Further education institutions have experienced much turbulence since the COVID-19 pandemic, but now more recently, are being hit with funding constraints
Staff shortages and time-poor workforces trying to maintain continuity and high standards in the public sector are also putting limits to the progression of further education institutions too.
This strain has only been further exacerbated by the Government’s reclassification of further education institutions in England and Wales to financially align them with public sector organisations, which sees them become subject to strict government lending rules.
Not only does this mean further education institutions will be joining the queue for funding and awaiting decisions with every other part of the public sector, but this is being enforced at a time the government is tightening its purse strings and trying to bring down the deficit.
Forming a new financial outlook in institutions
Any proposals for new private-sector borrowing will require consent from the Department for Education and are likely to be declined due to the typically higher costs of non-government lenders. And, despite the DfE’s £150m funding for capital projects and £300m support package for the sector, many colleges will face disruption to growth and development plans, with projects being delayed indefinitely or stopped altogether.
While the sector has more than proved its resilience over the past few years, this latest challenge will intensify the need for bullet-proof financial reporting and cash flow management as colleges need to get to grips with their new financial outlook and forge a way forward.
Data visibility and crystal-clear reporting are going to be crucial to further education institutions
Data visibility and crystal-clear reporting are going to be crucial to further education institutions in navigating this uncertainty. Cash flow management has never been so important, and robust accounting systems have a vital role to play in helping colleges to track every penny, identify costly inefficiencies, and understand if and where essential revenue may be going missing. This transparency and traceability are also going to be key in helping institutions comply with the government’s managing public money guidance.
Yet, accounting software’s remit doesn’t simply begin and end with the finance department. It should never operate in silos and needs to be able to work seamlessly with other mission-critical programmes across the organisation to be truly effective.
Enabling institutions to overcome the difficulties created by disparate systems and data silos
Interoperability, referring to when software from different third-party suppliers interacts and shares information in real-time without human intervention, is becoming increasingly essential to enable institutions to overcome the difficulties created by disparate systems and data silos. It means that information only needs to be input once for it to be replicated across all systems used by the organisation automatically, reducing time-intensive and error-prone manual data entry.
Now more than ever, in light of recent developments, this bigger picture is crucial to enable the monitoring of management information so any issues can be identified and addressed quickly. When effectively interacting with and leveraging data from other key operational areas, financial software can become a powerful tool for performance insight and act as a mission-critical, decision-support mechanism.
How will the public sector fare in the long run?
This visibility and interoperability are also vital for fast and efficient stakeholder reporting, which is crucial in helping institutions make data-driven decisions and remain most agile in the face of cost restrictions and funding challenges.
The reclassification of further education institutions as part of the public sector has significant implications for their funding and operations, and it remains to be seen how these changes will play out in the long term. However, the further education institutions better prepared to weather the storm will undoubtedly be those with effective reporting, data visibility and watertight interconnected operational systems.
