The impact of budget regulations on further education institutions

Posted by  Ricky Prota

The way in which further education (FE) institutions are funded varies widely across the UK, as do the social and political contexts within which these decisions are made. Widely accepted though, is the belief that the sector has suffered for far too long from a lack of investment and focus.

In what has been hailed by the sector as a ‘breakthrough budget’, Philip Hammond recently confirmed major extra investment for technical education. He highlighted a need for a model that encourages growth and development in education in order to improve the UK’s productivity and competitiveness. This has been met by scepticism by some, who believe it is merely a redirection of funds that have previously been cut elsewhere.

Education provision needs to be flexible in order to fit the needs of learners and teachers. Where there are funding restrictions, the development of flexible and bespoke delivery models is limited. FE colleges are of course challenged by their dependence on government spending, unprotected budgets, and the difficulties associated with rising fee income from employers or individuals. Compare this to the university sector which, despite media coverage about financial difficulties, is able to benefit from better access to its income.

Colleges with healthy balance books and growing incomes do exist, but recent and future funding cuts and changes, along with increasing competition for students, only makes the sector’s financial environment more vulnerable and ‘muddling through’ may not be enough to survive. In its current state, with pressure mounting, should just one or two colleges find themselves in financial downfall, the result could potentially disrupt the entire sector.

The Skills Commission argues that FE institutions and training providers should too be granted more freedom and flexibility in terms of their funding and financial structures. It believes the government should review its current arrangements as, at the moment, they are limiting institutions from better access to, and utilisation of, the funds of their future.

To learn more about how Unit4 can help your college manage budget restrictions, please visit our FE hub

Ricky Prota

Ricky Prota joined the Unit4 Education team in 2016 taking an active role within the further education sector. He has a passion for providing people centric solutions to colleges going through major change, helping institutions achieve their goals amidst challenging external pressures.

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