Government 'desperately slow to tackle looming crisis in further education'
The Government is not doing enough to prevent a "looming crisis" in further education, claim the authors of a "deeply worrying" report examining the financial health of colleges in England.
The Public Accounts Committee (PAC) has warned that the declining finances of many further education (FE) colleges has "potentially serious consequences for learners and local economies".
The PAC report criticised the Department for Business, Innovation & Skills and the Skills Funding Agency for "not doing enough to help colleges address risks at an early stage".
While 29 colleges were deemed "financially inadequate" in 2013/14, the Skills Funding Agency predicts that number will more than double to 70 by the end of the 2015/16 academic year.
Meg Hillier MP, chairwoman of the PAC, said: "The Government has been desperately slow off the mark to tackle a looming crisis in further education.
"This is deeply worrying for a sector which equips people with skills and qualifications that can transform their life prospects, and by extension those of the communities in which they live and work."
During its inquiry, the committee spoke to college principals about the difficulties they faces including recruiting quality staff, cancelled courses and stalled investment plans.
Ms Hillier added: "There is no doubt further education is under significant pressure and it is both frustrating and sad to think of the potential going unfulfilled - particularly in cases where earlier intervention could have prevented problems from escalating.
"There must be greater clarity over who is responsible for taking action when colleges face financial difficulties, when that action should be taken, and a fuller understanding of its effects.
"There is a real danger of substantial further deterioration in the sector and Government must act now to ensure FE is put on a stable financial footing."
The committee is calling for the Government to introduce measures including ensuring the Further Education Commissioner has adequate resources to intervene when colleges are struggling.
The report also calls for a more proactive approach in helping FE colleges prepare for the "significant financial challenges they face in the likely event of further funding cuts".
Responding to the report, Dr Jonathan Tummons, of Durham University School of Education, said FE has been "underfunded in comparison to schools and 6th forms for many years", impacting on curriculum provision and teaching staff.
He added: "If colleges are to provide environments for learning that are authentic, are properly equipped, and are linked to the needs of local industry or business, then they require a level of funding commensurate with their importance to local economies."
In a statement, the Skills Funding Agency said: "The current financial health of the FE sector remains a priority for us.
"Alongside Government Area Reviews, we have strengthened our own approach to intervention. This includes using a variety of data sources to assess where risk might be highest.
"In addition, for the current year we included clauses in our funding agreements with colleges that enable us to require early action to be taken before formal triggers for intervention have been breached.
"And in November, we published our Early Intervention Strategy and amended our Approach to Intervention to clarify the link with Area Reviews and the FE Commissioner."
Skills Minister Nick Boles added: "We have protected funding for further education and will be increasing real-term spending by more than a third in the next five years, furthermore funding for apprenticeships will have doubled since 2010.
"We recognise the important contribution the sector makes to increasing opportunity for young people and businesses, and ensuring our long-term economic security.
"With early intervention from the funding agencies, the FE Commissioner and locally-led area reviews, colleges will become more efficient and financially resilient while ensuring the best return on investment for public funding."