The government has set aside £726 million after the recent area reviews to cover FE colleges’ restructuring costs.
The Department for Education feels that implementing the changes suggested by the recent area review will cost no more than £726 million in the spending review period (until around 2020) and will be spent largely on funding loans to cover the necessary restructuring costs. They have confirmed that money will only be paid out subject to need and only if applications are realistic and affordable.
The majority of the funding will be available through the restructuring facility to help colleges cover the cost of the changes suggested by the area reviews. However, £12 million has been put aside for transition grants (government money given to colleges for specialist consultants) which colleges can use to bring in any expertise they need to help them change and follow the review’s recommendations.
Julian Gravatt, the assistant chief executive of the Association of Colleges, said: “It is good that the Treasury has made loans available to support colleges.
“The sums involved are large but colleges educate and train millions of people a year, so this needs to be put in context.
“Colleges have bank loans which total £1.6 billion, and although some colleges can borrow more if they want to invest or fund a merger, others can’t.”
It has not yet been revealed which colleges have been awarded the funding or which consultants have been selected by the different colleges, but this information will hopefully be revealed in the near future.
The Department for Education has also set aside £5 million for ten plans that will help the Further Education sector respond to Skills Plan implementation and the results of the area reviews. The ideas cover things like meeting the sector’s developing needs and sharing outstanding technical learning and assessment.
After all the recent media coverage of the skills gap and the focus on the importance of improving technical and vocational education routes, it is good to see Further Education Colleges getting the necessary funding to evolve and make the changes they feel they need.