The new academic year is approaching, with many college staff now taking a well-earned holiday before what looks set to be a busy term ahead. It feels like a good time to reflect on the position colleges find themselves in after lockdown and set out the challenges and opportunities they face in these most unusual times.

Colleges showed in lockdown why they are so important. Their switch to online learning and their clear focus on supporting the most disadvantaged as well as most vulnerable learners was impressive. Their pragmatic and positive approach to the uncertainties and risks was heartening. And their commitment to their communities was writ large across so many actions they took, including extending food banks, opening residential accommodation to the homeless and producing personal protective equipment for others.

All of this did not go unnoticed in Whitehall, with justified praise from the education secretary and the skills minister, securing the improved reputation and profile we have been working so hard for in recent years. On top of that, we have heard the education secretary launch work on an autumn White Paper, through which he wants to “give colleges the powers and resources that they need to truly drive change”.

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If that wasn’t enough to make college leaders feel that this really is a moment for our sector, we had the launch of the chancellor’s spending review, which will prioritise “strengthening the UK’s economic recovery from Covid-19 by prioritising jobs and skills.”

Colleges are vital to our economic recovery

It is not just warm words that colleges have won, but significant new investment for the next academic year - with around £500 million allocated this month for capital, traineeships, catch-up support and an extra year for 18- and 19-year-olds. That’s on top of the 7 per cent increase for 16 to 18 funding that was announced last year, which also starts in August.

That’s the good news, but the pandemic has hit colleges hard, just like every other organisation and business in the country (other than a notable few like Amazon and Zoom). Over £150 million was lost in the past few months from an aggregate college turnover of around £7 billion, but the crisis has hit colleges unevenly. Colleges with bigger apprenticeship and commercial turnover have lost most and face enormous risks as those markets look likely to remain at very low levels.

With 40 per cent of college turnover at risk for the next academic year, half of the colleges we surveyed are having to plan for redundancies just to make the books balance.

The uncertainty we have all experienced since lockdown continues with no clear end-point. That presents a range of challenges for college leaders, not least in how to financially forecast for next academic year. On the demand-side, some can foresee spikes in recruitment of young people who are struggling to find work in the face of mass unemployment. Others predict drops in recruitment as young people decide to stay in schools because they want the familiar, rather than the unknown. Most believe apprenticeship recruitment will be extremely low and retention will be hit as many employers begin redundancy programmes.

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On the costs side, there are so many risks with potential for more local lockdowns, shielding staff unable to come into college, students and staff frightened about contracting the virus, increased costs of transport and IT equipment, difficult decisions about the use of face masks in college, the unknown impact on student behaviours of the qualification results this summer being based on assessed grades. The list goes on.

Overall, this feels like a less bad position to be in than I had feared earlier on in the pandemic. The government has committed to support colleges through the challenges and to face the risks together. The White Paper plans clearly set out a bigger part to play for colleges in the future, and the spending review hints at the same. The financial hit for colleges has been extremely tough, but it has been worse in other sectors. The words of support have already been backed by hard cash, showing that the role of colleges is understood better now than for many years.

The next few months will be no easier than the past few, but I’m confident that colleges will shine through again. Their unstinting commitment to their students and communities, their relationships with employers and their belief in everyone’s potential will bring them through the challenges. Our job at AoC is to make sure that their profile and reputation remains high, that the spending review focus on jobs and skills delivers better investment, and that the White Paper leads to a better system for colleges to excel. For the good of people, productivity and places.

David Hughes is chief executive of the Association of Colleges