Select Committee on Education and Skills Minutes of Evidence


Examination of Witnesses (Questions 40 - 59)

WEDNESDAY 31 OCTOBER 2001

MR DAVID GIBSON, DR JOHN BRENNAN AND MR JOHN TAYLOR

  40. John Taylor and John Brennan, very nice to see you and it is nice to see someone from another great city in Yorkshire today. What is your view on this?
  (Mr Taylor) My view is a more local one in terms of looking at what happens on the ground rather than what happens in policy. I think there are issues developing in terms of clarification of policy and vision for further education, and therefore as a college as we plan our future strategy for our provision across the city of Sheffield, in what context are we planning, and how do the plans and aspirations of others within the city impact on our own plans, and how does the Learning and Skills Council both locally and national—because some of the issues are national policy issues—cope with the challenges that come from the implementation of local plans? For example, the future of post-16 in parts of the city of Sheffield. If the funders wish to open additional sixth form colleges or attach sixth forms to schools, how is that managed? What is the process whereby the due diligence issues for existing providers are assessed and taken into account? How is the financial rigour of the models considered? In many ways, and understandably, the Learning and Skills Council is having to reassess the processes which it previously had, or the FEFC had, to handle capital and plans of this nature to interpret policy, to change processes and make decisions which are inevitably going to take time and have great influence on the providers in the area.

  41. We will come back to that, I am sure. John Brennan?
  (Dr Brennan) I think there are four things. Your suggestion that we have made a lot of progress is absolutely right, but in making progress we have set ourselves a whole new set of questions as well, and there are probably at least four which are key to all of that and they have come out already in different ways. One is about the mission and about what further education colleges are for. In some respects we have articulated the policy agenda much more clearly than we had before, in 16 to 18s we have made great progress, for example, but in the adult field there are great lacunas in the policy in terms of what colleges are expected to do and how they are expected to do it. There are issues here which need to be addressed. There are a number of issues around the whole planning agenda, the balance of the relationship between colleges and the LSC as the key planning body, and the need for a relationship to be worked out which provides the flexibility and responsiveness that institutions need if they are going to meet the needs of learners, and not a heavy-handed approach to planning. That is still to be worked through. It is not at all clear that will balance out. On the funding agenda, yes, we made a lot of progress, the Government have given a lot more money to the system, but when you look at the way the money has been tied up in terms of the growth agenda and earmarked funding and so on, the core funding which colleges are getting to manage the basic business is still going down in real terms, and that is a real problem for college management. That needs to be addressed. The final thing which is linked to that is bureaucracy. What we have seen over the last four years is an increasing degree of control, of accountability, of requirements in respect of rules for different bits of activity, of data collection, of auditing, inspection, and those kind of arrangements, and now a review of the LSC funding system, and all of those things I think are creating a bureaucratic burden on institutions which really needs to be looked at afresh to create a regime which is both going to deliver the quality and the accountability which Government rightly demands but gives institutions a flexibility to get on and do the job they are being asked to do.

Mr Pollard

  42. My own college is selling off bits of its land in the city centre because it is of high value to raise capital for the necessary expansion. A few years ago the same college wanted to extract gravel from underneath, which was a crazy scheme altogether and the whole city was up in arms about it. Is capital a big issue?
  (Mr Gibson) Simply, yes, it is. What we have not got is a system whereby new capital is available for colleges in the same way as it would be for schools and school buildings. There has to be a contribution and you have to work out where that contribution comes from, you have an agreement which often entails loans and so on, so I think it is a major challenge which we have yet to get right.

  Mr Pollard: What about Sheffield College? I am looking after my friend here.

Chairman

  43. She does not need any help!
  (Mr Taylor) I think capital and accommodation are key issues and it is terribly important that colleges have appropriate accommodation, appropriately resourced, in the right location to meet the needs of learners, and that is facilitated by appropriate capital provision. It is a problem and it is often a key factor in the financial success of a college. If a college is carrying more accommodation than it needs, it is a tremendous overhead that diverts resources away from the learners because it is necessary to heat and staff space which is not really needed.

Ms Munn

  44. I should make clear I am a MP for a constituency in Sheffield and, interestingly enough, part of the Sheffield College is a building which was the comprehensive school I attended in Sheffield. I wanted to follow up the issue of funding, and that is a key issue for Sheffield and also for Barnsley, which my neighbour here, Jeff Ennis, represents. I was struck by what Chris Hughes said, that if you approach the process by funding learners you create competition, and I would be interested to hear about possible alternative ways of funding. I spend a bit of time talking to people in further education about the complexity which arises with these students, what is a student unit and these sort of issues. I would like to hear how else we might approach it and how that links to this whole issue of funding for either the core bit or—I forget how you put it now—all the bits round the side of projects. What could we do which would be different which would stop some of these issues of competition which are obviously key in areas like Sheffield where there is the possibility of alternative resources, whether through sixth forms or whatever?
  (Mr Taylor) I am pleased to pass that over to my colleagues who have studied the funding methodology.

Chairman

  45. Are you having problems yourself with core funding?
  (Mr Taylor) Yes. You mention I come from a great city, Sheffield, and I travel to Sheffield from another city in Yorkshire, Leeds.

  46. It is getting even better!
  (Mr Taylor) They have different challenges in the sense there are 43 schools with sixth forms and eight colleges, and therefore the funding situation, the competitive situation, is rather different. A college with a major provision that is planning on behalf of the city has challenges regarding funding and competition and internal competition. A city with 51 public providers of further education has different problems. I think it requires considerable research and proposals and my colleagues in the AoC have done some of that work.
  (Mr Gibson) How much competition there is varies partly according to geographical circumstances. Mr Turner was saying earlier that if you were an isolated rural college, you have to be everything to everybody, and therefore circumstances do vary in that way. Having said that, I would return to the core funding as the critical point. We estimate that if you look just at core funding, it is about 95-96 levels now, and it will go down by 2002-03 by another 10 per cent, and that is the money with which in every way you have to manage that institution. I am sorry to repeat that but I believe that is the core problem.
  (Dr Brennan) I am tempted to say, Chairman, that debates about funding systems are the kind of thing which we expect of consenting adults in private; it is a very arcane theory. I am not against competition per se in the system, but I think it is about the level of competition you encourage. If you have a system which is cut-throat, in which anything goes, that becomes destructive and counter-productive. You need a degree of competition to provide a spur to institutions to develop and improve the quality and promote what they do. An element of that is not unreasonable, but equally you have to balance that with a degree of planning in the system and you have to approach that through the question of individual institution missions and to look at a coherent pattern of provision across the area in order to ensure there is the proper balance.

  Chairman: Meg Munn is not looking very happy with those answers.

Ms Munn

  47. What I am trying to understand, and it relates to the development of the Learning and Skills Council which is supposed to have this planning function as well as funding, do you think the Learning and Skills Council will make the situation better or worse, regardless of whether they give you more money for core funding or not?
  (Dr Brennan) I think that will depend very much on the kind of planning model which is developed. If it is a model, as was said earlier, which attempts to dictate in very precise terms exactly how many you could recruit for a particular course you run, that would be a model which would fail unquestionably. If you create a model which has a degree of flexibility for institutions to respond to demand from the learners and employers, that is the kind of model we would be seeking, and it is not yet clear what LSC have in mind in terms of the approach they want to adopt.

  Chairman: It does seem to me the FE sector of the whole range of areas this Committee looks at—and I know, John, you said this in a light-hearted way—is the most dense, the most impenetrable, because there are so many competing parts of it, and sometimes we do speak in acronyms and codes and tongues that the people we represent do not quite understand. We all know you are talking about core funding but in a minute I hope some of my colleagues will push you on unwrapping this core funding. Andrew, do you want to do part of that?

  Mr Turner: I was going to pursue a different line entirely, so do let somebody else have a go.

Bob Spink

  48. I was very taken with what Dr Brennan said just now about competition, and that strikes a chord with me. I was taken also with his four point introduction. I think we all agree with him on mission and someone has to develop core funding, and I think we all agree with you, and I think you all agree on those two. You also all seem to agree on the operation of the LSCs and I wondered if each of you could say how that operation could be improved and where it is falling down. Is it in co-ordination between national or local, or is it the constitution of those bodies, or is it a mixture of all these things?
  (Mr Gibson) I think it is a mixture. It is early days—if I could say that as an introduction. Having said that, it is a very massive organisation which goes immediately from a national to 47 different locals. One of the difficulties, I believe, is the local LSCs which do not have any representation from FE on them at all, where FE is 85 per cent of the provision. Where that has happened there has been a serious trick missed and it ought to be addressed, and it ought to be addressed by, I guess, yourselves because you are the ones most likely to make that change. There is an argument that if you were talking about Regional Development Agencies, if you looked at having nine regional LSCs, so you had a way of bringing together within each region four or five local LSCs, that might make the management of it easier. At the moment, I think from the outside, and this is only an opinion obviously, there is a tension between the national drive and many of the 47 local ones. I do think that needs debating and resolving.

Chairman

  49. Would not a lot of people in the FE sector if another tier was introduced at this moment go out and shoot themselves? FE has a reputation sometimes for complaining and whingeing, and I remember the FEFC was described as a very bureaucratic organisation, and now what this Committee hears is that you are now saying the LSC is even more bureaucratic. Is it?
  (Mr Gibson) Yes.

  50. It is?
  (Mr Gibson) Yes, categorically.

  51. It is not just the FE sector whingeing a lot, it is true?
  (Mr Gibson) Let me ask John to come in because we have some figures for you on the cost of bureaucracy which you were asking about earlier.
  (Dr Brennan) Can I deal with that and then add a comment on Bob Spink's question as well. In terms of the bureaucracy, let me illustrate the problem which I think we are facing in this way, David Blunkett was very clear in the proposals to set up the LSC that he wanted to reduce bureaucracy and save £50 million in operating costs in order to deliver more money to learners. If you look at the figures, many of us are puzzled about the way this saving of £50 million is actually occurring, because the operating costs of FEFC, excluding the inspection side, were about £15 million a year. The central grants to TECs were £93 million and they spent, if you look at their accounts, something of the order of £140 million. So something of the order of £150 million or so would appear to have been the administration cost of the system prior to change. The central administration budget for the LSC is £188 million for this year and £193 million for next year, and that is supposed, we understand, to represent £50 million less than it would have been if the system had carried on. This kind of arithmetic does not make sense to us and it is not at all clear where one has actually achieved the streamlining in the system which we all thought this was intended to deliver.

  52. So you are saying it is much more expensive and it is not delivering the perfect system?
  (Dr Brennan) If I can pick that up with Bob Spink's question as well, it is early days and it is not entirely clear how LSC will perform in the longer run, but part of the problem which David has already drawn attention to is this tension which exists between the centre and the local units and the nature of the relationships which need to be developed there. Our view would run along the lines that there needs to be a fairly strong policy framework from the centre which is clear and public and everybody understands what that implies, what the goals are and what the parameters are, and there needs to be delegation to local LSCs within that framework within which they make the local decisions responsive to the local needs. At the moment we do not have clarity about that framework and in all sorts of areas there is no clear national policy, in all sorts of areas local LSCs are in the dark in trying to know exactly what decisions they can make and how they can make them, and colleges likewise do not understand what is a legitimate decision made locally, where they can challenge decisions if they do not feel they are appropriate and so on, and all of that framework needs to be filled out to make the system work effectively.

Bob Spink

  53. This is all extremely interesting and useful and will arm us well when we face ministers in the coming weeks, and it vindicates your decision, Chairman, to do a follow-up on and fine-tune a previous report. I think that was an excellent initiative. Could I take you to your fourth item, Dr Brennan, bureaucracy. You have hinted at that a little but could each of you just confirm to me from where this increasing bureaucracy is continuing to come?
  (Dr Brennan) This is not something which has happened overnight, it has to be acknowledged it has built up over a period of time. Some of it is associated with the multiple funding streams. We have counted 73 different funding streams which colleges can access and every one of those funding streams has its own rules, its own auditing, its own accountability and so on which is required to go with that, so there is a massive burden of administration associated with that. Colleges are subject to extensive auditing and inspection arrangements. An example was given to us recently where one college within the space of two months was going to have inspection and audit from ten different organisations involving 57 external individuals visiting the institution. I think John Taylor may be able to give some local examples to take that kind of case further. Alongside that LSCs have started to introduce other arrangements for auditing and reviewing, a process called provider review, which they have established which is to be taken every three or four months in which you have to look at ten categories of activity on the part of every provider and within each category there is a whole series of issues that you look at.

Chairman

  54. Okay.
  (Dr Brennan) I think you have to wonder what this is achieving at the end of the day.
  (Mr Gibson) Just very quickly on funding. If you have got a simple funding document that requires annual advice on how to operate it that goes to over 100 pages you have got a problem, I think. Can I ask John to give real examples from Sheffield College because I think these will actually surprise you.
  (Mr Taylor) If I could first of all apologise, Chairman, but it is very difficult to be brief in illustrating the burden that we have.

  55. Try.
  (Mr Taylor) If I can just illustrate the burden of inspection which is the responsibility of a number of agencies, Ofsted and the Adult Learning Inspectorate, rather than the LSC. Members may find it a surprise if I just describe some of the inspections to which we will be subjected, or have been subjected recently. In August we were inspected for three areas of training provision with three inspectors for four days. On one of the provisions for which we were re-inspected we had no intention of enrolling any students whatever on from September 1 and the three students who were completing that provision had done so some time before, so in effect the inspection was of no trainees. The other two curriculum areas had 28 trainees and the college has 22,000 students. Statisticians would say that there is no reliability in picking a sample of 28 from a population of 22,000 and putting a grade against it as an indicator of quality of that population. In October we will be inspected for five days with ten inspectors because we help deliver the New Deal in a joint partnership in Sheffield. We, in fact, have 100 enrollments of our 22,000 in that provision and will be subjected to that inspection over the next few weeks. Some time in January we will be inspected for higher education provision for 32 students. My own calculation, just for the symmetry of it, is that it will probably cost us £32,000 to prepare for that inspection, therefore the average cost of preparation for inspection will be £1,000 per FTE. We will be subjected to inspections on higher education of that cohort or slightly higher. We are uncertain as to over what period we will be inspected but we expect four reviews in four days. There will be an area-wide inspection in Sheffield before the end of the next calendar year because it is an Excellence in the Cities college. There will be an inspection of learndirect because we are a learndirect hub. Sometime we will be re-inspected for the main body of our work. If we factor up the number of inspectors who have gone into colleges in the first five Ofsted inspections and apply it to Sheffield we would expect 240 inspectors for five days.

  Chairman: We have got the picture, John, thank you very much. I will switch to this side because if we continued over here you would have had Yorkshire, Yorkshire, Yorkshire and Yorkshire.

  Bob Spink: And Yorkshire.

Jeff Ennis

  56. I would like to make a quick response. Since the report was published the Government have tried to expand the participation agenda of student support. What is your analysis of the use of the EMAs and should that be rolled out nationally?
  (Mr Gibson) We would definitely want to see EMAs rolled out nationally. I believe the evidence that the Department has so far has indicated that it has assisted in improving recruitment but also, just as importantly, retention. I think we would favour it. I am aware that it is not in every part of the country looking around the table and remembering Valerie's comment in the House. It is to be welcomed and the sooner it is rolled out the better. I have to draw your attention to the fact that FE students do not get access to loans and for some reason which I cannot explain there is more access money, that is for hardship for students, that goes to higher education than comes to FE even though they have got loans and less students. I think we have got a real problem on student finance.

  57. Looking at the quality teaching agenda within FE establishments, we seem to have enormous differentials about the use of agency staff. Some colleges use agency staff very much as a last resort whereas others use them on a regular basis to provide mainstream courses. Is there any direct correlation between the use of agency staff and the quality agenda?
  (Mr Gibson) There are views that there are. My personal view would be that it is about the concern for the support of part-time staff whichever direction they come from which is critical: are they involved in the college, are they given managerial support, curriculum support, are they aided in the materials they use, and that sort of thing. Some of us, and certainly one Member of the Committee, are used to working with a vast majority of part-time staff and many of them are absolutely excellent. I think we just need a little bit of care. I do not think it is whether a member of staff is full-time or part-time, it is how involved they are in the institution and the degree of professional support they are given.
  (Mr Taylor) I have researched the Educational Maintenance Allowance (EMA) situation at the college and we had over 5,000 students on EMAs last year. The retention of those students was 84 per cent. That was of those who enrolled in September. We had 9,600 of the same age range who were not EMA students and their retention was 75 per cent. I think there is no doubt whatsoever that the EMAs are highly successful.

  58. Do we have a break down of the number of students who are on EMAs studying vocational courses as opposed to academic courses?
  (Mr Taylor) We certainly could provide it and I think it would be a rich vein of research. In terms of part-time staff, I think we particularly welcome the opportunities under the Teaching Pay Initiative (TPI) to look at issues of conversion of posts into permanent establishment as part of TPI. I think the correlation between staff and performance may well be a correlation between part-time staff and performance rather than necessarily whether it is agency staff and performance. I think there is a correlation based on research that was done some time ago that staff who were part-time or agency do tend to have a lower performance through the research that has been done over the years.

  Chairman: We are running out of time.

Valerie Davey

  59. Can I just say that hearing your concerns about audit and inspection would, I think, perhaps have led everyone to believe that everything in the garden has been wonderful in the past and I think we have to recognise that it has not always been in FE sadly and we do need some level of accountability. What I would like to ask you, therefore, is how do we ensure that it is at the right level? Who is going to determine that? You have very strong voices in this. How are we going to get this balance right between really ensuring that public money is well spent, that the curriculum that we are giving to young people is right and that the quality is excellent?
  (Mr Gibson) Can I first of all say we have never said we should not be accountable. I want to make that absolutely clear. Equally so, with all respect, can I say that since 1993 if we went round the room I think you would all mention the same five or six colleges. That is five or six since 1993. They were well publicised, I think they damaged us, some of the stories, there is absolutely no doubt about that. I do stress that we need to be accountable. However, I do not see the point in having more and more of the same which failed us in the past as the methodology of accountability. If you have one audit and it does not pick it up, what is the point of having ten audits? That would be my point. I think we have got to go back to the drawing board on that. We have volunteered to work with civil servants to look at different models of accountability which do not weigh down the whole machine and are effective. In my view, people of whom questions have got to be asked are those colleges where they have had internal and external audit that has been costing them £10,000, £15,000, £20,000 a year where some of these things were not spotted early.


 
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