5 focus areas every FE senior finance lead should be looking at
Since the publication of the September FE Week article surrounding the ESFA’s oversight of financial management, FE colleges may have found themselves questioning the integrity of sector financial information. As a result, Dame Mary Ney will be carrying out a full review into the way the government monitors college finances.
The review by Ney will undoubtedly highlight any perceived sector failings and bring more clarity and scrutiny to how FE colleges are measured. Colleges will no doubt need to view their finances more holistically, going beyond just identifying cost savings and financial attrition. This can only be a positive step forward for the sector.
Naturally the review will give rise to recommendations that will potentially set the direction of travel for the sector. However, based on our discussions with senior leaders, including senior financial leaders, we feel the current oversight is limited and limiting in its focus.
The top five areas to focus on now are:
1. The bigger financial picture
The sector is used to having a single score of financial health and retrospective ‘snapshots’ of financial performance. But this approach is unlikely to provide FE leaders with the type of business improvement intelligence that looks at the bigger picture. The sector needs analysis and intelligence that will help bring about strategy improvement, enhanced actions plans that create greater impact and the evidence-based roadmaps to move forward.
2. A 360-degree view of data
Looking at data objectively from 360 degrees will allow college leaders to clearly devise effective strategies to improve business performance. Objectively identifying the performance milestones that demonstrate the effectiveness of those strategies will always be the challenge in a sector that has largely been focused on rear-view mirror reporting. As colleges step away from this to a more investigative approach and one that uncovers truths in data, analyses its effectiveness and benchmarks it with the sector, only then will they be able to set aspirational, yet evidence-based, performance targets.
3. Overcome the limitations of FE reporting
There is huge desire in the sector to improve FE, but the questions of ‘how’, ‘where’ and ‘by what amount’ are not defined, but instead left to interpretation of the limited, and limiting, datasets. Which is probably one contributing factor to why we see such wild variations in performance across the sector. Performance Benchmarking naturally bridges this gap by looking at every aspect of performance across the college and benchmarking against the sector, so each college can see how it performs against sector benchmarks and can then make informed decisions about their KPIs, at every level of operations.
4. Harnessing the current data and passion in the sector
Years of sector upheaval have shown us the determination and passion evident in colleges to succeed, individually and collectively. It has also led to us scrutinising college finances to the nth degree in order to help leaders identify opportunities for savings and create the most efficient and effective operations possible. So, between us and college leaders we have available a wealth of data and analysis, as well as the mindset to collaborate for the good of the sector. There is an opportunity to use this strength to engage in collaborative dialogue, facilitated by independent, objective, sector wide datasets and analysis. Some colleges have already done so by opening their performance benchmarking analysis to give context to variations in performance and subsequently identify strategies that lead to improvement. As it seems the sector is beginning to receive additional funding (despite continued political uncertainty in the UK), what better opportunity to make sure investment is made in the right strategies.
5. A country-wide approach
In England we may be some way off the likes of New Zealand and Ireland where whole-sector performance benchmarking is already in place, but the conditions are there, and government has made it clear this next phase of further education will be informed by much scrutiny in order to elevate it to the next level. Key to achieving the desired and sustainable results, however, will be supporting that scrutiny with a more performance-improvement-focused oversight.
To find out how Tribal can help, download our brochure.
Tribal has 20 years’ experience talking independently to senior leaders in FE and using an objective model that gives Financial decision makers the information to truly understand their costs, optimise their resources, and increase productivity, efficiency and effectiveness. So, we’re well qualified to contribute on this topic. As a company, we’ve got one of the most comprehensive financial oversights in FE (we’ve benchmarked over 80% of UK colleges).