In some colleges, the restart of Ofsted inspections cannot come soon enough. Why? Because of way the Department for Education uses and misuses inspection data.

Around 36 colleges were judged “requires improvement” and two “inadequate” in their last full inspection and, because of the policy, there is a growing list of programmes that they cannot access. They can’t run T levels until 2023 and then, just 12 months later, will be expected to run the full range of qualifications.

They couldn’t bid for the Institute of Technology. The Home Office won’t let them have an education sponsor licence which, following Brexit, means restrictions on their ability to enrol EU nationals. And finally, there are multiple development bids ring-fenced to exclude their staff and students: the Higher Technical Education Development Fund and the Professional Development Fund being two recent ones.

News: Some ‘won’t get level 3’ after qualifications reform

Need to know: Btecs that overlap with T levels to lose funding

Boris Johnson: We’re escalating the value of vocational

Policy is “just plain wrong”

Using inspection grades to allocate funding is a simple and obvious policy for the Department for Education (DfE) to adopt but it is, unfortunately, just plain wrong. Owing to the pandemic, all current inspection grades are slightly out of date but even before then, the inspection rules meant some of them were old. Ofsted’s risk-based approach and multi-year inspection cycle means it visits a sample of colleges each year and some more than others over a decade.

The average grade vintage for the 36 further education and sixth-form colleges judged “outstanding” is eight years. They couldn’t have kept this grade without reporting a low-risk performance in data examined by Ofsted each year but, even so, this is a time gap when it comes to making funding decisions.

Meanwhile, reports for colleges with lower grades are also quite old. The average “requires improvement” grade is more than two years old and, for several colleges, grades date from 2017. Three years is a long time in FE, particularly as the exclusion policy denies millions of pounds to the colleges - and their staff and students. Around 20 per cent of the whole college sector is prevented from running levels,  restricted from developing higher technical qualifications and banned from enrolling new non-UK nationals.

The DfE’s application of the exclusion policy is particularly arbitrary because it uses an indicator from one part of college life to judge another. Ofsted doesn’t inspect higher education courses or judge international activities in colleges but the government uses its ratings for programmes in these areas. This is counterproductive to the DfE’s own goals. College higher education is generally strongest in areas with low participation but at least 10 colleges with substantial higher education cohorts - 500 students or more - have the wrong Ofsted rating. It’s on a yellowing certificate and it relates to a different set of students but, hey ho, a simple and obvious indicator saves the work of thinking through a sensible policy.

The problem with using financial health ratings

If this was not enough, there are signs of DfE ministers and officials expanding exclusions to cover financial health ratings. In a couple of recent bids, the DfE made “good” or “outstanding” financial health a precondition for participation. This increases the size of the exclusion list and may make decision-makers feel tough but it just compounds the issue. It disqualifies 19 colleges with otherwise “good” or “outstanding”  Ofsted ratings (however old) simply because they have weaker finances. Now, one in three colleges in the sector is outside the tent rather than one in five.

But why? College financial health ratings are heavily influenced by specific events. Falling student numbers or large capital projects lead inexorably to lower finance ratings. Sometimes, a principal or governing body was at fault for taking the wrong decisions but, as with inspections, this happened in the past. The budgets that determined the latest set of college financial health ratings were set a full two years ago. Colleges use financial health ratings to take their temperature and adjust their behaviour but, if the DfE starts using them to allocate funds, it will throttle self-improvement, particularly as schools, universities and local authorities operate to easier or non-existent standards. 

The use of ratings to allocate funds and licences is simple, obvious, but wrong. It excludes 20 to 30 per cent of students and means some well-qualified colleges don’t participate in important initiatives. The fact that they’re often colleges in disadvantaged areas only compounds the senselessness of the policy. The short notice given by Ofsted for inspections may well strengthen their reliability but if the grades are gateways to funding, this massively increases the stakes. The 150 colleges with good or better ratings nervously wait the call.

The colleges on the exclusion list are left to pull themselves up by their bootstraps. If the DfE won’t support their technical education development, they have to DIY. If they can’t get official help with staff development, they’ll have to cut something else in the budget to make up the difference. It’s a simple, obvious and wrong policy in colleges and it’s time it went. There are better ways for the DfE to work with colleges than competitive bids and hopefully we’ll get to that place after the next spending review. But while we’re in the world we’re in, this is something that must change.

Julian Gravatt is deputy chief executive of the Association of Colleges