governance good practice guide

background to the FE system

Introduction

Further education (FE) operates in a broad context delivering post-16 education and training. Of around 560 colleges of all types in the FE sector, the majority are FE corporations receiving funding from the Learning and Skills Council (LSC). The total annual budget given to colleges by the LSC is around £5 billion, catering for around 6 million learners in England.

There is a wide range of FE colleges, and these can be divided as follows:

• general further education colleges, offering a wide range of academic and vocational courses, both full- and part-time
• tertiary colleges, in areas where courses for people over age 16 are placed in one institution, and schools do not have 6th forms
• 6th form colleges offering both academic and vocational courses up to A-level or equivalent standard
• voluntary aided and controlled 6th form colleges, such as those run by church organisations
• agricultural and horticultural colleges, offering courses in land-based industries
• arts and design colleges,
• specialist designated colleges, established to fulfil particular purposes – for example, for students with learning disabilities and difficulties.

Between the different types of college there are minor differences in membership and responsibilities of the governing bodies set out in the Instrument of Articles and Government.

Most FE colleges are statutory corporations set up by an order of the Secretary of State under the Further and Higher Education Act 1992. A statutory corporation exists only for the particular purposes that Parliament intended. These purposes, referred to as 'powers', govern the relationship between the college and the outside world.

All colleges, whatever their legal status, are charities. This brings with it benefits and obligations, which vary according to the route by which the college is recognised as a charity.

Registered charities

Most specialist designated institutions are registered as charities with the Charities Commission, and subject to the provisions of the Charities Acts. The Charities Commissioners exercise supervision over registered charities, and have the power to act for the protection of the charity.

Exempt charities

Further education college corporations are exempt charities and do not fall under the direct supervision of the Charities Commission. The rationale is that they are adequately supervised by other bodies such as the LSC, the Inland Revenue and the National Audit Office. Exempt charities cannot describe themselves as a registered charity, and do not have a registered number. There is an expectation, however, that governors of further education corporations follow the standards set out by the Charities Commission for the governance of their institutions.

Because colleges are charities, governors are required to:

• act in accordance with the charity's powers and its charitable objectives (i.e. to act as an educational charity), promote the interests of the charity and ensure that its assets are applied only for its charitable purpose (i.e. the provision of education), and
• safeguard the assets of the charity.

The powers of the further education college governing bodies are set out in sections 18 and 19 of theFurther and Higher Education Act 1992. This act has been amended both by theLearning and Skills Act 2000 and theFurther Education and Training Act 2007, which now provides the corporation’s principle powers to:

• provide further, higher and secondary education, and to participate in the provision of secondary education at a school, and
• supply goods or services in connection with the provision of education.

The Learning and Skills Act 2000 and the Further Education and Training Act 2007 provide for a number of supplementary powers, which specifically include:

• conducting an educational institution
• providing facilities such as accommodation and recreational facilities for staff and students
• acquiring and disposing of property
• entering into contracts, such as employing staff
• borrowing money and granting security (subject to the requirements of the financial memorandum)
• investing money
• forming or investing in companies and becoming members of charitable incorporated organisations; with the consent of the LSC, they may use either of these powers for the purpose of conducting an educational institution.