Rayner: Nearly half of colleges at risk of collapse as new cost pressures emerge
|
Nearly half of colleges in England could be at risk of becoming
insolvent in the next decade, as Ministers have admitted that a
pensions black hole will cost colleges over £100 million every
year. There are currently 38 colleges subject to a notice
to improve financial health, but Ministers have admitted that this
figure is likely to rise to 100 in the next decade. These are all
institutions that the government has officially warned to
“ensure they were...Request free trial
Nearly half of colleges in England could be at risk of becoming
insolvent in the next decade, as Ministers have admitted that a
pensions black hole will cost colleges over £100 million every
year.
By contrast, the government’s recent announcement of £38m of capital funding for T-Levels, at £142,000 per college is less than half of the cost pressure they are facing as a result of rising pension costs.
Labour’s Shadow Education Secretary Angela Rayner, speaking at the annual conference of the Association of Colleges, contrasted the government’s package with Labour’s pledge to increase FE capital investment by £140 million in the year they take office, and would then increase total capital spending to £1 billion per year over the course of a parliament.
Last week, the Commons voted for a Labour motion demanding that the government address education cuts in the forthcoming comprehensive spending review.
“We have seen the number of adult learners fall by one million since 2010 and overall spending on adult skills fall by almost half, just at the time when we need to develop a skilled workforce more than ever, with Brexit looming.
“Now it has been revealed that the Treasury is imposing new unfunded pension costs of £80 million a year from 2020, amount to over £300,000 per college. So I want to reiterate our call on the government to give all schools and colleges the certainty they need and guarantee that their budgets will be protected from these stealth cuts.
“Yet there was not one word or a single extra penny for further education in the Budget. The Education Secretary provided just £38m in capital funding for the supposedly flagship T-Levels. Last month, I was proud to celebrate Love Colleges week. But colleges have had neither love nor money from this government.
Ends
Notes to Editors
The Department for Education have said that there are 37 colleges
subject to a published notice to improve for financial health,
and that “100 colleges will need to fully familiarise themselves
with the insolvency procedures.”
In a written Parliamentary Answer given today, Ministers admitted
that the number of colleges currently subject to a financial
notice to improve increased to 38, and confirmed the figure of 63
colleges at risk of triggering a notice in the next ten
years.
Further education providers are facing an additional cost
pressure of £142 million as a result of rising employer pension
contributions
£80 million of these cuts will fall on further education colleges. Across 266 colleges in England this equates to over £300,000 per college (£80,000,000/266 = £300,751.33)
According to the Association of Colleges there are 266 colleges
in England. 100 colleges would be just under 40% of the total
(38%);
A previous Labour analysis of figures produced by the Institute
for Fiscal Studies shows that further and adult education budgets
have been cut by £3 billion in real terms since 2010.
The Secretary of State for Education announced at Conservative
Party Conference that capital funding for T-Levels would increase
by £38 million
Labour has previously committed to increasing FE capital spending by £140 million in the first year in office, and increase investment year on year until capital spending is £1 billion a year over a Parliament;
For the decline in adult learners see the tables accompanying
Institute for Fiscal Studies,2018 annual report on education
spending in England, Figure 4.3 |