.

Spending per student will, therefore, be the same in real terms for at least the next two academic years.

FE funding cut sharply

The report also highlights that FE funding has been cut much more sharply than funding for schools, pre-school or higher education. It adds: "Funding per student aged 16–18 has seen the biggest squeeze of all stages of education for young people in recent years."

Tim Gardam, chief executive of the Nuffield Foundation, said: "The authors show that further education has been a big loser from education spending changes over the last 25 years. There have been significant cuts to spending per student since 2010, and further changes are on the horizon in terms of the regional devolution of responsibility for adult education, the tight timescale for the development of the new T levels, and the continued focus on apprenticeships for adult learners.

"The Nuffield Foundation has long been concerned about the particular challenges facing further education, and its relative neglect in both financial and policy terms."

Spending per student in FE and sixth-form colleges is now about 8 per cent lower than spending per pupil in secondary school, while at the start of the 1990s, it was 50 per cent higher than in schools. Overall spending per student in FE has also fallen by around 12 per cent in real terms since 2010.

By 2019-20, funding per young person in FE will be at about the same level as in 2006-07 and only 10 per cent higher than it was 30 years earlier in 1989-90.

The report also notes that funding for adult education has been cut by 45 per cent since 2009-10.

'Investment is needed, urgently'

Julian Gravatt, deputy chief executive at the Association of Colleges, was on the advisory group for the report. He said: “This IFS report shows how difficult it has been for colleges over the last ten years, with further education bearing the brunt of a decade of real-terms cuts in education. Colleges in England educate and train 2.2 million people a year.

“A decade of almost continuous cuts and constant attempts at reform has led to fewer adults in learning, less teaching hours for sixth formers – 15 hours a week in England compared with 25 hours on the continent – and inevitably a growing population which is not acquiring the skills the country needs them to have to secure prosperity post-Brexit.

“If the government is serious about competing on the global stage once we’ve left the European Union, real-terms investment is needed, urgently.”

'Sharp reductions to vital student support'

James Kewin, deputy chief executive of the Sixth Form Colleges Association, said the report provides further evidence of the sharp decline in funding for sixth formers since 2010.

He added: "The story behind the numbers is what really matters, and our funding impact survey has shown how this decline has led to courses being cut and sharp reductions to vital student support services.

"Only a significant increase to the 16-19 funding rate in next year’s spending review will ensure that colleges and schools are equipped to provide young people with the world-class education they deserve."

'The situation is completely unsustainable'

University and College Union general secretary Sally Hunt said severe cuts to further education funding have led to job losses, course closures and fewer learning opportunities.

She added: “Staff have seen their pay fall by 25 per cent since 2009, and many colleges are struggling to recruit the expert staff they need. The situation is completely unsustainable. If the government really wants to ensure that everyone can access the skills they need to get on in life, it must urgently invest in further education institutions and their staff.”

NUS students’ union FE vice president Emily Chapman said a failure to invest in FE is a failure to society and future generations.

She added: “On a day-to- day basis institutions are facing severe financial difficulty. The government’s failed attempt to stabilise colleges is visible through the area reviews and mergers. The needs of learners have not been sufficiently considered and it’s now those exact people who are suffering the consequences.”

'Under-funded sector'

Darren Hankey, principal of Hartlepool College of Further Education said the report highlighted “what many of us working in the sector have realised for many years - the sector is under-funded, and it has borne the brunt of austerity measures for too long. 

“The government’s own data, Further education: measuring the net present value in England produced in 2015, highlights the positive return further education colleges make to the UK’s economy.  So, with this in mind, the government should look at further education as an investment and not a cost - greater investment leads to a greater return.”