Review of further education governance in Scotland

B. Introduction

In introducing this review of governance within the Further Education Sector in Scotland, it is important to say at the outset how we have defined the sector. Throughout this report we use both the terms ' FE Sector' and 'College Sector' since both are in common use. We believe that neither term, on its own, fully conveys what the sector is and does. What is commonly described as the ' FE Sector' in Scotland covers much more than just FE, as Colleges also deliver Higher Education ( HE) courses on a scale much above that for example of their counterparts elsewhere in the UK. Therefore there is not the separation of FE and HE in Scotland that we see elsewhere. The term ' FE Sector' should therefore be taken as including all levels of teaching and learning which are delivered. Equally, to use exclusively the term 'College Sector' would also be incomplete, and might imply that our focus had been confined to the buildings in which learning is delivered. One of the certainties at present is that more and more learning of all kinds can and will be able to be done elsewhere than in prescribed learning facilities. Therefore for the purposes of this review we refer to this wide sector in ways intended to highlight both the FE and HE learning it delivers, and the infrastructure which supports that.

In conducting the review we have tried to look at not just what is needed today but perhaps more importantly what will be needed in the future. This is to ensure that any new governance model we recommend can be a good base to allow the development and evolution of provision across the College sector over the next decade and beyond, where the only certainty is that there will be change in what and how we all learn.

As we will refer to in more detail later, the structure of governance we have in place today has not really been challenged since 1992. Even then, the incorporation of Colleges involved only a transfer of responsibilities from one part of society to another.

Governance can only operate within the context and rules which are given. Therefore we need to be absolutely clear that, in all that we write in this report, there is no criticism of current College Boards and Principals implied or indicated. They have operated in the way they felt fitted with what they had been asked to do. What we are doing today in the College Sector is what has been asked of it by Government over a long period of time.

Whether the decision in 1992 to introduce the current arrangement was right or wrong in a sense is a fruitless discussion. The aim of the review has been to establish if it is still fit for purpose.

Governance in the College Sector has been improving, but not in a cohesive way.

Therefore while this report does recommend some profound changes for the way the sector is governed this is only because these address questions now being asked. It is only, as is stated above, the first step on a journey which may be challenged further in the future. We believe this report now provides a simpler and more robust base from which to start.

The report also tries to look outwith and beyond the current fiscal environment in which we find ourselves. We should not be making changes simply because of that. All we recommend here is what we believe is the best for the sector in any fiscal circumstances. However we do recognise that sadly, when fiscal times are good, we tend not to ask the more basic and harder questions around what and how we can improve and deliver better outcomes. We therefore miss the opportunities those times bring us to make them more easily. We as a society and as individual human beings in general tend to wait for the pressures of fiscal restraint to focus on the real issues we should have addressed, but now do in a more difficult environment. There is a strong argument to say that we should have asked these questions fully 20 years ago - and if not then definitely sometime in the last 20 years - but for whatever reason we have not.

However what we need to make clear at the outset is that, for our recommendations to be implemented, this will require funding beyond what has already been allocated for the College Sector. The benefits we believe this new structure will bring will be significant, especially for the learner, but without proper investment and management to match that new structure as a starting point, the task risks being done in a manner that delivers the wrong or an incomplete outcome.

Also, before getting to the specifics of what we were asked to review it is useful to establish what governance is.

There are many definitions of governance which we have examined but below is what we feel is perhaps the simplest.

' It is the framework of rules and practices by which a Board of any form ensures accountability, fairness and transparency in an organisation's relationship with its stakeholders and shareholders to ensure they are bought into what the organisation does.

The governance framework consists of

a) Explicit and implicit contracts between the company and the shareholders/ stakeholders for distribution of responsibilities, rights and rewards

b) Procedures for reconciling the sometimes conflicting interests of shareholders/ stakeholders in accordance with their duties, privileges and roles.

c) Procedures for proper supervision, control, and information-flows to serve as a system of checks and balances.'

Governance is also to do with what is being governed and represents the rules that shareholders, funders and others have or should impose in order to fulfil what they require.

Therefore in carrying out our review we have had to cast widely to ensure that we have consulted with all those on whom governance impacts as learners, shareholders and stakeholders of the College Sector. Each in their own way plays a part in determining the most appropriate form of governance which should apply.

We have viewed Government as the main shareholder in the College Sector. We have viewed the SFC as the main funder/ financier who, like any other organisation with such a role, imposes governance restrictions and rules on the organisations being funded. All others we have spoken to, or whose submissions we have considered, we have treated as stakeholders with the exception of the learner. Quite simply the interests of the learner have to be the sole reason we do anything in the sector. We see the learner therefore being in an exclusive category which must see benefit from whatever we recommend.

Also, since many other parts of the UK and places elsewhere in the world have looked at the process of governance in their College sectors, we have looked at their thinking and outcomes. Annexe C lists those reviews which we have examined.

Finally it should be stated quite clearly that the picture we have formed ourselves and, which has been endorsed by many others, is that College provision is a national public service locally delivered and we have tried to enforce and recognise that in this review.