A Critical Analysis of the Effects of a Market Model on the Culture of Further Education

A Critical Analysis of the Effects of a Market Model on the Culture of Further Education and a West Midlands Further Education College.

By: Mr Michael Hammond Research and Development Manager: Dudley College

Introduction

Further Education has changed significantly in the 10 years since colleges were taken out of Local Authority control (incorporation). This has led to many changes, as colleges have sort to adapt to a new more market-orientated model of development and structure. This has brought with it many problems, in implementation, which this text seeks to identify. Many of these problems have resulted in financial scandals, which have become front-page news in the media. The aim of the paper is to seek to identify the market rationale behind these problems and the changes that the market model has imposed on Further Education It is proposed to analyse these changes in relation to the experiences of a Senior Manager and a Chairman of the Trade Union Natfhe (National Association of Teachers in Further and Higher Education) at a West Midlands Further Education College, as well as considering broader and more national issues within the micro framework of one Further Education College.

The objectives of this paper then, are to analyse this change in relation to how the market model has effected and changed one Further Education College after incorporation in relation to:

Governance

Management

Academic Staff

Accountability

Funding

While contextually the paper only looks at one Further Education College, and the effects that national policies have had on it. It is argued that tentative conclusions can be made from it about Further Education colleges per se, particularly where the experiences in the college are contextualised by literature from primary and secondary sources.

Methodology

The paper is presented as a piece of original research, which is contextualised for methodological triangulation purposes, [see Cohen and Manion (1994,p236)] using literature from both primary and secondary sources, and a non directive interview technique, [see Cohen and Manion (1994)]. The interviews were carried out with a further education college manager, and a more focussed interview with the Natfhe Chairman, see Cohen and Manion (1994,p289). This was deemed more appropriate by the researcher, as the senior manager was very experienced, and had a strong personality and decided views, and had a story that he wished to tell. The member of the trade union was not as confident, and so the questions were more structured. This also allowed the researcher to seek consensus or otherwise from the data received from the senior manager. The Literature review contains a range of primary and secondary sources, from journals and directives produced specifically for the Further Education sector.

Historical Perspectives of the Effect of Market Philosophies on the Governance of Further Education Colleges

Prior to the Education Reform Act 1988 Governing Bodies of Further Education colleges were very much restricted in their control of the colleges that they were governors of. All strategic planning, and budgeting was the remit of the Local Authority. In the pre-incorporation world of Further Education, between 80-90% of college budgets came directly from the Local authorities, which gave them almost complete autonomy over the institutions, they managed. The Education Reform Act 1988 sought to develop the managerial role of the governors (hereafter referred to as the corporation) by allowing them to have some control of the budgets, staffing, and general direction of the college. In the pre-incorporation model, the control exercised by the Local Authority directed the way the college operated. There were clear checks and balances on the types of activities a Further Education college might engage in to obtain funding etc. During the course of the interview with a senior manager, these checks and balances were discussed. He stated:

“In local authority days, there was the letter of the law and there was the spirit of the law. If you tried to bend the rules within the letter of the letter of the law, that is the kind of policy and procedures laid down by the LEA, someone senior in the Local Authority, often the chief education officer would say: “Now come on Principal, you’re not playing the game here”. And the principals would settle down because they had masters. After incorporation, the relationship between college principals and the Further Education Funding Council was quite different from the relationship between college principals and the local authorities.”

The Further and Higher Education Act (1992), removed power from the local authorities, and gave these powers to the governing bodies of colleges, thus completing the reforms of the Education Reform Act 1988. To address what it is suggested were the perceived strains that this would put on Further Education College Corporations, rules were implemented to change the structure and make up of the college corporation. The senior manager in somewhat disparaging terms spoke of the pre-incorporation college governors.

“Prior to incorporation, the governing body of colleges were the councillors and fishmongers and someone who’d been in the local authority, but had retired, and had always been keen on adult education, and his wife had done an embroidery class, and he thought he ought to get on the committee. A load of well meaning people, but clueless by enlarge. But it didn’t matter because their function was one that was sort of manual, very little else. And they would pop in for a cup of coffee with the principal occasionally, and meet students that had won prizes, and they’d arrive on prize giving days.”

The new governors were no longer to be seen as the mere functionaries described by the senior manager above, but were to take on a role more akin to the non-executive director within industry. The corporation then was to become a group of non-executive directors [see Further Education Unit (1994)], which were responsible for the management and strategic direction of the college. Coulson-Thomas (1990) produced a report on the qualities required of new directors, and the Further Education Unit, in their publication cited this with enthusiasm for new governors. Governors as directors were to show strategic awareness and objectivity. They had to have good communication skills and be able to demonstrate individual responsibility, impartiality, and a willingness to work as a team. They were also expected to spend a lot of time working for the college, and show an aptitude for customer focus, Coulson-Thomas (1990,p27).

With great respect to Coulson-Thomas (1990) it is argued that these criteria would be restrictive to the recruitment of any corporation as the analogy between non-executive directors of companies and corporations is flawed in one important respect. Non executive directors are paid an honorarium, which is not available to public sector governors who remain unpaid volunteers. It is argued that it is unrealistic to expect such abilities or one might argue commitment from the pool of unpaid talent likely to make itself available to work as governors of Further Education Colleges. Nevertheless, the retreat of the local authorities from the further education sector has left some rather onerous responsibilities to be undertaken by the governing body. These are defined by the Further Education Unit (1994) as the strategic direction of the college, which includes setting and overseeing the mission and general policies of the college. The governors are also required to see that the college creates a climate for creativity and change and responsiveness to the external environment and the local community and customers. Governors are required to make sure that the college is solvent and is making efficient use of its resources. Governors are also responsible for monitoring the performance of management in meeting targets, carrying out policies and maintaining information systems; FEU (1994, p48).

A further incredibly onerous task now placed on corporations is the evaluation of the principal and senior managers, (FEU (1994,p48), which under is deemed under SI England and Wales Education (Government of Education Corporations) (Former Further Education Colleges) Regulations (1992), (hereafter SI (1992). This includes the appointment, grading, suspension, dismissal, and the determination of the pay and conditions of service of holders of senior posts, and setting a framework for the pay and conditions of service of all other staff, (see SI (1992)).However, to support corporations in their new and onerous duties , the SI (1992) sought to increase the business acumen of the corporation by enlarging the statutory requirements for independent members who have been engaged or employed in business , industry, or alternatively any profession or employment field that is relevant to the activities of the institutions, SI (1992,p4).

It is argued that notwithstanding the good intentions of the SI (1992) to attempt to create corporations with the ability to manage the powers given to them. The evidence from the recent past , with a number of scandals coming to light in various Colleges would suggest that the new style of corporation had failed in many instances to grasp the real issues surrounding incorporation. That this was the view of the present government it is argued can be seen in the debate on the committee stage of the Learning and Skills Bill in the House of Lords. Baroness Blatch (Conservative) was very concerned at allegations that the then Further and Higher Education Minister Baroness Blackstone had criticised the market model, which had been created by the previous administration for Further Education. She said:

However the noble Baroness not only offended some in this House who actually believe in further education but also others outside the House. Since that evening phone calls that I have had from further education colleges and people representing them have shown how deeply offended they were by the sweeping statement of the Baroness when she said that the Government’s inheritance on taking office was one of sleaze and mismanagement in the further education sector that had been allowed to flourish by a government which took a back seat whenever they could.” Hansard (2000, 200210-10)

However, Baroness Blackstone was not perturbed by this suggestion and immediately restated the Governments position on the state of Further Education. She said:

“Let there be no mistake about this. I was saying that the previous government totally failed to ensure that there was a proper system in existence, when there was a breakdown in the performance that we expect from colleges of further education provision being provided and to financial probity. I was suggesting that there were a number of colleges and I will name them a little later during the debate where sleaze, incompetence and financial mismanagement as well as poor educational standards were allowed to flourish because of the previous governments failure to institute a proper system to ensure that such things did not happen.” Hansard (2000,200210-10)

But the model the FEU (1992) lays out points to the corporation as the mechanism that would provide the curricula and financial probity, which Baroness Blackstone claims, was missing. The problem would appear to be that corporations as intimated already were not capable of carrying out the duties that were given to them in the act. But why did Corporations in some (many) colleges fail to function as was intended? In the interview with the senior manager, this issue was explored. He said:

“By enlarge, most principals, and I’ve worked in a few colleges and I know a lot of Principals. Most Principals put together their own corporation. They recruited the people; they recruited the clerks of the corporation. The clerk of the corporation is their creature, and they recruited the people that they knew that they could pull the wool over their eyes; those that would do what they were told and wouldn’t make a fuss, and that’s what actually happened. Many of them I bet are well over 70, and have never been educational professionals. You get the occasional retired Principal, but a retired principal is going to be the mate of the principal, and so he is not going to challenge it. They’d probably be in cahoots with each other against the rest of the corporation anyway. I’ve seen corporation minutes massaged, and I’ve seen papers presented to corporations, and put together quite deliberately to keep them confused, and I have had discussions with Principals about putting papers to corporations to keep corporations confused. I don’t think that it is too difficult with most of them to get them confused. They come through the doors confused so they don’t get to the end of a corporation meeting without remaining confused.”

If the practice of corporation rigging by principals is as wide spread as the senior manager would suggest, then it is argued that there is a suggestion that the corporations were not independent from the management as had been perceived by the FEU (1992). Whether in fact the corporations within Further Education actually matched those intended by the act, is outside the scope of this paper (and could be an area for more research) However it is suggested that if the senior managers statement is correct, then this again could explain the failure of the market model as envisaged within The Further and Higher Education Act 1992 in many cases which in turn led to the reform of Further Education in the Learning Skills Bill (2000).

The Development of the Market Model in Further Education

The theoretical concept that was driving The Further and Higher Education Act (1992) was that of creating a commercial ethos [see Jessop (1994)] within a traditional state sector. This meant that there was the creation of an internal market within the 16-19 educational provision. Halsall (1996) points to a competition ethos developing around an internal market, which led to competition between different schools, and between colleges and schools, and between Training and Enterprise Councils and Colleges and between Colleges and Universities; Halsall (1996,p3). The then Conservative Minister for Further and Higher Education saw no problem with this arrangement, and encouraged colleges to strive to be business like. He said:

“There is nothing incompatible between education and business, each can enhance the other since both worlds have common interests. Colleges are in the market place, and the successful ones can call the tune. They know that they have no captive clientele and must use the language of business for business in order to get business.” Boswell (1994)

The business ethos has been communicated down to staff at all grades within the West Midlands College although not perhaps in the purist tones of Boswell (1994), and when asked within an interview if he thought that lecturers were more business orientated. The union chairman stated:

“Well I would say that, that’s the message that is constantly being conveyed. I mean that you either recruit or upgrade your achievement, your student's achievement, or else the college is going to go out of business and you’ll be out of a job. I mean that’s the constant threat, which is hanging over people. It’s grow to survive, it’s beat the competition to survive, otherwise you’ll be out of a job. I mean that’s prevailing philosophy. I think that we are certainly more aware of competition. The business that we’re primarily concerned with is the growth and success of one particular college. I mean that is the primary objective, service to the community even though it is displayed on a banner outside the college in fact doesn’t mean an awful lot, because that service to the community takes second place to financial success”.

The financial success that the member of staff referred to was precipitated by the new efficiency targets put in place by the FEFC. In developing a business ethos between academic years 1992/3- 1996/7, colleges were required to expand their student numbers by 28%, while at the same time, bringing down their unit costs (called Average Level of Funding or ALF for short) down to a predetermined national average. This was called convergence. If colleges subsequently failed to increase student numbers then financial penalties in the form of claw-backs were extracted by the FEFC from colleges, see FEFC (1995). Not suprisingly, this financial squeeze resulted in 1995, with a situation where most incorporated institutions had failed to reach their targets (FEFC (1995)). However, it is argued that it was the funding arrangements and philosophy of the FEFC, which created the development of the dash for growth, and the aggressive style of competition that has been recorded both form the primary research here, and also from the secondary research sources, e.g. Halsall (1996) et al. This created a culture of change within Further Education, which effected all staff. It is proposed to consider the effects on both management and academic staff in the next two sections of this paper.