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30-06-2006
Response to White Paper - Further Education: Raising Skills, Improving Life Chances
1 INTRODUCTION
1.1 CIPFA is pleased to offer the following general comments on the White Paper. CIPFA has commented on the issues in which it has a particular interest in its role as a professional accountancy body.
1.2 CIPFA welcomes the overall aims of the White Paper and in particular, the proposals for a simplified system for planning and funding provision.
2 SPECIFIC COMMENTS
2.1 The proposed approach for providing fair funding for comparable activity across all institutions is welcome and should, in our view, lead to greater understanding and transparency across the sector.
2.2 The White Paper includes proposals to ensure that more adult funding is demand-led and notes that the LSC will review how the Agenda for Change funding system can incorporate the increasingly demand-led approach so that funding for providers is directly driven by the decisions of employers and learners. In doing this CIPFA believes that it is essential that the system provides colleges and other providers with sufficient certainty to use their resources to develop and maintain the required capacity to deliver. It is important that the commissioned element does not fluctuate significantly from year to year otherwise uncertainty will be created in the financial planning and management of colleges. Where a change in funding methodology impacts overall on an institution’s funding allocations, we would recommend that a safety net is used during the first years to smooth the transition.
2.3 CIPFA notes that it is intended that the LSC’s capital programme will extend eligibility of capital grant to new providers and training providers (paragraph 6.40). In these circumstances it is essential that such providers are subject to the same investment appraisal, control and assurance regimes that underpin the operation of further education college capital programmes to ensure effective accountability and stewardship of public funds.
2.4 In CIPFA’s view, the proposed key performance indicators for financial health and financial control (paragraph 5.14) will need to be carefully defined if valid comparisons are to be made between colleges and between different types of providers which may operate in different financial and business environments.