Since incorporation, FE has been funded using an annualised formula that includes a proportion linked to qualifications being achieved. This funding model requires the gathering of extensive amounts of performance data and a whole range of associated metrics. Colleges are forced to focus on producing positive data to the detriment of students’ educational experience (see Smith 2007. Dhillon et al 2011). 
In Secondary Education, the average ‘stability rate’ of school children staying at the same school from Year 7 to Year 11 is above 90%. That means schools can rely, more or less, on five years of continuous funding per student. Around 40% of young people in England do not achieve the national benchmark of 5 GCSEs at A* to C. Just imagine the government taking back a proportion of schools’ funding based on those achievement rates.
In HE, most students are funded at £9K a year through tuition fees, paid up front by the government. While this money will be gradually paid back by the students themselves, universities can rely on it and are likely to get three years of secure finance per student if they retain them for the duration of the course. Neither is it clawed back if students do not pass their courses.
Micro-level performance measurement is undermining the powerful work FE does (Smith and O’Leary 2013). As a sector of education that offers young people and adults who may not have had positive experiences in schools an additional life-changing opportunity, FE should be funded on an equal basis. FE is in a position to respond to the different needs of people who may finally find themselves in a place where they want to learn and to improve their lives through education. The funding model should really reflect and support the enormous social and economic benefits that accrue from that.
Watch a critique of the current FE funding model and its reliance on performance data here. .
Watch a discussion with a former Director of Curriculum & Quality about funding & Study Programmes .
Dhillon, S., Hamilton-Victor, R., Jeens, D., Merrick, S., O’Brien, J., Siddons, N., Smith, R. and Wilkins, B. 2011. ‘Skills for Life: insights from the new ‘professionals”, Journal of Educational Administration and History, 43: 1, 61- 83.
Smith, R. & O’Leary, M. 2013. New Public Management in an age of austerity: knowledge and experience in further education, Journal of Educational Administration and History, 45:3, 244-266
Smith, R. 2007. Of ‘duckers and divers’, mice and men: the impact of market fundamentalism in FE colleges post-incorporation. Research in Post-Compulsory Education. 12:1, 53–69