"Our estimates show that substantial savings can be made
by reducing bureaucracy in further education, and demonstrate the
need for focused and systematic management of these costs to drive
sustained improvements in efficiency.
"The Department for Business Innovation and Skills and
the Skills Funding Agency have the ambition to make changes to
simplify the system, but they must get to grips with the issues we
have raised in order to achieve value for money and prevent
colleges being embroiled in red tape."
Amyas Morse, head of the National Audit
Office, 16 December 2011
The Department for Business, Innovation and
Skills and the Skills Funding Agency are pursuing a range of
initiatives to simplify funding, qualification and assurance
systems in further education as part of their wider reform of the
skills sector. However, they do not know the scale of the problem
faced by further education colleges and other providers.
The National Audit Office has estimated that
the administration of funding, qualification and assurance systems
is costing general further education colleges around £180 million a
year. The NAO has further estimated that this cost amounts to
around £250 million a year for all types of further education
colleges and other providers, even assuming the other providers
bear only half the costs of general further education colleges.
The Department and the Agency recognise that
some of the administration of funding, qualifications and assurance
systems is unnecessary. However, they have not yet measured the
size of this burden on further education colleges and other
providers. The NAO’s £180 million a year estimate of the cost to
general further education colleges of administration equates to
£150 per student.
Working with the Department for Education, the
Department and the Agency have developed a series of initiatives to
simplify the system, which target the most costly burdens. Colleges
themselves suggested that large savings can be made through cutting
administration. The Department and the Agency should set a clear,
ambitious target for the scale of the burden reduction they are
seeking to provide more impetus to change.
The Department lacks a complete picture of its
final operating model for the funding, qualification and assurance
system, supported by a detailed plan of how to get there. Nor does
it know how much the new system will cost or the impact of the
reductions proposed.
There are various initiatives underway but
they are not well coordinated and further education colleges and
other providers, although welcoming the changes, do not have
confidence that the simplification of the system of administration
will be sustained.
Publication details:
HC: 1590, 2010-2012
ISBN: 9780102977035