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.

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