ONS Review of College Classification: Where does this leave post-16 education?

Following the Skills for Jobs White Paper (January 2021), and the Skills and Post-16 Education Act (April 2022), the Office for National Statistics (ONS) announced they would carry out a review of the sector classification of further education and sixth form colleges and designated institutions in England in the context of the latest international guidance, sector classifications and public policy.

Reporting their conclusion at the end of November, the ONS announced that colleges would now come into the public sector. This conclusion has triggered the need for decisions by colleges on a range of issues including tax, senior staff pay, accounting, and borrowing.

Whilst it was hoped that a change in classification status from private to public sector might mean a financial gain for colleges, the benefits now seem less clear. The significance of a change is normally that a public sector classification generates financial benefits which are not available to private sector institutions, and reclassification of the FE and sixth form sector would normally expect to provide similar financial benefits to schools and academies. However, at the time of going to print, the change in sector classification has not generated the hoped-for benefit of a VAT refund scheme.