A financially sustainable college sector is vital to delivering the education and training that the country needs. The government expects colleges to play an increasingly prominent role in the coming years – to help meet the need for a more skilled domestic workforce following the UK’s exit from the European Union, and to support the government’s plans to develop national infrastructure, increase the number of public servants, and ‘level up’ skills and prosperity across the country. Colleges will also be important in developing the skills of people who retrain or change roles as a result of the economic impact of the COVID-19 pandemic.
The report concludes that ‘overall, the financial health of the college sector remains fragile. Ofsted inspection ratings suggest that colleges are generally maintaining educational quality, but other evidence shows that financial pressures are affecting wider aspects of provision such as the breadth of the curriculum and levels of student support. The programme of area reviews led to structural change and had some success in making the college sector more financially secure. The Department is now formulating a strategic reform programme intended to remedy systemic long-term weaknesses in the sector. This is a welcome development but, until such a programme is in place and achieving results, we cannot conclude that the Department is responding effectively to the financial sustainability challenges that colleges are facing’.