Colleges pay the price for degrees

Almost a fifth of further education colleges are now offering degree or sub-degree level courses supported by the Higher Education Funding Council for England. But the funding mechanism was not designed to cater for such programmes and many colleges say that offering higher-level study is causing too many financial headaches.

In particular, colleges with large higher education programmes argue that their work is starved of capital and equipment funds, which could affect quality of provision. This is because the Further Education Funding Council's priority is FE study and no extra weighting is given for HE students. The colleges are unable to bid for HEFCE capital funds.

Because of such difficulties, HEFCE has this week published a consultation document on the role of FE colleges in HE. The council stresses that colleges have a distinctive role to play in delivering HE. Higher level courses in the college sector cost HEFCE Pounds 26 million last year, bringing opportunities to 32,000 students.

In addition to the students studying degrees devised by colleges the HEFCE also funds another ,000 student places franchised by universities to colleges.

Why are colleges so keen to shift away from their original mission and offer higher level study? The report praises colleges for providing routes into degree work. They are also able to use their HE student numbers to boost income if there is under-recruitment in other areas. In addition, the status of degrees is an important motivator.

Courses offered in colleges were found to be different in character, helping them attract mature and other non-standard entrants. The report says the majority of courses supported by HEFCE are in business and management. Most are cheaper than corresponding provision in the HE sector. This may reflect the fact that growth in colleges has predominantly been on a fees-only basis.

In a number of subject areas such as maths, information technology, computing, business and management, humanities and arts, the average unit of council funding was almost half that in a HE institution. But there were some subjects -- science, engineering, art and design -- in which the average was higher in colleges.

Colleges supported by the HEFCE range from those that offer limited HE to others that have more than 1,000 full-time HE students -- perhaps half their total. Some colleges serve a national and international market, although most degree and sub-degree programmes were a response to student and employer needs at local and regional level and there was often a vocational emphasis.

Despite their success, many colleges feel they are inadequately provided for in a number of areas. Colleges directly funded by HEFCE have been excluded from a number of proposal-related funds. A number of colleges have also argued for inclusion in the research assessment exercise to allow further academic development of programmes.

It is also claimed that the converging financial pressures of growth in FE and consolidation in HE could have negative consequences. The FEFC funding methodology no longer recognises the extra costs of providing higher- level courses and so those colleges with substantial degree work simply appear to have high FE costs.

HEFCE says that funding constraints make it difficult to consider any changes in its approach to funding colleges at the expense of HE institutions. It is unlikely that the council would increase the number of colleges which it funds directly. But it is possible that a small number of mixed economy colleges could be identified for special treatment by HEFCE.

The question on which the report says a decision is needed is whether the council should be even-handed between colleges and HE institutions in funding or whether it should primarily be concerned with the universities.

Higher Education in Further Education Colleges: Funding the relationship, published by HEFCE.