Tuesday, December 13, 2011

Academies, finance directors and accountancy qualifications: lessons from FE?

If you want to start a lively discussion amongst academy Finance Directors at a Christmas party or anywhere else, you could ask them whether academy FDs should be professionally qualified accountants. This subject might be seen as too contentious by some – placed in same category as religion and politics.

Many of the academies in Labour’s programme did not initially have accountants appointed as Finance Directors although these schools often had involved and supportive sponsors who could provide financial expertise. By 2010 the National Audit Office was finding that almost two-thirds of these academies had Finance Directors who were accountants. Under the Coalition’s policy of encouraging schools to convert things may be different - many of those acting as Finance Director will not be accountants but will be experienced and qualified School Business Managers.

There are people who think that accountants should be leading on financial management in academies.

The Academies Financial Handbook (pdf) stated in 2006:

The DfES strongly recommends that the person appointed as Finance Director, or equivalent, should be a qualified CCAB accountant, or equivalent, with some experience in a senior position; charity experience would be valuable. An acceptable alternative, subject to the governing body themselves having significant financial experience and ability, would be a member of the Association of Accounting Technicians who has significant relevant experience in either a charity or educational institution.

When the successor to the Handbook arrives is unlikely to send out a different message - unless there is ministerial pressure.

The public sector accountants’ professional institute, CIPFA, published in 2009 a Statement on the Role of The Chief Financial Officer in Public Services. One of its five Principles is that:

The chief financial officer in a public service organisation must be professionally qualified and suitably experienced.

The cynics might suggest: professional bodies for accountants would say that, wouldn’t they? Nevertheless, academies - along with other independent providers of education such as colleges and universities – are entering a world where austerity casts aside the assumption of funding that grows faster than or even in line with inflation. General FE colleges and sixth form colleges gained their independence in the early 1990s – a similarly bracing climate – and they soon opted for professionally qualified Finance Directors.

I would not personally say that all academy Finance Directors must be accountants. However, each academy must ensure that it has robust financial management in place – which may involve support from, say, Responsible Officer governors or consultants if the Finance Director is not a trained and qualified accountant. Governors and Headteachers must always be mindful that if things do go wrong they will be asked whether they critically assessed the arrangements which they put in place.

Tuesday, November 29, 2011

Public sector pay restraint – a stealth funding cut for colleges?

There was not much in today's Autumn Statement specifically for colleges. The new shared services VAT exemption may interest some although they may be put off by the tight conditions of HMRC and the inherent wariness of colleagues. One area of both uncertainty and relevance to colleges is "public sector pay restraint".

The Policy Costings issued with the Statement note:

Public sector pay awards will average one per cent for each of the two years following the end of the pay freeze. Departmental budgets will be adjusted in line with the policy, with the exception of health and schools, where savings will be recycled. The principal impact of the measure will therefore be to reduce public expenditure, through reduced departmental resource spending.

Does that mean that DFE and BIS expenditure for colleges will be "adjusted" down in line with pay restraint?

Thursday, November 24, 2011

My speed dating experience - novel approaches to board recruitment

This week I had my first experience of speed dating. I had seen that a social business in the Marches was looking for board members and I expressed an interest. So on Tuesday I was invited to, in effect, a speed dating session.

The organisation put a dozen potential board members supplied with light refreshments in a room with current board managers and key staff. Every five or so minutes a timer instructed those present to talk to someone else. Perhaps only an organisation working in the cultural arena could think of something so novel and creative.

Too many organisations still recruit board members from networks of friends, acquaintances and sometimes "the great and the good". This leads to board re-creating themselves in their own (often stale, male and pale) image rather than experiencing genuine renewal. Where organisations do adopt a more rigorous approach, this can become somewhat formal and even bureaucratic with panel interviews and application forms which can demand a lot from applicants and organisations but may not be useful in creating effective boards.

I would encourage organisations to consider the speed dating approach. Firstly it is a quick way to get to assess applicants when such exercises can otherwise absorb a lot of time and energy for all concerned - especially for smaller organisations. Moreover, allows the existing board members to be involved in recruitment and assess the chemistry between them and applicants.

It is worth adding some caveats. Speed dating may be better at assessing social and networking skills (hopefully more than small talk ability!) but less useful in divining other requirements such as strategic insight. Requirements such as ability and willingness to prepare and attend meetings have to be checked out via the speed dating or another mechanism. There is still a need to have a clear person specification which the applicants can reflect upon and the organisation can rigorously assess candidates on.

My speed dating experience certainly made me think – not least about board recruitment. Now I will await feedback from the organisation.

Sunday, October 09, 2011

2012 free schools and UTCs to be announced this week

This week we will learn which free schools are likely to open and where in September 2012. There are rumoured to be 55 in the pipeline. Some of the free schools may be formed under the powers to create 16-18 academies contained in the Education Bill expected to received Royal Assent this autumn. This will intensify the growing competition for 16-18s.

It will also be interesting to see how many are new schools as opposed to transfers from the independent fee-paying sector.

The media may well highlight some of the moves within English football to promote free schools. Last week Everton FC’s charity announced that it had been successful in reaching the financial stage of the free school application process. Further down the line, it seems that a new sixth form college may be part of Manchester City’s ambitious plans for the future. There was talk of the Premier League and free schools as far back as August 2010 but there is now clear progress.

There will also be the announcements of the 2012 University Technical Colleges. This weekend there was some media coverage of the Silverstone UTC set up in partnership with Tresham College and the motorsport industry. UTC are technical schools intended to provide a rigorous vocational curriculum with close links to business. They are a hardly noticed policy innovation.

Wednesday, October 05, 2011

A problem shared? Shared services, fear, loathing and VAT

There has been some debate on the FEWeek newspaper website about colleges and shared services. An Agitator op-ed suggested that shared services collaboration might end up with college principals in jail. The comments below the article seemed to highlight the doubts and even suspicions associated with the shared services agenda. No comments backed my suggestion that colleges could collaborate with colleges who are not competitors or even with other types of organisation.

Does any of this matter? Maybe.

In the summer the government’s Open Public Services White Paper explicitly encouraged shared services. Austerity will inevitably make cost cutting imperative.

One barrier to shared services has been tax. Colleges buying in services from outside suffer the irrecoverable VAT which in-house operations don’t incur. With VAT at 20%, the efficiencies from shared services (and, of course, other types of outsourcing) have to be significant to be worth the effort.

After three decades the UK government is getting round to implementing a European Union directive with a bearing on VAT on shared services. Last Friday a HMRC consultation closed on how certain types of shared service arrangements by charitable organisations might escape VAT.

The charities sector publication Third Sector has highlighted the debate on the significance or otherwise of the HMRC proposals. The National Council for Voluntary Organisations, the Charity Finance Directors’ Group, Universities UK and the National Housing Federation have declared that the proposed exemption is too restrictive:

In its proposed form, the exemption is likely to be of little use to the charity sector, particularly for smaller organisations who in many cases could benefit the most from cost sharing.

The Chartered Institute of Taxation have given the HMRC a hard time on the proposals too.

There is rumoured to be a divergence between a hardline HMRC worried about loopholes and a Treasury keen to see efficiencies in public services. Who will win? Who knows? But it will be a test case for the government with its commitment to a Big Society and its rhetoric about reform.

If the VAT issue is resolved, it will be up to colleges, universities and charities to think creatively and positively.

Monday, September 26, 2011

FEWeek, college recruitment and the number of 16 year olds: is demography the answer?

Figures compiled by the Office for National Statistics in a UK National Population Projection show the number of 16 to 18-year-olds could fall by more than 90,000 from 2011 to 2015 – from 2,279,948 to 2,186,192.

Experts believe this could have an impact on recruitment figures for further education (FE) and sixth form colleges.

The article shows how future demography will affect colleges each year up to 2015. However, the immediate issue is how this is affecting colleges now.

The Office of National Statistics released data for England in 2009 show that there has been a decline in the numbers of 16-18 year olds (xls file). This year’s numbers of 16 year olds are 2.1% lower than last year. This figure is less than that found by FE Week’s survey of college enrolments suggesting that other factors have been at work.

This is not a new development as shown by the graph above showing the number of 16 year olds declining in recent years. In 2009 there was a 3.3% decline and last year a 1.5% fall. However, over the last decade there has been a rise in participation offsetting this.

FEWeek is right to point to demography. But the enrolment challenge must be seen in the broader context including EMA and other factors.

Sunday, September 11, 2011

Inbetweeners, EMA and sixth form providers: what comes after the long rise in participation?

When I went to the cinema last week I wondered if all four of the Inbetweeners would have stayed on in the sixth form if they had been 16 a decade ago. Over the summer the release of NEET numbers got media attention but not the data showing the huge expansion of 16-18 education since 2000.

How much of the rise in participation was due to Educational Maintenance Allowances? It definitely played a role. The Institute for Fiscal Studies found that EMA was an “efficient maintenance allowance” increasing the proportion of eligible 16 year olds staying in education from 65% to 69% and boosting the participation of eligible 17 year olds even more.

One of the first acts of the Coalition was to wind down EMA as part of its £6 billion of ”efficiency savings”. This year 16 year olds will no longer be eligible for EMA if they stay in education. How will this affect participation rates?

There is anecdotal evidence that there may be an impact this autumn – for example, chatter on the TESConnect website. There has certainly been some pretty crude hard-sell in the run-up to enrolment trying to attract 16 year olds – colleges offering free laptops, even a school sixth form promising free driving lessons.

What this means for the enrolment of 16 year olds, the raising of the participation age to 18 and the funding of providers of 16-18 education will, no doubt, become clearer over the next few months.

Monday, August 29, 2011

The SFA’s qualified accounts, colleges and red tape

Over the summer the annual accounts of the Skills Funding Agency (SFA) were published. If anyone was interested in them, they would have read that these accounts were qualified by the SFA's auditors - the National Audit Office. While generally in life qualifications are something to be sought, qualified accounts are a bad (and unusual) thing.

The NAO judged in its qualified audit opinion: “the financial statements do not give a true and fair view of the state of affairs of the Skills Funding Agency and its subsidiaries as at 31 March 2011”

The auditors believed that financial reporting standards required that the SFA should have “consolidated” the accounts of further education colleges as "subsidiaries" into the agency’s own accounts because the SFA has control over colleges. (That control is in the form of the borrowing consents which otherwise independent corporation have to seek.)

The SFA declined to do this given the practical challenges of incorporating the accounts of every FE college for the year to 31 March 2011 – a task further complicated by colleges accounting to the 31 July each year on the basis of a different set of reporting standards.

Does any of this matter? Not too much in itself – but it does highlight a wider issue and a potential threat.

In his report on Internal Control, Geoff Russell, as SFA’s chief executive’s noted how the accounting treatment of colleges poses an “unexpected risk” threatening “to contradict the Government’s simplification and cost reduction policy”. This arises both from international financial reporting standards and from last October’s designation of colleges as public sector bodies by the Office for National Statistics (ONS).

While Geoff Russell does not spell it out, what that means in practice is that in the future FE colleges might be asked to provide the information necessary for the SFA to consolidate all those figures into its own accounts. This would mean a Spring return in addition to the Finance Record and the Financial Plan returns. Inevitably there is a compliance cost for colleges as well as a resource required at the SFA where presumably a shrinking staff could be doing something more useful than chasing accounts and crunching numbers. In terms of cost-benefit analysis, there is no benefit to colleges from such a return to balance the cost.

Similar issues are posed for Sixth Form Colleges although the ONS classification treated them as local government bodies as, until the Education Bill becomes law, councils grant borrowing consent. That difference meant that the Young People’s Learning Agency avoided the embarrassment of qualified accounts.

The DfE and BIS are promising to deal with these issues but the promised “freedoms” may not be enough to remove threat of some more new red tape.

Tuesday, August 16, 2011

Judging them by their results: MPs, sixth forms and value for money

Today the House of Common's Public Accounts Committee (PAC) published its report on Getting value for money from the education of 16– to 18– year–olds.

While few people are excited by a select committee report, I was a little dissappointed by the PAC report. There was plenty of common sense in the report including the observation that larger sixth forms benefit from scale economies and a promise to scrutinise the impact of the abolition of Educational Maintenance Allowances on staying-on rates. That is all reasonable and useful. Nevertheless the PAC report was a let down.

Back in March, the National Audit Office (NAO) published its own research on sixth forms and value for money - indeed, it sailed under the very same title. Many of the findings and recommendations of the NAO fed into the PAC report. However, a key finding of the NAO was that sixth form colleges deliver impressive value for money:

Sixth-form colleges, which perform best on most measures of learner achievement, are paid at a lower funding rate than school sixth forms. While the Department has taken some steps to reduce differences in the funding of different types of provider, colleges receive £280 per learner less than schools.

Sadly this message was somewhat diluted in the PAC report which noted:

School sixth forms currently receive £280 per student more than colleges.

Why was this lost in translation? I have no idea. Maybe it is because colleges lack political friends and public profile. (How many party manifestos have spouted off about schools and universities but forgotten that colleges even existed?)

To add insult to injury, the normally excellent Education Guardian had an article headlined: "Money being wasted on badly-managed colleges, say MPs". No! The PAC may have failed to applaud sixth form colleges but it did not question college management. In fact, it observed: "further education colleges have become more adept at making tough choices to improve value for money".

The Guardian article was better than its headline. It noted that PAC was concerned about the comparability of data for assessing value for money. (The NAO report pointed to the weaknesses in the quality of data coming out of school sixth forms although this was not evident in the PAC report.)

As results are published for the nation's sixth forms, there is no way that the PAC (or the sub-editors at the Education Guardian) deserve an A*.

Friday, August 12, 2011

Only 12% of police are on the beat – true or false?

Inevitably police cuts have become a political football after a week that looked like an apocalyptic version of Supermarket Sweep - what the French newspapers have called "the shopping riots".

Yesterday David Cameron told the House of Commons that 20% police budget cuts would not necessarily lead to reductions in police on the beat. This claim was scrutinised by Cathy Newman on the Channel Four Factcheck, who concluded it involved a “rhetorical sleight of hand".

David Cameron also noted:

Today, as we speak, only 12% of police officers are on the beat at any one time.

It’s a shocking statistic. I verified this figure in a report, Demanding Times (pdf available), by HM Inspector of Constabulary. However, it’s a little misleading and maybe a tad mischievous.

Demanding Times explains exactly what is involved in the 12% figure for police “available” and “visible”:

The majority of officers and PCSOs in visible roles who are not available will be off shift. Some will be appearing in court (to give evidence or act as court liaison officers), others will be on holiday and a few will be off sick.

… 19% of police officers and PCSOs are in the middle and back offices combined. It is to be expected that there will be some police officers in these categories, as they include roles such as managing and processing intelligence, criminal justice, specialist investigative support functions and crime management. They will also be working in roles that benefit from operational insight, such as business transformation projects. Equally, the back office category includes training roles: and forces rely on the brightest and the best from the front line being able to pass on their skills and knowledge. Nevertheless, authorities and forces, taking account of their local circumstances, would benefit from assuring themselves of the need for police officer skills in these two categories.

No one would deprive police of their annual leave, sick leave or being off-shift – particularly after the last few days. Likewise intelligence, investigation, etc are valuable. Of course, there is no doubt scope for reducing red tape – just as there is in most public services. The fact that there is variation in rates of “available and visible” across the country points to scope to spread best practice e.g. in shift management.

There is a strong case for police reform and an urgent need for greater efficiency – the police force is arguably the least modernised territory of the public sector. However, misleading and mischievous use of eye-catching statistics is unhelpful.

Wednesday, July 27, 2011

Unions and accounting for redundancies – lifting the fog?

The Coalition’s budget deficit programme is causing redundancies to ripple through the public sector as well as quite a bit of the third sector exemplifying the Big Society. The OBR expects 330,000 public sector jobs to go by 2015.

In times such as these it is vital that unions provide workplace representatives as well as rank-and-file union members with the tools to understand what is going on. In the college sector UNISON have published a Guide for UNISON reps dealing with cuts.

The Guide helpfully sets out how the Coalition’s policies are affecting funding for colleges. It is less clear when it comes to explaining college accounts and measures of financial health used by the Skills Funding Agency. In fact it seems to not appreciate how making operating losses inevitably worsens a college’s financial health.

UNISON is right in understanding that further education funders have in the past paid funding allocations in advance to struggling colleges. But can the Skills Funding Agency do that when the whole sector is ravaged by funding cuts? Perhaps not.

On the website of the Universities and Colleges Union website there is useful Insiders Guide to HE sector finances including university accounts (pdf available). It was commissioned by Joint Negotiating Committee for Higher Education Staff to assist both employers and employees in negotiations. The college sector could do with something similar in these troubled times.

Monday, July 11, 2011

The Coalition gives birth to the Open Public Services White Paper

After a long and difficult gestation, at last the Open Public Services White Paper arrived today.

Its timing could not have been less auspicious. The gaze of the media was upon the House of Commons where the Secretary of State for Culture was being flayed by the leader of the Opposition who wanted to know why the Prime Minister was not there to answer questions on Hackgate – rather than at Canary Wharf launching the plan for Open Public Services to a friendlier audience assembled by the centre-right Reform think tank.

The coincidence of the Open Public Services White Paper with the news of the break-up of the Southern Cross care home chain was unfortunate.

The White Paper set out five principles of Open Public Serices:

Choice – Wherever possible we will increase choice.

Decentralisation – Power should be decentralised to the lowest appropriate level.

Diversity – Public services should be open to a range of providers.

Fairness – We will ensure fair access to public services.

Accountability – Public services should be accountable to users and taxpayers.

It is worth considering the parentage of the new White Paper on Open Public Service. In Public Services published by the Prime Minister’s Strategy Unit, the language was of:

- With horizontal pressure from competition and contestability

- And bottom up incentives of choice and voice

- Supported by improvements in capability and capacity

…to create a “Self improving System”

That was in January 2007 in the last months of Tony Blair’s government.

In some quarters today was seen as a (another) re-launch of the Big Society. The White Paper certainly. Interestingly the only use of the term was in relation to the Big Society Bank. While the White Paper place emphasis on the role of new entrants as providers – including charities and mutuals – the New Philosophy Capital think tank was blogging quite sceptically this afternoon. The chill wings of austerity are blowing through the third sector.

How significant is the White Paper? Time will tell. The Coalition is promising more meat on the bones in coming months.

Sunday, June 05, 2011

TES reports FE colleges in the black in 2009/10 - so what?

The Times Education Supplement on Friday published an interesting analysis on the state of the college sector's finances. The headline was somewhat eye-catching: FE colleges in the black.

The numbers crunched for the article showed:

On average, colleges reported an operating surplus of about £300,000 last year, after two years of deficits. This came despite the lowest rate of income growth for five years.

Of course averages can disguise as much as they reveal. (In particular, mean averages are a crude measure which can be distorted by extreme outliers. The article did not indicate if the analysis used the more useful average of the median - the value in the middle of the distribution.)

Certainly in 2009/10 there were over 70 colleges with operating deficits. That is a lot of red ink - even if the college sector as a whole is in the black.

Comparing like-with-like is helpful although tricky when there is a lot of churn with mergers and takeovers in the college sector. When I compared the performance of individual colleges excluding those that had been dissolved or merged, indeed the figures suggest that three-quarters had larger operating surpluses (or smaller deficits) in 2009/10.

The article asks the question: So are institutions in better shape than their funding body feared?

While 2009/10 was a better year than the previous year, we have to remember that we are talking about financial years starting on 1 August 2009 - over 22 months ago - and ending before the cuts heralded by George Osborne's Spending Review. While Labour had introduced their own cuts in funding rates, the Conservatives are taking the axe to whole programmes such as Train to Gain. The squeeze will be felt in the next four years - not in 2009/10.

So perhaps "doom-laden predictions about the state of college finances" cannot be discounted in 2011 on the grounds that the college sector on average had a less bad time in 2009/10.

Sunday, May 29, 2011

School for scandal: colleges, franchising and efficiencies

For some time I have had a sense of deja vu. All the talk of swingeing funding cuts and reducing "unit costs" in the college sector took me back to the 1990s.

A Google search found me a chilling article from the Times Higher Education supplement a decade and a half ago: it reported 20% “total efficiency gains” made by the college sector in the three years to 2005/6. A significant part of that was from growth.

I am not the only one who thinks we are going back to a future very like the 1990s. This week the Education Guardian published an excellent article by the college funding expert Nick Linford. It warned of how colleges may feel compelled to blunder into risky sub-contracting arrangements - just as many did in 1990s through growth in "franchising" provision to businesses and community groups offered lucrative margins.

Nick Linford's blog helpfully offers news clippings on some of the major cases of franchising and sub-contracting that went badly wrong.

So should colleges steer clear of franchising and sub-contracting? Arguably no - it will depend on their circumstances. However, they always need to have good risk management including due diligence on prospective partners, on-going monitoring and robust quality assurance.

Friday, May 20, 2011

Fraud Friday: some scams in the news

Third Sector reported yesterday that the Charity Commission had found that the Director and chair of an education charity not only stole £245,000 from two charities but also made fraudulent payments for training and other activities.

When trustees abuse their position it can be difficult for other employees to know and stand in their way. However, it is disturbing that the charity failed to submit audited accounts for two financial years. Trustees really should pay attention. Too often trustees place undue reliance on their more financially literate colleagues - maybe this happened here.

The headline on this week's Inside Housing is: Landlords targeted by electronic con. In fact the scam does not seem that technological: housing associations seem to have fallen for fake letters requesting changes to supplier details.

Last month the Young People's Learning Agency issued a fraud alert to colleges and academies which warned:

All Academies and sixth form colleges are asked to be vigilant when dealing with notifications of changes of bank account from their suppliers, and if necessary to review their procedures for dealing with changes. The YPLA has been notified of an alleged attempted fraud in which an apparently genuine change of bank details for a supplier (a building contractor) was notified and acted upon. The notification was subsequently been discovered to be false once the genuine supplier raised a query over a missing payment.

The police are currently investigating this incident – the YPLA has been informed that similar attempts have been made elsewhere in the country

While most people are wary of emails and phone calls - particularly the most amateur of 419 scams such as those highlighted on the 419eater website - too often people accept a piece of paper if it is signed and looks official.

Colleges, financial health and institutional landscape: size sometimes matters

Last year I analysed the 2008/9 accounts of general FE colleges (GFEs) to see if they showed that big was beautiful: the results showed that larger GFEs might have economies of scale from lower admin costs but they were not financially healthier. With the Skills Funding Agency’s (SFA) release of the 2009/10 college accounts I thought it was time to see if anything had changed.

The SFA’s college accounts spreadsheet allows anyone with a spare 30 minutes to correlate college size (as measured by the income measure used by the SFA for analysing finances) and financial health (as gauged imperfectly but simply by college adjusted surpluses as a proportion of income).

When analysing GFEs I excluded the two super-colleges in Leeds and the North East which are so much larger than the rest of the sector. Again I found that there was still no correlation between college size and financial health. (Last year I found was a slight deterioration in operating surplus as a percentage of income as income increased although I excluded all London GFEs.)

The results for Sixth Form Colleges were more interesting. They showed that there was some correlation between larger size and better financial health. The lower admin costs college size increases did feed through to larger surpluses which can be saved for a rainy day and/or re-invested into better building and equipment.

The lessons for Sixth Form Colleges and policy-makers? Mergers and collaboration have more to offer them than GFEs in terms of better financial performance. While I suspect that Sixth Form Colleges do not the thirst for expansion (even empire) that some GFEs demonstrate, there may be ways of developing alliances and federations without full-blown merger. They will have to consider options as the landscape changes around them – particularly feeder schools forming federations and joining academy chains.

Note: the charts show adjusted surpluses as a proportion of income (%) against college income (£k)

Wednesday, May 18, 2011

Education for-profits or not? It depends

We live in interesting times. The talk of Maoist revolution in public services seems to have tailed off. However, in education there is a huge wave of change coming the way of education even if the NHS is centre stage at the moment.

A critical issue in education at the moment is whether for-profits will become significant players. In the medium term, the answer may depend on which sector you are talking about.

In universities, the minister responsible is keen on “alternative providers”. They have already arrived. As I have noted on this blog before, the professional training company BPP is getting University College status. Recently it was announced that BPP had teamed up with Swindon’s New College to offer a no-frills law degree for £3000 per year.

This week an article in the Times Higher Education by a consultant from The Parthenon Group global strategy consultancy suggested:

By charging £27,000 for three years, England and Wales have just become Treasure Island to for-profit companies that know from experience that they can teach degrees for much less.

The article goes on to suggest that the new entrants will shake up the incumbents:

Universities must begin to provide the platform for more sophisticated strategies, including: greater pricing differentiation; international growth; regionalisation; improved employer partnerships; greater student employability; and targeting particular student segments - for example, adult learners.

For-profits may be welcomed by the government in higher education but the red carpet is not yet rolled out in primary and secondary education.

The government’s free school policy is turning out to be less revolutionary than hoped or feared. Last Friday’s New Statesman points to “the Coalition’s free school dilemma”. The introduction of new suppliers in the schools market need buildings when there are constraints on capital spending. Jonn Elledge of EducationInvestor magazine concludes:

The government wants three things: to create enough new schools to shake up state education; to keep the profiteers out; and to keep the cost to the taxpayer down. But it can't win on all three fronts. One of them is going to have to give. And right now, it looks like the revolution will be the one to get tossed aside.

Not so long ago it seemed like the ban on for-profit free schools might be lifted. There were voices from policy wonks calling for a change – people like Julian Astle of the Lib Dem think tank CentreForum. Now it seems that the government – or at least the Lib Dem wing of the Coalition - may be more cautious in reforming public services – let alone allowing for-profit schools.

Maybe things will change for schools as well as universities. The Coalition has – potentially – another four years when a week is a long time in politics.

Monday, April 18, 2011

Two cheers for the SFA: college accounts and benchmarking

The Skills Funding Agency has recently published its spreadsheet summarising the 2009/10 accounts of 351 colleges. One of my concerns about the end of the Learning and Skills Council in 2010 (alongside the inevitable confusion and complexity involved) was that the publication of the college accounts spreadsheet would end. The survival of the spreadsheet is to be welcomed.

The college accounts spreadsheet allows colleges and their advisors to compare their performance. However, care needs to be taken. While the SFA says that the finance records submitted by the colleges have been “subject to basic credibility and reasonableness checks”, there are evident anomalies. There is the college paying £1800 a day for internal audit and another seven colleges paying a nil day rate. There is also the college which capitalises all expenditure over £5. The SFA would deserve three cheers if they looked at the extreme values and queried them before publishing them.

After a few reasonableness checks I will be publishing some analysis of the college accounts here over the next few weeks to make up for the scarcity of my blog posts recently.

Thursday, March 17, 2011

Public sector jobs disappearing more quickly than forecast

Yesterday's depressing unemployment figures from the Office for National Statistics revealed that public sector employment in the UK fell by 132,000 last year. About half were central government - about half of those 66,000 were in the education sector.

Worryingly, at the macro level, the loss of jobs in public sector is running at more than twice the rate predicted by the Office for Budget Responsibility. (The rate is even higher than the initial OBR estimates.) Clearly the OBR has been caught off-guard by the front-loading of the grant cuts to local government and the responses of councils. This may be only a timing effect but in these uncertain times it may affect confidence more generally.

Thursday, March 10, 2011

Hutton's pensions report: The Deal and the reaction

This morning Lord Hutton of Furness published his report in to public sector pension including his Deal for public service workers and taxpayers (see above). With 200 pages of recommendations and analysis but few surprises, the report arrived in time for the Radio Four Today programme.

On Today Dave Prentis of Unison responded to the report in very reasonable terms. It appeared that he was more concerned about the hikes in employee pension contributions starting in 2012 than the actual report. He did express concern that the government might cherry pick the report at the expense of public sector workers.

(I have blogged a few times about the 3% pension levy and its potential implications for the local government pension scheme. The 3% levy followed Hutton’s interim report which pointed out that increased contributions allowed short-term savings. In the interim and the final report Hutton deftly handed over the issue of contribution rates over to the government.)

There is a more militant and wider-ranging response from the Public and Commercial Services union. PCS have warned: “any increase to contributions and the pension age for civil and public servants would be an unfair and unnecessary tax on working in the public sector and will be fiercely opposed”. (Of course, the threat of less take home pay in just over 12 months is more potent in getting the brothers and sisters out and around the picket line brazier than the prospect of a year or two or three of work possibly several decades hence.)

It does look likely that there will be co-ordinated strikes over pensions - perhaps even a million strong strike. However, I suspect that Hutton is playing almost a cameo role.

Monday, March 07, 2011

The final Hutton Report on public sector pensions – more signs of unrest

On Thursday Lord Hutton publishes his final report on public sector pensions. (Strangely, the publication date was only announced at the end of February.) A shift away from final salary to average salary pensions is likely to be proposed. The increased employee pension contributions advocated in his earlier interim report are already meeting union opposition.

In yesterday’s Observer a report pointed out:

Strike laws dictate that workers can only call action over a change to their pay or conditions and pensions are the only single reform that affects all public sector workers, justifying a general walkout. Some unions are already agitating for such a move.

At a time of pay freezes pension contribution rises are particularly painful for the “squeezed middle”. To the extent that lower paid workers are protected, the greater the rises for their better paid colleagues.

In a portent for the future, last week the University and Colleges Union voted at 67 universities by two thirds for strike action and 82% voting for action short of a strike. A series of rolling strikes will take place from 21 March if a resolution cannot be found to a dispute over changes to the Universities Superannuation Scheme.

Tuesday, March 01, 2011

In the news: academies, free schools and university technical colleges

In today’s Guardian an interview with former Tory education secretary Lord Baker highlights his recent work with Labour’s academies programme and now the Coalition on University Technical Colleges:

He is reviving the long-forgotten technical schools, which were enshrined, alongside grammar schools, in the 1944 Education Act, but which never got off the ground. They will be grandly, if rather confusingly, called university technical colleges (UTCs). One has already opened in Staffordshire – across the road from its sponsor, the big machinery maker JCB – and Baker has government support and funding to set up another 15. But that's just the start. "I want a hundred by 2015," Baker says. "After about 10 years, there will probably be 200 to 300." At the minimum, the initial costs will be £3m each. To hear Baker talk, you'd think the words "deficit reduction" had never been uttered; his fellow ministers used to say he was never knowingly underbid in public spending rounds. He has no truck with suggestions that the colleges are experimental. "This has become a movement," he proclaims.

The UTCs will cater for 14-to19-year-olds and offer a technical curriculum. The students will undertake 40-80 days' work experience each year on top of a nine hour day for 40 weeks a year. Lord Baker claims the support of Jaguar, Rolls-Royce, National Grid, British Aerospace, Siemens and Toyota for his movement.

The UTCs have been under the political and media radar. That might well change.

Selection and admission policies are always visible. This morning the Daily Telegraph reports (or maybe warns its readers) that the Coalition will consult over changes to the school admissions code in England which would give academies and free schools the freedom to prioritise deprived children when places are oversubscribed.

Today’s Financial Times highlights the problems of the Department for Education – in particular its ability to deliver the reform policies set out in the DfE business plan (pdf available). It notes the delays in changing planning rules to allow free schools in a variety of non-educational buildings.

Education Executive reports on the Free School Kit from Partnerships for Schools which will assist parents and others in their search for a site for a new school. The Kit is available online and allows parents to explore the geographical area where they propose setting up a new school, helping them to understand more about the existing educational landscape including pupil attainment, the percentage of pupils eligible for free school meals, Ofsted ratings, surplus places, etc. It is intended to find the “hot spots” of unmet parental demand.

Friday, February 25, 2011

Women on Boards: as the public and third sectors do better than PLCs, is there anything to worry about?

In November I blogged on the possibility that Lord Davies’s independent review into Women on Boards would recommend mandatory quotas for boardrooms. Yesterday, Lord Davies’ report was launched; I opens with the bald fact: at the current rate of change it will take over 70 years to achieve gender-balanced boardrooms in the UK. However, his report does not recommend quotas. It recommends that FTSE 100 companies should be setting their own targets for a minimum of 25% female board member representation by 2015.

Lord Davies’ report also recommends that the Financial Reporting Council should amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity. This would include how they would implement such a policy and require an annual disclosure summarising progress made.

Corporate Governance Code requirements usually flow through to the governance codes and requirements in the public and third sectors. Targets of 25% would not make sense in many organisations where women are well represented. (Last week I was presenting at a housing conference. When I started talking about gender balance on boards, one of the seminar participants pointed out that housing associations do much better than the 7.8% figure for women on the boards of FSE250 companies.)

While sectors such as housing associations may do better but there is no room for complacency when 37% of board members are women and only 21% of board chairs and chief executives.

Thursday, February 24, 2011

Mind the [narrowing college funding] gap: the impact on school sixth forms

In the media coverage of the cuts there has been surprisingly little coverage of sixth forms. While overall 16-18 funding is set within the constraints of the deficit reduction program, there is the policy expectation that increased participation levels from raising the school leaving age should be funded by efficiency gains. In addition, schools are to be funded at the same (lower) rate as colleges. While there is “transitional protection” limiting losses in any one year, austerity will bite.

What does this mean? The local press around the country is starting to pick up on the implications. Staffordshire County Council is warning schools to prepare for significant challenges and to look at whether their courses will remain viable. This means collaboration and – for small uneconomic school sixth forms – closure. While in Croydon the Council wants schools and colleges to share sixth forms.

It is ironic that in the early noughties the Learning and Skills Council was expected to reshape 16-18 education with unviable school sixth forms being reorganised out of existence. Now the LSC is gone, this might well happen.

Sunday, February 20, 2011

LGPS – mounting opposition to increased contributions

I was doubtful that the Coalition was retreating on public sector pensions when it was announced that the consultation period for the 3% pensions levy on most public sector workers would end three months later than previously planned. However, I think there is now a real chance that the Coalition may U-turn on the planned increase in employee contributions Local Government Pension Scheme.

There is mounting opposition to the suggestion that LGPS members should pay an extra 1% each year from 2012 for three years. First a group of London pension “administering authorities”. Then the Conservative leader of the Local Government Association. These concerns are on top of and different from the unions’ resistance.

The new opposition are concerned about the effect of the 3% pensions levy on the sustainability of the LGPS if it triggers a “mass opt-out” and spiralling contributions as the contributing membership shrinks.

The alternative advocated by some of these opponents is a paring back of pension entitlements within LGPS. There case makes a lot of sense. However, the savings will be over decades – George Osborne’s Spending Review was looking for about £3billion for the LGPS employers and the rest of the public sector by 2015. How can that gap be filled if the Coalition does another full or partial U-turn?

Wednesday, February 16, 2011

In the news: demographic pressures and failing secondary schools

A "youth bulge" may have been at work in the Tunisian and Egyptian revolts but demography has political implications closer to home. Since the turn of the millennium many education providers have been conscious of demographic decline. Now there is a recognition that rising birth rates are starting to feed into demand for primary school places as an extra 100,000 babies every year are fed into the equation.

This week the quality media has turned its attention to the longer term and post-11 places.

The Financial Times reports that secondary schools will be affected by both rising birth rates and slower rates of migration of middle-class families out of cities. The FT analysis of official projections indicates that an extra 80,000 secondary school places will be needed in England by 2016/17 in areas of population growth. However, in those areas, there is space for only 50,000 students at schools that meet government targets. In addition there are currently 6,000 places available in schools that do not meet the government’s minimum “floor standards”. This might become a major political issue unless new places are created through the free schools and other policies.

The ever excellent Guardian DataBlog maps the location of the current surplus capacity. It’s a shocking statistic that 225 schools - 7% of England's school estate - are more than a third empty and most of these have poor GCSE results. (Off course some may have poor results due to challenging circumstances but the persistence of such concentration of educational disadvantage remains a serious social issue.)

Wednesday, February 09, 2011

The OECD on Housing and the Economy – arguments and evidence

Yesterday I stumbled on an OECD survey Housing and the Economy: Policies for Renovation. The report seemed to have been overlooked by the UK press apart from the Financial Times. Even Inside Housing appears to have overlooked it.

The report recommends reforms to financial sector oversight, taxation, land use policies, rental sector regulation and social housing provision. It argues that these changes will improve the functioning of the housing market and benefit the economy more generally. (The relevance of the report can be seen in US’s jobless recovery where negative equity is hindering the ability of America’s unemployed to move for work.)

As housing has been a casualty of the financial crisis and now the deficit reduction plan, it might have been expected that this objective, balanced and well-researched report might have been read by someone. Even if it had not been carefully studied, chunks could easily be copied and pasted to provide fodder for arguments on all sides.

Advocates of the Coalition’s housing benefit curbs could point to:

Where housing supply is constrained in the short run, however, part of the benefit of government rent allowances may shift from renters to landlords without necessarily enhancing housing availability for needy households. Indeed, there is some evidence that rent allowances are passed onto higher rents.

Opponents of the government’s moves to weaken security of tenure in social housing could signpost:

means-tested social housing systems may potentially reduce job seeking incentives amongst the unemployed, or discourage low-wage workers from seeking higher paid jobs if social housing is withdrawn or rents are increased as earned income grows.

Even abuse and manipulation of the report might have been better than being ignored.

The report is written to draw conclusions from across the OECD’s membership of advanced industrial countries. Inevitably this means that the report’s recommendations may not all be relevant to all 30 countries. Even where the recommendations such as looser land use policies, freer rental markets and more reliance on rent allowances than social housing may be appropriate, there are practical and distributional concerns. However, the study is worth reading with an open mind.

Saturday, February 05, 2011

Inside Housing’s board performance survey: cause for concern?

This week's Inside Housing has a survey of governance in the social housing sector. My initial reaction (or rather tweet) was: Shock! Horror! 82% of board members in #socialhousing think they do a good job - "only" 71% of chief execs agree

More important that some mismatch in satisfaction with board performance is the level (and again) some mismatch in the level of dissatisfaction with board performance: about one in ten board members was "dissatisfied or very dissatisfied" with board performance and a little more than that among chief executives, company secretaries and governance officers.

Arguably more serious than all of this is the problem of weak boards not realising that they are failing and not doing anything about this. (History shows us that often such weakness is only diagnosed after the event by regulators for all sorts of reasons.)

In the world of corporate governance good practice, external facilitation of board performance reviews are increasingly seen as important. I doubt many housing boards have accepted that challenge. Maybe something for the next Inside Housing survey?

The notes to the survey report need to be read:

95 valid responses were recorded. 62% were from board members, 9% from chief executives and 22% from company secretaries and governance managers.

I struggle to get those percentages to get anywhere near 100% - even allowing for roundings on all the figures. Am I missing something or is there a typo? (The percentages in the report are different from those in the article but do still fall short.)

The fact that we are talking about a survey of 95 must mean that we have to treat the findings with some caution. You do not need to be a statistical boffin to recognise that the margins of error may be somewhat substantial – possibly bigger than some of the mismatches between executives and non-executives. If 9% of the 95 were chief executives and 22% were company secretaries and governance officers, we are talking about 29 people.

Inside Housing should be applauded for commissioning the survey. However, a larger survey might have allowed some of the issues to have been probed more effectively and robustly.

Wednesday, February 02, 2011

The IFS Green Budget: public finance challenges and public sector pay premiums

Much of the media coverage of the Institute for Fiscal Studies’ (IFS) Green Budget (press release and full document pdfs available) has focused on the message that George Osborne should resist the temptation to have a giveaway Budget. A quick look at Google News suggests that there are fewer headlines about the Green Budget on desirability of a Plan B.

The IFS forecasts that the government will borrow slightly less in 2010/11 than the Office for Budget Responsibility (OBR) forecasts. Will the Chancellor splash out or even give a gentle stimulus when the recovery stalled in the fourth quarter last year?

There has been speculation that the Chancellor may delay the planned fuel duty rise. I had wondered if he may find some loose change for 16-18 students who lose the EMA grants.

The IFS’s warning against a giveaway on 23 March arise from two downside risks for the public finances.

1) the economy might not grow as quickly as the OBR expects, and even if it does the public finances might not bounce back as strongly as it forecasts.

2) the planned spending cuts might prove formidably hard to deliver.

Other commentators have suggested that the cuts may be hard to stomach. The IFS warn that the success in reducing public spending in the 1990s is of limited relevant. This is “the tightest five-year period for public spending since at least the Second World War”.

The IFS notes that

Spending plans set out in the October 2010 Spending Review imply a significant public pay freeze and large employment cuts.

Controversially it goes on:

Before the financial crisis, public sector employees were, on average, paid at levels roughly in line with their private sector counterparts once observed differences in skill composition were taken into account. Since 2008, a significant public pay premium has appeared. We do not therefore believe that the planned two-year pay freeze will lead to widespread recruitment problems in the public sector in the near future. However, the average pay differential hides large variations in relative pay between different areas of the country. Consequently, some public sector vacancies, especially in London and the South-East, will remain hard to fill.

Talk of a 6% public sector premium for men and over 10% for women could well show up in this spring’s debates about pay and pensions.

Sunday, January 30, 2011

Government “retreat” on public sector pensions levy?

Yesterday Guardian readers who work in the public sector may have been pleasantly surprised to learn: “Treasury retreats over public sector pensions reforms”. The article went on:

The government has retreated over reforms to public sector pensions, saying it will not have proposals ready until the summer rather than pressing ahead with planned higher contributions in the March budget

In plain English: this means is that the consultation period for the *3% pensions levy on most public sector workers will end three months later than previously planned. This is hardly a U-turn. It could be seen as a tactical move to avoid industrial action on pensions before the May local elections.

More significantly this week it became clear that the extra pensions contributions for public sector workers would be the rallying cry for co-ordinated industrial action. Strikes really should start featuring on risk registers across the public sector.

* The 3% may actually be significantly more for some if lower paid workers’ contributions are kept constant.

Thursday, January 27, 2011

16-19 academies: free schools meet sixth form colleges

The Education Bill published today makes provision for 16-19 academies. Until now many academies offered courses for 16-19 year olds. But this is more radical. It is a development of the free schools policy.

I am not sure how many people were listening last week when the media was full of Alan Johnson, Ed Balls and Andy Coulson but David Cameron gave a speech on Modern Public Services. It included this:

For the first time, charities, universities, businesses, teachers and groups of parents will be allowed to establish their own academies where there is a lack of suitable education for 16-19 year olds.

Based on the same principles that underpin our Free School programme, this will widen the range of options available to young people and encouraging them to continue in education beyond their GCSEs.

Incumbents in the 16-19 market had better be aware of this new challenge.

PAC on academies: some thoughts on governance and regulation

Today is a big-ish day for education policy. At 11.30am Michael Gove published his Education Bill although the contents are previewed in parts of the media. Until then we can read about the cross-party Public Accounts Committee report on the Academies programme.

The parliamentary PAC report expresses concern over financial control in the academies sector. Unfortunately the headlines have overlooked the good news in the report’s Executive Summary:
sponsored academies… have performed impressively to date, achieving rapid academic improvements and raising aspirations in some of the most deprived areas in the country. In many cases this has been achieved through high-quality leadership, a relentless focus on standards, and innovative approaches to learning and to the school timetable.

However, the Summary goes on to make serious criticisms:

Many academies have inadequate financial controls and governance to assure the proper use of public money, and the Department and Agency have not been sufficiently rigorous in requiring compliance with guidance. In developing a new financial handbook and governance framework, the Agency should make it compulsory for all academies – sponsored and converter – to comply with basic standards of governance and financial management. This should include segregation of key roles and responsibilities, and timely submission of annual accounts.

Academies will have to consider and act on the concerns raised in relation to governance:

We heard evidence of non-separation of roles, for example the chair of the governing body also being the chair of the finance committee, the responsible officer also chairing the governing body, and the responsible officer also chairing the finance committee. All of these roles should be clearly separated. There was further evidence of a shortfall in financial assurance and challenge owing to academies not having audit committees – against Departmental recommendations and Charity Commission good practice. We also heard that not all academy finance directors are CCAB-qualified accountants, again counter to recommendations in the Academies Financial Handbook.

Quite a few academies may not like all or some of these criticisms. It is a fair point that academies may struggle to arrange their governance structures with a standalone audit committee when so many claim that they have difficulty recruiting one governor who is an accountant or auditor. If academies do not move on these issues, they will find that they are censured by the YPLA auditors.

Even without the PAC report, there was a strong case for academies to review and strengthen their governance and financial management. They are high-profile and publicly funded organisations with their reputations at risk if they do not demonstrate compliance with high standards of governance.

(I should declare an interest: I work with academies and provide Responsible Officer services – the quasi internal audit of basic financial controls mandated by the Academies Financial Handbook.)

The report touches on the nature of regulation for the academies sector:

In future [sic] there must be greater clarity about what is required as opposed to what is recommended. Too much in the current framework is permissive, and there is insufficient mandated practice to prevent individual academies adopting practices which do not comply with basic standards of good financial management and governance.

I would agree that there is a need for a clearer distinction between “must” and “should”, particularly in the Academies Financial Handbook. However, I believe that academies should be encouraged and cajoled individually and collectively to raise their standards of governance so that regulatory input can be focused rather than broad-brush and heavy-handed. For a long time I have argued for a code of governance agreed by and for the academies sector leveling-up standards with a “comply or explain” approach. It works in other sectors.

Strangely the report is out-of-date on one issue before it is published when it states:

From January 2011, all academy trusts became exempt charities. This means that the Secretary of State for Education has replaced the Charity Commission in the role of Principal Regulator, and academy trusts submit their accounts to the Department only

Due to delays, the Charity Commission is - for now – the Principal Regulator. Hopefully, when there is a new Principal Regulator (presumably the YPLA and then its successor the EFA), they will use the right mix of regulation, self-regulation and governance to strengthen internal financial control across the academies sector.

Wednesday, January 26, 2011

IT, productivity and culture

On the LSE Politics and Policy Blog there is an article highlighting how the productivity of the Department for Work and Pensions fell for much of the last two decades. The explanation is not the traditional Aunt Sally of allegedly lazy or incompetent public servants – it’s more complex than that as well as relevant beyond Whitehall.

Policy churn, organisational change and personnel turnover at ministerial change partly explain the dismal performance at DWP. More significantly, Patrick Dunleavy and Leandro Carrera suggest that a conservative mindset hindered the adoption of IT for improving productivity:

Three main organisational culture problems inside DWP prevented top officials even considering a shift to digital-era governance. First, senior officials with little or no IT background themselves did not believe that the poorer households and individuals receiving welfare benefits would ever get Internet access. However, in 2008 they discovered to their surprise that 51 percent of DWP ‘clients’ were already online with broadband Internet access.

Second, for years top civil servants saw the web as merely a place for posting static billboards of information and had no conception of creating a more interactive Web experience. Third, internal organisational power over policy on IT was concentrated among officials (aged in their 40s and 50s) running the big-budget mainframe computer systems, who saw web processes as a financially trivial (and hence organisationally irrelevant) sideline.

While these issues may be particularly acute in parts of central government, some of those attitudes can be found throughout the public and third sectors.

Tuesday, January 25, 2011

Hindmarch’s hints on college turnaround

Today's Guardian has an interview with the Colin Hindmarch - the principal credited with Harlow College's turnaround. The article includes advice on organisational recovery:

For turning around a college

• Keep students at the heart of everything you do

• Create a clear strategy for teaching and learning that is understood by everyone

• Be bold and brave and don't be afraid to take risks

• Create a culture where everyone accepts responsibility for students' successes and failures

• Always be truthful about what is going on at the college. Never deceive anyone else or yourself

Monday, January 24, 2011

A spring of disgruntlement? Strikes, pay and pensions in the public sector

Today the teaching union ATL announced that it would be balloting its members on industrial action over the proposed increase in teachers’ pension contributions. Meanwhile in colleges and universities UCU is doing likewise on the issues of jobs, pay and pensions.

Beyond schools, colleges and universities are we facing a spring of disgruntlement?

How will public sector unions respond to the austerity that is affecting their members’ jobs, pay and conditions?

Headlines may inflame matter when they highlight the remuneration packages of se senior management. The Daily Telegraph this weekend reported on pay rises enjoyed by university vice chancellors. (The paper’s survey found that three-quarters of vice chancellors saw pay packages, including salary, pensions and other benefits, increase during the year to August 2010. Eleven of the 87 surveyed benefited from rises of more than 10 per cent.)

The issue of pensions is likely to be a highly sensitive one. The Hutton Commission final report on public sector pensions is due in March 2011. The exact date has not been published but the 2011 Budget is on Wednesday March 23 – this would be an obvious candidate. The final report is likely to recommend pension entitlements based on a career average salary rather than “final salary”.

Public sector pensions are not “gold-plated” but public sector pension schemes do give workers a certainty about the timing of retirement and a level of entitlements that most private sector workers lack. I suspect that not all public sector workers recognise the full value of their pension schemes. Unions have not mobilised against the change in inflation indexation introduced last year. However, the increased pension contributions likely to kick in across the public sector from 2012 will be harder to swallow - as seen in the case of ATL members in schools - when pay is frozen for most of the public sector. Whether unions will enjoy public sympathy is another issue.

Sunday, January 23, 2011

Quiet zone: the public sector whispering when Twittering

Maybe it is inevitable that last week Facebook complained that social media is not used enough by public agencies in the US. Perhaps as a relative newbie to the world of Twitter, I should not criticise those who are even later to the party than me. However, I have noticed that in the world of Twitter some UK public and third sector organisations have a presence that is worse than useless.

Fundamentally too many organisations do not know who they are talking to (Users? Other stakeholders? Media? Opinion formers?). Let alone what they are trying to convey.

Quite a few organisations lose interest after setting up their Twitter profile – why have a corporate presence if you have nothing to say?

Some struggle to get any followers at all. This is hardly surprising. They forget that you need to follow others in order to attract attention. A few hashtags might encourage people to take a look.

Too often tweets do not have any links - so the content becomes a dead-end rather than a path to a corporate website or other media content. (These cul-de-sacs do nothing in terms of search engine optimisation.)

It is sad that some organisations cannot even be criticised for using social media for “broadcasting” their messages rather than engaging in dialogue. So many organisations are half-heartedly whispering rather than broadcasting.

Friday, January 21, 2011

Is fraud rocketing? Even if it isn’t, what should you do about it?

Last week Public Finance was reporting that levels of fraud rocketed during 2010. There is plenty of media coverage of fraud. This week I joined in tweeting a link to a
blog about Portsmouth University and MacIntyre Hudson’s survey of public sector fraud

It is worth emphasising that the Public Finance’s report was based on KPMG’s Fraud Barometer which tracks fraud cases in UK Crown Courts. So detected fraud is “soaring” – is actual fraud up?

Recessions, credit crunches, austerity, etc have a tendency to expose financial chicanery. Just ask Max Madoff. I am sure that Bob Maxwell would agree.

To borrow a great quote from Warren Buffett and use it in a different context:

It's only when the tide goes out that you learn who's been swimming naked.

Of course, total – detected and undetected – fraud may be up too – in line with media coverage. For example, some of the squeezed middle may resort to white collar crime in hard times. Media coverage may even have a copycat effect – MPs are not the only ones who may be susceptible to the feeling that if colleagues’ snouts are in the trough, they should no be missing out. Experts point to need, opportunity and justification driving fraud - "others doing it" offers a self-justification for some.

Organisations should treat the fraud threat seriously. They should ensure that internal audit allocate sufficient days to fraud detection using IT tools as well as addressing fraud risks as an integral part of other audit reviews.

Decisions, decisions

I am currently reading The Decision Book. It sets out fifty models for decision-making alongside some historic context to each model. I’m reading one a day – a bit like Thought for the Day.

The Decision Book even has something of interest to say about old and familiar favourites like the SWOT model of Strengths Weaknesses Opportunities Threats. The SWOT section includes a quote from Margaret J. Wheatley relevant to our uncertain times:

The things we fear most in organisations – fluctuations, disturbances, imbalances – are he primary sources of creativity.

Monday, January 17, 2011

Colleges, Alumni and their donations

I was pleased to see on the Education Guardian website an article about colleges and alumni. Iain Mackinnon – from the governing body of Ealing, Hammersmith and West London College – was suggesting that donations from alumni could become a major source of income for colleges as it has for many UK universities.

Ian MacKinnon gave examples of colleges generating income now:

Plumpton College in Sussex, for example, which has an international reputation for its wine-related training, was recently given £70,000 for research. Bournemouth and Poole College has raised over £1m in the last 15 years, from a wide range of supporters. The City Lit, London's most illustrious adult education college, raises tens of thousands every year, mostly from alumni, which it uses to help students with their fees.

I am aware of sixth form colleges seeking to generate donations from parents. This a wise move but parents are no longer when students move on – alumni are for life.

Following my earlier blog post on alumni donations, I googled to see how many colleges had alumni pages on their websites. The answer was very few. Not all of them may be using alumni to

EMA may be saved or, more likely, more than 10% salvaged. But its not likely. Students now could benefit from alumni donations and the associated Gift Aid. What is stopping colleges?

Monday, January 10, 2011

Talking about the future – what about small housing associations?

This week’s Inside Housing carries a roundtable discussion on What’s on the cards for 2011. It brings together figures from the world of social housing and its hinterland to discuss the threats and opportunities of the next 12 months.

The discussion was quite upbeat. Maybe the flexibility of the new Affordable Rent at 80% of market levels will ensure new development despite the huge reductions in public finance.

What struck me was who at the table. Local authorities and large housing associations were well-represented. Small housing associations were not there. Liverpool Mutual Homes and City West Housing Trust have around 15,000 – other soothsayers in the article many more.

The small associations will struggle to develop in the future – does that mean decline? The roundtable participants believe that associations will have to be more commercially driven. That is not necessarily something that small housing associations are well prepared to do with their limited resources and voluntary ethos.
One participant suggested: “‘Voluntary boards are part of the past now”.

Small associations – those with a few hundred or, even, a thousand or so homes - will have to do some serious thinking. Working together and with others will be vital for the associations who like to call themselves as “the smalls”.

It would be ironic if local organisations based on a voluntary ethic found themselves evicted from a future of localism and Big Society.

Thursday, January 06, 2011

Academies: the significance of numbers and the future of regulation

So one in ten English schools are now academiesmarking a doubling of academy numbers. I do have some sympathy with commentator Conor Ryan’s tweet that:

It is not the number of academies, but their contribution to school improvement that matters most.

As a former advisor to the last government Conor Ryan blogs:

it is simply ridiculous to claim that the marginal governance and financial changes involved in converting an outstanding school to an academy are in any way comparable to the huge task involved in gaining secure sponsorship and leadership for a new academy in a tough area or an academy replacing a failing school.

The setting-up of academies planned by the previous government and the conversion process allowed by the current government mean that there is a significant challenge and workload associated with regulating them. (On top of that free schools are in the pipeline.) It is therefore ironic that a fog of uncertainty has descended on the future regulation of the academy sector since the regulatory changes planned for 1 January appear to have been postponed. The Young People’s Learning Agency is funding and overseeing the sector, but Third Sector reported yesterday that it has not formally been made the new Principal Regulator to replace the Charity Commission.

Wednesday, January 05, 2011

Bracing weather - the "double freeze": pay rises and increments

Today’s Financial Times reports on proposals from a group of NHS chief executives for a "double pay freeze" - that is, a two year pay freeze for staff earning less than £21k and a freeze on incremental rises which over two thirds of NHS staff enjoy. The good news would be a promise of no compulsory redundancies – the article notes scepticism over whether all NHS organisations could afford that guarantee.

Similar plans – whether or not the NHS proposal happens – may be seen elsewhere – perhaps in education where funding cuts for some organisations may be serious enough to require radical action but not so deep as to require compulsory redundancies.

Tuesday, January 04, 2011

I am tweeting

I am now on Twitter and getting the hang of it. You are very welcome to follow, re-tweet and anything else.

I am personally finding that following others is a handy and quick way of keeping up to date.

Monday, January 03, 2011

Foretelling the future: 2011 predictions and speculations

With Christmas and New Year at the way it’s time to read the retrospectives on 2010 and the crystal ball gazing for 2011.

I have not yet listened to Radio Four’s Correspondents Look Ahead programme but Paul Mason of Newsnight makes an interesting prediction on the BBC website. He suggests that in 2011 the Coalition will fall “because everytime it tries to do something serious a bit falls off the machine”. (Interestingly Tony Benn and Dennis Healey made a similar preduction yesterday on Radio Four's Broadcasting House.) Paul Mason foresees a Liberal Democrat pull out leading to “a Second Coalition to be formed between the Conservatives, an inner core of Orange Book Libdem leaders and various Unionists, with a slim majority.” We will see if that happens and what it means for the public and third sections.

The London School of Economics blog on British Politics and Policy has a look ahead at some of the big issues that could dominate 2011. The list is far-ranging although it is a list of questions rather than predictions. While it features the Coalition and austerity, it does not mention the impact of the changes in schools and the NHS which are potentially profound and, the case of the slow painful death of Primary Care Trusts, possibly toxic.

One area which I will be watching and trying to understand is open source government, armchair auditors and some of the technology which may make this something significant. I am sure that there will be some headlines as more public bodies have to publish the detail of their financial transactions. There may even be some good to come out of these exercises.