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The possible policy effects on FE colleges in England under the Learning and Skills Councils

Michael Hammond

Paper presented at the Annual Conference of the British Educational Research Association, Heriot-Watt University, England, 11-13 September 2003


This piece of policy research, looks at the potential effects on Further Education (FE) colleges under the Learning and Skills Councils (LSC)in England, and initially presents an overview of what the author perceives to be a number of important key themes coming out of the policy changes.The LSC was created by the Labour Government in 2001, to plan and fund all post 16 education and training within England, excluding some adult provision. It is a centralist body with its head office in Coventry, and 47 regional arms, known as Local Learning and Skills Councils (LLSC's). This paper charts the development of the FE sector from a traditional local authority model under the Local Education Authorities (LEA's) to the 'new managerial' market forces model of the Further Education Funding Council ( FEFC).The LEA's managed FE provision in England up until FE colleges were transferred into their own independent corporations, by a process known as incorporation. Thus the FEFC was created by the Conservative Government 1992-1997 to fund these new corporations, and was a funding body only not a planning body. From this, the paper then considers the possible reasoning behind the change from the market forces model of FE, to the 'planned' model proposed under the LSC. Within this heading, issues such as 'sleaze' (a generic word much in vogue during the 1990's to cover a range of misdemeanours by politicians and people working in the public sector), and governor failure are considered. Having set the scene as it were, the paper then considers some of the issues that come out of the LSC model, in relation to planning, control, bureaucracy, and rationalisation etc, within the sector. The paper concludes by suggesting how these concepts might impact on FE colleges.


To understand the momentous changes discussed within this research, it is important to appreciate how the FE college sector was born, and how it developed up until incorporation in April 1992. The researcher would suggest that the FE sector had been, until this time, an educational sector that had not attracted the attention of the government and policy makers in the same way as schools probably because the economy of Great Britain had been able to absorb a large number of unskilled and semi-skilled workers without training. For example, prior to 1939, eighty eight per cent of young people left school at fourteen years of age to pursue a career which, more often than not, was in unskilled employment (Tomlinson, 1997). This left their upper and middle class colleagues to pursue a liberal-academic education in the grammar and public schools to prepare them for the universities and the professions.

By 1959 these figures were substantially unchanged with only ten per cent of young people stayed in education until the age of seventeen (Tomlinson 1997,p3). Some of those young people who left school before seventeen were fortunate enough to obtain an apprenticeship to a trade but for them there was only a limited and somewhat sporadic provision of technical education which had begun in 1823 through the vision of George Burbeck. Burbeck founded the first Mechanics Institute with the intention of teaching young men the scientific principles which underpinned much of what they were doing in their respective trades.

The Great Exhibition of 1851 was however a catalyst for the development of further Mechanics Institutes as deficiencies in technical innovations between Great Britain and continental Europe were exposed to the shock of Victorian Britain (Macfarlane 1993,pp10-11). In 1878, the City and Guilds of London Institute was founded, which provided a qualification framework for technical education. This development then allowed many of the Mechanics Institutes to evolve into colleges of technical education which, in addition to night school courses, began to offer day release classes (Green, 1998).

A further impetus in the development of the FE sector, was the 1918 Education Act which was promoted by H.A. L. Fisher, who was President of the Board of Education in the Coalition Government of that period. The Act had intended to compel Local Authorities to provide continuing education, but this measure was never properly implemented, although some provision was made for part-time post school education (Green, 1998). In 1921 the Government, as a further initiative to help employees along the path to promotion, introduced a national certificate scheme at ordinary and higher national level. The FE college sector received further Ministerial support for expansion through the Local Education Authorities (LEA's) which were compelled by the 1944 Education Act to secure the provision of adequate facilities for both full and part time FE for people over compulsory school age.

From the 1944 Education Act, FE initially expanded rapidly with many new colleges being built in the 1950's and 1960's. This expansion though was short lived and highly uneven, varying substantially from one locality to another (Lucas, 2001). During the 1970's concerns began to arise about the core (English, Mathematics) skill deficits of school leavers entering the workplace. Mr. James Callaghan the then Labour Prime Minister, sought to raise these concerns in a major policy speech on education at Ruskin College Oxford. The policy described by Callaghan was to relate curriculum in schools nearer to the needs of industry in the country. Mr. Callaghan in making the speech was seeking to engage the academic community and other interested parties in a debate on the future of education within the country. Callaghan achieved this ambition, as the speech is recognised as being the start of the 'great debate' on education (Baker, 2001).

Thus Callaghan's Ruskin College speech in 1976 was taken up by the Conservative administration of Margaret Thatcher when they were elected in 1979. That initiative was extended towards FE colleges initially by the Thatcher Government, and subsequently by the John Major Conservative Government. When discussing the Ruskin phenomenon, it was seen by Morris (2001) to be the start of a decline in the ideology of 'liberal' education, towards the more focussed concept of 'education for business.' A critic of these reforms, Morris (2001) lamented that the 'new' Labour Government has carried them on. He concluded:

"The speech set the standard for the beginning of Tory intervention, which has now been taken to its extreme by New Labour centralised control of the curriculum, and the whole idea of education for business. It set future trends that have become so disastrous." (Morris, 2001,p21)

Until the end of the 1980's FE had avoided many of the changes that had been inflicted on schools by the Conservative Government (Baker, 1989,p1). Mr. (now Lord) Baker, the then Secretary of State for Education indicated in a speech, however, that FE in its turn was about to receive similar change at the hands of the Conservatives. He stated:

"Further Education is not just the bit in between Schools and Higher Education. It is not just the Cinderella of the education service. Over 1,750,000 people attend further education classes, taught by the equivalent of 63,000 lecturers. There are some 400 LEA maintained Colleges. The whole thing costs over 1 BN a year. It is a big, big enterprise." (Baker, 1989,p1)

He continued:

"We have set in-hand, the changes which will achieve a better foundation at age 16. Now I believe the time is ripe to give a similar thrust towards education and training thereafter, building on the work done through TVEI. In short it is time for an initiative to promote further education." (Baker, 1989,p1).

Thus the development of FE prior to 1992 began with individual, voluntary efforts in the nineteenth century. It continued with patchy LEA provision during most of the twentieth century. Recognition of its inadequacy in relation to the need by business and commerce in Great Britain for good technical education for potential employees, led post 1976 governments of all political persuasions to adopt more interventionist approaches, as was signalled by Callahan's Ruskin College speech. These approaches began with the Conservatives moving FE colleges out of LEA control, to be incorporated as individual 'business' corporations under central control through the FEFC. The Labour Government then replaced the FEFC with the LSC.


When undertaking a piece of policy research then the concept of 'methodological eclecticism' has been held to reign supreme (Finch, 1985; Troyna 1994). Published policy research has for example consisted of a methodology based entirely on interviews (MacPherson and Rabb, 1988). Primary source documentation was used as the sole source for data collection in policy research (Slater and Tapper, 1981). A 'partial' ethnographic approach to policy research has also been used by other researchers (Bowe, Ball and Gold ,1992; Walford and Miller, 1991). The researcher, in designing the methodology for this research used primary and secondary literature. The primary literature took the form of Government DfEE/DfES publications and LSC/FEFC circulars (Cohen and Manion, 1994). This paper is based around three research questions: What were the ideologies behind incorporation of the FE college sector? What were the motivators which persuaded the new Labour Government that there needed to be a change from the FEFC model of FE to the LSC model of FE? What is the impact of the LSC likely to be on the FE sector?

Ideologies behind incorporation of the FE college sector

A major difference between the LEA and FEFC models lay in the significant reduction of state intervention which the Conservative Government sought to achieve by removing FE colleges from Local Authority control into independent corporations run by college governors. This reduction in state intervention arose from a Government desire to achieve marketisation of the FE sector using the techniques of new managerialism. Many years before the birth of 'Thatcherism', Margaret Thatcher was expressing the view that there was too much Government (Thatcher, 1997). While in opposition to the Wilson/Callaghan Government of 1974-79, the themes that were to dominate her administration during the 1980's began to be developed and defined (Russell 1978; Gamble 1988). Grocott (1989) states:

" With the arrival of Thatcher came a great determination to do what was necessary to rescue Great Britain from the perceived national decline for which the civil service was partly to blame. Reducing public expenditure, eliminating waste, rolling back the frontiers of the state, lifting the dead hand of bureaucracy, cutting the public payroll were the objects of a crusade given authority by a clear electoral victory and leadership of a peculiarly visionary and dogmatic kind." (Grocott, 1989,p119).

Linked with the concept of marketisation was the concept of new managerialism. Although the various facets of new managerialism and marketisation are discussed separately in this paper, academic authors tend to denote the two phenomena as arising together (Levitas, 1986; Hall 1988; Clarke, 1991). New managerialism involves deregulating public sector management to help 'managers to manage' without being hampered by excessive demands for accountability (Clarke and Newman, 1997). Thus, the politicians (at local level), the bureaucrats (in the town hall), and the professionals (teachers, social workers, etc) who the Conservatives felt by their controlling interest in the public services actually distorted the potential working of the free market model, had to be removed or sidelined.

This they believed would then leave the market to control both supply and demand (Pollitt, 1993). This has invariably enabled managers to compel and control workers within the public sector, as unions were enfeebled through repeated anti-trade union legislation enacted by the Conservative Government with a view to rolling back the state (Pollitt, 1993). Marketisation as a secondary phenomenon acted as a check on newly emancipated public sector managers by creating a quasi market for their services. This for the first time raised the spectre of redundancy for public sector managers and their employees if their 'business' failed to be efficient. By the use of both of these mechanisms, the Conservative Government sought to reduce the amount of public money spent on education.

Public services' new managerialism was encouraged by such academics as Peters and Waterman (1982) in their work on customer service. This influenced the development of three initiatives which collectively Pollitt (1993) calls New Public Management. These initiatives involved the re-working of budgets so that they became transparent, costs being attributed to outputs not inputs and outputs being measured against quantitative performance indicators (Pollitt, 1993; Dunleavley and Hood, 1994). To the Conservative Government the changes they proposed were going to increase the student numbers in FE colleges, and improve quality, while at the same time through increased efficiency, and business acumen reduce the overall cost of FE to the Treasury. It has been argued however, that the Conservative Government policies had a very negative effect on many public sector workers as public sector organisations engaged in cost cutting, downsizing and a loss of professional status by teachers and lecturers (Gleeson, 1996, p102)

As Macfarlane (1993) points out however, an ulterior motive for marketisation and new managerialism being implemented in FE by the Conservative Government, was a perceived skills deficit in the workforce in comparison with other nationalities according to independent reports (Confederation of British Industry (CBI) 1989, Institute of Manpower Studies 1989,Royal Society of Arts (RSA) 1991). These reports cited skill deficiencies as having a possible detrimental effect on Britain's economic performance. The Conservative Government believed that new managerialism and marketisation of the FE sector would address this issue by making colleges responsive to business needs, while at the same time increasing efficiency of the sector, thus reducing increases in public spending.

This was an important policy change from the former position of the Conservative Government as until the production of these reports, training of workers in employment had been seen by the Government as the responsibility of employers (Lawson 1992, Hutton 1995). This policy change in relation to the FE sector was emphasised by Coldstream (1993) a senior civil servant when he addressed the Institute of Manpower Studies and emphasised the need to retain more young people in education beyond the age of sixteen. The purpose of this was to bring the UK more in line with the numbers of students staying on in education in the EU and the world generally.

Initially, the process of new managerialism of the FE Sector had begun through the Education Reform Act (1988) which began 'divorcing control' of FE, as well as schools, from the Local Education Authorities. By this Act, some responsibilities and powers were transferred from the Directors of LEA's to boards of governors in colleges in accordance with the Conservative's philosophy of rolling back the state (Pollitt, 1993). The Conservative Government, however, wanted to go much further with this new managerial marketisation philosophy and to create a complete 'divorce' between FE colleges and Local Authorities (Ayer, 1994). This process was called incorporation, and was achieved through the Further and Higher Education Act (1992) (F&HE Act 1992). Colleges were taken from LEA's, and handed to their own newly created independent corporations.

The Further and Higher Education Act (1992) (Section 1) provided for the creation of an un-elected quango, the Further Education Funding Council (FEFC). The FEFC was to be administered by a corporate body centrally. Section 1 4-(a) (b) provided that the right to appoint members of the council was the responsibility of the Secretary of State and this is also inferred in Section 1 (2). Thus the FEFC was a centralist organisation, with organisational control being held by the FEFC board and head office albeit with regional offices. This apparent contradiction was offset because the FEFC was a funding body only with no planning responsibilities (Ainley and Bailey, 1997).

In addition, the Further and Higher Education Act tasked the FEFC with creating an inspection regime for FE colleges, which until that time had enjoyed only periodic inspections from members of Her Majesty's Inspectors. Thus the FEFC became not only a funding body but an inspecting body as well. Inspection was defined by the FEFC in the following way.

"Inspection is based on judgements about quality and standards. The council is also gathering statistical information about college performance. A set of six performance indicators was agreed with colleges during the year. The indicators cover the extent to which colleges are effective, and give value for money. Student staying on rates, student achievements, and College contributions towards the National Targets for Education and Training. " (FEFC, 1995,p19).

The Further and Higher Education Act (1992) transformed colleges into independent autonomous organisations (Section 15, 1-6). Every FE college was then put under the control of a board of governors. Sections 18 and 19 of the Act gave powers to the boards of governors, now named the corporations, to facilitate their FE colleges in the supply of 'academic services' (which is the description in the F& HE Act (1992) for teaching and learning) and to provide funds for them to achieve this purpose obtained from the FEFC. A further ramification for FE colleges was contained in Section 26 (1-2) of the Act, in that it transferred responsibility for employing all staff to these corporations. This created two phenomena. First, the corporations, in having direct control of their staff sought to make them more efficient through varying their contracts of employment in accordance with the new managerial concepts discussed above. Secondly, this created new functions within FE colleges as personnel departments were created to look after personnel issues and also newly appointed estate offices began to look after college buildings.

A further perceived change for FE colleges after incorporation was that governors who pre-incorporation under the LEA had been mere 'place men' with little in the way of responsibility (Hammond, 2001), were supposed to become non-executive directors (Coulson-Thomas 1990; Further Education Unit (FEU)1994). In this way though, marketisation and new managerialism combined to centralise theoretically power in managers and directors as it is in private companies. Governors under the Statutory Instrument England and Wales Education (Government of Education Corporations) (Former Further Education Colleges) Regulations (1992) SI (1992) were also responsible for the management, control and accountability of the Principal and other senior managers in their colleges. This placed some onerous tasks on governors, including appointment, grading, suspension, dismissal, and the determination of pay and conditions of service of senior post holders and the setting up of a framework for the pay and conditions of staff at the college.

The Act translated FE college governing bodies into corporations, which the Conservative Government expected to contain more business people on them than had been the case under the LEA, and this was enshrined in the F & HE Act (1992). These governors (as newly styled executive directors) were expected to demonstrate a wide range of talents and experience not requisite before, which included strategic awareness and objectivity. They were also expected to have good communication skills, to be able to demonstrate individual responsibility, impartiality and a willingness to work as a team. It was also envisaged that these new governors would spend a lot of time working for the college and show an aptitude for 'customer focus' (Coulson-Thomas, 1990,p22).

Governors were also required to oversee the strategic direction of their college by setting and overseeing the mission and policies of the college. Governors were responsible for seeing that their colleges created a climate for creativity, change and responsiveness to the external environment, to the local community and to a college's customers. Governors were also responsible for the financial management of their colleges. This entailed making sure that the college was solvent, and was making efficient use of its resources. Governors were also required to monitor the performance of senior management in meeting targets, carrying out policies, and in maintaining information systems (FEU 1994,p48). Thus, governors were responsible for getting their colleges ready to compete in a quasi-competitive educational market.

Therefore the emphasis of marketisation and the new managerial model of FE was on competition and the creation of a quasi-market in which FE colleges would compete for students (Pollitt, 1993). The Government believed this would increase the participation rates of students as well as the attainment, and the efficiency of FE institutions:

" The rationale for granting independence to Colleges was that it would free them to engage in entrepreneurial activity and to enter a 'market place' of education where they could compete with other Colleges to attract students. The overall aims were to increase the level of participation in FE, to raise the levels of attainment and to do so in a way which encouraged institutional efficiency." (Bradley, 2000,p157).

With the concept of marketisation and new managerialism and its emphasis on efficiency, came the expectation that some rationalisation of FE Colleges would occur. Mr. Tim Eggar the Conservative Minister for Further and Higher Education who guided The Further and Higher Education Act (1992) through the House of Commons openly expressed the opinion that rationalisation would occur, as the less efficient colleges would be rooted out by the natural process of market forces and be closed (Bradley 2000).

This rationalisation was to happen through market forces. For FE colleges this was a much larger competitive marketisation model than they had encountered before, as they came into competition not just with other colleges, but also with universities, school sixth forms, private training providers, and in-house training organisations. FE colleges also could no longer rely for customers on the previous quasi-monopolistic control of the sixteen to eighteen year old market in particular (Smithers and Robinson, 2000,p2).

Taking all these issues into account and the marketisation and new managerialism ethos of the model arising from the 1992 Act, the FEFC claimed to have been created with six aims, which were:

"To secure throughout England sufficient and adequate facilities for further education, meet the needs of students including those with learning difficulties and/or disabilities and the communities in which they live. To contribute to the development of a highly skilled and competitive workforce, as envisaged in the National Training Targets for education and training. To promote access to further education for people who do not participate in education and training, but who could benefit from it. To promote improvements in the quality of further education. To ensure that the achievements, contribution and potential of the sector and its financial needs are properly represented at national level. To secure value for money, for the funds employed by the council."(FEFC, 1995,p2).

Keeping with the marketisation philosophy described earlier in this paper, with its emphasis on increased efficiency, the Government and the FEFC while at the same time as wishing the FE sector to expand drastically, also wanted this expansion to be funded mainly through increased internal college efficiencies without the benefit of new money (FEFC 1992,p8).

"The Government has put Colleges at the forefront of its education policy for the over 16's. Its expenditure plans announced in autumn 1992 envisage rapid expansion. The Colleges have been asked to increase their intakes by a quarter over three years. The Colleges are expected to become more efficient without loss of effectiveness. Growth in student numbers is not to be matched by pro rata increases in funds." (Smithers and Robinson 1993,p37).

In order to achieve this growth without extra funds, under the new managerial model, managers were supposed to be free to manage. To reinforce this however, the FEFC provided that failure to achieve targets meant that theoretically managers and organisations were to be penalised. Therefore to ensure that colleges would either make their growth targets or be penalised financially, the FEFC entered into funding agreements (contracts) with individual colleges. These funding agreements consisted of a main allocation of units, with each unit being equal to a specified sum of money, which differed amongst colleges. This sum of money was based on their historical LEA funding prior to incorporation but which reduced each year after incorporation so that most colleges would converge down towards a national norm.

The FEFC funding methodology was also based on an allocation of units. Units were a sum of money which were paid to colleges for their students (FEFC, 1997c,p1). The number of units allocated to each college was determined, and this was paid by the FEFC in return for the college meeting the targets it set itself for enrolling students, retaining them on their course to completion and then achieving their projected learning outcomes.

This main allocation of units was made up of 90% of the previous year's allocation of units which was called the core funding. Core funding was guaranteed to all colleges. Thus effectively to avoid a 10% cut in funding, a college had to bid to the FEFC for additional units known as bidded units. This meant that colleges had to increase the number of bidded units they were delivering year on year just to stand still, as the main allocation of units to each college reduced year on year. Colleges therefore were receiving 90% of 90% and so on. At the same time the amount paid for each individual student was also dropping during this period by an average of 3.5% per anumn through convergence (Ainley and Bailey, 1997).

The marketised model through the FEFC also provided an additional source of income for 'successful' colleges who recruited students over and above their core and bidded units. This source of income was known as the Demand Led Element (DLE). Thus colleges were able to recruit over their core numbers and bidded units which had been allocated by the FEFC by as many students as they wanted. This was because DLE (at the time) was not cash limited by the Treasury (Melia, 1999). These additional students were however being funded at the much-reduced rate of 6 per unit for the course of study that they were on, whereas the core rate was around 16.

Nevertheless, colleges made more extensive use of this facility than had been anticipated. Therefore when the FEFC presented the bill to the Treasury, DLE was rapidly consigned to the dustbin as the Treasury, although paying the initial bill, refused to fund the initiative in future years. This was to have dramatic effects on some individual colleges whose budgeting and planning had contained a large allowance for DLE funds. For example, Bilston Community College in the West Midlands initially sought to challenge this by threatening to take the FEFC to judicial review. However this action was then dropped by the college, which subsequently became embroiled in allegations of sleaze and mismanagement. Bilston Community College also received a very poor inspection grade from the FEFC, leading to its amalgamation with another college. This was due mainly to financial difficulties the college had as a result of the Government decision to remove DLE funding (Melia, 1999). Thus the Conservative Government appeared to be overturning its own policies of allowing the free market and market forces to operate unchecked.

In conclusion then, the FEFC funding methodology was designed, theoretically at least, to take account both of the diversity of the sector and the need to treat colleges and courses equitably. It placed particular emphasis on the retention of students during their courses, rather than simply their presence at the start of the academic year as had traditionally been the case in FE (and still is in the schools and university sector). Funding was paid to the colleges in respect of students on a term by term basis, with the FEFC releasing funds to colleges each term. Thus if the students withdrew from one term to the next, then the college received no further funds from the FEFC for them. Money was given to colleges on census dates in November, February, and June (Halsall, 1996). The FEFC's formula also included an achievement element which financially rewarded the college for the successful completion and achievement of the qualification on the course by the student (Select Committee 1998a,para 33,and p14).

As already stated, the FEFC also sought to reduce the base line cost of each unit being generated by the colleges under their methodology through convergence. This was done for the purpose of working towards a national uniform rate for all colleges in England. A requirement for convergence came from a historical dis-aggregation of funding for FE in different colleges around the country. This historical problem related to the different resource levels that colleges had received off Local Education Authorities to produce the same curriculum outputs (Ainley and Bailey 1997).

Marketisation and new managerialism in FE colleges led to many practices 'supposedly' common in private industry being incorporated into education (Ayer, 1994). College managers were encouraged like other public sector managers to engage in managerial techniques championed in 'for profit' industries (Pollitt, 1993). It has been argued, that this led senior management in many colleges to respond to the challenges of incorporation by adopted 'hard' human resource management practices (Elliott and Hall, 1994). Other techniques to make efficiency savings made by management included the truncation of class contact hours on courses, the increase in class sizes and the refusal by management to remove difficult students from classes, which caused problems with teaching and learning (Lucas 1998, p301).

After incorporation, management also put the emphasis more on funding than on progression (Lucas 1998,p302). Management itself was also affected by an upsurge in work load with the massive increase in the requirement for statistical data by the FEFC, which required colleges to produce as many as 1.5 million data items in an academic year (Lucas 1998,p304).

A further impetus to a change of managerial style in FE colleges may have been because the financial consequences for any college under the new managerial model that failed to hit their performance targets could be quite serious (Barrow, 1997). This created a situation where it could effect potential growth and expansion of that institution:

"For colleges which did not meet their performance target, the maximum permitted increase was only 15% above the core funding level for the lowest cost college in this group, reducing to 0% for a college with ALF of 40.00 or more. Thus colleges which had not met their previous funding agreement were significantly constrained in their possibilities for expansion." (Barrow 1997,p141).

Finally, the marketisation model also led to large increases in expenditure by FE colleges on marketing in an attempt to achieve their growth targets (Lucas, 1998,p305). In urban areas where there were a number of colleges in close proximity, this meant that competition often became very fierce, (Ainley & Bailey 1997).

It can be seen that the change from a traditional LEA 'not for profit' model, to a more ideologically driven market forces model within FE changed radically the way that FE was controlled and managed. This created problems, which it might be argued led to the change from the FEFC to the LSC as the sector struggled under the FEFC model.

The motivators perceived to have created a change from the FEFC model of FE to the LSC model of FE

On its election in 1997, the new Labour Government inherited a sector that was, as a result of the FEFC model, suffering some unintended consequences of marketisation and new managerialism. One problem was that the FE sector was struggling with a large amount of internal strife between managers and unions. This was because on incorporation, many members of staff in FE colleges had been made redundant. Many colleges reacting to the new managerial and marketisation model of the FEFC had no choice but to make staff redundant (Kimberley, 1997,p249). Thus there was a large number of staff who left the profession in the first three years after incorporation (Select Committee 1998,b). Staff who remained were forced onto more onerous contracts of employment than they had previously enjoyed under the LEA pre incorporation.

Industrial relations problems had got worse in the sector because the Colleges Employer Forum (CEF) and the National Association of Teachers in Further and Higher Education (Natfhe) (the employers' representatives and the main colleges lecturers' union respectively) had failed to reach a deal on the terms of new academic contracts. Negotiations were dragging on and on and the structure relating to national pay bargaining had been reduced to tatters. Thus staff found themselves restricted to narrow bands within pay scales, with FE colleges setting their own pay rates rather than a nationally agreed one (Burchill, 1998).

It is argued that it is important to understand this backdrop when considering why the LSC replaced the FEFC in relation to college funding and ultimately, of course, college planning. The Labour Government was (and probably still is) 'obsessed' with image and presentation, and the market forces model had reduced FE to an industrial relations' problem. Also it might be suggested, that in 1997 the future Labour Government had placed "education, education, education", at the heart of its manifesto and thus it was politically unacceptable for the Labour Government to allow strikes and other industrial action and disturbance to mar what it wished to achieve.

Another concern about the FEFC model of FE which may have preapilated a change to the LSC model was that as a result of incorporation there was a belief that in some colleges:

"The culture of fear and intimidation, which is now all pervasive in our colleges, has had a corrosive effect on the learning experience, by adding to the anxiety of the professionals working in the sector. From being a rarely invoked sanction (previously professional peer pressure ensured that high standards were maintained) disciplinary action is now a routinely used method of control. It has been estimated that in the five years since incorporation, over 8000 disciplinary cases have taken place. This beggars belief, as a true reflection of poor professional attitude. It is in reality, a reflection of the crude use of the weapon to stifle legitimate opposition to the disastrous changes that have taken place in the past five years. We have evidence that demonstrates that the CEF was instrumental in emphasising the efficacy of disciplinary action, as a means of counteracting genuine concern about the wisdom of some of the changes." (Evans & Robinson 1998,p326).

While the literature suggests that ordinary FE staff appeared to be suffering under the new marketisation and new managerial model of FE, college principals appeared to do somewhat better out of incorporation. Post incorporation, the salaries of principals rose by just under twelve per cent (Reeves, 1995,Taubman 2000) which was significantly more than ordinary FE lecturers received.

In addition to these large salaries, allegations of sleaze began to emerge which added to the concerns which led to the replacing of the FEFC model (Select Committee, 1998a). Sleaze in relation to its meaning within this paper means actions by people in authority (usually principals, senior managers and governors) in FE colleges which were not in accordance with good practice in relation to concepts such as public accountability or the use of public money (Baston, 2000). These attacks on FE sleaze were exacerbated by the general public profile of sleaze leading up to the General Election of 1997. As Major (1998) points out in his memoirs, the Conservative Government was rocked by numerous 'sleaze' allegations, which centred initially on the 'sexual' antics of a number of Conservative MP's. This was then extended and developed by the media to cover large salary increases, share options and other bonus payments, which were being made to the Chief Executives of newly privatised public utilities, such as the water industry. Against this scenery, it might be argued that the incoming Labour Government was very keen not to be seen to be in any way tarnished with the same brush as its predecessor and they were thus very sensitive to allegations of sleaze within the public sector.

Governors of the new incorporated colleges therefore were given responsibility for monitoring and controlling Principals and SMT's. These intended safe guards failed in dramatic fashion at many FE Colleges, because Governing bodies did not change to any great extent after incorporation and in many cases governors were appointed due to personal contacts with the Principal or other governors. It is suggested that governor failure was at the root of many problems with sleaze colleges within the sector (Hammond, 2001).

So for example in literature produced by the National Audit Office (NAO) in reports produced as a response to public concerns about the management in two FE colleges, governors were found to be at fault in both. At Halton college the FEFC considered that the expenditure of 100,400 of public money on college away days for managers/governors was 'excessive'. Expenditure of 210,000 by the college on overseas trips which were not supported by a business plan, was deemed unacceptable. The purchasing of prints by the Principal for his office to the value of 31,000 without following internal College financial procedures also could not be justified ( NAO, 1999b). The FEFC also discovered that at Halton College, there was a lack of control over College credit cards and that the receipts were not always available, nor had a "senior officer" of the College approved the expenditure (NAO 1999b, p2). Under the F & HE (1992) legislation, the Governors of the College should have been monitoring this activity properly, which the FEFC felt they had not done.

Similar allegations were also proved at Gwent College (NAO 1999a). At Gwent College it was discovered that expenditure of 6000 by a College employee using a college credit card was not b supported this with receipts; a seconded employee to the 'training shop' from the local county council could not account for advances of foreign currency over a two year period of 4,200 (NAO 1999a, p51). The major allegation made in the report is that the governors on the College Corporation had not adequately supervised the restructuring of the college undertaken by the Principal and by the Chairman of the Corporation. As a result of this restructure a plethora of new management positions was created, (mainly through internal promotions) which substantially increased the costs of the College without boosting income. This created a financial crisis (NAO, 1999a, p29).

Governors at Halton College were also criticised in the NAO report, for allowing the clerk to the corporation to be a member of senior management (vice-principal) (NAO 1999b,p38). It was felt that the corporation at Halton College had failed to make sure that appropriate mechanisms, reporting structures and systems were in place to prevent problems, as they relied too much on the Principalship (NAO, 1999b,p39). Finally, the NAO concluded that the corporation should have made sure that the chairman and other members of the board had not become involved in in-appropriate foreign travel or hospitality (NAO, 1999b, p37).

Governor failure would appear to have also played a large part in the failure and eventual closure of Bilston Community College in the West Midlands. The FEFC also claimed to find evidence within the college of weak governance and management. They claimed this had led to: imprudent financial planning and monitoring and poor value for money, hence a failure to account for public funds (FEFC,1999d). There was also evidence of ineffective strategic planning and a lack of monitoring of college policies and performance. These problems were exacerbated within the college by weak market research and ineffective management information systems (FEFC 1999d, p28).

Perhaps in response to perceived problems of governance identified here, the FEFC (2000) issued a comprehensive guide of good practice and responsibilities to governors. The Labour Government clearly felt however that something more structural was needed, if FE were to benefit from the large amounts of extra public investment that Labour had pledged to put into FE if elected (Rentoul 1995). As indicated by the literature, there were problems being experienced in the FE sector in relation to industrial relations and financial stability as a result of the FEFC model in addition to the issues of sleaze and mismanagement by principals and other senior managers. There was also in the literature, evidence of governor failure to make principals and SMT's accountable, and this failure too, probably precipitated the change from the FEFC to the LSC.

A further motivator to change lay in the inadequacy of the system of controlling the related area of work-based learning and private training contractors. While tangential to FE, its importance to the LSC change needs to be noted here. Prior to the LSC, responsibility for work based training was under the control of the Training and Enterprise Councils (TEC's). This is to change under the new model, with the LSC having responsibility for all post 16 education and training.

"While the majority of TEC funded training is of high quality, the action of some providers is cause for concern. In the worst cases, there has been evidence of fraud, and misuse of resources, the use of unqualified and untrained staff, and unreliable assessment of qualifications." (DfEE 1998a, Para 5.9, p59)

Thus the problems with the TEC's paralleled those in FE and almost certainly contributed to the decision by Ministers that the FEFC/TEC model was not actually capable of delivering what they wanted. Hence came the White Paper which sought to fundamentally reorganise post 16 education and training (DfEE, 1999). This seems to have been influenced by scandals within both FEFC and TEC funded providers. The Government through DfEE (1999) and the White paper sought to create a more controlled sector with colleges being more subject to scrutiny from their LLSC's. Additional pressures on government to develop an alternative to the FEFC model emerged in the light of problems arising from college franchising. In this paper, the abuse of franchising by some colleges means that franchising is considered within the context of sleaze.

The proliferation of sleaze arising from franchising has been identified in the literature as a significant, but unintended consequence of the FEFC model (Bradley, 1996,p384). The misuse of franchising therefore can be seen as a contributor to the change to the LSC. Franchising involves the delivery of college provision often by other private training providers in off site facilities, or through community groups. Rospigliosi (2000) points out that franchising was particularly attractive to colleges struggling under the grip of the high growth targets discussed earlier (Rospigliosi, 2000). FE colleges were able to effectively sell unused FEFC units to private training providers at a DLE (6) rate per unit, while the colleges themselves claimed the full FEFC rate, thus keeping the difference as profit. Often this figure would be anything up to 10 per unit which FE colleges received for doing little, but possibly some internal verification and administration. In this way FE colleges could achieve FEFC growth targets and show a healthy surplus, which could be used elsewhere in the organisation to support other curricula (Melia 1999).

It should perhaps be noted that when illegal or inappropriate franchising was pruned back for example at both Halton College, and Bilston Community College, then this led to some severe financial deficits within the college accounts. These in turn then impacted adversely on curriculum and jobs in the 'core-college', which is the curriculum provided at the college itself. As already mentioned in the case of Bilston Community College in the West Midlands, this meant that a large number of staff were made redundant, and the College was forced to merge with Wulfrun College (Melia, 1999).

The problems of franchising which encouraged the change to the LSC were exacerbated by the difficulties of auditing arrangements for franchised work effectively (NAO, 1997). There was the question of whether or not the provision, which the FEFC paid for through franchising, was really additional to other provision taking place in the franchising organisations. This was because most private training providers were funded by the TEC's to provide training for modern apprenticeships. There was a fear on the part of the National Audit Office (NAO) that the franchised qualifications merely replicated the modern apprenticeships funded by the TEC's, and resulted in no added value or extra training.

It must also be remembered that what drove much of the expansion of franchising was the overflowing 'in trays' of Principals with letters from private training providers touting to take over funding units. Private training providers invariably have lower overheads than FE Colleges, thus making the arrangement financially viable for them (Rospigliosi, 2000). Franchising from a financial perspective would however still appear to be problematic for some colleges within the FE sector. So for example The Guardian in January2003, pointed to the financial difficulties at South Nottingham College due to an LSC enforced reduction of franchised provision from forty per cent to thirteen per cent of College business, as being the major factor in the college's subsequent financial troubles (Kingston,2003).

There was also concern expressed about the educational value of much of the franchised provision. It was felt that private training providers in fact offer little by way of enrichment to their students through their franchised operations, (NAO, 1997; Rospigliosi 2000,p155). Franchising therefore needed more controlling, and should not distort what colleges do (Select Committee 1998a, p41, para 130). There was the issue of geographically indeterminate franchising (i.e. the franchising of curricula all over the country by one college). For example a college in the Midlands might be franchising courses to a private training provider in the Southeast. The Select Committee concluded that this should not be allowed (Select Committee 1998a, p41, para 132).

The monitoring and control within all FE colleges was the responsibility of governors on the independent corporations (FEFC, 1996b, FEFC, 1998b, FEFC, 1999c). In Halton College for example Scottish students were claimed for which was illegal as Scotland had its own funding body. Thus the governors were deemed to have failed in their duty to monitor the franchising activity of their college properly (NAO, 1999b,p2). The extent of concerns over the problems of franchising can be seen in a number of circulars issued in 1999, which reiterated earlier circulars of 1996 and 1997. Colleges were instructed to adhere to the legal rules for franchising (FEFC, 1996a). In Circular 99/07, the FEFC informed colleges that it did not expect any further 'out of area' franchising arrangements (FEFC, 1999a). In Circular 99/09 the FEFC confirmed that the Governments policy towards franchising was very much as that stated by the Select Committee (FEFC, 1999b).

Circular 99/37 sought to remind governors and colleges about their responsibilities for franchising which had been contained in earlier circulars (FEFC, 1996b, FEFC, 1998b). Circular 96/32 sought to place even more responsibility on the non-executive director Governors who managed the FE colleges, by requiring them to make sure all franchising plans were approved in advance (Circular 96/32 Paras 23-25) (FEFC, 1996b). In addition the governors were responsible for scrutinising franchising (Circular 96/32 para 26) and approving any significant changes in franchising activity by colleges (Circular 96/06, para 8) (FEFC,1996a). Finally governors were tasked with making sure that they received regular reports on all their colleges' franchised activity (circular 99/37 para 13(d)) (FEFC, 1999c). Through these measures it appears that the FEFC sought to control some of the excesses that franchising had created within the FE sector.

Franchising has generally been viewed negatively in the literature, but Kennedy (1997) is a dissenting voice. Kennedy (1997) in her report was for curricula reasons in favour of some franchising as a method of achieving inclusivity of groups traditionally not involved in learning. There was also a belief by Kennedy (1997) that franchising could be used to raise the number of level 3 qualifications in the workforce. It is also probably true to say that franchising allowed some FE colleges to survive the consequences of failing to meet FEFC growth targets. It might be argued, however, that some colleges did not actually grow much at all in actuality in their core work, but compensated for it in the proliferation of their franchised work.

The anticipated impact of the LSC on the FE sector

The literature reviewed in the preceding section of this paper showed that the FEFC funding methodology was beginning to cause significant financial difficulty in the FE college sector (Kimberley, 1997,p249, AOC, 1998). Despite this, it would appear that the LSC intended to retain many of the facets of the FEFC funding methodology, albeit with amendments. These amendments have retained the ideas of differential funding for different types of curriculum. The concepts of units are however to be phased out (LSC, 2001a; LSC, 2001b).

It was recommended to the Government that the number of agencies involved in FE be reduced and that FE curriculum be planned more (Select Committee, 1998a). The White Paper (DfEE, 1999), when announcing the creation of the LSC, stated that the LSC was to be a planning as well as a funding body. In relation to the LSC, the purpose of the planning is to relate training to skills needs within the local and national economy, with an intention of meeting skills gap needs (DfEE, 1999). The Government vision for addressing skill gaps through the LSC is not however without its detractors. It has been suggested for example that SME's (Small Medium Enterprises) because of their inability to release employees/ managers to sit on LSC planning committees may actually be disadvantaged in determining LSC direction and policy, and their needs not fully considered (Mager, 2000,p8).

There was also concern that the Government proposals for the LSC would merely create additional layers of bureaucracy, while the 'added value' that the LLSC's would bring to the planning process would be negligible. Concern was also expressed about the duty of the LLSC's to give impartial advice and guidance. This might create a conflict of interest. The LSC and LLSC's would need to hit targets given them by Government and the national LSC, in relation to the number of Modern Apprentice enrolments they are required to achieve. Thus the LSC's might encourage students into programmes which would enable the LSC to hit its targets rather than necessarily being the best option for each particular student (Mager, 2000,p10).

Another detractor of the LSC planning model also points to a reality gap between what labour market data says is required and actual activities in the market place (Robinson,2000a). He cites as an example, market data that states that there is a desperate need for more science graduates within the economy (Robinson,2000a). He states that a shortage under a supply/demand economic model should make science graduates' pay be at a premium, yet in fact this is not the case. He concludes: "Do not listen to what employers say, look at what they pay for." (Robinson, 2000a,p19).

That the planned learning model might not work in the way that is proposed by the Government also concerned the CBI, they state:

"While most funding should follow individuals, there do need to be enough funding controls at local level for LSC's to help match skills to labour market needs." (CBI, 1999,p12)

Potential conflicts of interest within the LSC model also concerns other authors:

"However, the Government's plans to have a public body in charge of 6 Billion of taxpayers' money also responsible for delivering the National Targets raises the spectre of a return to manpower planning. If the job of the Chief Executive of the LSC is on the line if he/she fails to hit the targets, how could the council not resist the temptation to skew the funding mechanism to serve that end? Funding would no longer follow the learner-it would follow the need to hit the targets. This sets up an unacceptable conflict of interest for the LSC." (Robinson, 2000b, p89).

An example of the data and planning concepts which LLSC's may use for planning purposes has been produced by the Government commissioned National Skills Task Force (NSTF) (DfEE 1998a, DfEE 1999). NSTF produced a report on skills as part of the development of the planned model of skill development (NSTF 2000). This report defines skill areas as being generic skills, which are transferable employability skills across numerous occupations. Then there are vocational skills, which are related to an occupation or occupational group. Finally there are personal attributes which are characteristics employers claim they are looking for, and include such things as motivation, judgement and leadership (NSTF 2000,p11). The report also analyses occupational changes/ expected changes between 1998 and 2009, and the current poorly qualified state of the British workforce in relation to France and Germany. Then the report identifies the perceived mismatches in skill supply and demand, and identified skill priorities. This report concludes by drawing up some conclusions/recommendations (NSTF, 2000).

The sample for the study although large, was not and could not be anything other than a small representation of British Industry and Commerce. In this report, the methodology and data collection tools consisted mainly of 23,000 telephone interviews, 4000 face to face interviews, and seven industrial case studies. Thus although large, this sample may not be large enough to give anything more than general trends, and may not account for very local phenomena which might be different for some reason to the national picture. This eventuality is cited as a reason for retaining planning within FE colleges, as in the FEFC model (Mager, 2000; Robinson, 2000a).

Related to the issue of planning is the concept of Centres of Vocational Excellence. When the Government launched the Centres of Vocational Excellence (CoVE) initiative, they stated:

"Our aims for further education in a transformed and modernised system of technical and vocational education must be high. Colleges must earn and retain a reputation for excellence in vocational and technical learning that will give definition and enhance standing to the entire College. Here I believe that specialisation is the way forward." (DfEE, 2000b, Para 49,p15).

Both the LSC and DfEE issued a consultation paper which asked for views on the concept of CoVE's (LSC, 2001c). Responding to this consultation document, the Learning and Skills Development Agency (LSDA) commented:

"There has been considerable debate within the FE sector around the title of the initiative and some have argued that identifying some colleges as Centres of Vocational Excellence downgrades those not so designated." (LSDA 2001, para 3, p1).

They continued:

" Our discussions with FE colleges have revealed considerable disquiet about possible exclusion of disadvantaged non-traditional learners from the Centres of Vocational Excellence initiative. The fear that excellence may be equated solely with high level learning programmes or qualifications, has been expressed." (LSDA 2001, para 6, p1).

Another issue intimated by LSDA from the CoVE programme is that many colleges feared that non-CoVE provision may be rationalised and forced to close as students and resources migrate towards the CoVE provision. The LSDA was given the task by the LSC subsequently to the production of this report of researching, recommending, and identifying suitable pathfinder colleges (LSC 2001d). The LSC also issued circular 0/14, for colleges seeking CoVE status (LSC 2001e). This was in addition to LSC circular 01/01 where colleges had already been asked to set out their initial strategy for involvement in the CoVE programme. In seeking to engage FE colleges in a bidding process for recognition as a centre of vocational excellence the LSC produced two circulars encouraging colleges to apply for CoVE status (LSC, 2001b, LSC, 2001f). How this process will work in practice has not as yet been the subject of any academic examination except for the concerns raised (LSDA, 2001).

In relation to rationalisation there would appear to have been a policy of seeking to rationalise the FE sector dating back almost to the election of the new 'Labour' Government in 1997. The new Secretary of State for the Labour Government encouraged FE colleges to rationalise through the medium of merger in a letter to the FEFC (Blunkett, 1997). This theme was picked up in the Green Paper, which the Government produced on FE shortly after the Select Committee had finished its deliberations and made its report. It stated:

"In some places there is also potential for greater efficiency through rationalisation of provision and facilities, harnessing competition and making progress through local partnerships. The development of a collaborative network of tertiary education is a long term objective of the Government." (DfEE, 1998a, para 4.13, p47).

This theme of rationalisation of provision is carried on through a number of Government documents relating to FE and the LSC (DfEE, 1999, DfEE, 2000a, DfEE, 2000b). These documents suggest that this rationalisation will be achieved through targeting resources towards specific specialisms within each institution rather than allowing institutes to do anything and everything. Part of this rationalisation may actually be achieved implicitly, if not expressly, through the CoVE. It seems eminently possible that LLSC's would seek to target finite resources towards their CoVE provision, at the expense of other identical non-CoVE provision in the area. Were resources to move to CoVE provision, with the resulting increases in recruitment which CoVE's are supposedly allowed to make, then it is argued here that students, their parents, and employers would probably migrate towards CoVE's and away from other non CoVE provision.

A confirmation of Government policy on rationalisation of the FE sector, is stated in "Success for All", a DfES consultation document published in June 2002. This consultation document envisages rationalisation with OfSTED and ALI inspection grades being used as a measure of identifying curriculum to be rationalised.

"We want every College and provider to be clear about its own educational and training mission and focus on its particular strengths. This is not about imposing arbitrary or unnecessary restrictions on what is offered where that is of good quality and meets local needs. In the past there have been incentives to pursue every new initiative in order to increase income and expand, which has meant some trying to do too many things. In the future we want Colleges and other providers to concentrate on what they do best. This will mean taking hard decisions about whether it is right to continues with everything that they do now, in discussion with the LSC, using OfSTED and Adult Learning Inspectorate (ALI) grades as an important guide. This may mean that some providers discontinue offering some provision where other providers can run it better elsewhere in their locality. It may also mean specialising in certain areas or focussing on particular client groups. It will also mean collaborating in new ways with other providers." (DfES 2002, para 14,p9).

Thus from the literature coming from Government, it would appear that rationalisation of the sector is likely to be an issue over the next few years. This will probably lead to difficult choices for FE college management over the next few years.

Another impact on the FE sector as a result of the LSC model is the changes in the inspection of FE college curricula. The Government have made the LSC responsible for managing the quality of provision in the new learning sector through the Office for Standards in Education (OfSTED), and a new inspection body called the Adult Learning Inspectorate (ALI). ALI has been tasked with inspecting all adult learning in the sector excluding full time 16-19 students, which are to be inspected by OfSTED (LSA, 2000). As part of developing a national programme for inspection for FE colleges, OfSTED and ALI engaged in five pilot inspections of FE colleges (OfSTED, 2001a; OfSTED, 2001b; OfSTED, 2001c; OfSTED, 2001d; OfSTED, 2001e). The results were disappointing for the sector generally, as two of the five colleges were deemed to be offering inadequate quality of provision and weak management (OfSTED, 2001b; OfSTED, 2001d).

Only one college was deemed to be offering a programme that was outstanding, (grade 1) (OfSTED, 2001e). In addition, only twelve areas were offering curriculum that was deemed good (grade 2) throughout all the five pilot colleges, with the rest being satisfactory (thirty-three, grade 3), or unsatisfactory (fourteen, grade 4).

As a result of the pilot inspections, John Harwood, the Chief Executive of the LSC, created a controversy about quality of provision within FE college sector when in a radio interview on BBC radio Four, he suggested quality in forty percent of FE college courses was inadequate. The OfSTED Chief Inspector who was also interviewed for the programme went on record as saying:

" We've inspected five colleges. Of those five, two have been given the tag of "inadequate". In three of the five, the management was considered to be less than satisfactory and across all five colleges we found a rather large and in some cases disturbing amount of teaching which is less than satisfactory." (Tomlinson 2001,p2)

But the Chief Executive of the LSC went much further, he said:

"We reckon about forty per cent of the provision across the whole sector is just unacceptable in terms of the quality of the learning and the provision which takes place. And of that, we think about five per cent of the sector is appalling." (Harwood 2001a).

There was an almost instant backlash from these comments, with most of the wrath of the colleges being directed at Harwood rather than at Tomlinson (Nash, 2001). The Association of College wrote an open letter to Harwood in which they stated:

"We are currently as you know, preparing our bid for the spending review. This is, of course taking place at an extremely sensitive time, given all the strains and pressures caused by terrorism around the world. An inaccurately critical review of the sector has, therefore, an even greater potential for damage at this time."(Gibson, 2001)

Initially at least, the LSC claimed that the figures used by Harwood were justified because they came from the FEFC's figures (Nash, 2001). These figures showed that eleven per cent of provision was outstanding, fifty one per cent was good, thirty two per cent satisfactory, with six per cent being unsatisfactory or very unsatisfactory. It has been suggested however that as the FEFC used a 1-5 scale, whereas OfSTED use a 1-7 scale when undertaking classroom observation, then (so the argument goes) Harwood was confusing OfSTED grade 4, which is satisfactory, with FEFC grade 4 which was unsatisfactory. Harwood wrote to 400 college Heads both to apologise, and to infer that he had been quoted out of context. He said:

"The effect of my words on Radio 4, and their interpretation were neither what I intended nor wish to allow to persist. They were however, my words. I need not only to make it clear what I meant but to say sorry for the effects they have had on you and your colleagues." (Harwood, 2000b).

Pressure continued to bear down on Harwood however, as in a letter to the AOC, the BBC refuted an implicit suggestion made by Harwood that they had misrepresented him, and taken his words out of context. For a short time therefore, Harwood again faced calls for his resignation (Hook 2001). Sanderson, the LSC National Chairman however simply confined himself to a public rebuke of his embattled chief executive in an interview with The Guardian. He said:

"The words chosen weren't very smart and don't give due credit to what I think is a very under-funded part of the education sector." (Kingston, 2001a)

The Guardian was also to allege in the same article that the LSC national press office had contacted the LLSC's by e-mail on 29 September 2001 saying that they wanted the 'forty per cent of provision in FE colleges is inadequate' story in the press (Kingston, 2001a). The argument dissipated however and Harwood remained in post. It might be argued that given what is written in 'Success for All' in relation to rationalisation, then Harwood's comments would appear to be following a natural pattern adopted by politicians of all political colours when they are seeking to implement a policy that may be unpopular. By seeking to implant in the minds of the general public the concept that FE college curriculum was of poor quality, subsequent closures and mergers of colleges might provoke less negative reaction.

Another emerging issue for colleges with the LSC are the powers that the LSC have currently and the potential new powers that are also being proposed by Government for the LSC in the near future. The powers that ministers are considering giving to the LSC were leaked to the Association of Colleges (and thus to The Guardian) via discussions with an LLSC (Tysome 2001a). These powers consisted of the ability to:

"To place a number of Colleges under one governing body. To transfer the responsibility for a further education corporation to a higher education institution or private company. To call special meetings of governing bodies. Via the Secretary of State, to suspend Principals, Clerks and Chairs, and to dismiss Governing bodies. To transfer some or all of the College assets including staff to another organisation." (Kingston 2001b).

At the time the LSC refused to comment on this report (Kingston, 2001b). The Government at the same time however issued a consultation document into the organisation of 16-19 education, through the newly named Department for Education and Skills. This consultation document also proposed further powers for the LSC, but these would not appear to be as exhaustive as the leaked document suggested (DfES, 2001; Tysome, 2001b). This lead to speculation that the Government intended to grant these powers through ''stealth' (Tysome 2001a). Evidence of this phenomena could be seen a critic argued in an example of some very high handed behaviour by the LLSC in Hackney (Crequer, 2001a). The LLSC there was accused of trying to force Hackney Community College to vacate one of its buildings by Christmas 2001, to make way for a new Sixth Form College that the LLSC desired to create (Crequer, 2001a).

Harwood was tackled about the question of bureaucracy, in an appearance he made in front of the select committee (November 2001). Sheerman the Select Committee chairman tackled the issue of bureaucracy by accusing the LSC of costing 45 Million more than its predecessors. Harwood however refuted this statement, and claimed that the LSC was actually 100 million cheaper than their FEFC/TEC predecessors were. Harwood also claimed that whereas the FEFC/TEC had employed 11,000 staff between them, the LSC and LLSC's actually employed only 5,000 staff. Sheerman also reportedly told the LSC to start punching "above its weight, and lose its fuzzy image", and start showing its mettle by "baying for resources" (Crequer 2001c).

There was also some evidence coming out at this time, that staff in FE Colleges were feeling under-valued, tied down by bureaucracy, and underpaid (Crequer 2001b; Tysome 2001b; Hughes 2001). The Select Committee also challenged Sanderson about FE pay, and Sanderson is reported as saying to the Committee that the FE model was unsupportable in the medium and long term, and something would have to be done with FE rewarded better (Crequer, 2001c).


This paper seeks to answer three research questions on the policy effects of Government on FE College management and what policy makers intended. It also considers what actually happened, and how this effected and will effect FE College management. In addressing the literature's views on the first research question relating to the literature, this paper looked at the difference between the LEA and the FEFC model. The literature would suggest that the FEFC was a new managerial organisation. It thus had no responsibility for planning and controlling FE colleges but was simply a funding body. In relation to accountability, planning and management control of individual colleges, then the literature indicates that this became the responsibility of the governors of the individual college corporations and their senior management teams.

The second question considers the potential reasons for the change from the FEFC model of FE to the LSC model. Incorporation of colleges and the creation of the FEFC model led to some problems within the sector which were unanticipated when the model was conceived. These problems were identified as sleaze (often as a result of inappropriate franchising), mismanagement, a lack of accountability and failure of some FE college corporations to control the management properly in their colleges. This led the Government to decide that a change was necessary.

The third question within this thesis looks at the likely impact of the LSC on the FE college sector. The LSC differs fundamentally, according to the literature, from the FEFC in that the LSC does have a planning role, which the FEFC never had. Thus the LSC will be required to monitor colleges much more than was the FEFC. The LSC is also charged with reducing duplication and, where possible, rationalising provision to allow colleges to concentrate on what they do best, or to provide curricula which meets the needs of the locality in which they are located. There is some disquiet among academic authors though as to whether or not the planning model will actually work in practice, or whether it is just a return to manpower planning techniques, which they deem to have failed in the past.

Linked to the issue of rationalisation are the issues related to the effect of the inspection regime on FE colleges. The literature suggests that OfSTED and ALI grades are likely to form part of any LSC decision to rationalise FE provision. It might be argued that poor OfSTED results might hasten the rationalisation process, and may explain the Harwood comments on Radio Four. The literature would also appear to suggest that the inspection agencies will tend to concentrate more on standards of teaching and learning than the previous FEFC inspection teams did.

To facilitate these changes, it would appear that the LSC might have some major powers given to them to intervene in FE colleges and on their corporations. This may involve such actions as suspending corporations and/or principals, and merging organisations together if that is deemed necessary. The literature appears to indicate that, in addition, there is concern being expressed that the LSC might be quite a bureaucratic organisation requiring large amounts of paperwork and statistics. It is likely that the true policy effects of these changes will be seen over the next few months and years.


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