Recent plays by two of our most acclaimed playwrights have centred on government’s obsession with creating fewer, bigger entities - in these cases the closure of small local hospitals and replacing them with large regional centres of specialist excellence. The central character in David Hare’s I’m not Running is a doctor who leads a campaign to save Corby hospital and becomes an independent MP on the strength of it. 

In Alan Bennett’s Allelujah! the local geriatric ward is not saved. Both writers set out the case for the big centres - fewer deaths, better care - and they acknowledge that modern ambulances are as well-equipped as a local hospital was not long ago. But it is clear their sympathy is for the small and for the local.   

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Background: Area reviews have led to more collaboration

Bigger and more resilient colleges?

The area review process trumpeted the virtue of bigger, more resilient institutions, yet there is no compelling evidence that big is beautiful. In reality, colleges have not become much bigger. Matt Hamnett’s recent Further Education Trust for Leadership-funded study, Beating the Odds, and the System, showed that the number of colleges has fallen significantly but the average income has only increased slightly, and deficits are getting bigger.

This simultaneous consolidation and static income should be concerning because college groups tend to have an HQ and have the power to close down local provision in a way that would not be considered by a more locally focused institution. They are less emotionally attached to the newly acquired territory; it’s why we always worry when an overseas company takes over British institutions like Cadbury’s or British Steel.

We have a lot of evidence that travel distance is a major barrier for students. They will often choose a different path rather than do what they really want if it involves travelling more than 10 miles. I am sure the famous Nudge Unit would say the best way to discourage a student from taking up a science, technology, engineering and maths (Stem) subject is to make them travel further away to study it, yet that is what we are often encouraged to do on merger.

The reality is that government may talk big, but we are actually acting small. And maybe that is the right approach in line with the sympathies of our two national-treasure playwrights?

Sensible reasons

There are many sensible reasons for not enlarging and not merging.

We are in an era of unprecedented uncertainty, which tends to herald delayed decision-making and inertia. Just think of all those Donald Rumsfeld “known unknowns” - what will Brexit mean? Will anyone do a T level? Will the apprenticeship reforms work? Will apprenticeship funding dry up? Will the funding rate ever increase? Will we get anything from the post-18 review? How will insolvency work in practice? Who will win the next election? Who will be the party leader? What is their education policy?

These are on top of some difficult “known knowns” like devolution, the introduction of more providers and a very tough financial climate.

Resilience is vital if you want to stay big and grow. If that is what government wants, it has a strange way of showing it. Resilience requires colleges to be strong, fast and flexible but policy in recent years has depleted all three qualities. Funding cuts deplete our reserves and our ability to invest; constant policy change makes it impossible to respond quickly; and every year we become more micromanaged, eliminating much of our flexibility.   

Income versus cost

Next, increases in income come at a cost, often hard to predict. Accountancy theory dictates that while income might rise in a linear fashion, costs tend to rise like in uneven steps. At some point a small increase in income can trigger a big rise in costs; for example, it might tip you into introducing a new layer of management or pursuing a major capital investment.  There are likely to be levels of income that are inefficient and some that are very efficient, and if you don’t know where those steps are, you can have a nasty fall.

Interestingly, there is a case for saying that hospital consolidation is less likely to put people off than college consolidation. If I want to study engineering but don’t want the hassle of a long journey, it is not a difficult decision to put it off or do something else instead. If I need cancer treatment or a life-saving transfusion, I may not like the inconvenience but I suspect I’d go wherever it takes to stay alive.

Heavy funding cuts

We have made a dangerous assumption that bigger means stronger. We’ve decided that the reason the sector is in trouble is because colleges are too small. The more obvious reason for our woes is the heavy cuts in funding and funding rates. The lower the real-terms value of our funding, the bigger the sector deficits. Correlation isn’t cause and effect but it seems a reasonable premise the two are linked. There doesn’t seem to be a correlation between college size and financial strength. 

Just combining colleges might not work. Victoria Wood once lampooned consolidation with a spoof TV advert that went “Struggling with several small manageable loans? Let us lend you some money and then you can struggle with one huge unmanageable loan.” Perhaps the recent announcement of a large college demerging shows that we are rediscovering the virtues of being small and perfectly formed?

Ian Pryce is chief executive of Bedford College