Examination of Witnesses (Questions 20
WEDNESDAY 22 NOVEMBER 2000
BOURN, KCB, PROFESSOR
20. Yes, how much more do you allow for a unit
of education in London?
(Professor Melville) In Inner London it is 18 per
cent and that goes in Outer London to 12 per cent. In the London
periphery it is 6 per cent and we also give some allowance for
parts of some counties around London of three per cent.
21. Has that changed in the last three years?
Has that reduced?
(Professor Melville) Yes, we have reviewed the London
weighting on a regular basis in 1997 and in 1999, and it has actually
been increased since the most recent review.
22. So does it reflect the increases in rent
(Professor Melville) Yes. What we actually did was
we set up a working group to look at this and they commissioned
external consultants to look at comparative costs over a whole
range of issues associated with staff costs, but also fixed costs,
premises costs and so on.
23. That is wages. What about issues like the
costs of multi-cultural education and mobility?
(Professor Melville) We take account of the costs
of what might be called educating particular types of students
who may be prevalent in larger numbers in London and also, for
example, in some parts of Birmingham, by applying an additional
weighting to the student, that is what we call the widening participation
24. That is presumably a weighting linked to
multi-cultural and multi-lingual?
(Professor Melville) Not specifically multi-cultural,
multi-lingual. We do it by post-coding. We also apply it to students
who are studying English as a second language. It averages eight
per cent currently, planned to go up to ten per cent.
25. The problem I have locallythis is
slightly anecdotalis that in Croydon there is a view there
that the extra costs of multi-cultural teaching and the costs
of actually being a student or being a teacher in a college are
much greater and are not properly compensated for. Do you think
that is a reasonable position?
(Professor Melville) One of the complications is just
how we might focus specific funds related to specific students.
Certainly all adult students who are on basic education courses
are regarded as in some way being educationally deprived and,
therefore, would attract this upliftanyone studying basic
literacy and numeracy, for example.
26. In Croydon, which is one of the average
places, it is regarded as deprived per se, and it clearly
faces all these costs, namely the cost of multi-cultural delivery,
the higher levels of wages, the costs of retaining staff. Do you
feel they are adequately compensated for doing this?
(Professor Melville) The review indicated, subject
to checking, that I believe Croydon lies in the three per cent
area as far the uplift is concerned.
Certainly individual students attract a premium should they be
studying English as a second language or basic education or, for
example, if they came out of care or where they had been in hostels.
All of those situations attract a premium, so they are regarded
as being more difficult to recruit and, of course, requiring greater
27. I am thinking of more normal run-of-the
mill average people who just happen to live, say, in Croydon and
happen to be black as opposed to coming out of care or anything
(Professor Melville) Yes.
28. Can I ask about recruitment which you mentioned
when you said that recruitment and retention were big issues in
terms of financial difficulties in terms of stability of staff
numbers. Would I be right to say that retention problems in terms
of staff are much greater in London basically because young teachers
in colleges may do their training in London and find that their
family cannot afford a house, so they go to Birmingham or to some
nice place in Yorkshire where they can buy a house and get a similar
wage and have a much more comfortable lifestyle? Are you seeing
a trend of an exodus which is making difficulties for London because
of housing prices?
(Professor Melville) I do not have any specific figures,
certainly we have not gathered them, I have not seen them, specifically
as far as further education in London is concerned.
I have to have say that there is a general problem of teachers'
pay in further education that has been recognised as one of the
consequences when in this Committee we discussed the issues surrounding
the management of the growth that had taken place very rapidly
in most of the colleges, and along with that there has been a
relative depression of teachers' salaries in further education
relative to schools, for example. The Government has recently
addressed this and announced a further £50 million which
will be applied to improving conditions for teachers. I have not
seen it specifically at the moment. Certainly one of the reasons
why we have a higher weighting associated with London is that
generally staff in London have to be appointed higher up the scales
in order to attract them at all or let them subsist.
29. Would it be possible to ask either the NAO
or Professor Melville whether there are some statistics available
to confirm or otherwise, or to paint a picture of how this situation
is changing in terms of the level of people leaving London to
go to similar jobs elsewhere with similar pay, bigger houses and
all the rest of it? That would be very useful.
(Professor Melville) Yes, there is work going on in
the Department at the moment reviewing the whole of the teachers'
30. On the demand side, on the student sidethis
is something we have already touched upondo you again find
particularly in London, where there are more job opportunities,
the opportunity costs of going to college are more and the actual
cost of living without any income in digs is much higher, that
there is a real problem with students sticking around in college
or even coming along, that instead they go to the job market and
remain uneducated and on long-term lower wages as an example?
(Professor Melville) I think I probably need notice
of the question, but as far as I am aware there are not huge variations
in retention or recruitment in London.
31. If it is the case that we are seeing a regional
disparity due to factors of cost and wage opportunities, it will
be interesting to know. Now schools versus colleges. It is the
case, is it not, that if you did an A Level, for argument's sake,
in a school versus a college, the amount of subsidy going to the
school is much greater, is it not?
(Professor Melville) Yes, the funding to pay for a
typical three-A-level student is higher currently in schools than
32. Is there an argument to change that in terms
of the behaviour of students? Is it the case that students in
school get better results, other things being equal, as it were?
(Professor Melville) Generally not. If we take sixth-form
colleges, for example, the 103 sixth-form colleges, often produce
better results than schools even though there is a discrepancy
in terms of their funding. If we take added value, the distance
travelled from their GCSE entry to A-level, or ENVQs then we find
all colleges compare well with schools.
33. Can I ask about whether the imperative of
keeping costs down is inadvertently closing down courses that
are needed in the market place? I am being anecdotal, in Croydon
where we have the May Day University Hospital on tap, as it were,
Croydon College closed down its course on nursing because of the
cost. Indeed, in the building support areawe have some
building companies in CroydonCroydon College is closing
all those courses down because they cost too much to run. Is that
not financial management gone mad?
(Professor Melville) It is very interesting. The discussion
in this report, which is on course-costing, is one of the clear
recommendations that we are following up, to encourage colleges
to be more careful about their course-costing and what they subsequently
do when they discover a particular course is costing more than
they are receiving in terms of income for it, because there are
fixed costs. Those two examples, as you say, are courses which
have very significant costs in terms of space and facilities.
34. What can be done if we want more people
building houses and curing patients? The Government want to put
more money into house building and into patient care yet because
of the way the Funding Council operates all of these colleges
are simply closing down their courses to save money and to avoid
a bad report from the Public Accounts Committee.
(Professor Melville) It is not true to say that this
is happening in a lot of colleges. I was aware that the MP for
Croydon raised the issue at the previous Public Accounts Committee
when the construction programme had closed. This coincided with
a general downturn in the construction industry, where we attempted
to try to ensure there was some consolidation so there were centres
of excellence that remained. A lot of colleges are now going into
construction because it is a boom area.
35. What would be done if they were closing
engineering down, for instance?
(Professor Melville) I think the important issue is
that courses which are not viable should not be continued. It
is not a sensible use of public money to have a small course here
and a small course there. We encourage colleges to work together,
so we make sure there is provision within a reasonable distance.
You may find that a particular college may not have all provision.
36. Will the Learning and Skills Council help?
(Professor Melville) Let me make a point, the Funding
Council's main duty is the adequacy and sufficiency of further
education, not simply providing funding, therefore, every year
we review the provision. They are required to report it to us
where they pull out of programmes. I suspect that nursing is not
one of our programmes, as I was not aware of that. That may be
funded by the Higher Education Funding Council. We are aware of
what is going on. We review carefully to see if it causes a problem
locally in terms of there being un-met demand.
37. If you do find that in what you are looking
at and what you are talking about there is chronic and systemic
reduction and certain high cost provision, what will you do about
(Professor Melville) We will obviously review whether
we have the cost weighting factor right. Generally that has been
in response to industry downturn. We have something similar in
agriculture at the moment. For example, if we found that it was
essential to continue construction in Croydon because there was
a demand that was not being met elsewhere then we would apply
a premium to that college to continue. We have applied that in
other parts of the country, particularly in more isolated communities
where we saw provision disappearing. It may not have been economic
but it was essential that it continued. We do have powers to vary.
You asked about the Learning and Skills Council. It is a much
more local body, it will have an office in Croydon, the South
London office will be in Croydon and it will have 90 or so staff
there. That will be one of its responsibilities, to ensure that
there is local provision, not just in colleges but also in private
38. If one looks at the graph and the proportion
of colleges in poor financial health, you see there are not any
less than they were in 1996, 1997 and 1998 but there are more,
a higher percentage, in poor financial health than in 1999, 1995
and 1994. This is a pretty mixed record. There is no particular
sign that you have managed to get a grip on this or improve matters.
(Professor Melville) This is precisely the variation.
If you talk about poor financial health, it went up and it peaked
roundabout 1996/1997, that was a period from incorporation, where
colleges dealing with the inheritance they had, were subject to
efficiency squeezes that added up to a 26 per cent reduction by
that year and, therefore, they had very severe financial problems
from a poor base. The turnaround only took place when that squeeze
was raised from 1998/1999 onwards.
39. It is now going up again?
(Professor Melville) In terms of the graph you had
there or in the terms of the figures?
4 Note of Witness: The most recent review included
the London Weighting for Inner London. Back
Note by Witness: Croydon is in the area receiving 6 per cent
London Weighting. Back
Note by Witness: Published figures (Staff Statistics 1996-97
and 1997-98) showed an increase of 1,100 teaching staff in London
colleges against a slight decline nationally. Back