The financial sustainability of colleges remains a “significant risk” to the Department for Education, the department’s consolidated annual report and accounts state.
The report, published today, states that of those risks highlighted in last year’s annual report and accounts around “the financial resilience of further education colleges, not having sufficient levels of high-quality teachers and high-needs costs remain significant risks”.
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The report goes on to say that “a significant number of further education colleges are not financially resilient enough to make the long-term investments required”. According to the report, a reduction of the overall risk “reflects improved 16-19 funding and stronger preventative tools”, and it also says that an enhanced system of college support and monitoring has been introduced.
Fears about college finances
The DfE says government intervention has been further strengthened, and improvements have been made to financial information provided by colleges through financial plans and forecasting. “Securing capital investment in the college estate and the overall outcome of the spending review for FE will drive the overall level of risk beyond 2020-21,” it concludes. “This remains one of our significant risks. However, the severity does fluctuate.”
The report says that, meanwhile, the risk relating to apprenticeship delivery and budget challenges reported last year “has reduced in severity” through the year “as a result of financial pressure predictions for these areas now judged less likely to be realised in the short term”.
“However, we expect Covid-19’s emergence immediately in the months before the year end may reverse the improvement in 2020-21.”
