Examination of Witnesses (Questions 40
WEDNESDAY 31 OCTOBER 2001
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 nationalbecause some of the issues are
national policy issuescope 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
41. We will come back to that, I am sure. John
(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.
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
Mr Pollard: What about Sheffield College? I
am looking after my friend here.
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.
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 orI forget how you put it nowall 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.
45. Are you having problems yourself with core
(Mr Taylor) Yes. You mention I come from a great city,
Sheffield, and I travel to Sheffield from another city in Yorkshire,
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
Chairman: Meg Munn is not looking very happy
with those answers.
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 atand I know,
John, you said this in a light-hearted wayis 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.
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 daysif
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.
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
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.
(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.
(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
Bob Spink: And Yorkshire.
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
(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.
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.