How to plan for cuts in public services budgets – Ian Pryce

By Ian Pryce, former CEO of Bedford College Group.

In 2006 Bedford College decided to take a radical three-part approach to jump from being consistently good to becoming excellent. It involved following two books and a model. Staff were expected to follow the principles of Steven Covey’s “7 Habits of Highly Effective People”, the college followed the wisdom of Jim Collins’ not-long-published “Good to Great”, and we adopted the European Foundation Quality Model (EFQM).

A year later we won the EFQM leadership award and 5 Star recognition. Two years after that, Ofsted judged the college outstanding, and over the next decade and a half, the college became a group, merging with five institutions, and creating two brand new sixth form colleges.

Reflecting on that journey, the one piece of wisdom that feels most regularly instructive is Jim Collins’ description of the Stockdale paradox: “believe you will prevail, but always face up to the brutal reality”.

It strikes me as particularly pertinent as we approach the forthcoming general election, which regardless of result, will provide a political cleansing or reset. However, the state of our public finances is so bad that cleansing is likely to take the form of a cold shower. People are feeling the pinch despite the Institute for Fiscal Studies showing the average Brit is very lightly taxed compared to the average western European.

Big real-terms cuts in public spending are already built into to the forecasts, with little room for manoeuvre. Existing funds won’t meet the demand for students with SEND needs, those with mental health issues, or parents needing childcare. On top of that, almost every public service is demanding more money; we need more teachers, doctors, nurses, police, child carers, social carers, and soldiers.

These demands then, however well-made, are unlikely to be met. In these circumstances shouldn’t we be seriously planning, as well as perhaps seriously hoping? Should we not be facing up to the brutal reality?

In tough times, savings can be made in public services in five main ways.

1. You can do fewer things. This has been the approach of most local authorities, cutting provision of libraries for example, and simply focusing on services legally required. Council Tax is not reduced so income is unaffected.
2. You can reduce service levels. We’ve become used to shorter GP appointments or carers being given less time for each home visit.
3. You can spread a service more thinly. You can reduce opening hours to force queues and reduce gaps between customers being served. You can provide general information to groups of people, rather than see them individually.
4. You can ask people to work harder or longer or pay them less. Most public sector strikes in the last year have focused on the loss of earnings in real terms over the last decade, showing this has been a common approach until now.
5. You can replace people with technology or shift work to the individual. E-passport gates, train ticket apps, building access controls, are all good examples.

How realistic are these options for colleges?

My grandsons love a tricky card game Bandido where the aim is to prevent a bandit escaping his cave by cutting off all escape routes. Unlike most public services, colleges are subject to similar blocking arrangements when it comes to making the above savings, limiting their options.

First, if we eliminate services, we tend to lose income because funding follows the learner. Second, if we reduce services, and for example, reduce course hours we fall foul of funding rules that prescribe input hours as well as expected outputs. Third, there are usually practical limits to spreading ourselves more thinly. Yes, we can increase group sizes, but there are always physical and health and safety limits, and you need high demand too. Fourth, college teachers already have the largest teaching loads in the education sector, and the lowest relative pay, so scope for further savings is improbable as well as unfair. Fifth, technical subjects are often those where the jobs, and the teaching, are most AI-resistant, like care, hairdressing and plumbing.

So, if we are to face up to the brutal reality, what options do we have?

It does makes sense to think harder about shrinking our traditionally wide range of courses, significantly raising group sizes, and investing in technology that reduces the volume of staff, while boosting the real pay of those retained.

However, I also believe that the sector should campaign hard for greater funding given its relative efficiency and effectiveness. We should seek to stop government specifying inputs as well as outputs, the “how” as well as the “what”. This sort of control inhibits creativity, innovation and worsens productivity.

We also could argue for greater flexibility when looking to achieve the “what”. If we fall short on one measure but overshoot another, we tend to be penalised for the first but not rewarded for the second. More flexibility would allow better staff retention and reward, more stability, and prevent wasteful expenditure. Leave it to colleges to decide course hours and how they organise delivery. This would then allow colleges to focus on the most important services without fear of losing income.

The views expressed in Think Further publications do not necessarily reflect those of AoC or NCFE.