Softening the blow of funding cuts with data

The FE Commissioner recently sent a letter addressed to All Chairs and Principals/CEOs of Corporations and FE Institutions, advising them on steps they should consider in order to save costs through “rationalisation” and “collaboration”.

The first part of the letter addresses rationalisation and begins by saying that an “increasing numbers of colleges are having to take some difficult decisions as to what they can afford to provide and how best they can provide it”. It then goes on to list some of the ways that this can be done, such as reducing internal inefficiencies, increasing class sizes, decreasing the percentage of income spent on staffing, and reviewing curriculum delivery models to include cost-efficient teaching such as online learning.

Having briefly addressed these issues, the letter moves on to say that once these initiatives have been exhausted, if finance is still a big problem it may be time to consider collaborating or even merging with other institutions. This is of course already going on, but the tone of the letter suggests that an increasing number of colleges are going to have to consider going down this route as funding becomes even tighter.

The remainder of the letter is dedicated to setting out some basic principles that should be borne in mind by colleges considering collaboration or merger. There are many points of interest for senior management teams, which you can read about here, but I want to pick up on one particular area that is touched upon.

According to the letter:

Agreeing the core purpose of the collaboration from the outset drives the type of structures which providers may wish to consider. These might be one or more of cost reduction, improving quality, investing in new sub-sectors relating to LEP or other employer priorities, growth into 14-16, HE or International markets, or protecting local provision.

What this statement is getting at is that any colleges thinking of collaborating or even merging should take steps to ensure that they do not cut services and courses that might harm learners and employers. Cutting costs is clearly one of the primary aims of merging, but it must be done with great caution, taking care to protect things like “employer priorities” and “local provision”.

There is also a section later on in the letter which says that decisions such as this should be taken on the basis of proper evidence, rather than according to subjective whims:

Governors have a critical role to play in key decisions about structure and in the interests of their college and more importantly its learners and employers. Fundamentally they must be as objective as possible. Objectivity means cutting through any vested interests, ensuring that ultimately decisions are made on data and other firm evidence, and not basing too much reliance on memories of past success.

Put these two things together and what do we have? Really a call for colleges that do decide to collaborate or merge to ensure that any decisions they make are made using objective data, in order to ensure that what they do isn’t detrimental to learners and employers.

This is where I think good local data can really help. In particular, one of the ways that data can really be effective in this area is in mapping courses to local employment trends to establish areas of over or under-supply. Colleges who are planning to collaborate or to merge together could take a joint approach, mapping their combined provision against the needs of the local labour market, and so be well placed to see which areas of their curricula, if any, can be cut without causing real harm to the aspirations of learners and the needs of employers.

I appreciate that none of this is exactly going to thrill anyone in the sector. Cuts rarely excite. Yet there is a need to be realistic, and the reality, as the letter says, is that “there is clearly not enough money for the sector to continue as it is and rationalisation and collaboration is the new order of the day.”

There is therefore very much a need to be pragmatic and to take the kinds of steps that will bring about the “least worst scenario” available to us at this time. If this means colleges having to collaborate or even merge, with certain courses being axed, objective Labour Market Data which maps courses to the needs of the local economy really ought to play a fundamental role in informing where the axe should fall.

Anthony Horne is the head of Further Education for Economic Modelling Specialists International