Are sixth-form colleges on the verge of going bust?

The Sixth-Form Colleges’ Association has captured press attention this morning ahead of the A-level results with dire warnings that many of its members are in danger of going to the wall, and that expensive courses, like science A-levels are already being cut. They have a point.

In the last parliament, schools’ spending was protected in real terms, while universities were given a new £9,000 per year tuition fee system. But no protection was given to the 16–19 phase of education.

For 5–15-year-olds in school, spending per pupil is £5,782 (2015/16 forecast), but the flat rate spend for 16–19s (before adding weightings) is £4,000. (The complexity of 16–19 funding means we cannot give an accurate per pupil figure, but estimates varied from £4,304 to £4,645 for the year 2012/13.) That is, funding dips by at least £1,000 per pupil per year before going up again when young people enter university. This is particularly tough for sixth-form and further education (FE) colleges, since they cannot readily cross-subsidise 16–19-year-olds from other areas provision, not least because their 19+ funding is being cut very substantially. By way of comparison, fees for day students at the sixth forms of leading public schools are well over £8,000 per term.

If 16–19 education had been given relative protection in the last parliament, alongside that for 5–15 year olds, funding would have increased by £0.5 billion between 2010/11 and 2015/16, from £7.7 billion to £8.3 billion a year (nominal). That translates into a nominal per pupil increase of 6.6 per cent, rather than a cut of 9.1 per cent – after inflation, equivalent to a much less severe real-terms cut than actually took place.

Figure 1

Counterfactual spending by age-group, 2010/11–2015/16 (nominal, £bn)

It is also worth noting that the UK is unusual among OECD countries in spending considerably more on lower secondary education than on upper secondary (what we would consider 15–18/19-year-olds). Most OECD countries do the reverse, as the graph below demonstrates.

Figure 2

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The government has now moved to a fairer, formula-based system of funding students whatever their institution of study – school sixth form, sixth-form college or FE college. But it has achieved this by levelling down rather than up. (And as the colleges point out, they pay VAT while schools don’t, so the playing field is not entirely level.)

Providers of 16–19 education now face further deep cuts in the forthcoming spending review, since the government is only committed to protecting funding per pupil for 5–15-year-olds in cash terms. Demographic change – a rise in the number of compulsory school-age pupils and a fall in the number of 16–19-year-olds – means that this translates into near flat school budgets, but further substantial cuts for sixth-form provision.

To mitigate this pain – and to ensure that the education of young people isn’t as adversely affected as these projections imply – the government should consider extending flat-cash per-pupil spending protection to 16–19-year-olds. A forthcoming report from IPPR on the 2015 spending review will make this case, among other recommendations.

How would this settlement look? A summary of the Department for Education’s resource budget is given in the table below. This sees overall funding for 16–19 education fall by 13.4 per cent to 2019/20, and schools funding by 1.0 per cent. While both are protected in the same manner, the number of 16–19-year-olds is projected to fall by around 300,000 over the spending review period, whereas the number of 5–15-year-olds is projected to rise.

Figure 3

Indicative settlement for Resource DEL in DfE under IPPR proposals (2015/16–2019/20)

Source: IPPR calculations using OBR (2015) and HMT (2015)

Cumulative cuts of over 13 per cent by 2019/20 are still tough – just a lot less severe than the 25–40 per cent cuts that many government departments can expect. The government’s answer to this is a series of state-backed mergers and acquisitions of post-16 institutions, achieved through a process of area-wide reviews. Bigger but more efficient colleges are the intended result – indeed, there is a lot of sense in conducting such reviews. However, while colleges are being rationalised, academies have almost free reign to open sixth forms – seeing unchecked growth of small and inefficient sixth forms at same time. The area-wide reviews will not cover school sixth forms, for what appear to be solely ideological reasons.

The consequence is likely to be a continued demise of the sixth-form college as a distinct institution.

There is a social mobility angle to all this as well. If sixth-form and FE colleges continue to cut more expensive science courses, the chances of state school students competing with their private-sector counterparts for access to Russell Group universities will diminish, since those universities are the most highly selective in respect of the hard sciences. It will become that much more difficult to study medicine, engineering or physics if you’ve been educated in the state sector – particularly if you live in a part of the country that is currently served by sixth-form and FE colleges rather than school sixth forms or grammar schools.