WIREDGOV

Red tape cut to allow colleges freedom to manage affairs as independent bodies

News Release issued by the COI News Distribution Service on 27 February 2012

The Government drive to cut red tape and give organisations greater freedom has been boosted by the Office for National Statistics (ONS) decision that further education colleges should no longer be classified as part of central government, Skills Minister John Hayes announced today.

The Government has worked hard to ensure that FE colleges have the freedom to manage their own affairs as independent bodies and the ONS has acknowledged this by changing the public sector classification they made in October 2010.

Public sector classification brought FE colleges into government accounting boundaries, which could have had significant implications for the financial decision making and reporting of colleges.

Skills Minister John Hayes said:

“I am delighted at this very positive news which we have been working hard to achieve over the last year.

“The Government is committed to cutting red tape so that further education colleges have the freedom they need to make their own judgements on how to manage their affairs for the benefit of learners, employers and wider communities.”

Martin Doel, Chief Executive of the Association of Colleges said:

“We are extremely pleased that the Government has succeeded in getting this decision reversed and has delivered on its promise to afford further education colleges greater autonomy.

“Allowing colleges to maintain their own affairs is not only beneficial to the institutions themselves, it also brings more clarity to the way public money is spent.”

Lynne Sedgmore CBE, Executive Director of the 157 Group said;

“The 157 Group is delighted that ONS have made the constructive decision to reclassify colleges into the private sector.

“This decision aligns with the freedoms and flexibilities given by John Hayes and his department and enables colleges to deliver Governmental priorities and initiatives.

“Clearly the voice of colleges and our business communities have been listened to, and responded to, on this critical matter to good effect”

Through the Education Act 2011 the Department for Business, Innovation and Skills and the Department for Education removed a wide range of restrictions and controls on further education and sixth form college corporations, putting them on a similar footing to charities operating within the independent/private sector. These provisions will come into force in April 2012.

Having reviewed these changes, the ONS has concluded that they are sufficient to remove public sector control over FE College and sixth form college corporations, and they will consequently be reclassified to the private sector.

Notes to Editors

On 14 October 2010 the Office for National Statistics (ONS) announced the decision to reclassify general further education colleges as part of central government for the purposes of national accounts. On the same date ONS announced that sixth form college corporations were classified as Local Government entities for national accounts purposes.

The ONS classification committee considered the case BIS submitted in December 2011 setting out the range of measures taken to remove government controls on colleges. ONS notified HM Treasury on 23 February 2012 that Further Education Colleges and Sixth Form Colleges will be reclassified to the private sector. The private sector classification will apply from April 2012, when the relevant provisions of the Education Act 2011, concerned with college freedoms, come into force.

This reclassification is provisional upon ensuring that there are no other public sector controls in other documentation, such as the funding agreements, and keeping under review the use of remaining government powers within legislation.

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Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

Victoria Heath
Phone: 020 7215 5950
victoria.heath@bis.gsi.gov.uk