Background

While the production of new government publications slows down over the summer Parliamentary recess, the Department for Business, Innovation and Skills (BIS) recently issued College Governance: A Guide.  The Guide is accessible here.

The Guide has been designed to help governing bodies perform their duty to hold the senior leadership of colleges to account for delivering their college’s mission and for ensuring that the college serves the needs of its learners, employers and communities.  

The Guide follows a recommendation from the report by the Association of Colleges Governors’ Council (AoCGC), Creating Excellence in College Governance, published in November 2013.  Copies of the Guide have been sent to the chairs of all FE college governing bodies in England.  However, it is envisaged that it will also be useful to those who work with governing bodies, such as clerks and senior managers, and those who deal with colleges and are not always familiar with FE colleges’ legal status and characteristics.  In our experience, this can include lenders, contractors and even government departments and agencies not familiar with further education.

Status of the Guide

While the Guide does not have statutory force, it is nevertheless important.  BIS indicates that it expects the Guide to be used in the training of governors, and we would add that the training of clerks should also take it into account.  The Guide does not cover sixth form colleges, and it remains to be seen whether the Department for Education will issue a similar publication covering sixth form colleges.  BIS expects the Guide to be used alongside the code of governance to be issued by the AoCGC in 2015-16.  BIS intends that the Guide should be refreshed annually in time for the new academic year.  Such regular updating is highly desirable given the frequency of legal and governance changes in the FE sector in recent years.

Characteristics of FE colleges

FE colleges sometimes struggle to resolve the tension between their traditional role as part of the public sector provision of education with the need to run themselves as sustainable businesses.  The Guide addresses this tension by describing FE colleges as “first and foremost social enterprises”.  The term “social enterprise” is not defined, and has no clear legal meaning, but perhaps refers to the accountability of FE colleges to their multiple stakeholders, at local, regional and national levels.  For example, BIS, SFA and Ofsted all expect FE colleges to consult stakeholders on the relevance of their curricula to the needs of learners and employers.

FE colleges are described as providing a range of academic and vocational provision to those aged 14 upwards.  Although the amount of teaching of 14 to 16-year-olds at most FE colleges is limited at present, the government seems to be assuming that provision for younger students in FE colleges will grow in the future.

In relation to funding, the Guide stresses the diversity of colleges’ funding sources and warns that although these include government grant funding, there is no legal entitlement to such funding. Grant funding could be removed if a college performed badly, to be replaced by contract funding similar to that received by private sector colleges.  The Guide also points to the fact that FE colleges will access capital funding through LEPs from 2015-16, underlining the need for colleges to engage constructively with their local LEP.

Accountability of FE colleges

The Guide identifies high-level outcomes which it would expect colleges to produce.  It stresses the importance of employers taking greater ownership of the skills system and creating their own outcome measures.  The government’s role will be to work with the colleges and regulators to ensure that learners and employers have more relevant data to help them choose the most relevant courses and hold providers to account.  Their incentives for doing so will be increased as learning is increasingly jointly funded by learners and employers as well as government, as fees for adult learners become more common and take-up of tuition fee loans increases.  The Guide explains the information on provider performance which is already available, and the pilot schemes for producing more meaningful data, for example on student destinations.  The Guide also reminds colleges that they are bound by contract to provide learners with impartial careers information and advice, in a manner similar to that imposed on schools by statute.

The Guide puts considerable emphasis on the mechanisms for accountability of colleges to users of their services.  All colleges are required to have at least one student governor on the board.  Colleges have to abide by the same fair trading and consumer protection rules as other organisations providing services for a fee, and some colleges need a consumer credit licence.  Colleges are reminded of the importance of having appropriate complaints procedures and making complainants aware of their right to pursue a complaint with the SFA if dissatisfied with the college’s handling of it.

Operation of the FE market

The Guide discusses at length the arrangements for providers to enter the FE market, modify their provision in the light of market trends and ultimately to leave the market.  It clearly indicates that the government wants to see a dynamic FE market, responding readily to changes in consumer demand.  There should be no barriers to new providers entering the market if they have the capability to respond to unmet needs and are sustainable financially, independently of government funding.  To ensure quality, applications for FE corporation status will only be considered from providers which are graded “good” or “outstanding” by Ofsted.  Providers considering making such an application should consult with BIS and SFA at an early stage.  Annex 1 to the Guide sets out the application process and criteria.  Readers will be aware that the first FE corporation to be established (other than as a result of merger) since 1993, Prospects College of Advanced Technology, was incorporated on 1 September 2014.  An interview with the principal of Prospects College, Neil Bates, will appear in the autumn edition of Instep Magazine.

With regard to existing FE colleges, the Guide reminds them that they are free to change their structure or delivery model to better meet the needs of learners or employers, but must undertake a Structure and Options Appraisal to consider all options, and consult fully and openly with stakeholders, before making a decision on the preferred delivery model.  

Finally, the Guide reminds corporations of colleges which may be in difficulty and/or are considering merger of the need to undertake appropriate consultations on the way forward, in addition to the need to comply with the statutory processes leading to dissolution and transfer of assets to the continuing college.  Corporations will also need to comply with charity law and ensure that their assets are made available for educational purposes should the corporation decide to dissolve itself.

Conclusion

While the Guide does not set out any new government policy, it contains important reminders of the expectations of the government on the outcomes FE colleges are expected to deliver, and the way in which they are expected to carry out their business.  The Guide will be essential reading for governors, particularly those recently appointed, clerks and senior managers.  It is, however, only a starting point and clerks in particular will need to refer to more detailed guidance produced by the Association of Colleges and by those such as Eversheds who regularly advise on governance matters.