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Classification of Colleges

Volume 541: debated on Monday 27 February 2012

I am writing to inform the House that the Office for National Statistics (ONS) has recently reviewed the classification of colleges and notified HM Treasury on 23 February 2012 that both further education colleges and sixth-form colleges will be reclassified to the private sector upon commencement, in April 2012, of the relevant parts of the Education Act 2011.

On 14 October 2010, I informed the House of the decision by the ONS to reclassify general further education colleges as part of central Government for the purposes of national accounts. FE colleges had previously been classified as part of the private sector. On the same date ONS announced that sixth-form college corporations were classified as local government entities for national accounts purposes.

Confirming the Government’s commitment to reduce burdens on further education colleges and to give them freedoms to make their own decisions on how best to manage their affairs for the benefit of learners, employers and wider communities, I pledged to work to challenge the original classification.

Through the Education Act 2011, the Department for Business, Innovation and Skills and the Department for Education have removed a wide range of restrictions and controls on further education and sixth-form college corporations, putting them on a similar footing to charities operating within the independent/private sector.

Having reviewed the changes we have made, the ONS has concluded that they are sufficient to remove public sector control over these corporations, and they will consequently be reclassified to the private sector. This reclassification is provisional upon ensuring that there are no other public sector controls in other documentation, such as the funding agreements, and keeping under review the use of remaining Government powers within legislation.

I am today writing to the Association of Colleges to inform it of this achievement. Lord Hill is similarly communicating with the sixth-form colleges’ sector.