FE sector is re-nationalised

This had been a long-awaited decision, after the ONS announced its decision in September 2022 to review whether to reclassify the sector. The re-nationalisation is expected to provide the FE sector with a much-needed cash injection, similar to that received by schools.

The finances and accounting for the statutory FE sector will now come under the remit of the Department for Education (DfE). The FE sector includes FE colleges, sixth form colleges and other designated institutions. This new governance structure contrasts with the way in which the FE sector has been run since its privatisation in 1993. Some efforts were made during the Blair government to bring the FE sector back into public ownership; however, it did not take place. In Wales, on the other hand, the FE sector was re-nationalised in 2014, after education was devolved to the Welsh government.

In between its privatisation and its re-nationalisation, the FE sector has been neglected of investment, with staff pay now on average approximately £9,000 below that of schoolteachers. Staff are suffering the brunt of the cost of living crisis, as evidenced in our surveys e.g. UCU cost of living survey report and UCU workload survey report.

The re-nationalisation is expected to bring additional monies into the FE sector, similar to that received by schools e.g. from VAT refunds and National Insurance compensation, which are not available to private sector organisations. UCU's concern is that once the sector has been re-nationalised, that government may change the rules to withhold some of those financial benefits available to the public sector. UCU are yet to see any evidence that that is the case.

One of the reasons that colleges used to seek private finance was to improve the condition of the college estate and against this backdrop, Education Minister Robert Halfon MP has announced (29 November 2022) that DfE will be investing an additional £150 million of capital grant funding in 2023-2024, to 'support and protect colleges planning to invest in their infrastructure/estate where previously they would have borrowed from commercial lenders'. 

Robert Halfon MP has also announced a financial restructuring plan to address the historical cashflow issues that colleges experience by March each year, caused by the government's uneven monthly payments. To address this issue, the government is bringing forward £300 million of funds to 'smooth out the funding' from 2023 - 2024 for both the 16-19 and adult education budgets; however, this does not appear to be new investment but a restructuring of the money already available to the sector.

One of the criticisms that UCU has levelled against some employers is that they are more concerned with the college estate than staff salaries. It is therefore interesting that the government is making new money available for college estates and not for staff salaries. UCU will continue to maintain a close eye on development in this area, particularly in light of DfE's current research into the FE workforce, which we have fed into.         

UCU notes that Robert Halfon MP, in his announcement, talks about the mission of colleges as providing the infrastructure to deliver the government's skills agenda for the future, in partnership with employers. UCU recognises the importance of the skills agenda; however, we support education in its wider sense in further education, so that education is not divided along class divides i.e. skills education for the working class and academia for the middle classes. UCU is also working to promote the voice of educators in partnership with employers in the development of Local Skills Improvement Plans (LSIPs). The government, in the Skills and Post-16 Education Act 2022, gave the lead to employers to develop LSIPs; however, UCU have been working to promote the voice of members within that process.

The re-nationalisation of the FE sector is to be welcomed; however, it is too early to say what the impact will be on the national bargaining context. UCU's position is that we want meaningful national negotiations and common sector standards regarding employment terms and conditions. We will be pressing the DfE on these and related matters to ensure the voice of UCU members are heard.

Contact: Rhianwen Roberts, UCU policy officer