college governance summit benchmarking (and some other issues) julian gravatt, aoc assistant chief...
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College Governance Summit
Benchmarking (and some other issues)
Julian Gravatt, AoC Assistant Chief Executive
4 March 2015
Slides available at:
https://www.aoc.co.uk/funding-and-corporate-services/funding-and-finance/reports-and-presentations
College income
Colleges
SFA
FE College income2014-15 (£ millions)233 Colleges
EFA 2,823 (44%)SFA 1,734 (28%)Other 1,756 (28%)Total 6,396Surplus 34
Sixth form colleges2014-15 (£ millions)93 Colleges
EFA 822 (95%)Other 42 (5%)Total 864 Surplus 20
EFA
Funding update – where are we right now?
EFA (16-18 education)2015-16 allocations issued to collegesVery few changes to the formula or rulesAverage funding down by c2% (because student numbers down)
ApprenticeshipsBudget ring-fenced but major reform programme underway
SFA (19+ further education)24% cut in “other Adult Skills Budget” (allocations 16 March 2015)New SFA CEO interested in simplifying the funding approach
Loan supported education24+ advanced learning loans - money available to growNo student number controls in higher education
Sources: GFE Finance records 2008/09 to 2013/14 (adjusted); Financial plans 2014/15 to 2015/16
College Forecast
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
6,200,000
6,300,000
6,400,000
6,500,000
6,600,000
6,700,000
6,800,000
6,900,000
Total Income
College Forecasts
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
0
20,000
40,000
60,000
80,000
100,000
120,000
Staff Restructuring Costs
£'00
0
Financial health assessment
College financial health (EFA/ SFA assessment)Cash based profitabilityNet current assetsLevels of borrowing
Latest scores (based on 2013-14 accounts)45-50 FE colleges 10 sixth form colleges “inadequate financial health”
Colleges with no debt can’t necessarily borrowc80 FE colleges have weak finances judged on surpluses & cash150 FE colleges in a stronger position but facing a difficult present
How colleges will improve their finances
Some or all of the following:
1. Better government policy (funding properly matching the task)
2. Cost reduction (to bring budgets back into balance)
3. Property sales to release cash (only open to some colleges)
4. Relentless focus on student/employer demand and need
5. Outsmarting the competition (eg schools, universities)
Some other things to think about
Politics
The general electionNew policies
The 2015 spending review
Education
New A-levels, GCSEs, Tech levelsOfsted’s 2015 framework
Rising student expectations
Society & Economy
Changing demographicsEconomic recovery
Mental health
Technology
Social mediaEducation technology
New industrial revolution
Benchmarking – what’s available?
Reputation
People College FinanceThe College
Finance Spreadsheet
ILR
StudentsConsultancies
(eg Tribal)
Ofsted Data DashboardDFE/ BIS League Tables
Surveys
MiDES
Benchmarking – what’s available
MIDES servicehttps://mides.rcu.co.uk/Provided as part of AoC membershipAdditional MIDES services (LMI £1,188; Vector £5,580)
Consultancies (cost more, deliver more)www.tribalgroup.com
Financial benchmarkingLarge publicly available spreadsheet from college accountswww.aoc.co.uk/funding-and-corporate-services/funding-and-finance/accounting
gov.uk
MIDES (www.mides.rcu.uk)
RCU, Unit 3 Tustin Court, Port Way, Ashton on Ribble, Preston, PR2 2YQ
Tel 01772 734855 | Fax 01772 721621 |
16-18 Classroom Learning In-Year Retention Report (2014/15 R04)
In October 14/15 the College (96.97%) was higher than the GFE average (96.83%).
The College’s retention rate (96.01%) was lower than the GFE average (96.45%) in 13/14 in October.
Why is the cost of teaching different?
Is it as simple as; because there are more FTEs teaching?
The college finance spreadsheet
www.aoc.co.uk/funding-and-corporate-services/funding-and-finance/accounting
The numbers aren’t everything…
“Some of the world’s leading business brains have gone out of their way to highlight the role of more intuitive, subjective, creative thinking in driving corporate performance, and to warn that an excessive boardroom focus on number-crunching and cost management is coming at the expense of experimentation, innovation and top-line growth.”
“It’s hard to imagine the future when your head is buried in a spreadsheet”
Martin Sorrell, founder & CEO, WPP article in City AM, 26 Feb 2015
What governing bodies need to do
Understand your position, your environment and your risksWhat do national trends mean for the college?Opportunities for income growth: 16-18, apprenticeships, loansRisks around every cornerStakeholders keep shifting (SFA, EFA, Ofsted, LEPs, Councils, MPs)
Focus on your roleGoverning bodies - solvency, viability & future of the collegeTrustee relationship – it’s your principals, SMT and staff who deliverTake a cold, hard look at the present and the future
(PS) Slides available at:
https://www.aoc.co.uk/funding-and-corporate-services/funding-and-finance/reports-and-presentations