FE colleges are facing extinction

I recently met with a group of training providers and over lunch they discussed the future of FE colleges. As a group they thought FE colleges face extinction in the next few years.

Are they right or wrong?

Below is a synopsis of their comments plus a few comments of my own.  Some of what they said to me is quite provocative. What are your thoughts?  Are they right, wrong or badly informed? Add your thoughts in the comments box below.

Colleges not valued by government or employers

Let’s start with politicians and civil servants? The training providers argued that if they really believed in the sector they would have provided stability over the years.  

The sector wouldn’t be plagued with so many initiatives and there would be equity in the way different parts of the sector were treated for VAT etc.

The older UK providers had seen initiatives as diverse as PICKUP (most readers will not be old enough to recall this one), numerous apprenticeships initiatives from YTS to Apprenticeship degrees, COVEs and TQS to name just a few.  

They argued that these had impacted colleges far more than private providers.  Colleges had focused on initiatives whilst the private providers had got on with ensuring they engaged with their customers, became financially secure (profitable) and built sustainable business structures.

They went on to list some of the ways they had diversified their offer so as not to be too dependent on government funding.  Some operated totally independent of government funding.

Their argument was that colleges had kept a tight focus on the 14-19 market and were now tied in to a market that was totally underfunded for colleges to perform in the context colleges currently operate.  

However, they recognised ways that colleges could cut costs and these are mentioned later.

One provider said “We were constantly being told that these initiatives were essential and we had to get accredited if we were to receive future funding.  But all were designed by civil servants with barely a hint of employer influence and we weren’t going to fall for that one”.

On the subject of employers, they said colleges generally have little experience of the cut and thrust of running a business in the real world.

 The majority of senior staff have come up through the ranks and have never actually run a business outside of their colleges.

The colleges don’t think like employers, they don’t understand employers and this can only hold them back.  

That didn’t matter so much on the past but employers now hold many of the purse strings.

They continued by saying that colleges were often last on the list of businesses preferred training suppliers.  

One of them said there are two types of employer.  

The first always contacts the college first and then, having established a baseline, negotiated with private providers.  

Apparently the second type doesn’t even think of contacting a college.

I have to say that employers aren’t generally interested in education initiatives and the fact we deliver government policy.  

Some understand the difference between a L2 and L3, but the masses that never engage with colleges don’t understand much of the jargon we use, and have little wish to.  

Employers don’t want rhetoric such as knowing that the college was a COVE, previously achieved TQS or was judged several years ago as Outstanding by an Inspectorate they think has with little or no understanding of what business needs are.

Most of the college literature I see shouts many of these things from the rooftops.  

These websites are all about the college and never the employer’s needs.  

This is also true of the way the 14-19 market is approached.  Parents struggle with levels.  

Too many struggled with school and although they want the best for their children, they don’t fully comprehend the options available.  

Some parents are more aware, but have been brainwashed by government in to believing that the university route is preferred to the vocational route.

With regards employers, in most cases the employer’s only interest is their bottom line. They want training that can be implemented back in the workplace and they need it today … not next September.

Colleges are digitally challenged

The general feeling was that when it came to IT most academies were better resourced than colleges and our prospective students have high expectations. But worse still was the feeling that colleges managers were, in the main, digitally challenged.  

With a few notable exceptions they felt that most senior managers totally lacked digital nous and didn’t understand the opportunities that digital offers. They saw this as one potential downfall of colleges.

The providers gave examples of how they were using IT to substantially cut costs and improve quality.  Some were entering new markets and expanding overseas into full cost markets.  

One, based in the US in this case, regularly launched online training products that netted $250k+ within the first few weeks after launch. Development costs were usually crowd sourced, so risk was very low.  Development times were measured in weeks not months.

One of my own colleagues recently launched an online, non-accredited course in the US and took $2.5million in his first month.  He has been in business a very short time and is a one-man band that uses outsourcing and joint ventures very effectively.  

Another friend started from scratch and now employs a handful of people.  His turnover in the last five years exceeds $7.5million. All his “products” are online courses but he has no training or education background.  I’ve tried a few of his courses myself and they are very good.

One provider challenged me to find him a single college that used teaching webinars on a regular basis.  All of those present used Skype to keep in contact with employers and students and to deliver some of their one to one assessment and training.  

They always recorded Skype sessions and sent a copy to the trainee for later reference.

All of the providers present had used webinars as a recruitment tool and as a means to engage with prospective students.  One had run a series of short revision tips events for prospective students about to take GCSEs.

He said he knew the BBC also run these sessions but he wanted to do it locally for his prospective students.

Some of the group ran free B2B training events via webinars.  These always carried the offer of a costed course at the end of the session and in future emails.  

One of the group ran a closed group on Facebook for members of a group that paid him a monthly retainer to provide weekly training sessions to them.  

He said that most people thought that Facebook was for kids but that many leading brands ran groups and many people went onto Facebook daily.  Hence it made sense to him to use it as a platform for his customers; it was his equivalent of Moodle!

All the group mentioned the cost savings, customer satisfaction and quality improvements that digital provided them.

The general feeling was that the lack of digital acumen was putting colleges at a serious disadvantage. One said that colleges invest in new buildings but rarely think really seriously about investing in their IT infrastructure or teaching staff these teaching methods.   

But it isn’t just colleges that allegedly get it wrong when it comes to IT. Ironically, the recent SFA webinar on the agile evolution of the FE and skills sector was cancelled due to technical problems.  

Colleges don’t sweat their assets

The providers constantly pointed to the vast investment many colleges had made in building new centres and specialist buildings.  

They agreed that quality resources were needed but then pointed to the fact that colleges underutilised them.  

I often wonder why corporation members allow this. Few businesses would grow their businesses by constructing buildings that will stand empty for 40-50% of the time. Few could afford the interest on the investment.

One provider commented that the space utilisation at his local college was way below 50%.  He pointed out that most courses were run over about 30 weeks.  

That the college didn’t run at full time courses at weekends, or on Wednesday afternoons, and that even during the week rooms were often empty.  

His own training centre operated 6 days a week and they were working towards more courses on Sundays. When he wants to expand he rents more space.

Another of them said she had cracked Sundays.  She now filled her centre at the weekends with people on non-accredited courses.  Many were effectively leisure courses and some were subcontracted, but at least she received an income for this.  

Her claim to fame was running courses on Christmas Day which she’d done for the last two years.  

Apparently these are courses for the local ethnic community that do not celebrate Christmas!  

Of course some colleges do extend the academic year with apprentices being in college when the full time students break for holiday.  Some run various summer schools and let their facilities during the holidays.  

But it seems to me that these are the exception, not the norm.

One of the group said he no longer had premises.  All 200 of his staff worked from home.  

Each was provided with good IT resources and were fully trained to use them. When teaching space was needed it was rented by the hour.

 Knowing he offered hairdressing courses I queried this and he said that commercial salons are closed on Sundays and one weekday each week, and could be hired at very reasonable rates.

Decision making process is too long

The group thought the slow decision making process in colleges was distinctly advantageous to private providers!  One CEO said that if he or his team had an enquiry for a bespoke course they could usually cost it and quote within a few hours.  For longer accredited courses he worked within a time frame of a few days.  

He thought this was much quicker than colleges that had to contend with academic boards and a load of other hoops to jump through.

Based on his experience of previously working in a college he said timescales in colleges were often weeks or even months as academic boards met infrequently.  

He then related the story of how he recently needed a course for some of his staff.  He didn’t offer the course himself so thought he’d try the local colleges.  The first have yet to answer his request despite several weeks having elapsed.  

The second college passed him around the houses.  He has now spoken to no fewer than five people; the first passed him on to a person that tried to sell him an apprenticeship as that was the only way they offered the course.  

On explaining he wanted a short course starting in a few weeks he was passed on to another member of staff who said they didn’t run this course any longer.  On pointing out it was on the website he was passed to someone else …. and then passed on again and again.  

He has since sourced the course from another private provider that provided a full costing over the phone and had confirmed by email within an hour.

Over recent years we have gone down the route of consensus management.  It is good to include views from staff, but it could be argued that whilst the private provider CEO makes decisions, and know where the buck stops, colleges are too democratic and consensual.  

At best this leads to delays and at worse to bad decisions.

Inadequate board structure

The private providers were quite critical about the structure of college corporations.

They suggested they were full of academics and the “great and good” but very few of the specialists needed to run a £multi-million business (I said some of their comments were provocative).

They said that colleges claim their boards are full of highly talented people that they provide quality direction and advice to the colleges.  But the private providers said that whilst this might be true it is all around the direction that government and funding bodies want colleges to take.  Few they thought seem to think outside these restrictive boxes.

They went on to say that most colleges fail to bring on board the expertise needed to run a multi-million business. It is all very well having board members that are well connected with the local council, university, etc. but how many are well versed in running a large business?

How many boards have looked first at the skillsets needed to lead the college and had recruited on that basis?  They said that the old boys network doesn’t cut it any longer.

They were also critical of the level of involvement board members exhibited. One asked “when did a board member last go in to the college unannounced and have a good look around?  

When did they last mystery shop the college or ask to meet with staff to ascertain facts about any of the hundreds of things they should be on top of?”

The group argued that their boards were full of people needed to make the organisation run efficiently.  They said they had accountants, lawyers, construction and other professionals on board that delved deep into the way they operated and gave advice based on a much wider skill set than colleges could obtain.

One particular area of interest was how many of board members run businesses outside of education.  They said that, based on the information on college websites, few had.

It seems to me that boards need to include some academics but that a wide range of professionals, current business leaders and employers are needed give a broad experience base on which to base decisions and strategy.

How employers view colleges

The providers went on to discuss how LEPS were made up of employers and therefore understood private providers as being like them, whilst college were viewed as being outsiders.

They argued that now that employers are effectively controlling the apprenticeship purse strings, and sitting on LEPs, that private providers were better placed to receive the funding controlled through employers.

Thinking about it objectively, if you were an employer where would you send the cash?

If I think objectively about this, I think that employers will support us.  But only if we behave differently. More of them need to see us as responsive, up to date and very cost effective.  We have to prove our worth and that isn’t done by the methods we’ve employed to date.

Sadly, I know that far too many employers think colleges speak a foreign language and work to timescales alien to employers. For example, we have websites proudly proclaiming the awards we have won. Most of them aren’t understood or recognised by employers.  In some cases awards seem to make us complacent.  

The private provider I mention above was seeking customer service training for his staff, from a provider that had previously been awarded a customer service mark.  It would be funny if it wasn’t true. It is certainly ironic that the provider couldn’t demonstrate the skills relevant to the course requested.

Your Comments

I have to confess to having a certain sympathy with some, but not all, of the comments above.  

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Marketing consultant Stefan Drew was previously director of marketing at two FHE colleges and now works with colleges, universities and private providers throughout the UK, Europe and the US.