It has long been recognised as the Cinderella of the education sector but this is put into stark relief by a recent report
Since the publication of Dr Philip Augar’s long awaited post-18 education and funding review, there has been much coverage of how the higher education (HE) sector will be affected by the recommendations. However, I would argue that this misses the point, and the real importance of the report is in its conclusions on further education (FE).
From an estates perspective, the changes to HE funding and the student contribution system (as we are now to call it) will undoubtedly have a range of impacts including:
- A freeze on per-student teaching income until 2023 (meaning an 11% real terms cut), against a background of rising pension costs and declining student numbers will put pressure on university finances and consequently on capital spending plans across the estate in the medium term. The report’s view that this will provide HE institutions with an opportunity to improve efficiency feels a little condescending.
- More scrutiny from the Office for Students (OfS) on the funding rates for different subjects and a rebalancing of funding towards strategically important subjects is likely to impact the shape of the estate going forward.
- A push towards more innovative solutions to capital investment and working with industry is also likely to change how projects are delivered. I note the National Automotive Innovation Centre at University of Warwick, which RLB project managed, is held up as an example of innovation in the way it brings together students and industry to provide opportunities for learning and employment.
- A recommendation for the OfS to examine the profits that private business and investors are making out of student rents could unsettle investment in the student accommodation market.
However, in the longer term if the Treasury adopt the review’s recommendation of topping up the reduction in fee levels with a corresponding increase in grant funding and if projections of student numbers from 2024 are correct, then much will remain the same.
I think the real impact of the report is the contrast it draws between FE and HE: for example, the telling statistic that total spending on adult skills has fallen by approximately 45% in real terms between 2009/10 and 2017/18.
FE has long been recognised as the Cinderella of the education sector but this is put into stark relief by the report, which highlights the sustained under-investment that has occurred: “The FE college estate is in poor condition with limited capacity in the sector to address it and no resource to invest in high-cost yet high value provision”.
Augar recommends the allocation of £1bn over the next spending review period to remedy this position. The report goes on to recommend that Department for Education (DfE) should improve its understanding of the capital needs of the sector to inform the allocation of these funds to individual FE colleges. RLB is already assisting the DfE with this aim through our appointment under the Condition Data Collection framework which has been extended to cover condition surveys of the entire FE estate in England.
The report also highlights that creating a fit for purpose college network will require further rationalisation in some areas and augmentation in others to create a network that has comprehensive geographical coverage and provides the right level of technical facilities to address the country’s skills gap. This ambition could have significant impacts for the FE estate, requiring investment in some areas and disposals in others. While the report recognises that this will require additional capital investment, it is silent on the quantum or allocation of these monies, recommending instead that the OfS undertakes further consultation.
So, while the spotlight has very much been on HE and the level of student fees, the main impact of the report is likely to be a significant investment in the FE estate. However, with Theresa May’s departure, the future of the Augar review remains uncertain. Much will be dependent on whether the next administration grasps the recommendations made or quietly lets them slip into the long grass.