Flow of Ideas
The Business Takeover of Further Education and the Further Education White Paper

Glenn Rikowski, London 28th March 2006

The Business Takeover of Further Education Colleges?

The further education (FE) White Paper, Further Education: Raising Skills, Improving Life Chances (DfES, 2006a) was published yesterday. One of the disturbing things about it is that it appears to open up possibilities for the business takeover of further education colleges. According to Jon Boone (2006a):

“Plans to allow private companies to take over underperforming further education colleges are to be announced by the government today [in the White Paper]” (Boone, 2006a).

Of course, only a simpleton would expect this FE White Paper (or the schools White Paper of October 2005) or any White Paper to blurt out that ‘companies will take over failing colleges’ (or schools) – or some such words. But the FE White Paper does seem to offer up such openings for the private sector. This is set within the context of ‘eliminating failure’ in the FE system. Failing or ‘coasting’ colleges are to be given an improvement notice, and continued poor performance after a year will mean that the college will either be forced to change its leadership (including its governors), merge with another college or ‘opening up the provision to competition’ (DfES, 2006b, p.9). This last option paves the way for private sector companies to run these colleges. The point is made more stridently when the DfES announces that:

“To promote dynamism and innovation we will encourage new high quality providers into the FE sector. New competition arrangements will make it easier for new providers to enter the system” (DfES, 2006b, p.10).

Good colleges will be allowed to expand, Trusts and federations will be encouraged, and ‘independent and voluntary training providers’ will be enabled to enter the FE sector (Ibid.). In their Foreword to the FE White Paper (Blair, Brown and Kelly, 2006), the Prime Minister, the Chancellor of the Exchequer and Secretary of State for Education and Skills note that: ‘Through competitions we will enable new providers to enter the market’ (p.2). Once again, without shouting it from the rooftops (as some educational Left analysts seem to expect), there is a coded commitment here to ushering in private operators to run further education colleges. There is a whole section on encouraging new providers (DfES, 2006a, pp.62-64) in the FE White Paper, and greater use of competitions and tenders are advanced (p.62).

As Jon Boone notes rightly in today’s Financial Times, these FE reforms ‘go further than proposals for schools’, with the government believing that they can get away with more regarding promoting for-profit operations in the FE sector. For Boone, it is clear that on the basis of the FE White Paper:

“Failing colleges will be eligible for takeover by a private company if they do not improve after a year, [and furthermore]… The white paper also has provisions for the trial of a voucher-style arrangement, whereby individual “learners” will be able to take their funding to a provider of their choice” (2006b).

Thus, the FE White Paper seeks to enhance marketisation of the FE sector. Indeed, it argues that: “we seek to reinforce the role of the autonomous, independent college” (DfES, 2006a, p.85), whilst simultaneously advocating federations, Trusts, collaboration and mergers (in circumstances of failing colleges) elsewhere.

In addition, the FE White Paper will provide the legislative foundation for new models of the business takeover of colleges, noting that “new structural models” will be forthcoming, alongside the establishment of new Trusts and federations (DfES, 2006a, p.22). The state is striving here to develop ‘models’ of business takeover that will ‘work’; that is, allow companies to produce profits whilst safeguarding education and training standards, and which minimise political risks. This is a tough call. It is clear, however, that like for schools, the Trusts will be not-for-profit charities (DfES, p.61). Yet the same is not said regarding federations of colleges.

But do the Employers want it?

The FE White Paper is more concerned with labour-power development than the business takeover of colleges, however. This is established in the Foreword by Blair, Brown and Kelly. So, do business folk want a ‘business takeover of colleges’?

First of all, as Jon Boone notes (2006a), only 2 per cent of colleges are now inadequate according to the Office for Standards in Education (Ofsted), as compared with 20 per cent in 2001. Thus: business penetration of the further education sector is likely to be on a small scale if companies can only run up to 2 per cent of colleges on a for-profit basis. There is, of course, the notion that ‘coasting’ colleges – those underperforming but not ‘failing’ – could also be included, according to the FE White Paper. This would increase the numbers of colleges where for-profit operations might take root. Furthermore, companies could control federations of colleges, thereby making economies of scale. But, even if the situation is currently unclear in certain respects, Jon Boone indicates that:

“Some private sector skills providers have expressed interest in running colleges” (2006a).

So it seems that Boone has evidence that some private operators are up for the challenge of running FE colleges for profit. Meanwhile, the Confederation of British Industry (CBI), the leading employers’ organisation in the United Kingdom, has argued that the government needs to be much bolder than it is in the FE White Paper regarding letting companies loose in the FE sector to run colleges for profit:

“The White Paper on Further Education Reform is a crucial step towards ensuring people have the skills needed for business to compete in the 21st century, the CBI said today (Monday). But, the CBI believes, the Government should allow the private sector to bid for state funding in all areas of further education, not just where colleges are failing or where there is a gap in provision” (CBI, 2006, p.1).

Digby Jones, Director-General of the CBI said that:

“The Government should open up the [FE] sector to full competition and contestability to ensure that the provider which supplies courses to business is the best one available, regardless of whether it is public or private” (CBI, 2006, p.2).

Thus, if there is any fundamental contradiction between the social production of labour-power and the business takeover of colleges, it is not a contradiction that the CBI are inclined to recognise, or wish to contemplate, or perhaps the CBI believes that it can be resolved. Whatever: the CBI clearly favour the business takeover of FE colleges, and will no doubt press Gordon Brown, who was a signatory to the White Paper, to proceed with this.

Those who hold more faith in the radical and Left sympathies of Gordon Brown than they do in Tony Blair may be in for an unpleasant surprise on this issue. For the trade unions, it will be crucial for the merged AUT and NATFHE regarding whether lecturers in the higher education sector support their comrades in the FE sector against the private sector predators who seek to make profits out of running colleges. Barry Lovejoy, head of colleges in NATFHE, said yesterday that:

"We don’t agree FE is ripe for private organisations to make a quick buck. It has been shown that where problems of quality are identified, they can be turned around quickly” (in Boone, 2006a).

Lovejoy’s words need to be kept in view in the struggles over the heart and soul of the FE sector ahead.


Blair, T., Brown, G. & Kelly, R. (2006) Foreword to Further Education: Raising Skills, Improving Life Chances, Department for Education and Skills, Cm 6768, March, Norwich: The Stationery Office.

Boone, J. (2006a) Failing colleges may face private takeover, Financial Times, 27th March, p.4.

Boone, J. (2006b) Further education colleges to focus on employer needs, Financial Times, 28th March, p.2.

CBI (2006) Employers’ Needs Should Determine FE Funding – CBI, Press Release, 27th March, http://www.cbi.org.uk

DfES (2006a) Further Education: Raising Skills, Improving Life Chances, Department for Education and Skills, Cm 6768, March, Norwich: The Stationery Office.

DfES (2006b) Executive Summary: Further Education: Raising Skills, Improving Life Chances, Department for Education and Skills, D16/FM/93, DfES Publications: Nottingham.

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