A male teaches a class of further education students

Potential for colleges to return to the public sector

The Office for National Statistics (ONS) has announced that it has launched a major review into whether Further Education Colleges, Sixth Form College Corporations, and Designated institutions should be brought back into the public sector.

In 2012, the decision was made for colleges to be classified as part of the private sector, however there is a possibility for them to be reclassified, following the development of the government’s Skills for jobs: Lifelong learning for opportunity and growth white paper outlining reforms to post-16 education.

The ONS conduct these reviews regularly, and they look into different parts of the economy and decide how they should be accounted for in the national accounts.

In the document that outlines the ONS’ plans to review the classification of colleges, it says:

“Following the Skills for Jobs White Paper published in January 2021 and, and subsequent legislative changes with the aim of improving the skills and post-16 education sector in England, ONS will carry out a review of the sector classification of FEC’s, SFCC’s, and Designated Institutions, in England in the context of the latest international guidance.

As part of this process, ONS will consider the content of the Post-16 Education Act 2022 alongside other relevant acts, such as the Education Act 2011 and the Further and Higher Education Act 1992.”

Chief Executive of the Association of Colleges, David Hughes, commented:

“Many other institutions deemed by ONS to be public sector operate under a variety of different rules already. Colleges in Scotland and Northern Ireland are now public sector and we have been learning from their experiences since that happened.

Nonetheless, this is a significant review, and we will be active in discussions to inform any decisions by ONS, and help them navigate the framework of laws, policies and rules which govern the relationship between DfE and colleges. Our initial sense is that DfE is taking a very open-minded approach to see what positives this might bring as well as trying to avoid any potential negatives, should ONS decide to make a change in status.”

As outlined in the ONS’ release about the review, a potential move to the public sector would have an impact on public sector net borrowing, public sector current budget deficit, public sector net cash requirement and public sector net debt.

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