governance good practice guide

The Association of Colleges (AoC) represents general FE colleges, 6th form colleges and specialist colleges in England, Wales and Northern Ireland; 98% of colleges are in the Association of Colleges' membership.

The AoC supports its member colleges in a number of different ways, and seeks to raise the profile of colleges with the Government and other agencies.

The AoC provides professional support on clerkship and governance issues. The services include seminars, conferences and regional network meetings, to share good practice and to provide updates on new initiatives.

The AoC issues important circulars on FE matters – including those relating to governance and clerking. The AoC provides a governance helpline: freephone 0800 652 0535.

The awarding bodies work with the Sector Skills Councils to devise qualifications for centres to use. Centres may be FE colleges, work-based learning (WBL) provider organisations, adult and continuing learning (ACL) providers, schools, etc. The 'big five' awarding bodies are AQA, CGLI, Edexcel, OCR and OCN.

The awarding bodies base their qualifications on the National Occupational Standards (NOS) specified by the SSCs and they submit them for approval to the Qualifications and Curriculum Authority (QCA).

Awarding bodies offering NVQs (National Vocational Qualifications) subscribe to the NVQ Code of Practice (previously known as the Common Accord). The NVQ Code of Practice aims to streamline administrative arrangements, specifies centre approval criteria, promotes consistency of quality, etc. The activities of the awarding bodies are monitored by the QCA.

The Centre for Excellence in Leadership (formerly known as the Leadership College) was launched in October 2003 to ensure world-class leadership within the learning and skills system as a key national agency within the government's 'Success for All' initiative.

CEL's remit is to foster and support leadership improvement, diversity, reform and transformation across the learning and skills system.

It provides leadership development to existing and future leaders of all providers within the learning and skills system, including FE colleges, training and work-based providers, adult and community learning providers, specialist colleges, voluntary organisations and higher education.

The Centre for Excellence in Leadership provides, for example, induction programmes for new college principals and a leadership programme for existing and aspiring senior managers in post-16 and higher education. It is currently developing a principal's qualification. Its role is being reviewed in the light of the establishment of the Quality Improvement Agency (QIA).

CEL complements other leading public service leadership initiatives, especially the National College for School Leadership and the Higher Education Funding Council for England's (HEFCE) international leadership academy.

CEL provides the Leadership Skills for Governance (LSG) programme.

You can contact the LSG via email at info@fegovernance.org, visit the website at www.fegovernance.org or phone the free governance helpline on 0800 652 0535.

The Chartered Institute of Public Finance and Accountancy is the leading professional accountancy body for public services. It publishes useful briefings on its website, a handbook for audit committee members in HE and FE, and runs training sessions. It commissioned the Good Governance Standard for Public Services.

This new department is tasked with working closely with DIUS and DCSF so that the country has a strong skills base, and businesses and individuals of all ages are equipped to face the challenges of the years ahead. DBERR is responsible for:

• taking the lead in creating the conditions for business success
• promoting productivity and enterprise across government and within the EU.

This new department works closely with DIUS, and is responsible for:

• education, children and youth issues
• pre-19 education policy responsibilities (working closely with DIUS to ensure successful delivery of the 14 to 19 reforms).

DCSF leads the 14 – 19 reform strategy, in which colleges and providers play an important part. DCSF will take a close interest in LSC performance, and will attend Ministerial Review meetings. DCSF is responsible for all education to the age of 19. Funding for 14 – 19 learning will be allocated by the DCSF through local authorities from 2010. DCSF has planning and funding responsibility for all the 14 – 19 reforms, school 6th forms and 6th form colleges. Funding for school 6th forms, 6th form colleges and the contribution of FE colleges to 14 – 19 will transfer from the LSC to local authorities' ring-fenced education budgets.

This new department is responsible for:

• the development, funding and performance management of further education and higher education (HE), working closely with the Department for Children, Schools and Families (DCSF) (FE sits within DIUS; 6th form colleges sit within DCSF; Information, Advice and Guidance (IAG) for adults is the responsibility of DIUS; IAG for young people is the responsibility of DCSF)
• ensuring that the UK has the skilled workforce it needs to compete effectively in a global economy
• taking forward the Government's wider skills agenda, including the implementation of the Leitch report
• driving forward delivery of the Government’s long-term vision to make Britain one of the best places in the world for science, research and innovation, and to deliver the ambition of a world-class skills base.

DIUS is the Government department that is responsible for policy on FE, HE and training in England. It is responsible for the overview and strategic direction of FE, HE and skills. It has to ensure that all those involved in the post-compulsory learning and skills system understand their respective roles and responsibilities in working towards the achievement of excellence.

DIUS has joint responsibility with the Learning and Skills Council (LSC) for the overall implementation of the Government’s ‘Success for All’ reform programme.

DIUS has a remit for strategy and legal frameworks, and is accountable to Parliament for an effective FE system and the use of public money.

DIUS sets the framework of the Instrument and Articles of Government within which governing boards operate.

The Learning and Skills Council is the principal funding and planning body in England for post-compulsory education and training.

It is currently responsible for:

• planning and funding post-compulsory learning and skills
• monitoring the provision that the LSC funds
• taking forward (with the QIA) a strategy for quality improvement.

Its national office is located in Coventry and it operates through a recently strengthened regional infrastructure (nine regions). As part of the Agenda for Change, the LSC has undergone major restructuring. The recently published FE Bill announces the abolition of the local LSCs and it is understood that the Leitch report will lead to a focus on funding for the LSC rather than planning – as provision will be demand-led rather than plan-led.

The LSC purchases local education and training from colleges, private training providers and voluntary-sector organisations. They can also purchase education from school 6th forms through their local authorities.

Each year, the Secretary of State for Education and Skills passes on policies to the national LSC by producing an annual 'remit letter', which outlines those actions that LSCs, colleges and other post-compulsory learning and skills providers should take. The regional/local LSCs purchase appropriate learning and skills provision from those local providers (FE, private, voluntary) that they judge to provide the best quality and value for money.

LSC role in monitoring, review and auditing

The LSCs have a key role to play in monitoring, reviewing and auditing the provision that they plan and fund.

They use the findings from:

• the Provider Financial Assurance (PFA)
• Regularity Audit
• college data and performance reports
• their (i.e. the LSCs') review of the business planning cycle, and
• the results of ALI/Ofsted inspections

to make judgements regarding the funding and support of learning and skills providers (including colleges).

The local (and, increasingly, regional) LSC maintains a dialogue with colleges and other providers, carrying out an Annual Provider Review and risk assessment as part of its planning and allocation of funding for the following year.

Key documents to be submitted to the LSC, following approval by the board, are:

• Strategic Development Plan (three-year plan submitted annually)
• budget and three-year financial forecast
• year-end financial statements
• self-assessment report and quality improvement plan.

LSC quality monitoring

The LSCs have a quality monitoring role (not an inspectorial role).

LSCs monitor providers' quality improvements and take appropriate action when providers are failing. With the creation of the Quality Improvement Agency (QIA), providers are advised to make use of its services when devising and implementing their quality improvement plans.

The LSC monitors implementation of these plans and – if it finds them ineffective – the provider may lose funding for this area of work.

The LSC shares findings from its annual reviews and from its continuing relationship with providers, with the QIA (Quality Improvement Agency) and with the inspectorates.

In terms of quality, it can be said that:

• Ofsted inspects
• LSC assures
• QIA supports.

LSC – PFA (Provider Financial Assurance)

The local LSC Provider Financial Assurance (PFA) team assesses the corporation's compliance with statutory responsibilities, and the effectiveness of systems of governance and financial management. This is undertaken alongside the ALI/Ofsted inspections.

The LSC PFA team evaluates:

• compliance with the Instrument and Articles of Government, the Financial
  Memorandum and Audit Code of Practice, and
• the financial health of the college and the standard of financial management.

LSC – the self-assessment report questionnaire (SARQ)

This is a questionnaire (accompanied by guidance for colleges) issued by the LSC and relates to their financial management and governance.

The SARQ sets out a comprehensive series of questions in relation to the soundness, operation and also the effectiveness of colleges' financial management and governance frameworks, and is the key means by which the LSC audits the college's governance and financial management compliance.

Colleges assess themselves against these questions as part of the annual self-assessment process, allocating grades on a scale of one to five.

The clerk has a key role to play in providing the evidence relating to the questions on governance. As these form the majority of the questions in the SARQ, it is not unusual for the clerk to lead on this (whereas the financial director would lead on the Regularity Audit).

Following the annual assessment, the clerk should feed back to the governing board and its committees on any gaps, and recommend any corrective action.

The SARQ forms the basis of the PFA review process and is undertaken in parallel with the ALI/Ofsted inspections. Completion and updating of the SARQ annually helps inform colleges' self-assessment reports, and vice versa.

When the SARQ forms part of the Ofsted inspection, the document must be signed off by the principal and the clerk. The clerk, therefore, has a key accountability around the SARQ.

LSC – the regularity audit

The LSC requires colleges to undertake a Regularity Audit, which is carried out annually by the college's own financial statements auditors. It involves completion of a regularity audit self-assessment questionnaire (SAQ).

While the SARQ (see above – LSC PFA) looks at the quality of governance and financial management, the SAQ (FS auditors) focuses on the proper use by the college of public funds.

Following the discontinuation of the funding audit for most colleges, the Regularity Audit is now the LSC's key source of assurance regarding the use of public funds.

As a result of recommendations in the Foster review: 'Realising the Potential', and the White Paper, 'Raising Skills and Improving Life Chances', the LSC (Learning and Skills Council) is developing a Framework for Excellence in conjunction with the Quality Improvement Agency (QIA) and the Department for Education and Skills (DfES).

The Framework for Excellence is a streamlined framework for the assessment of college and training provider performance against a nationally agreed set of key performance indicators.

Go to the page about the Framework for Excellence in the governance and the FE system section

The intention is that this new framework will simplify the management of quality improvement, enabling the achievement of real results across the whole of the FE system.

It builds on the requirements of the Common Inspection Framework and supports the LSC's Agenda for Change.

The Leadership Skills for Governance programme, provided by the Centre for Excellence in Leadership (CEL), supports the specific needs of college governing boards. Its services include conferences, seminars, development workshops, customised consultancies and a governance newsletter.

It provides this web-based Governance Good Practice Guide.

You can contact the LSG via email at info@fegovernance.org, or visit the website at www.fegovernance.org.

Lifelong Learning UK – formed in 2005 – is responsible for workforce planning and development in the lifelong learning sector.

It is the Sector Skills Council (SSC) for the development, quality assurance and promotion of national standards for the post-compulsory learning and skills sector (including those for governance).

This encompasses further education, adult and community learning (ACL), work-based learning (WBL), higher education (HE), youth work, and library archives and information services across England, Wales, Scotland and Northern Ireland, in the public, private and voluntary sectors.

LLUK, therefore, has a much broader remit than FENTO (Further Education National Training Organisation), whose responsibilities lay with the further education sector, and whose activities have been incorporated into LLUK.

The National Audit Office sets the rules within which the FE sector and national audit operates. It publishes useful reports on a variety of topics of interest to audit committees and periodically carries out reviews of aspects of the FE system. The audit committee needs to be aware of these reviews.

The Office for Standards in Education is the body that inspects the quality and effectiveness of learning provision.

Colleges (and other learning and skills providers) are inspected by Ofsted, currently on a four-yearly cycle, using the Common Inspection Framework (CIF).

The CIF contains five key questions relating to areas of a college's operations. Each area is graded, using a scale of one to four. The CIF puts learners and their achievements, and the quality of their education and training, at the heart of what is inspected and self-assessed.

The CIF is also used by providers (including colleges) to self-assess. Good self-assessment is of central importance: the revised inspection arrangements place an even greater emphasis on a provider's capacity to self-improve through effective self-assessment. This focus on self-improvement is supported by more frequent contact between inspectors and colleges, including an Annual Assessment Visit (AAV).

Go to the section on self-assessment to self-improve

In addition, the emerging move towards self-regulation across FE relies for its success on honest, robust and systematic self-assessment by college staff, governors and stakeholders.

Go to the page on self-regulation in the governance and the FE system section

The inspectorate produces an inspection report that is published on its website and, therefore, publicly available. The report gives details of the findings of the inspection, with grades for areas of learning, and for leadership and management (including governance).

The inspection report provides valuable information, which the college uses to inform its quality improvement plan. Colleges are advised to update their quality improvement plans as soon after the feedback meeting with inspectors as possible, and to utilise the services of the QIA.

Go to the page on the LSC Agenda for Change in the governance and the FE system section

The Chief Inspector also publishes an annual report reflecting on issues and trends across the system that have arisen during the previous year. This report is a useful source of information when comparing in-house performance against the national picture, and when preparing for an inspection or looking at ways to improve.

The Qualifications and Curriculum Authority is the body responsible for developing the complex framework of academic and vocational qualifications gained in schools, colleges and publicly funded training. Its work covers work-based learning and education (except higher education).

Working with the Sector Skills Councils (SSCs), the QCA oversees the programme to develop national occupational standards (NOS).

The QCA regulates the activities of the awarding/examining bodies.

The Quality Improvement Agency is a national body that has been set up by Government to drive forward quality improvement across the learning and skills sector. It encompasses the work of the former LSDA (Learning and Skills Development Agency).

The QIA is working with the inspectorates, the LSC and other key partners and providers to develop and implement a national (Quality) Improvement Strategy across the learning and skills system.

Go to the page on the LSC Agenda for Change in the governance and the FE system section

This includes integrated approaches to quality improvement across vocational learning, the commissioning of teaching and learning materials, commissioning services to turn around poor provision, and commissioning national programmes to support the system in responding to strategic change.

To promote FE sector-wide self-improvement through effective self-assessment, work is being undertaken nationally by the QIA, LSC and DfES to develop and pilot a Framework for Excellence.

Go to the page on the Framework for Excellence in the governance and the FE system section

This is a framework for the assessment of college and training provider performance against a set of key performance indicators.

The Regional Development Agencies were established in 1999. There are nine RDAs, which are funded through the Department of Trade and Industry (DTI).

They have five statutory objectives:

1. to further economic development and regeneration
2. to promote business efficiency and competitiveness
3. to promote employment
4. to enhance the development and application of skills relevant to employment
5. to contribute to sustainable development.

The RDAs develop a Regional Economic Strategy (RES) for their region with partners from all sectors. They support enterprise and new businesses to provide jobs and stimulate the economy. They work with colleges, learning and skills providers, businesses and others to ensure each regional workforce has the skills to meet the needs of its regional economy.

There are 25 Sector Skills Councils (SSCs). They replaced the National Training Organisations (NTOs) and are licensed by the Secretary of State for Education and Skills in consultation with Ministers for Scotland, Wales and Northern Ireland.

They are employer-led, independent bodies each covering a specific sector:

• Asset Skills (property, housing, cleaning and facilities management)

• Automotive Skills (the retail motor industry)

• Cogent (chemicals, nuclear, oil and gas, petroleum and polymer industries)

• Construction Skills

• Creative and Cultural Skills

• Energy and Utility Skills

• e-skills UK (information technology, telecommunications and contact centres)

• Financial Services Skills Council

• GoSkills (passenger transport)

• Government Skills

• Improve (food and drink manufacturing and processing)

• Lantra (environmental and land-based industries)

• Lifelong Learning UK (which includes FE and HE)

• People 1st (hospitality, leisure, travel and tourism)

• Proskills UK (process and manufacturing)

• SEMTA (science, engineering and manufacturing technologies)

• Skillfast-UK (apparel, footwear and textile industry)

• Skills for Care and Development

• Skills for Health (all staff groups working in NHS, independent and voluntary health organisations)

• Skills for Justice (custodial care, community justice and police)

• Skills for Logistics (freight logistics industry)

• SkillsActive (active leisure and learning)

• Skillset (broadcast, film, video, interactive media and imaging)

• Skillsmart (retail)

• Summitskills (building services engineering – electro-technical, heating, ventilating, air conditioning, refrigeration and plumbing).

The SSCs have four key goals:

1. to reduce skills gaps and shortages
2. to improve productivity, business and public service performance
3. to increase opportunities to boost the skills and productivity of everyone in the sector's workforce
4. to improve learning supply – e.g. apprenticeships, higher education (HE) and national occupational standards (NOS).