Colleges seeking emergency funding from the restructuring facility that closes later this year need to explain how they go about making money, according to a senior official at the Education and Skills Funding Agency (ESFA).
Speaking at the Capita Further Education Conference at the Radisson Blu Hotel, East Midlands Airport yesterday, Peter Rossi, deputy director of ESFA’s transactions unit, told delegates that in the context of the restructuring facility, “it boils down to the ability of a college that’s coming to us to tell us how they make money”.
He remarked that the ESFA’s request for information such as the gross margin for courses “causes a lot of trouble to colleges that we see”.
The restructuring facility is for colleges that need to make major changes after an area review recommendation but do not have the funds. The closing date for applications for the funding, which is available up until next March, is September 2018.
Invest the time
FE institutions need to invest time in considering how they approach their actions as a business, he said. “When you are thinking about your business, what should you do more of, what should you stop doing, what should you be doing better, what could you be doing differently and how do you make that decision?”
He added that quality is what matters when it comes to college accounts. “If they are inaccurate the fact that they are signed off correctly is not much comfort…it’s really about the quality of the information”.
Focussing on commercial considerations “is about enabling you to think strategically” and although “it is perhaps a challenge to do it but there’s a longer term pay off,” he said.
Mr Rossi commented: “Understanding the way you make money, what you’re good at as a business enables you to think about what you can do more, where are the real opportunities”.
Speaking at a session on why colleges need to become more commercially focussed, he added: “It stops you looking at things that you might have previously thought that you were good at or that you should do, whether you should build this new shiny something nearby without realising that’s not your core strength, not realising that your competitors are doing that, so there is a really big strong payoff - it enables you to have a proper strong strategy”.
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