What Price Institutional Solvency

The continued operation of the ‘free market’ precipitates a whole series of paradoxes to companies and organisations. Employers, both in the private and public sector, struggle to cope with increasing competition and continuing cuts and Government requirements to make ‘efficiency gains’. As staffing levels continue to be reduced, they are finding it increasingly difficult to maintain the quality of their products and services. This is most certainly true of organisations such as the prison service, probation, health, social services and education. One accepts that a great many manufacturing industries have witnessed significant cutbacks, yet they have managed to increase productivity and quality which has enabled a number of companies in this country to compete in the global economy.

The situation, however, is different in the public service sector and the requirements to do ‘more for less’ is now significantly affecting the quality of service provided by schools, FE colleges and universities. As staffing costs represent the highest expenditure for an institution, then the need to reduce (or as is euphemistically called ‘downsize’) staffing levels, institutions now struggle to maintain a quality service and a comprehensive range of provision. It is also proving difficult to widen participation and provide all the additional learning support to the pupils and students, just at a time when their needs are becoming more diverse. Convergence of funding brings about an inevitable reduction in the number of staff and in the number of programmes of study.

You cannot adopt a free market to areas of employment that are mainly dealing with people, whether this be in health, social services or in education and training. It is all about commercial endeavour and there seems to be an interesting tension between so-called commercial solvency and the probity of an institution’s mission. There continues to be a lack of clarity, nationally, about the mission of further education and there is no national or regional strategic planning programme.

Funding methodologies have no respect for local missions which are properly based around public service values which are appropriate for their locality. The current methodologies encourage an annual approach to income and attracting public funding. It would seem that funding imperatives subvert college missions where they are attempting to widen participation and open access for all people to encourage lifelong learning.

This imperative does raise a classic paradox and this is most certainly highlighted when inspectors attempt to assess the quality of an institution. The inspectors, quite rightly, have adopted a range of inspection and assessment instruments to assess the quality of any particular institution and its work. If that institution has set its top priority to remain solvent, then most certainly tensions and difficulties arise. After all, what is the point of an institution ignoring the realities of the funding methodology and moving into massive deficit and going out of business, whatever quality measures have attached to that institution. It is an incredibly difficult equation to balance. The auditors and accountants of FEFC require evidence of strong and effective financial management, while the inspectors prioritise other sets of requirements for an institution, dealing with factors that most certainly could be marginalised as the organisation tries to manage and plan its future finances. It is a classic clash of two opposite cultures which is now increasingly causing difficulties for institutions. The paradox is independent of whether the colleges are low or high alf, inner city, rural or monotechs or large mixed economy institutions. There are also difficulties where colleges have sought other funding streams which could often be shortterm or require matched funding. It is now clear that the FEFC is just a pump-priming organisation and that colleges need to become more independent from them and to develop more permanent funding streams. Key questions need to be asked about this. How can you increase participation at a price that people can afford? This is particularly true in the case of full-cost-fee work when many employers are struggling to survive and remain solvent themselves. The transient nature and in many cases the need for matched funding of Government initiatives and European funds can also, in the long term, give rise to difficulties for institutions. The sudden announcement of the demise of the ‘demand-led’ element is a good example of how difficult it is for institutions to plan their future operations and yet maintain quality and sustain growth that will still be required of them. Colleges accept that they can make efficiency gains, but there is a limit, especially when guided learning hours are reduced and key support systems cut back. With fewer staff, colleges are now finding it difficult to maintain, let alone enhance, the comprehensive range of provision and associated learning support systems. There therefore is a tension between inspection reports for colleges and those institutions’ audit and financial reports.

Quality, most certainly will suffer and as the student populations become more divergent and diverse, major issues will arise about the purpose of fe in the current climate.

A number of researchers are referring to FE colleges as being like ‘warehouses’ or ‘parking lots’ where many learners lack motivation or serious intention when at college. This will significantly affect retention and achievement rates. I have no easy answers to the balancing of the difficult equation between solvency and quality, but unless that balance is achieved, FE colleges will find it increasingly difficult to maintain quality and yet remain solvent. It is hoped that the new fefc Inspection with its greater emphasis on ‘self-assessment’ will allow colleges to articulate more precisely their mission and purpose in terms of their learners. The merging of the inspection and audit section will assist in the endeavour as the two elements of the equation: i.e. quality and solvency can be more effectively considered in a more integrated fashion.

Dick Evans is principal of Stockport College of F&HE.

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