Tories and a Nash Blog

David Cameron tells us a Conservative government would fund public services more efficiently than Labour and use growth in the economy to cut the percentage of GDP needed to pay for them. Putting the Tories firmly back in the tax-cutting camp, he said: “We believe low taxes are both morally right and economically efficient.”
We have been here before, of course. Post-1993, after colleges were incorporated and funded directly by central government, the then chancellor Kenneth Clark set in train measures on these very lines. That led to the 1 per cent year-on-year “efficiency savings” – that caused so much grief – and annual claw-backs totalling £50million for colleges that failed to impose new staff contracts.
So we need a lot more detail about how Cameron’s proposals would shape up before rushing to sign party membership forms. And with an election maybe just two years off, now is the time to start asking those awkward questions.
The only area where he has so far pledged savings that can be identified, if not costed, is on the issue of bureaucracy. And, as John Taylor, head of Single Voice, the umbrella body for organisations in the FE sector, has pointed out: 2.6% of budget is spent on regulation, at least ten times the proportion in HE, which amounts to £1m a piece for the bigger colleges.
However, the solution is not as easy as a simple switch of funds from bureaucracy to teaching. Moreover, the devil of the modern-day red tape and paperwork mountain lies substantially in the detail of incorporation 15 years ago. It is generally true that, in the early stages, centre-left governments find extra cash for public services - but at the cost of more controls over what the money can be spent on. Whereas, centre-right governments are less generous but give greater freedom.
Unfortunately, the freedoms given to colleges in the days of John Major as Prime Minister opened the doors to all manner of scams around franchising, “unit farming” to trade off surplus cash with other colleges and ethics that were so questionable that one national inquiry followed another. Each resulted in more constraints, shackles and regulations. Remember the Shattock Inquiry into the affairs of Derby College that led to the dismissal of the governing body?
And, of course, there was no extra cash to meet these escalating costs since that would have broken the very “efficiency” rules that Cameron is now espousing. Bureaucracy continued to mushroom under New Labour. It had its own badly managed schemes, such as Individual Learning Accounts, that were wound-up amid fraud allegations. Predictably, further inquiries resulted in further regulations.
So, where does Cameron find the money? How does he square tax cutting and efficiency with promises of stability and growth? These are crucial questions since he has spokespeople, including John Hayes, shadow minister for skills, pledging to restore publicly-funded general adult learning, which has seen the loss of 1.5m learners over two years.
Will Cameron crack the whip at employers and tell them to pay for more of their own training? Most unlikely – even though he dislikes Train to Gain policies – since they would not vote for him if he so much as hinted at it.
What about higher fees for adult learning? It is difficult to see how he can go higher than the 50 per cent-plus targets Labour has already committed to. Besides, just as Labour pledged when it came to office, Cameron says he will stick with the economics of the out-going government for the first two years. So any such reform would be four to five years away at least.
He does not even have the option of savings through cheaper distance learning. As the British Educational technology Association (BECTA) though it’s ambitious Harnessing Technology project has found, such learning is only effective when “blended” with more traditional methods and no-one yet knows the true cost. Besides, BECTA must identify £100m savings over three years as a result of the project, leaving little scope for additional manoeuvre.
Wherever one looks, Labour has either implemented cost-cutting measures or stolen the Tories’ economic clothing. Of course, this raises serious questions – with the economic downturn – of where another Labour government would find the cash. Indeed, will the Single Voice group, having identified the 2.6 per cent wasted on regulations simply find the money snatched away?
Nevertheless, since it is Cameron who set out the first few trinkets on his tax-cutting barrow this week, it is he who needs to say where the cash for the FE system will come from under a new Conservative government.