The LGA has called again for devolution of further education funding to councils after two damning National Audit Office reports on the sector’s finances.
Earlier this week the National Audit Office announced it had qualified the 2014-15 accounts of the Skills Funding Agency, which funds colleges, for advancing £49.9m to 17 colleges without Treasury approval. The SFA sought retrospective approval, which was also refused.
This means it must deduct this sum from this year’s budget.
Meanwhile a separate NAO report, also published this week, found the financial health of 41% of colleges had worsened over the past two years.
It said the sector’s dire financial situation showed “fundamental structural problems which might require decisions at a regional or sector-wide level”.
Calls for control over skills budgets and policy have been common to almost all bids for devolved powers made by councils and combined authorities.
Auditors said the decline in colleges’ financial health “has been quicker than indicated by college plans, and current forecasts suggest that the number of colleges under strain is set to rise rapidly”.
NAO head Amyas Morse said: “The further education college sector is experiencing rapidly declining financial health, and lacks a clear process to inform decisions about local provision.”
An LGA spokesman said: “The LGA firmly believes councils could do far more to improve further education provision if powers and funding were devolved to local areas enabling councils, colleges, schools, providers and businesses to work together locally to more effectively plan what provision is needed across local areas.”
Association of Colleges chief executive Martin Doel said the further education sector had been “battered by a swathe of funding cuts [and] cannot endure any more cuts without impact on the local communities it serves”.
Picture by Kevin Dooley