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.