Thoughts about incorporation


This is a post for specialists – those interested in the organisation of technical and further education colleges in England.  These colleges were separated from local government in 1993, and granted legal independence.  Now, 27 years later, the government is proposing to renationalise them.  A journalist rang me to get my views, as an old codger in this field, and published a thoughtful article in FE Week magazine.  Before we talked, I did some homework, and here are my notes.  I was Principal of two colleges – Parson Cross College in Sheffield (1988-92) and then Lambeth College in London (1992-2002) – and previously worked in colleges up and down the country.  My first college (Kidderminster) was the national leader in carpet weaving; my last (Lambeth) in dental technology, with all manner of wonders in between.  I worked at colleges that trained make-up artists for Granada tv, that won the Worshipful Company of Plaisterers annual prize. Both my daughters qualified through FE. I’m not just an FE nerd, I’m an FE enthusiast.

The 1988 Education Reform Act had established Local Management of Schools (LMS) and of colleges, which was a precursor to incorporation in the increase in autonomy for institutions. It seemed to me to neatly combine local management with democratic control.  When I went to London in 1992, I found that, unlike the rest of the country, they hadn’t undergone LMS/C (it was felt to be too much on top of the abolition of the ILEA) and the difference in management style was painful.  I think the examples of bizarre and silly LEA interventions given in the Guardian’s article of 2008 refers to this time, not the ERA years that preceded incorporation.  An example – I can remember when, after the Wapping printers’ strike,  our college library was forbidden to stock Rupert Murdoch titles.

Further education had been off the government radar for years – known always as “the Cinderella service”, and it’s interesting to consider why.  FE hacks would say “because MPs’ kids never go to FE”, but it may be as simple as being a sector they and civil servants didn’t understand. One researcher puts forward the interesting idea that most of industry had survived with labour that had been unskilled and the interest in FE came from a realisation that foreign competition was now at a much more sophisticated level (see German apprenticeship system). I think that’s an exaggeration – there had been reports since Victorian days about the way foreigners were catching us up, and Mechanics Institutes had been going since the 1830s – but no doubt the alarm bells rang louder in the 70s & 80s.

What happened

The 1988 Education Reform Act, as we’ve seen,  had considerably increased the autonomy of colleges (and schools, of course).  Then came the publication in May 1991 of “Education & Training for the 21st Century” by the (John Major) Conservative government, which transformed into the Further and Higher Education Act of 1992, which stipulated

  • Polytechnics would become universities with their own degree conferring powers (previously they’d depended on a quango called the CNAA). This ended the ‘binary system’ – polys & universities – established by Antony Crosland in 1965.  I had also, by coincidence, been present at his Woolwich speech, so was there at the establishment and demolition of the binary system.
  • Further education colleges[1] would gain legal independence as ‘corporations’ independent from local authorities. They would be run by their governing bodies.
  • Colleges took responsibility for their own strategic planning – recruitment and marketing, premises, procurement, staffing, budgets and financial strength. On the latter, one salty FEFC officer said that “incorporation without bankruptcy was like religion without hell”.
  • Funding of the new sector in each country would be administered by a Further Education Funding Council (FEFC(E) – based in Coventry).
  • The FEFC was not a planning body, just a funding body. Each college had to conclude a funding agreement, specifying its output targets for the coming year; it was penalised if it fell short.  However, it did establish an inspectorate which published reports on each college every four years.
  • A common funding system replaced lots of different LEA models, often based on historic cost (i.e. you got what you had last year plus inflation minus the cuts). As a result of LEA differences, the sector comprised of colleges with sharply different unit costs that the FEFC set about levelling under a process of ‘convergence’. You may imagine which college Principals thought this was a good idea, and which did not[2].  A league table of costs and achievement was published (bad taste !).
  • There was to be a strong incentive for growth in student numbers, but these were allocated by the FEFC at a lower cost than before, thus driving down unit costs.
  • Apprenticeship funding remained with the Training & Enterprise Councils, employer led bodies that were merged with the FEFC to make a Learning and Skills Council under the Blair government.

Why did it happen ?

There’s quite a good debate in the House of Lords launching the second reading in 1992 here, with government aims and opposition reservations. It’s striking to read such a calm and intelligent debate. Maybe it’s because it’s the Lords, maybe just how politics was back then. The context was Thatcherite – distrust of local government as politicised bunglers, feeling that independent institutions would do better freed of bureaucratic fetters and driven to meet market/consumer need by competitive forces[3].  John Major held a reception for college Principals and Governors in the QE2 Conference Centre, getting up on his soap box to ask us all “Isn’t it great to be free ?”.  Overt arguments were

  • Build on the success of the polytechnics, which had expanded student numbers and reduced costs after removal from LEA control
  • Moving on from Baker’s Education Reform Act of 1988 to the next step of college autonomy
  • Need to increase participation in post 16 education. It had grown from 41% in 1980 to 60% in 1991, but plainly needed to go farther. This would be achieved by “powerful financial incentives to recruit additional students” (HoL debate)
  • Need for more skills to meet labour market and student demand (not always the same thing !). There had been moves in this direction already in response to a number of reports on skills shortages and the UK shortage of qualified technicians – TVEI in schools, the TECs to run employer based courses. Indeed, the chapter in Lord Young[4]’s autobiography telling of their introduction is titled of “A Dawn Raid On Education”.
  • Desire to raise quality, and introduce a new qualification framework. The White Paper was big on this, wanting to establish broad 16+ diplomas, a broader GNVQ, and full coverage of industry by the NVQ system. Like most such attempts it was a mess, and still is 38 years on. Think of T levels and cry. The power of the awarding bodies still remains, a system that I think no other advanced nation has chosen.
  • Cynical footnote – incorporation was also extremely convenient after the Poll Tax debacle, with central government keen to get lumps of spending off local government books (and local ratepayer bills). Baroness Blackstone makes this point in the Lords debate.

The results

Difficult to always separate out factors from a number of directions – for example, the coming of academies, the growth of the new universities and (latterly) the malign influence of austerity, which hit FE particularly hard (harder, I think, than any other sector of education). My views:

  • There was substantial increase in managerial autonomy, and this was on the whole a good thing (it’s rather exaggerated in the FE Week “Twenty Years celebrating incorporation” sheet, in my view, which depicts incorporation a bit like VE Day). But efficiency and flexibility improved sharply, and you only had to visit college premises to see the step change.  A management training programme was launched, and Principals had to pass their exams, much like senior police officers or football managers. Improved management information yielded information on (eg) wastage that could identify problems and target action.. I favoured strong links with local government, but much of what was said about it was true,
  • A major change came in staffing, where the power of unions was dramatically reduced. I had five strikes during my first year at Lambeth, often called just to show me who was in charge.  Until incorporation, staff contracts were enshrined (the word is not too strong) in what was called The Silver Book, which laid down inflexible staffing levels and grades. The colleges were told by the DfE to issue new and more flexible contracts – indeed, it became a condition of funding – which led to abrasive industrial relations. One year, I believe, FE was the largest source of days lost to strikes in England. The scars still lie deep, especially as the gig economy with poorly paid and insecure part-time teaching has come to FE.
  • Student volumes increased in response to the funding incentives. Some of this was iffy – for example, buying in extra students from private trainers under franchising arrangements, but much wasn’t. However, the race for volumes caused great difficulties for some colleges.
  • Quality increased sharply, particularly with the coming of a Labour government less committed to reducing unit cost and more into opportunity and progression. David Blunkett made a pact with the sector – he would deliver the funding as long as the colleges could deliver the outcomes.  His junior minister Margaret Hodge was pretty fierce about this, using the failure and drop-out rates in the sector to illustrate the unsatisfactory chances of success. The CEO of the FEFC – John Harwood – chimed in with a controversial interview on radio to the same effect.  It wasn’t comfortable, but success rates improved markedly, partly as a result of the ‘Success For All’ initiative which engaged the sector with good practice, staff training and lively learning materials. Inspection was also a push factor, as were league tables (though they could be subject to methodological objections).
  • One of the main improvements was in student services. Student surveys entered the FE world. Marketing presented the colleges with smart publicity and lively corporate images.  The Kennedy Report encouraged the sector to better meet the needs of disadvantaged learners.
  • The FEFC administered the system efficiently, if a little officiously, with a stream of Circulars specifying how student information was to be collected and how plans were to be submitted, which funds were available if you submitted successful bids for modest projects.  Some Principals had their own views on how much ‘freedom’ this represented.  The CEO, Sir William Stubbs is still around, as is his successor Sir David Melville (who’s on Twitter).
  • The withering of local collaboration was an undoubted negative. The 1992 analogy with polytechnics was false – they were national institutions, whereas colleges had grown to meet local need.  Tertiary systems – where colleges offered comprehensive post 16 opportunities, mixing academic, vocational and adult learners in a way that improved guidance and reduced costs – fell apart as schools opened sixth forms and LEAs separated their adult services. Schools often denied their pupils knowledge of 16+ alternatives, until eventually the Dept had to insist it was included in inspection reports.
  • I don’t think the employer links or in-demand skills were fostered as was hoped at the start of incorporation, for a whole raft of reasons. One of which was the funding system – if you could get more cash by expanding FEFC/LSC funded programmes, why market employer funded work ? The other fact is – brutally – students are attracted to occupations that pay well, not some patriotic idea that the nation needs engineers not hairdressers.

[1] Including sixth form colleges, which was curious, as these were effectively the sixth forms of local 11-16 schools. Rumour/anecdote has it that the Minister was asked if all colleges, including 6fc, would become independent, and he said “Yes, all of them” to the obvious chagrin of accompanying civil servants.

[2] The well-funded colleges included some that were simply inefficient, but also those working for generous Labour authorities in tough urban environments. Measures aimed at trimming the former often hit the latter

[3] It was part of the New Public Management idea – arm’s length bodies, tasked with clear goals, transparent funding etc.

[4] Lord Young was a former businessman who Thatcher valued for his can-do attitude.  He launched YTS at the height of 80s youth unemployment, for example.  “Others bring me problems, David brings me solutions” she once famously said.

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