Nadhim Zahawi

Secretary of State

Department for Education

Dear Nadhim,

I am writing to you to highlight the enormous funding pressures further education colleges, including Greater Brighton Metropolitan College in my constituency, are under as they enter into annual negotiations on staff pay with unions.

In his letter to you last month, David Hughes, Chief Executive at the Association of Colleges, outlined the considerable gap between what is affordable for colleges and the cost of living rises being experienced by staff. Andy Cole, Chief Executive at Greater Brighton Metropolitan College, in my constituency, has also written to me to share his serious concerns as they impact upon his staff, students and the wider communities the college serves.

Greater Brighton Metropolitan College, as a member of the FE Sussex consortia, is leading on Electric Vehicle technology as part of the Greener Sussex programme, an innovative £7M Strategic Development Fund initiative to address employer training needs for tomorrow’s Green economy and the Green awareness of the next generation of students and employees. Central to its continued engagement with future strategic initiatives such as the Sussex Local Skills Improvement Plan is its ability to attract and retain the best talent.

However, a decade of neglect and large funding cuts through the 2010s, combined with the cost of living crisis which is affecting every part of our economy and society, risks severely damaging the College’s recruitment and retention of its staff.

Last autumn’s spending review delivered a modest inflationary rise in 16-18 budgets, but other budgets, which represent half of Greater Brighton Metropolitan College’s annual income, were left stagnant. Along with other colleges, it is also having to deal with increases in National Insurance contributions, the National Minimum Wage, pension contributions, utility bills and other costs. While this looked like a challenging set of financial circumstances at the time of the spending review, with inflation currently at 9% it now looks almost impossible for colleges such as Greater Brighton Metropolitan College.

This is the financial backdrop to the sector’s annual negotiations on staff pay with trade unions. The result will be a considerable gap between what the College is able to afford in terms of increases to staff pay, and the cost of living rises being experienced by its staff, making recruitment and retention even more difficult. Exacerbating this is the inequity in pay between school teachers and further education lecturers - the average-pay differential is over £9,000.

This is taking place at a time when a lot is being asked of colleges – delivering new T Levels, increasing apprenticeship delivery, the growth in adult Level 3 and the introduction of Higher Technical Qualifications. Greater Brighton Metropolitan College stands ready to play its part and deliver on the ambitious agenda the Government has for the sector, but it is being constrained in its ability to deliver because pay falls considerably short of what’s needed to attract enough skilled people – especially when they can earn far more in industry and schools.

I would call on you to reduce the financial risks for colleges such as Greater Brighton Metropolitan College which, in turn, could help make a better pay settlement for their staff.

Steps to this end include:

• reviewing the Adult Education Budget (AEB) business case processes.
• more flexibility on the extra 40 funded hours in 2022-23 that are eating into the funding available, and which are also more challenging to deliver given the widespread difficulties in recruiting and retaining teaching staff.
• suspending intervention action on Education & Skills Funding Agency (ESFA) financial health assessments and the FE commissioner’s 65% staff cost benchmark, because those measures will severely constrain colleges from making better pay offers to staff.
• a cost increase sharing mechanism for approved DfE capital projects (currently 100% of extra costs fall to the college) because of the large inflationary increases in construction materials and labour costs – for Greater Brighton Metropolitan College this has already meant having to find over £1M to complete a much needed refurbishment of the Pelham Tower at its Central Brighton Campus.
• offering an income guarantee for colleges where the grade inflation in last summer’s exams led to more young people staying in school sixth forms.
• considering a rate increase on AEB, learning from the approach taken in London by the GLA with its devolved powers. The AEB funding rates have not increased for over a decade.
• considering a rate premium on priority courses and qualifications, including in skills shortage areas such as construction, engineering, digital and health where colleges have the most difficulties in recruiting skilled staff and for T Levels, HTQs and other courses which the Government wishes to see grow.

Taken together, these steps would significantly improve the financial outlook for colleges such as Greater Brighton Metropolitan College and go some way to help address the unprecedented recruitment and retention challenges facing the sector.

Yours sincerely, Caroline