Scottish Further Education Funding Council: A ... - Audit Scotland

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12Part 3. Initiatives to address theadequacy and efficiency of the provisionof further education3.1 In December 2003, the AGSreported on SFEFC’s progress witha number of initiatives to addressthe adequacy and efficiency of theprovision of further education. Thispart of the report updates progresson these initiatives.Main findings• Colleges have, for the mostpart, successfully addressedthe issues identified in theSFEFC Management Review.• The latest supply and demandreport provides information onfurther education provision andon demand from employers andstudents; one of its conclusionswas that demand for furthereducation outstrips supply. It didnot address the extent to whichcurrent levels of provision meetprevious statutory requirementsfor adequate and efficientfurther education in Scotland,although SFEFC has maderecommendations on the futuredirection of work in this area tothe Funding Council.• Three college mergers tookeffect in 2005 and work oncollaboration and merger inGlasgow is ongoing. Collaborativework between colleges acrossthe sector has increased.• The Funding Council is providingcolleges with £250 millionof capital funding over threeyears to improve the qualityof colleges’ estates andsubstantially address theidentified maintenance backlog.Management action plans3.2 In 2000, SFEFC engagedconsultants to review themanagement of Scotland’s furthereducation colleges. They examinedseven themes: governance; strategicand operational planning; qualityassurance and enhancement;marketing; human resources;financial management; and estatesand facilities management. Thisestablished a baseline assessmentof the quality and effectiveness ofmanagement in each college, andcreated a mechanism for identifyingand addressing development needs.3.3 As a result of the review, collegeswere asked by SFEFC to produceManagement Action Plans (MAPs),setting out how they planned toaddress the seven themes. Colleges’boards of management wererequired to take forward the MAPs,with the broad aim that collegesshould make changes to theirstrategies, structures and processesto embed good practice, where thatwas required.3.4 When the AGS reported in 2003,SFEFC was reviewing the progresscolleges had made in implementingthe actions described in their MAPs.It will produce a sector-wide reportin February 2006 based on a collegeself-evaluation exercise. The FundingCouncil believes that the exercise willshow that good progress has beenmade, with colleges for the mostpart having successfully addressedthe key areas for developmentidentified in the Management Review.
Part 3. Initiatives to address the adequacy and efficiency of the provision of further education 133.5 The Funding Council recognisesthe need to ensure that collegescontinue to apply good practicein management. A new financialmemorandum, which will come intoforce in January 2006, places greateremphasis on the responsibility ofboards of management to drivecontinuous improvement andin accounting for their college’sperformance. SFEFC has providedguidance and funding to supportthe continuing training of boardmembers, and the Funding Councilintends to hold regular meetings withall colleges to discuss their progressagainst strategic objectives.Supply and demand3.6 SFEFC completed its first reviewof the links between supply anddemand across the further educationsector in 2000. The primary purposeof the exercise was to provideinformation to lead a strategicplanning process across colleges toassess the adequacy and efficiencyof further education in Scotland. SFEFCcommissioned two separate exercisesto map information on supply anddemand, on a geographical basis andon an industry basis.3.7 In 2002, the Audit Committee’sseventh report called on SFEFC tosuccessfully complete its research toestablish levels of supply and demandfor further education in Scotland. Thecommittee recommended thatSFEFC publish a step-by-stepprogramme for the implementationof the process to ensure propercoordination and that, once completed,the projects should form the basis ofstrategic planning by colleges.3.8 In 2003, the AGS’s performancemanagement report recorded thatSFEFC’s industry mapping exercisewas abandoned after contractualdifficulties but that the geographicalmapping had been completed.SFEFC had discussed the resultswith colleges and was planning torefine the measurement of supplyand demand to include a widergroup of stakeholders.3.9 In his evidence to the AuditCommittee in November 2003, thechief executive of SFEFC confirmedthat the Funding Council wascommissioning a further supplyand demand report. This would helpSFEFC to assess the extent to whichit satisfied its statutory requirement‘to secure the provision of adequateand efficient further education inScotland.’ The exercise would berepeated every two years to build upreliable information to assess supplyand demand.3.10 The next report was commissionedin April 2004 with a remit to givepolicymakers and providers a morecomprehensive picture of demand,need and supply for policydevelopment, and an improved basison which the strategic educationbusiness decisions of providers andfunders are made. It did not set outto provide definitive answers on,although it is a major contributorin assessing, the extent to whichprevious statutory requirements toprovide adequate and efficient furthereducation in Scotland are met.3.11 The report was published inApril 2005 and provides informationon provision in all forms of furthereducation and on demand fromemployers and students. One ofits conclusions was that ‘demandfor further education remainsbuoyant and outstrips supply’.The report drew together over40 area-based indicators coveringdemographic change, current andforecast performance of the Scottisheconomy, labour market indicators,employer data from the ScottishEmployers Skills Survey 2004,schools performance and schoolleaver data, local authority deprivationindices and SFEFC data on furthereducation learner participation,college activity and strategic change.3.12 SFEFC provided advice tothe new Funding Council on theimplications of the report; theadvice was issued to collegesin a circular in September 2005.SFEFC based its recommendationson the belief ‘that the council’sinterventions should focus on helpingcolleges and other stakeholdersaddress educational deprivation byimproving the achievement levelsof skills and learning in Scotland’sdeprived areas, in order to improveindividuals’ potential employabilityand help more people to becomeand stay economically active.’ Therecommendations included specificaction in Lanarkshire, Glasgow,the Highlands & Islands and theSouth, (Exhibit 7, overleaf). InDecember 2005, the Funding Councildiscussed the recommendations andit will consider them further in futuremeetings to make decisions to informfunding allocations for 2006/07.3.13 The circular points out thatthe issue of supply and demand iscomplex and that it is hard to findclear-cut and uncontentious answers.It states that ‘there are tensions orperceived tensions between: the roleof the council and of colleges; socialinclusion and support for growingeconomies; short-term and longer-termtrends; the ability of education tosolve societal problems and someof the expectations put upon thesystem’. The colleges visited duringthe audit held the general view thatissues of supply and demand shouldbe dealt with on a local basis andthat the Funding Council has no rolein managing supply and demand.3.14 The latest ministerial letterof guidance in November 2005expected the Funding Council towork with colleges and universitiesto secure a coherent and flexiblepattern of provision that best
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