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New funding for further education will come with strings attached


Further education will need to contend with scrutiny from The Office for Students to access funding prescribed by The Augar Review, explains Martin Vincent, head of education at national law firm Weightmans.

The Augar Review’s recommendations have the potential to address deep-seated imbalances in post-18 education and put colleges on more equal footing with universities, both in terms of prestige and funding. However, now we’ve had time to digest them in full, the further education sector must quickly realise what this parity would mean in practice.

Augar has recommended that the Office for Students (OfS) should become the national regulator for non-apprenticeship education provision at levels four and above and establish a working group with The Education and Skills Funding Agency (ESFA) to develop new regulation that covers this extended remit. Whatever the outcome, this means the OfS will be significantly more involved in further education. This will come with a layer of scrutiny colleges and other vocational training providers are unfamiliar with and arguably, unprepared for.

The most significant impact of this change will be in relation to funding. How new revenue streams for further education would be structured is only hinted at in Augar’s report. as an overview, it recommends an additional £3 billion should be made available to further education annually, in addition to a £1 billion capital investment from the Government in a newly formed national network of colleges.

Two specific measures it does recommend are free level two and three qualifications for everyone over the age of 18 and a drop in the tuition fee cap from £9,000 to £7,500 (which will impact the growing number of colleges offering validated degree programmes).

As the new national regulator for post-18 education, we can expect a system that is more dependent on teaching grants from the OfS will emerge to bridge the funding gap left by a reduction in student contributions. This means, for the first time ever, FE could be reliant on the OfS and subject to all of the accompanying regulation this brings.

This will be a radical departure for colleges. Currently, the most significant regulations the sector must adhere to are the statutory provisions of The Higher and Further Education Act and financial probity conditions and performance guidelines set by the ESFA. FE funding is not currently dependent on areas such as teaching excellence and student experience.

This would change if The Augar Review’s recommendations are enacted in full. Teaching grants from The OfS are linked to the body’s Teaching Excellence Framework and league tables that certify institutions as gold, silver or bronze depending on performance. The system is designed to increase competition and deliver value for money to students, but if colleges are not up to scratch, the funding they would come to rely on could potentially be reduced or cut altogether.

Colleges would also have to officially register with The OfS to be eligible for grants. The Augar Review recommends colleges are given protected titles in the same vein as universities to increase their standing at a national level. Achieving this status will inevitably come with conditions. For universities, the status of Registered Provider carries with it responsibilities, rules and standards covering everything from student welfare and education delivery, to engagement with the community. Should an institution breaches any of these requirements, the OfS can launch investigations, levy financial penalties and in extreme cases, remove teaching licences altogether.

Colleges can expect a similar framework to be introduced and would be wise to start reviewing the steps that universities have taken to comply, in order to prepare themselves.

Beyond this, colleges that offer validated degree programmes will need to understand how their relationships with universities could change if higher and further education are both subject to OfS regulations. Should a college’s OfS classification drop from gold to bronze, a university that validates degrees for that institution might look to review the arrangement to protect its reputation. Whether or not this would happen from a contractual perspective is untested but colleges should start considering the possibility now.

The Augar review is, at this stage, still only a set of recommendations. While it was welcomed by the Government, it still needs to be transposed into legislation. It does, however, represent a significant shift in accepted thinking and is likely to usher in changes that improve FE’s position. Colleges and other vocational training providers need to understand and prepare for a corresponding step change in what is required of them in terms of regulation and compliance to take advantage.

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