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Enterprise and Lifelong Learning Committee

6th Report, 2000

Report on the Inquiry into the Governance of the Scottish Qualifications Authority
 
    
   
SP Paper 225

Session 1 (2000)

 
SUBMISSION FROM SCOTTISH HIGHER EDUCATION FUNDING COUNCIL (SHEFC) AND SCOTTISH FURTHER EDUCATION FUNDING COUNCIL (SFEFC)

SFEFC AND SHEFC: GOVERNANCE AND ACCOUNTABILITY

1. Introduction

This paper is provided as background information for the members of the Enterprise & Lifelong Learning Committee on the governance arrangements that are in place for the Scottish Further Education Funding Council and the Scottish Higher Education Funding Council.

Given the focus of the Committee's inquiry, the paper concentrates on the governance structures in operation and on the lines of accountability and communication between the relevant NDPB, officials of the Scottish Executive Enterprise & Lifelong Learning Department, and the Scottish Ministers (in practice, the Scottish Minister for Enterprise & Lifelong Learning). Other elements of the governance framework have not been substantially covered, such as the internal committee structures and delegation of powers, but of course further information on these aspects is available if this were considered relevant. The paper is written from the Councils' point of view and therefore does not provide comprehensive information about the sponsorship arrangements in place at the Scottish Executive Enterprise and Lifelong Learning Department except insofar as the Councils are party to them.

For ease of reference, the following abbreviations are used in the paper:

The Act

SEELLD

SHEFC

SFEFC

Further and Higher Education (Scotland) Act 1992

Scottish Executive Enterprise & Lifelong Learning Department

Scottish Higher Education Funding Council

Scottish Further Education Funding Council

2. Statutory framework

The statutory framework governing both SFEFC and SHEFC is contained within the Further and Higher Education (Scotland) Act 1992. SHEFC was established in 1992 following the passing of the Act. SFEFC was established in 1999 following the Scottish Further Education Funding Council Establishment Order 1998. Following the creation of SFEFC, the two separate NDPBs decided to enter into an agreement to operate a Joint Executive to achieve value for money and policy synergies.

The 1992 Act sets out both Councils' functions and responsibilities. Both Councils see their key functions as three-fold:

· Distributing public funding to universities and colleges in Scotland to meet the needs of learners and further the objectives of the Scottish Executive for further and higher education

· Developing and implementing policies for the use of those funds that encourage universities and colleges to contribute to the overall goals of the Scottish Executive

· Advising the Scottish Ministers on the needs and capabilities of further and higher education in Scotland

The Act confers a number of powers on the Scottish Ministers in relation to the governance of SFEFC and SHEFC, for example to make grants to the funding councils subject to terms and conditions, and to make a direction with which the relevant body must comply.

The precise nature of these powers varies for SFEFC and SHEFC. In particular, there are qualifications to the powers that may be exercised in relation to SHEFC due to a concern to prevent political interference in academic freedom. The Scottish Ministers may impose terms and conditions on the grants provided to SHEFC to be complied with in respect of every institution, or every institution falling within a specified class or description, but may not otherwise impose requirements that relate to activities carried on by any particular institution or institutions. Scottish Ministers may give directions of a general or specific character with regard to the discharge by SFEFC of its functions (except with respect to the Council's responsibility to provide advice), but may only give general directions to SHEFC about the discharge of its functions.

A copy of the most relevant extracts from the Act has been made available to the Clerk.

3. Corporate governance framework

Standard NDPB governance provisions provide the framework that enables the Councils to focus on contributing to the delivery of Scottish Executive goals and achieving value for public money, and to demonstrate to Scottish Ministers their success in doing this. Copies of all the documents mentioned in this section have been made available to the Clerk.

3.1 The Councils

Members of each Council are appointed by the Scottish Ministers through open recruitment. They are appointed as individuals and are expected to add value to the development of the further and higher education sectors in Scotland by drawing on their wide-ranging experience and expertise and increasing the direct involvement of stakeholders in decision-making.

3.2 Governance Documents

A number of parallel corporate governance documents that exist for each Council set the framework for the establishment and delivery of the Councils' corporate objectives, as follows:

· Financial memorandum;

· Management statement;

· Code of best practice for Council members; and

· Accounts direction from SEELLD (as reproduced in the Annual Accounts)

The financial memorandum and management statement for each Council sets out governance requirements across a range of areas, including standards of financial management, management structure and personnel matters, and the planning and review framework. This is one of the key mechanisms by which the Councils are accountable for their contribution towards meeting Scottish Executive goals, and is expanded on in section 4.1.

The Councils are also required by the management statement to conduct their affairs within good practice guidance relevant to NDPBs, such as "Regularity and Propriety", published by the Treasury in 1997, which contains guidelines for the proper stewardship of public funds.

These documents are supplemented by a range of planning and reporting documents for each Council, as follows:

· Three-year Corporate Plans

· Annual Operational Plans

· Annual Reports & Accounts.

3.3 Accountable Officer

Another line of accountability exists through the Accountable Officer system. The Joint Chief Executive is Accountable Officer for SFEFC and for SHEFC. He is responsible for ensuring that Exchequer funds received by the Council are put to uses consistent with the purposes for which they were given and are used in compliance with any conditions attached to their use. For these responsibilities the Accountable Officer is accountable to the Scottish Parliament and is liable to be summoned before the Audit Committee.

3.4 Audit and risk management

The financial memorandum requires each Council to establish an Audit Committee to ensure as part of their remit that proper internal audit arrangements have been put in place within the Councils. The Councils have a three-year strategic audit plan and an annual audit operating plan, prepared on the basis of risk assessment and approved by the Audit Committee of each Council. Reports of internal audits are considered and approved by the Audit Committee and follow-up reports are provided to ensure that appropriate action has been taken. SEELLD officials receive the papers of each Audit Committee at the same time as members. In addition, the Councils are subject to external audit by Audit Scotland.

The Councils have in place a risk management process that seeks to identify and control significant risks. SEELLD receives information on the most significant risks identified and the control strategies in place to manage them.

4. Governance and accountability in practice

In practice, there are a number of key processes around which communication and accountability between each Council and SEELLD centres, such as the budgeting and corporate planning cycles. The elements of the corporate planning and monitoring cycle are set out in some detail below as an example of the mechanisms for oversight and accountability that are in place.

4.1 Corporate planning

Each Council's corporate planning process plays a central role. The three-year corporate plan is updated annually and sets out the Council's objectives, strategies and policies as well as targets and milestones to measure achievement. It is the key mechanism through which SEELLD and Scottish Ministers seek to satisfy themselves that the relevant Council is taking account of Ministerial guidance, setting targets by which its performance may be monitored, and making progress towards the achievement of key objectives. Key points in the process are normally as follows:

· February: announcement of grant allocation and guidance from Scottish Ministers

· February - June: each Council drafts its corporate plan and submits draft to SEELLD for comments

· July: Strategic review meeting between the Chair and Chief Executive of the relevant Council and the Scottish Minister for Enterprise & Lifelong Learning

· July: each Council submits a finalised corporate plan to Scottish Ministers for approval

SEELLD receives in-year monitoring information on progress against targets, and reports on progress are formally published on an annual basis in each year's corporate plan. This process provides the focus for discussions between the relevant Council and SEELLD about the Council's performance and the extent to which it has delivered the desired developments set out in Ministerial guidance.

4.2 Operational planning

Based on the corporate plans of both Councils, an annual operational plan is prepared for management and accountability purposes. The purpose of the operational plan is to set out a manageable and effective programme of work for the coming financial year, providing information on tasks which the Council intends to undertake, and setting out detailed objectives, performance indicators and targets, proposed implementation arrangements, and costs and staffing implications.

Progress against the operational plan is monitored at quarterly intervals and reported to each Council. SEELLD officials receive these reports which provide them with a mechanism for determining if there is a risk of any significant tasks going off track.

4.3 Information and communication

The financial memorandum and management statement set out the Scottish Ministers' formal right of access to the records, accounts and papers of each Council and its Committees, and to send a representative to meetings of the Council. Council papers and papers of selected committees as agreed with SEELLD are copied to officials in advance of the meetings at the same time as they are distributed to members. In line with Scottish Executive policy, the Scottish Ministers do not routinely send a representative to meetings.

The annual strategic review meetings between the Scottish Minister for Enterprise & Lifelong Learning and the Chair of each Council provide the main formal opportunity for discussion about the Council's success in delivering its objectives and contributing to the achievement of Scottish Executive goals. Regular formal meetings between Scottish Ministers, senior SEELLD officials and the Chairs of each Council have included:

· SHEFC annual strategic review meeting (March 2000)

· SFEFC annual strategic review meeting (June 2000)

· Meeting of SHEFC Chair with Head of SEELLD to discuss performance of SFEFC Council members and future membership (January 2000)

· Meeting of SFEFC Chair with SEELLD Head of Lifelong Learning Group to discuss performance of SFEFC Council members and future membership (July 2000)

In addition, there is a wide range of other regular contact between Ministers, SEELLD officials, Council members and Funding Council officers, most recently a meeting on 21 September 2000 between the Minister for Enterprise & Lifelong Learning, a SFEFC Council representative and senior managers from SHEFC and SFEFC to discuss the Minister's priorities and expectations of the Councils in light of the SR2000 announcement. To assist the Councils to develop their policies in light of Scottish Executive priorities, SEELLD officials also participate in key working groups such as the Joint Lifelong Learning Group established by SFEFC, SHEFC, Scottish Enterprise and Highlands & Islands Enterprise to explore how the four organisations can work in harmony to achieve the aspirations for a lifelong learning society in Scotland. In turn, the Joint Chief Executive of SFEFC and SHEFC sits on a number of Scottish Executive working groups, including the Knowledge Economy Task Force and the Enterprise Networks Review high-level expert group (chaired by the Scottish Minister for Enterprise & Lifelong Learning).

Throughout the year, there is close and continuous contact between the Council Executive and SEELLD on a range of policy and governance matters. As an illustration of the level of contact, in the first half of the year the Chief Executive met with SEELLD staff to review progress on various issues on average on a monthly basis, and other senior management staff met with SEELLD on at least a weekly basis. Telephone contact between the organisations is even more frequent. Where substantive action points arise, there will normally be a formal exchange of letters to ensure that the action point is fully documented.

September 2000

29 September 2000: 22nd Meeting, Session 1 (2000)), Oral Evidence

29 September 2000 (22nd Meeting, Session 1 (2000))

 

SUPPLEMENTARY WRITTEN EVIDENCE:

LETTER FROM HENRY MCLEISH MSP, MINISTER OF ENTERPRISE AND LIFELONG LEARNING TO DR CHRIS MASTERS, CHAIRMAN OF SCOTTISH HIGHER EDUCATION FUNDING COUNCIL (SHEFC)

HIGHER EDUCATION FUNDING FOR 2000-01

Following Parliamentary approval, I am writing to confirm the Scottish Executive's plans for funding higher education institutions in Scotland in 2000-01 and to reinforce our main aims for the sector and the role I see for the Council in helping to deliver these. Detailed figures are set out in the Annex to this letter.

POLICY FRAMEWORK

1. As you know, much of the discussion on higher education since the Executive came to power has concerned student finance. Following our announcement on 25 January of the Executive's proposals for student finance, I hope that we can work together to develop a broader policy agenda for higher education.

Widening Access

2. The Scottish Executive has clearly stated our commitment to widening access as its main policy for higher education. Our document "Making it Work Together - A Programme for Government", included widening access to higher (and further) education as a priority. Our report "Social Justice - A Scotland where everyone matters", published in November 1999, included a commitment to increase the proportion of students from under-represented disadvantaged groups in higher education compared with the overall higher education student population. We are committed to increase by 2,000 higher education full-time equivalent student numbers in Scotland by 2002 and to ensure that more part-time students and students from low income families have access to higher (and further) education. Working together with schools and the further education sector will help deliver this agenda. This was reinforced in the aims stated in the Framework Document published on 25th January this year that, by 2005, we should see the majority of young Scots going forward to full-time education in our universities or colleges. This is an important area where I expect to see some progress and I believe that the introduction of the new student support arrangements from 2001-02 will have a positive effect.

3. As you know lifelong learning is a key component of the Executive's Programme for Government and you should therefore continue your efforts to widen access to part-time higher education. This year's grant provides funding for initiatives (including fee waiver) designed to help higher education institutions attract additional part-time students from low-income and unemployed groups. A very good start has been made on this initiative and I understand 3,000 students may benefit next year.

4. The Council should also continue to have regard to the needs of people with disabilities and the need to require institutions, as a condition of grant, to publish disability statements. The Council should also consider the desirability of institutions providing support for people with disabilities, identified in the Dearing report as under-represented in higher education. As you may be aware, there are proposals to introduce legislation at an early stage to introduce new rights for disabled students. These would require, inter alia, that institutions make adjustments to policies and accommodation to make higher education accessible to disabled students. The requirements are likely to be subject to tests of reasonableness and justification, but the presumption will be of inclusiveness, in line with the general thrust of the recommendations of the Disability Rights Task Force, which reported towards the end of 1999. The Council will wish to consider what might be the impact of introducing these new duties.

The Knowledge Economy

5. It is important that the Council has a clear strategic framework within which it can help the development and delivery of a knowledge economy. I hope that in both teaching and research funding, the Council will take a strategic approach to funding.

6. I welcome the Council's plans to consult widely as part of a review of its research funding mechanisms and expect the Council to provide appropriate policy advice when that process is complete. I also recognise the work that the Council has done to promote better commercialisation of research. I hope that your funding streams will continue to support the development of this activity.

7. As you know, the Executive wishes to work with the sector in creating a knowledge driven economy in Scotland. Commercialisation is, of course, only part of the process. I therefore hope that the Council will continue to work with Scottish Enterprise and others to ensure its policies support the knowledge economy. Your Chief Executive is, of course, a member of my task force.

8. I also expect the Council to continue to be pro-active in the development of UK-wide initiatives such as Foresight, the Joint Infrastructure Fund, the Contract Research Staff Initiative, the Review of University Accounting and Science Enterprise Challenge.

9. I welcome the Council's decision to continue working with COSHEP and others on a range of initiatives to make the best use of available resources.

10. I also wish the Council to encourage the development of ICT in teaching and learning.

International Activity

11. I welcome the inclusion of a reference to international recruitment in the Council's 1999-2002 Corporate Plan, and in particular the Prime Minister's target for Scottish higher education of attracting 5,000 additional overseas students from beyond the European Union by 2005. The Scottish Executive has been fully involved in the development and funding of the strategy to attract more international students to the UK. I support the Council's commitment to review information on objectives for international recruitment and to consider what support it could provide to assist institutions in meeting these targets.

FUNDING

Grant-in-Aid to SHEFC

12. The total grant-in-aid for financial year 2000-01 will be £609m (subject to adjustments for transfers such as those for the Open University and possible consequences of decisions on designation applications) and a detailed offer of grant letter will be sent in March. Plans for the remainder of the CSR period are indicated in the Annex to this letter.

Tuition Fees

13. As you will be aware, the Executive has decided to abolish personal contribution towards tuition fees at Scottish institutions for full-time Scottish domiciled and EU students from 2000-01. The Student Awards Agency for Scotland (SAAS) will move away from the yearly payment of fees made in February and revert back to paying 3 termly instalments of tuition fees direct to institutions. The Council should consider the implications of this on institutions when profiling its payments for the next financial year.

14. It will soon be announced that where appropriate the undergraduate fee that will be paid in 2000-01 will be £1050 and the postgraduate fee will be £2740. Can I take this opportunity to remind you that I do not expect institutions to charge "top-up" fees in addition to these amounts. Our policy on this was set out in my letter to your Chief Executive of 16 August 1999.

Student Numbers

15. The Council has taken appropriate steps in recent years to deliver a level of full-time undergraduate student numbers no higher than that assumed in its expenditure plans. The current plans for all full-time equivalent student numbers funded by the Council, 118,700 FTE, will remain unchanged in academic year 2000-01. However, our plans allow additional resources for a further 2,000 full-time equivalent undergraduate students at Scottish HEIs from 2001-02. Resources which permit an increase in part-time numbers were announced on 1 May 1998. However, these do not impact on the controlled number of full-time students. Total student full-time equivalent numbers are shown in the Annex.

SHEFC Running Costs

16. I expect the Council to continue to make efficiencies and economies in its administration costs and to seek increased value for money. I understand that the Department has recently received your estimates for the Council's running costs for the year 2000-01. Further to discussions on these, the outcome will be conveyed to the Council in a separate letter from the Department in due course.

Financial Management

17. Effective governance and management is critical to the success of higher education institutions. It is essential that institutions have in place proper arrangements to ensure adequate accountability and transparency for public money made available for higher education. The Council is responsible for ensuring that sound financial control systems are in place across the HE sector. I therefore ask that you continue to be rigorous on this issue and review the need for guidance to the sector on matters of financial management and value for money.

Allocation of Grant

18. The Council will receive separate Capital funding (see Annex) which is to be used for the on-going costs of the relocation of Edinburgh University Medical School and the New Royal Infirmary of Edinburgh project. These projects will be subject to agreement with Health Department officials taking account of any re-profiling by the project contractors.

19. I look forward to receiving the Council's final decision on its allocation of grant between: Teaching; Research; Other grants and special initiatives. Once I have been informed of the split it will be for the Council to manage its expenditure as it sees fit. However, Scottish Executive officials should be informed of any major (5% or greater) in-year shift in the balance between subheads.

The Open University

20. As you know, from April 2000, responsibility for financing the Open University student places in Scotland will transfer to the Council. I understand that agreement, in terms of the level of transfer of appropriate funds between DfEE and the Scottish Budget, is imminent and this will be reflected in the March grant-in-aid letter.

Performance Indicators

21. Following the publication of the report on Performance Indicators on 3 December 1999, I have agreed to meet with you on 6th March to discuss the role of the Council in supporting higher education institutions in Scotland deliver on the Executive's key policy areas. The Performance Indicators report will form part of these discussions. I believe that these indicators will be a useful tool in helping us maintain the quality higher education that we as a nation should all expect. I am keen to hear what steps the Council has taken in respect of individual institutions which have performed significantly below their benchmarks in the report in order to ensure improvement.

22. I would like to put on record my appreciation of the work of the Council and the recognition of their achievements in helping the Executive deliver its programme for widening student participation, expanding part-time student numbers and bringing about improvements in the quality and standards of higher education. I look forward to the Council's continuing help and advice in the forthcoming years.

23. I am copying this letter to your Chief Executive, Professor John Sizer, David Caldwell at COSHEP and Baroness Warwick at CVCP.

HENRY McLEISH

 

Annex
PLANS FOR HIGHER EDUCATION IN SCOTLAND (£millions)

Financial Years

2000-01

2001-02

Main Grant-in-Aid to SHEFC

609

642

Notes

(1) The Council is expected to fund this scheme from 2001-02 from its general grant provision.

(2) Based upon agreed NRIE and WGH profiles for the next 2 years grossed up.

(3) Estimated institutional tuition fee income in respect of both years based upon FTEs multiplied by £1,050. Also includes approximately 10,000 taught and research postgraduate students multiplied by £2,740.

February 2000

MANAGEMENT STATEMENT BETWEEN THE SCOTTISH EXECUTIVE ENTERPRISE AND LIFELONG LEARNING DEPARTMENT AND THE SCOTTISH HIGHER EDUCATION FUNDING COUNCIL

1. INTRODUCTION

1.1 The Scottish Higher Education Funding Council ("the Council") were established on 1 June 1992 under section 37 of the Further and Higher Education (Scotland) Act 1992 ("the 1992 Act").

1.2 The Council are an Executive Non-Departmental Public Body, responsible to the Scottish Ministers through the Scottish Executive Enterprise and Lifelong Learning Department (SEELLD). Note that references in this document to the Scottish Executive Enterprise and Lifelong Learning Department and the Scottish Minister for Lifelong Learning, while correct as at the date of this Management Statement, should be read as references to whichever Scottish Executive Department and whichever Scottish Minister has responsibility for Higher Education matters from time to time.

1.3 This Management Statement describes the Council's powers, functions and responsibilities, and outlines the Council's relationship with SEELLD and the Scottish Ministers. It also details the planning process and defines how the Council's performance will be measured against the objectives set out in their Corporate Plan.

1.4 This Management Statement and its associated Financial Memorandum have been agreed by the Council and the Scottish Ministers.

1.5 Taken together, the Management Statement and Financial Memorandum set out the broad policy, managerial and financial framework within which the Council operate, in particular:

· the rules and guidelines relevant to the exercise of the Council's powers, functions, and responsibilities;

· the conditions under which public funds are paid to the Council;

· how the Council will account for their performance.

1.6 The Management Statement will be reviewed from time to time, and at least every 3 years. The Scottish Ministers may, revise, revoke or add to any of the terms and conditions of this document after consultation with the Council. The Council may make representation to the Scottish Ministers for such revision, revocation or addition.

1.7 Copies of this Management Statement and any subsequent substantive amendments will be placed in the Scottish Parliamentary Information Centre.

2. THE POLICY FRAMEWORK

This section describes the powers, functions and responsibilities of the Council under the 1992 Act. It also outlines the underlying principles the Council will apply in the way in which they will carry out these responsibilities.

Powers

2.1 The 1992 Act empowers the Council to do anything which appears to them to be necessary or expedient for the purpose of or in connection with the discharge of their functions, to the extent that they can within the definition of the 1992 Act.

Functions

2.2 The Council's functions are set out in the 1992 Act. These are principally concerned with the funding of higher education in Scotland. The Council shall strive for effectiveness and efficiency in the exercising of their functions, following best practice guidelines in all aspects of their operations.

Responsibilities

2.3 The Council shall seek to ensure that value for money is obtained in respect of all public funds administered by them in fulfilling the following responsibilities:

Strategic

2.3.1 To work with the higher education institutions in ensuring the sector plays a full part in taking forward the Scottish Ministers' policy objectives for higher education.

2.3.2 To improve access to higher education for a wider range of students, particularly from groups who are presently under-represented among HE students, encouraging and supporting the higher education institutions in addressing this policy priority.

2.3.3 To facilitate strategic developments that improve the sector's capacity to meet Scotland's education and training needs.

2.3.4 To support a high quality flexible and internationally competitive research capacity in Scottish higher education.

2.3.5 To promote sound governance and the highest standards of management.

Funding and investment

2.3.6 To adopt and apply arrangements for the distribution of funds made available by the Scottish Parliament for higher education, and keep arrangements under review to ensure that they continue to meet the Council's statutory responsibilities and policy objectives.

2.3.7 To promote best practice in estate management across the sector.

2.3.8 To support learning innovations that improve the learning experience for students.

Quality and Performance Assessment

2.3.9 To secure a system for assessing quality of learning and teaching provision within the higher education institutions, and to promote a process of continuous quality improvement in learning and teaching in the sector.

2.3.10 To work with the Higher Education Statistics Agency (HESA) and other organisations to ensure that appropriate statistical, performance and financial information on the higher education institutions are maintained, developed and published.

Financial Appraisal and Monitoring

2.3.11 To operate internal administrative and monitoring systems in relation to the application of programme and running cost resources, in line with the Financial Memorandum between SEELLD and the Council.

2.3.12 To monitor the administration by higher education institutions of funds provided by the Council and their general financial performance and health, in line with the Financial Memoranda between the Council and the institutions.

Advice

2.3.13 To provide Scottish Ministers with such information and advice as they may require as regards the provision of higher education, and as the Council think fit to provide.

Working Relationships

2.3.14 To establish and maintain close working relationships with the higher education institutions in Scotland, SFEFC, the other national Funding Councils, the UK Research Councils, the Scottish Qualifications Authority, Scottish Enterprise and Highlands and Islands Enterprise, Government Departments and other external bodies with an interest in higher education.

Mission and Aims

2.4 In order to fulfil these functions and responsibilities, the Council have developed a Mission Statement supporting the maintenance and development of Scotland's higher education system. Details of the Council's aims can also be found in the above document.

Commitments

2.5 The Council will show a commitment to obtaining accreditation with Investors in People within an agreed timescale, as required by the Scottish Ministers. They will also seek to comply with all guidance applicable to the sound operation of NDPBs.

3. THE STRUCTURAL FRAMEWORK

This section sets out the roles and responsibilities of the Scottish Ministers, the Departmental Accounting Officer in respect of the Council, and those of the Council members, the Chief Executive and the Secretary. Its purpose is to identify in an overall context the role of each and to elaborate on their formal responsibilities in relation to public funds.

Role of the Scottish Ministers

3.1 The Scottish Ministers have been given a range of responsibilities in the 1992 Act. They are responsible for making funds available to the Council for the purposes specified in the 1992 Act and for issuing letters of guidance setting the broad policy framework for the Council within the provisions of the 1992 Act. They will, from time to time, provide directions to the Council with regard to the discharge of their functions. The Scottish Ministers are also responsible for determining the amount of grant in aid for the Council. They will also make the appointment of the Chairperson and other members of the Council; and approve the Council's appointment of Chief Executive. The 1992 Act permits the Scottish Ministers to remove members of the Council from office, in accordance with conditions contained in the Act.

3.2 The Scottish Ministers need to be satisfied that the Council's activities are consistent with their functions under the 1992 Act and with the Government's policies and objectives. The Scottish Ministers have a responsibility to ensure that the Council, as a Scottish NDPB, comply with all forms of advice and guidance, and achieve effectiveness and efficiency in the exercising of their functions.

Accountability to the Scottish Parliament

3.3 The Permanent Secretary at The Scottish Executive, as Principal Accounting Officer, is responsible for the overall organisation, management and staffing of the sponsor Department, and for ensuring that there is a high standard of financial management in the Scottish Executive as a whole.

3.4 The Secretary of SEELLD is the Accounting Officer for the Vote from which funds are issued to the Council. He or she is responsible for ensuring that Scottish Parliamentary authority for issuing funds to the Council has been sought and received, and that any conditions attached to these funds conform with the terms of the Vote.

3.5 The Chief Executive of the Council is responsible for proper stewardship of the grant in aid paid to the Council by the Department, and is formally appointed as Accounting Officer for the Council. Further information on the role of the Chief Executive is contained in paragraphs 3.13-3.17; and his or her responsibilities as Accounting Officer are detailed in the Financial Memorandum at paragraphs 3.2-3.6.

3.6 The Principal Accounting Officer, the Accounting Officer for the Vote and the Council's Accounting Officer are all responsible to the Scottish Minister for Lifelong Learning, and accountable to the Scottish Parliament for their respective responsibilities.

3.7 The Scottish Parliament also exercises oversight and scrutiny of the Council through the Auditor General for Scotland, who has responsibility for auditing the accounts of the Council, and shall have free access at all convenient times to the books of account and other documents relating to the Council's accounts, and shall be enabled to examine the Council's economy, efficiency and effectiveness in their use of resources. The Council are required by Schedule 7 to the 1992 Act to keep proper accounts and to send a statement of accounts for each financial year to the Scottish Ministers and the Auditor General for Scotland by the end of August of each year. A draft statement of accounts is required to be submitted to SEELLD and the Auditor General for Scotland not later than 31 May of each year. Once the Auditor General for Scotland has audited and certified the accounts, they will be laid before the Scottish Parliament along with any report on them which the Auditor General for Scotland may make.

3.8 In order to respond to Parliamentary Questions and to correspondence from Members of the Scottish Parliament about issues relating to the Council, the Scottish Ministers will expect the Council to provide information without delay, providing that the cost of gathering any information not immediately available does not exceed a prescribed limit. In the case of correspondence on operational issues or particular cases about decisions of the Council, the Scottish Ministers will encourage MSPs and MPs to write direct to the Council and they may also refer correspondence they have received to the Council for reply.

Role of the Department

3.9 SEELLD are responsible for ensuring that the Council conduct their business in accordance with the terms of the 1992 Act, Financial Memoranda, this Management Statement and such other guidance as it may issue from time to time. The Department will seek to carry out these duties in a manner which gives the Council the maximum autonomy to conduct their business in accordance with the various requirements and guidance of the Scottish Ministers. The Council will routinely copy in advance to the Department papers prepared for discussion at all Council meetings, and at such Committee meetings as may from time to time be agreed.

Role of the Chairperson of the Council

3.10 The non-executive Chairperson of the Council is appointed by the Scottish Ministers and acts as principal spokesman for the Council. The Chairperson and Council members have collective responsibility for the controls and management of the Council as a corporate body. The Chairperson also has a responsibility to review annually the performance of the Chief Executive, and to submit any recommendation regarding the awarding of a performance bonus to the Councils' Remuneration Committee.

Role of Council Members

3.11 Council members, including the Chairperson and Chief Executive, have a responsibility to ensure that projects, programmes and activities undertaken by the Council are consistent with the overall provisions in the 1992 Act, with Government policies as communicated to the Council and with any guidance issued to the Council by the Scottish Ministers or by SEELLD. A representative of the Scottish Minister for Lifelong Learning may attend meetings of the Council as prescribed in the 1992 Act. Council members will observe The Code of Best Practice for Council Members of the Scottish Higher Education Funding Council.

Joint Executive

3.12 The Council have agreed to establish a Joint Executive to support the work of the Scottish Further Education Funding Council and the Scottish Higher Education Funding Council. Details are contained in the Agreement to Create a Joint Executive.

Role of the Chief Executive

3.13 In addition to his or her duties as a Council member and as the Council's Accounting Officer (see para 3.4), the Chief Executive of the Council has overall responsibility for the economic, efficient and effective management of the Scottish Higher Education Funding Council and has a key role in assisting the Council to develop policies, identify priorities, and in ensuring effective policy implementation. He or she is responsible for ensuring that the Council meet their agreed financial and other targets.

3.14 The Chief Executive should advise the members of the Council on the discharge of their responsibilities under the 1992 Act and in accordance with this Management Statement. He or she should ensure that there are periodic reviews of the objectives of the Council programmes and of the effectiveness of Council expenditure towards meeting these objectives.

3.15 The Chief Executive acting on behalf of the Council should notify SEELLD in advance of major announcements and events planned by the Council, and should ensure that public statements are consistent with Government policy. Subject to the rules of Parliamentary privilege, SEELLD will similarly advise the Council in advance of any major announcement or events affecting the Council.

3.16 The Chief Executive, with the assistance of his or her senior management, is responsible for all aspects of industrial relations and communication with staff.

3.17 In addition to the above responsibilities on behalf on SHEFC, the Chief Executive has been delegated responsibilities in respect of the Joint Executive, in particular the responsibility for the day-to-day management of the Joint Executive. The Chief Executive will also carry out any other duties as are delegated to him or her from time to time by the Councils.

Role of the Secretary to the Council

3.18 The Secretary to the Council has a responsibility to advise the Chairperson and Council members on the management, regularity and propriety of Council business, to ensure the Council are properly constituted, that they act effectively and within their powers, and that they are open and accountable. In particular, the Secretary is responsible for ensuring that complaints made against the Council are properly investigated. The Secretary is the first point of contact for SEELLD on governance and membership issues.

Management Structure and Personnel

3.19 The Joint Executive (see para 3.12) have agreed to act jointly on the following issues:

· the employment of staff

· the procurement of goods, services and works

· obtaining any right in, to, over, or with respect to property

· the planning of the Joint Executive's operations.

3.20 The Council are responsible for their own human resource management, and have discretion to develop, and keep under review as necessary, their own overall staffing and grading structures subject to the conditions set out in this Management Statement. Subject to provisos set out below, the Council also have discretion to recruit staff at all levels below Chief Executive. SEELLD's prior approval is required for any increase in the number of posts which are graded equivalent to Civil Service Unified Grade 6 Level and above, and to any re-grading of existing posts to the equivalent of Grade 6 level and above.

3.21 The statutory requirements governing the appointment and terms and conditions of the staff of the Council are set out in Schedule 7 to the 1992 Act. The Council will determine with the approval of the Scottish Ministers the pay, allowances and other terms and conditions of employment to be applied to the Council's employees. These must continue to meet the criteria laid out in `Pay and Grading Delegation, Guidance to Departments, Agencies and NDPBs' issued and updated by the Cabinet Office, or to any equivalent criteria issued by the Scottish Executive.

3.22 The Council may operate appropriate incentive schemes for all staff, or groups of staff in accordance with guidance contained in "Regularity and Propriety". A note to the Annual Report will record any payments and their relationship to achievement of the Council's objectives.

3.23 The Council will be an equal opportunities employer and will provide as necessary any positive action programme or statement to assist them to satisfy relevant requirements.

3.24 Arrangements for the recognition of trade unions, and employee collective bargaining arrangements generally, are for the Council to determine.

3.25 The Council will introduce any procedures required in order to operate in accordance with best practice as outlined in the Public Interest Disclosure Act 1998.

4. THE PLANNING FRAMEWORK

Public Expenditure Process

4.1 Government expenditure plans for the period 1999-00 to 2001-02 were set out in the consultation document "Spending Plans for Scotland" published in the autumn of 1999. Plans for 2002-03 and 2003-04 together with any changes to the previously published plans for 2001-02 will be announced in the autumn of 2000 following Spending Review 2000.

4.2 The Department will communicate the Council's indicative grant allocation - which is subject to Parliamentary approval in the annual budgetary process - as soon as possible thereafter. The Council will then decide on allocations to colleges to be announced for the forthcoming academic year.

Corporate Plan

4.3 Each year the Council will update their corporate plan covering a 3 year period setting out the means through which the Council set their objectives, strategies, and policies as well as the means by which their effectiveness and their implementation may be measured. The plan will also set out how the achievement of these objectives will contribute to longer-term development of the higher education sector in Scotland. In preparing the plan, the Council should take into account advice given in the publication "Objective Setting and Monitoring in NDPBs", produced by the Cabinet Office in 1996. The plan will also be used by the Scottish Ministers as a means of agreeing performance targets.

4.4 The Corporate Plan should:

· include the Council's Mission Statement;

· set out policies, key strategies and objectives for the next three years;

· incorporate a comprehensive list of performance indicators to be used to measure progress against set targets of achievement;

· indicate the extent to which the main objectives and targets in the previous year's plan have been achieved, and the reasons for any variance from the targets set;

· aim to contain data on resource allocation with a view to demonstrating linkage between inputs and outputs;

· be used as a tool for internal scrutiny, reviewing achievement against objectives and revising targets;

· be available for discussion with SEELLD in draft by 31 May each year;

· be submitted to the Scottish Ministers for approval by 31 July each year.

4.5 It is not intended that the Council's corporate plan should necessarily be radically amended each year. Rather, the Council's strategies should normally remain stable over several years, requiring only minor updating on an annual basis. Such updates will be published. The corporate plan should, in any case, be thoroughly reviewed every 3 years.

Annual Strategic Meeting

4.6 A strategic review meeting between the Chairperson and Chief Executive of the Council and the Scottish Minister for Lifelong Learning will take place annually. The main purpose of this meeting is to review the Council's proposed priorities for the forthcoming year as set out in the corporate plan, and to keep the relationship between SEELLD and SHEFC under review.

Planning Cycle

4.7 The Council's planning cycle during each financial year will therefore normally be as follows:

· May-June: Council provide budget advice on the needs of the Scottish higher education sector to the Scottish Ministers;

· Jan/Feb: Announcement of allocation and guidance from Scottish Ministers;

· Feb-June: Council draft their corporate plan and submit to SEELLD for comment;

· July: Strategic review meeting on draft corporate plan;

· July: Council submit finalised corporate plan to Scottish Ministers for approval;

· August: Publication of corporate plan.

Operational Plan

4.8 The Council Executive will draw up an annual operational plan for approval by the Council describing the activities which they plan to undertake in the year ahead in pursuit of the aims and objectives in the corporate plan. The operational plan is seen principally as a management and accountability tool, for the Council's internal use. It will set out a manageable and effective programme of work for the coming financial year, providing information on tasks which the Council intend to undertake, setting out detailed objectives, performance indicators and targets, proposed implementation arrangements, and costs and staffing implications. It will include details of the Council's staffing and administration costs for the year ahead.

Performance Measures

4.9 The Council are committed to regular measurement of their performance and evaluation of their effectiveness across the full range of their overall aims and strategic objectives. Appropriate qualitative and quantitative measures will be included in the corporate and operational plans, and these will be used as a basis for monitoring performance against the key aims and objectives.

4.10 Performance will be reviewed quarterly against the operational plan and the results will be reported to the Council. These reports should provide information on resource allocation and the performance against operational targets for the period under review. The papers will also be passed to SEELLD for information.

4.11 An annual statement of performance against targets will be included in the Council's published corporate plan.

Financial Planning and Control

4.12 In exercise of their powers under section 42 of the 1992 Act the Scottish Ministers will provide funds to the Council for the purpose of exercising their functions under the 1992 Act. The general terms and conditions subject to which these funds will be made available to the Council by the Scottish Ministers out of monies voted by Parliament are set out in the Financial Memorandum. The Memorandum also records the understanding of SEELLD and the Council as to the manner in which the funds will be expended and accounted for and the arrangements for financial planning, monitoring and control. Other conditions under which grant in aid is provided to the Council may be prescribed from time to time.

5. THE REVIEW FRAMEWORK

Annual Report and Statement of Accounts

5.1 The Annual Report for the immediately previous financial year will detail the activities undertaken by the Council in that year, including the expenditure on each programme. It will also report on manpower variations and organisational change within the Council. Detailed arrangements regulating the Council's use of public funds, and the form and content of the Statement of Accounts are laid down in the Council's Financial Memorandum and separate Accounts Direction. The annual report will be published by 30 September each year.

Policy and Financial Management Reviews

5.2 SEELLD will conduct a Policy and Financial Management Review of the Council at least every five years, or at other such intervals as SEELLD may determine. Such reviews will be in two stages.

5.2.1 The initial stage will focus on whether the Council continue to be required; whether NDPB status is correct; and whether the functions are being delivered in the most effective manner.

5.2.2 If it is decided that the Council should continue, the review will focus on the efficiency and effectiveness with which the Council carry out their activities; their financial and other management systems; and the efficiency and effectiveness of SEELLD's procedures for monitoring the Council's activities.

ANNEX A

Key documents

This Management Statement underpins the broad policy and managerial framework within which the Council operate. In the body of the text reference is made to the following key documents, which should be consulted for higher detailed information, and which carry equal weight with this principal document.

Financial Memorandum
Accounts Direction
Corporate Plan
Agreement to Create a Joint Executive
Mission Statement
Code of Practice for Council Members
3 July 2000

 

LETTER FROM HENRY MCLEISH MSP, MINISTER FOR ENTERPRISE AND LIFELONG LEARNING TO MR ROBERT BEATTIE MBE, CHAIRMAN OF SCOTTISH FURTHER EDUCATION FUNDING COUNCIL (SFEFC)

FURTHER EDUCATION FUNDING FOR 2000-01

It is now some 14 months since the Council was established and almost 9 months since it took on its full responsibility for funding matters. The Council has achieved a great deal over that period of time, both in preparing itself for the tasks ahead and in discharging its responsibilities in accordance with the three letters of guidance issued last year. I would wish to record my appreciation for the work that you, the Council, and its staff have put into making all this possible.

Following Parliamentary approval, I am writing to confirm the Scottish Executive's plans for the funding of FE colleges in 2000-01 and to provide the Council with further guidance as to the main policy objectives that we would wish to see secured through the investment of these resources. I should make clear that the policy and procedural guidance issued in last year's Departmental letters to the Council still stands unless superseded in this letter.

POLICY FRAMEWORK

We are continuing to make significant additional resources available for the FE sector in the coming year. A sizeable proportion of the additional resources is to fund the next phase of the creation of an additional 40,000 college places by 2002. There is also an ongoing need to improve the financial stability, viability and efficiency of the sector. Resources have been identified too for investment in modernising the fabric and facilities of the FE sector, particularly in the area of ICT and the sector's ability to maximise the benefits from such investment.

I look to the Council to continue to refine and develop its funding methodology, strategies and programmes in order to achieve these objectives.

Widening access

Widening access to lifelong learning opportunities is a cornerstone of the Scottish Executive's policies, and the FE colleges have a major role to play in delivering this. In "Making it Work Together - A Programme for Government" we emphasised widening access to further and higher education as a priority. Our subsequent report `Social Justice - A Scotland Where Everyone Matters', published last November, focussed on the need to break down barriers that prevent people from taking up learning opportunities, so that particularly disadvantaged and vulnerable groups can access these new opportunities. This was reinforced in the aims set out in the "Framework Document" published in January of this year, to maximise opportunity for everyone to access high quality lifelong learning. The decisions we have already taken to abolish the private contributions towards tuition fees for full-time students, and to take steps to align the FE maintenance system with the HE, will assist this process. I wish the Council to support the Scottish FE colleges in targeting a significant proportion of the additional 40,000 college places on those who are socially excluded or from low income backgrounds. I also would wish to see the Council introducing measures, in the context of a widening access agenda, to improve student retention, achievement and post-course success rates.

The statutory duty set out in Section 1 of the 1992 Act refers to the requirements of persons who have learning difficulties. In taking forward a widening access agenda, I look to the Council to have proper regard to ensuring that the needs of students with all varieties of disability are addressed. We shall shortly be publishing the Scottish Executive's response to the Committee which you yourself chaired. There will be implications for the Council's work following that. Meantime, you may already be aware that there are proposals to introduce early legislation establishing new rights for disabled students. Subject to the wishes of Parliament, these might require among other things that institutions adjust their policies and make changes to accommodation and facilities so as to make further education more accessible to disabled students. The requirements are likely to be subject to tests of reasonableness and justification, but the presumption will be of inclusiveness. The Council will need to consider the potential impact for the Scottish FE sector of these new legislative provisions and how the policy objectives can best be achieved with the resources available.

The knowledge economy/ICT

I have emphasised on many occasions how the future economic success of Scotland is dependent on developing a knowledge economy and introducing new technologies and expertise so that we realise the full benefits of the digital age. The Council has a significant role to play in encouraging and supporting the FE colleges to work together with business and industry with the objective of providing a highly trained, flexible and ICT-literate workforce which will meet the economy's future requirements, including the emerging needs for e-commerce expertise and awareness.

Both the Council and the FE sector are of course represented on my Knowledge Economy Task Force and I expect the Council to work with the Scottish Executive, Scottish Enterprise, SHEFC, SQA and others to ensure that its policies are co-ordinated and support the establishment of a knowledge driven economy.

The development of ICT is critical to this. I would reiterate the guidance given to the Council last year about the need to ensure that the FE component of the National Grid for Learning is put in place, that there is appropriate investment in the FE sector in both hardware and software, in staff training and in course and materials development, so that maximum use is made of these new facilities. I welcome the Council's current consultations on a draft ICT Strategy and look to it to ensure that the resources already identified for investment in ICT are allocated to best effect. All colleges need to make further progress in improving ICT provision, distance learning opportunities and the range of education and training opportunities on offer so that all students are familiar with and skilled in the use of the new technology. I also look to the Council to encourage collaboration among institutions, and with other sectors, including schools and HE, to help take forward the appropriate development and use of ICT in support of teaching and learning and of knowledge economy objectives generally.

The Skills Agenda

The Council should continue to encourage colleges to access and analyse labour market information, including that from the new Scottish Labour Market Unit, and particularly to assess the current and likely local skills requirements within the areas which they serve, with a view to ensuring that the range and nature of the educational provision offered is as well tailored to likely skills requirements as it can be. The Council should endeavour to ensure that this process of assessment analysis and adjustment of college portfolios is an ongoing process.

In addition, I should wish to see the Council considering how best to support the colleges in playing the fullest part in taking forward a wide range of Government initiatives in the skills area. These include for instance developments within the Full-Time Education and Training Option of the New Deal, developing proposals for the further education and training of young people in the 16-24 age group, the sector's role in taking forward the Scottish Executive's recently published "New Strategy for Scottish Tourism" and "Framework for Scottish Manufacturing in the 21st Century", the impending creation of the Scottish University for Industry, the target of doubling the number of Modern Apprenticeships by the year 2003, and so on. The FE sector has a critical role to play in improving the skills base and sustainable employability of the Scottish workforce, and in thereby ensuring that our economy, both nationally and locally, benefits from maximising the potential and talents of all the prospective members of its workforce.

Adult and Adult Basic Education

In order to build a skilled and knowledgeable workforce, the Scottish Executive is committed to fostering a climate in which accessible lifelong learning is available to everyone. Good quality adult education is an essential component of this. And for the most educationally disadvantaged, basic literacy, numeracy, computer and perhaps most important of all, basic learning skills may be an essential precursor to being able to access further and higher education generally and to achieving a greater degree of participation in society, the community and the economy. The colleges have a very important role to play in providing adult education, alongside the many other providers. I look to the Council to encourage the colleges to play a full part in the preparation and subsequent implementation of coherent Community Learning Strategies and Plans for the areas which they serve, and to review their own provision particularly of adult basic education in light of the local community's needs and of the contributions appropriately made by others to meeting those needs. It is for the Council, in consultation with the sector, to determine what proportion of the additional 40,000 college places should be devoted to those in need of pre-access or basic skills courses.

Community based adult education, whether delivered by local authorities or the voluntary sector, is funded separately via the local authorities. The funds made available to the Council are intended to be used for the funding of educational provision delivered by the incorporated FE colleges and the four non-incorporated colleges currently in receipt of grant. Although the Council has powers to fund other than colleges I would ask that it does not fund the delivery of provision within any organisation (other than the above mentioned four colleges) which is not incorporated under the 1992 Act, without the Scottish Executive's agreement.

International activity

You will be well aware of the Prime Minister's UK-wide initiative to attract more college and university students from overseas. Scottish Executive officials are already engaged with the British Council, Scottish Education + Training (Export Group) and Scottish Trade International, bodies which acting collaboratively should be best placed to promote the export of FE and the attraction of foreign students. With such initiatives, however, there is a danger that some colleges with little or no track record in international work could expend a great deal of resource, time and effort to relatively little effect. In some cases there might be a danger of diversion of energies away from a more appropriate focus on the college's statutory duties and in-house matters. I would ask the Council to assist in ensuring that such risks are avoided, and that encouragement to develop in the international sphere is channelled appropriately.

FUNDING FOR 2000-01

Taking account of the fact that certain items of expenditure from within the FE total are paid direct by the Scottish Executive, the total resources available for the Council's disposal (excluding its running costs), for financial year 2000-01 amount to £351.165m. A formal, detailed `offer of grant' letter will be sent shortly. I look forward to an early indication from the Council on how it intends to allocate the total resources available for 2000-01 among the following sub-heads - recurrent funding for colleges; bursaries/student support; capital investment in infrastructure; ICT investment and development; and strategic issues, including quality.

Fees and Bursaries

The Department has already written to your Chief Executive, on 18 February, regarding work needing to be put in train by the Council in order to give effect to decisions announced in the context of the Framework Document published in January. This principally involves steps to abolish private contributions to full-time FE tuition fees from next academic year, and preparations to align the components of the FE student support system with that in HE, from August 2001.

From next academic year I would ask that the Council proceed on the basis that the appropriate level of reimbursement to colleges for the by then abolished full-time FE fee should be £820. In this context, I would also reiterate the Scottish Executive's expectation that FE colleges will not levy `top-up' charges in addition to that amount, for other than `full-cost' courses. Although alignment of the components of the FE and HE maintenance systems will not formally commence until the academic year 2001-02, it would be appropriate for the same 2½% uprating factor to be applied to the maintenance grants within the 2 systems for next year. I would ask that the Council plan on that basis.

As to the position of fee support for part-time FE provision, colleges currently have local discretion over the eligibility of part-time students for fee waivers. We acknowledge that a greater degree of consistency is desirable and therefore I look to the Council to give advice to the Executive on a policy for the waiving of part-time fees for 2000-01 and beyond, taking into account recent changes in respect of full-time students.

Student numbers/HE consolidation policy

Funding for the first tranche of 8,000 additional students (towards the Programme for Government target of an additional 40,000 college places) was made available to the colleges in the allocations for the financial year 1999-2000. I expect the Council to allocate funds to secure the 32,000 balance of additional student places over the next 2 years. I would also ask the Council to ensure that there is proper monitoring of these additional places, both in terms of numbers and in terms of type of student - including details of the disadvantaged or `under-represented' groups from which they come. In the grant-in-aid letter to colleges of 23 February 1999 Principals were forewarned to expect to have to demonstrate progress and achievement as regards their widening access agenda and the use to which the resources for the new student places has been put. I shall expect the Council to report annually to me with progress and details on this, as soon as information becomes available after the end of each year.

Last year, for the colleges which are not exempt from adherence to the HE consolidation policy (which limits the number of first year full-time SAAS supported HE students which a college may enrol), there was funding for an increase of 750 such students, within the overall figure of 8,000 additional places. For the forthcoming year, there is funding for a further increase of 750 in the overall HE `cap' figure. The Council will wish to consider how best to include this within a future consolidation policy and what arrangements should be put in place for the continued application and monitoring of the policy for 2000-01.

Financial health

The need for effective monitoring of the financial health of individual colleges, as well as that of the sector overall must continue to be a priority for the Council. The Council should work as needs be with colleges to assist them in identifying and addressing financial weaknesses, and in the formulation, and subsequent delivery and implementation by Boards of Management of appropriate and robust financial recovery plans. I shall expect the Council to ensure that all colleges operate sound, reliable systems of financial control to ensure propriety of expenditure and effective accountability. Where a breakdown in those systems is identified, the Council should take action to remedy matters.

The Scottish Executive will discuss with the Council how the recommendations in the recent Scottish Parliament's report entitled "Audit Committee, 1st Report 2000, Scottish Further Education Colleges: Managing Costs" should be responded to and taken forward.

Management and Governance

I look forward to receiving by the end of May the Council's Report on its Management Review of Scottish FE Colleges. Against the background of the Review, and the recently published report of the Scottish Parliament "Audit Committee 1st Report 2000 - Scottish FE Colleges: Managing Costs" - I shall expect the Council to continue to develop good practice guidance across the broad spectrum of both college management and governance, based on a holistic approach to benchmarking performance measurement and value for money.

External audit

The Public Finance and Accountability (Scotland) Act will lead to changes in the external audit arrangements for FE colleges. It is important that the transition to these new arrangements is a smooth one and I look to the Council to liaise with Audit Scotland on this matter.

Student Units of Measurement (SUMs)

I welcome the Council's intention to undertake a thorough review of the SUM values and weightings this year. The need for a reassessment of the costs of delivering various categories of course, is overdue. I would ask the Council to commence this review as soon as practicable and to include consideration of mechanisms for addressing the additional costs of accommodating students with learning difficulties or disabilities, both on mainstream and special programmes.

Higher Still Programme

I would ask that an existing commitment given for the financial years 2000-01 and 2001-02 be honoured, namely that £1.75m per annum of the funds allocated to FE colleges should be earmarked to assist with the development work relating to the Higher Still Programme. The Council should continue to allocate this amount of funding for this purpose.

SFEFC running costs

I expect the Council to work with the Scottish Higher Education Funding Council in striving to make efficiency savings and economies in the joint administration costs, and to seek increased value for money. The outcome of discussions with the Department on running costs for the year 2000-01 will be conveyed to the Chief Executive in a separate letter in due course.

STRATEGIC ISSUES

I note the Council's recent statement that it intends to continue next year with a significant measure of strategic funding used for broadly similar purposes to the three £1m funds established in the current financial year. I welcome the continued priority that is to be given to the promotion of innovation and new ventures in the FE sector, the extension of FE opportunities into areas, especially rural and remote areas, where access and availability is currently limited, and the promotion of collaboration between colleges, and rationalisation within the sector.

I shall wish also to be advised on how the Council intends to encourage the sector to work more collaboratively in a way that better satisfies the increasing demand for high quality further education provision. I am aware too that the Council is presently undertaking a review of the supply and demand of FE provision within Scotland. I expect the Council to report to me by December 2000 on how it proposes to approach any rationalisation of the shape and structure of the sector, to enhance the provision of further education in a regional context and deliver best value for public funds.

QUALITY ISSUES

I welcome the Council's commitment to promoting a culture of continuous quality improvement in the FE sector and to the putting in place appropriate mechanisms to deliver this. In particular I note the progress that has been made by the Council on reviewing the approach to external quality assessment, including the Council's intention to work with other agencies with an interest in quality in the FE sector to streamline and improve the effectiveness of quality assurance systems. I also welcome the Council's commitment to build on the existing links between quality improvement issues and funding, and shall also look to the Council to put in place arrangements which ensure that any instances of unacceptable quality which come to light are effectively and swiftly remedied.

Staff development (TQ(FE) and CPD)

I well recognise that the quality of FE provision delivered in the colleges is highly dependent on the training, motivation and professional development of college staff at all levels. I would wish to see the further development of an appropriate framework for staff training and development, which builds on the undoubted commitment already shown by dedicated college staff to the teaching task, and on the work being done by the FE Professional Development Forum. I would ask the Council to consider how best to establish such a framework and to encourage and secure an increase in the percentage of college staff, both full and part-time, who have acquired the TQ(FE) qualification, or component parts of it. I should also wish to see the further development of programmes for continuing professional development among staff within the sector. In taking this agenda forward I would ask that the Council engage with other bodies and agencies with an interest in these matters, as well with the Department on the statutory aspects of this.

OTHER MATTERS

Complaints procedures

Given the increasing emphasis on ensuring that users of public services have clear mechanisms for airing their complaints and having them investigated, I shall look to the Council to continue to work with both the FE sector and with the Scottish Executive to ensure that colleges have in place appropriate internal complaints procedures and that, in turn, the Council has in place effective arrangements for dealing with complaints about colleges.

Performance indicators

Good, robust and relevant performance indicators (PIs) at college level are essential measurement tools for the promotion and sharing of good practice among colleges. PIs also provide a vital basis for monitoring the effectiveness of the sector in delivering both `adequate and efficient' further education. Existing PIs are acknowledged as not being fully comparable between colleges. I would wish the Council to review the range of PIs considered necessary, and then to put in place appropriate mechanisms to establish, measure and publish these. I fully recognise that this work is complex and will need to be taken forward in stages, involving the sector. I would therefore welcome an early indication from the Council of the planned timetable of activity for this work.

Ethical standards

I note that the Council has welcomed introduction of the Ethical Standards Bill as a means of providing a consistent and transparent framework to ensure the highest standards of conduct throughout the public service. I shall expect the Council to put in place appropriate mechanisms to discharge its statutory obligations in this regard, once the legislation is in force.

Conclusion

This letter constitutes a challenging forward agenda for the Council. I look forward to working with you, and to the Council's continuing help and advice, in achieving the targets, objectives and role which the Scottish Executive has set out for the FE sector.

I am copying this letter to the Council's Chief Executive, Professor John Sizer, and to Tom Kelly at the Association of Scottish Colleges. The letter will also be placed in the Scottish Parliament Information Centre and copies will be sent to all the FE college Principals.

HENRY McLEISH
29 March 2000
 

   

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