An innovative new project involving five large college groups and the FE Commissioner’s office is underway and will set a new standard for FE collaboration, as well as providing participating colleges with new levels of insight into effective delivery models for cost-efficient and high-quality Support Services.
Financial Benchmarking in Further Education has been around for quite some time, and our own model has undergone developments and refinements over the last 20 years or so to match the changing needs of colleges. Occasionally, we have facilitated the sharing of benchmarking results between specific colleges, in order for them to gain greater context for their individual analyses, and derive heightened value from their projects. Despite a desire across the sector to engage in collaborative projects, and the abundance of granular data and insights afforded by benchmarking, such collaborative exercises have been rather an exception to the rule. That is until now.
A step-change in college collaboration
In early 2022 Tribal started discussions with several large college groups with the aim of establishing a benchmarking peer group whereby each college group would receive not only its own independent financial benchmarking results compared against the Tribal databank of colleges, but also a peer-group specific analysis as part of a collaborative reporting process.
The project has been delivered in a manner that has retained some independence for each of the college groups. Each college group had their own project launch meeting and worked to their own timeline within the overall project timeline to account for workloads and other priorities. Each of the college groups completed the model application process within 8-weeks of providing Tribal with the necessary data with minimal impact on staff, although adjustments are continuing as we validate the results and apply the level of diligence that is expected from Tribal’s benchmarking team. Presentations have begun, tailored to each college group and delivered independently of the other participants, with a focus on that college group’s results. A key next step (at the time of writing) is to bring all of the college groups together to discuss project outcomes collectively and identify what learning each group can take away from the others.
As part of the project scope it was agreed that representation from the FE Commissioner's Office would add value by offering an independent eye that would help facilitate the sharing of exemplars of best practice between the participating groups, inform a debate around the value achieved from different operating models, and highlight how large college groups differ to other FE colleges.
This more open approach to the use of benchmarking analysis should not be underestimated. It marks a real shift in how some FE colleges are prepared to innovate and pool their thinking in order to strengthen college performance and financial sustainability. The involvement of the FE Commissioner’s Office is further evidence of this step-change.
Identifying the most effective delivery models
To answer the question, “How do large college groups compare regarding the provision of lower cost and better-quality support services?”, focus was primarily placed on the cost and effectiveness of support services, which has been drawn from a holistic review of each college group, capturing all activity, irrespective of organisational structure. As standard, Tribal's results have been normalised to the same volume of activity of each subject organisation; for example, comparisons resized to the same volume of core income or equivalent full-time students, which has allowed the groups to compare cost and resource fairly. Importantly, results have been contextualised, and influencing factors are being discussed with senior leadership teams to help the interpretation of variances and form considered key messages.
Although the Peer Group has been the main focus for comparison, participating groups have benefited from access to Tribal’s databank to reflect on a wider dataset and result trends.
Colin Booth, CEO at Luminate Education Group, comments on the presentation of their benchmarking results, and the significance of the forthcoming collaborative exercise:
“It was fascinating and very interesting. We've got a lot more work to do on it. It's about sharing it and talking to others, as much as how we use it internally.
I think there's a world of difference between getting a set of data and looking at it internally, and getting a set of data all at the same time with a number of other colleges and then talking to each other. That’s the difference - you get different results from doing that. I think this would potentially be massively influential and important. And once you dig into the detail, then you're not only comparing numbers, you're having a conversation with somebody, interrogating areas of spend and the reasons behind certain variances.
The involvement the FE Commissioners Office will share some of the learning from the exercise into the public domain rather than it just being in the private heads of the people who attend and have participated, which is important.
It goes towards a more systematic approach to this. I've got no doubt that in order to survive and prosper long-term, we have to get more forensic about where we can save money. So, colleges that don't get much more aggressive and forensic about where they can save money - they haven't got enough money to be OK. That world is disappearing.”
Overcoming barriers to collaboration through objective evidence-based comparison and debate
The emergence of large college groups has created more complex institutions that are organised over several sites. The incorporation of different colleges brings with it a challenge of integrating different processes, contracts, systems, and culture into one organisation. The challenge of aligning institutions within college groups to achieve financial efficiency and lean and effective processes is considerable. Furthermore, given the size and diversity of large college groups, access to suitable and reliable comparative data is difficult, meaning college leaders have no reference point against which to compare resource allocation and expenditure profile.
By independently benchmarking the whole institution, college leaders can easily access insight that focuses on specific activity within the context of the organisation, with the addition of external comparisons that provides an evidence base and clear messaging to inform actions.
It is the Tribal model of disaggregating each organisation into several categories that ensures a consistent approach is taken when measuring and comparing each college group’s core activities, and thereby enabling college leaders to engage in subsequent meaningful debate.
Implications for the whole sector
There are already a number of colleges keenly aware of the exercise, recognising the potential benefits for their own organisations, as Tribal’s Lead Consultant, Phil Moseley observes,
“All colleges have the difficult challenge of delivering financially efficient services whilst providing high quality teaching and training that meet, learner, employer, and local community needs. The emergence of large college groups has brought with it even more complex challenges, so it is no surprise that these colleges should be first to seek a more innovative solution to informing their decision making around budgets and resource allocation.
But, importantly for the sector, the collaborative peer group model needn’t be restricted to ‘large college groups’ – we’re already discussing the impact that course length and class size ratios have on our funding efficiency and teaching financial productivity measurements, and subsequently, the impact that this, average pay levels and staff mix has on overall expenditure. There have been significant differences in cost profiles in college finance, HR, IT, exams, and student services, which our detailed approach to benchmarking is helping us understand - what the specific drivers are that underpin these messages - and allow us to discuss the value and benefits of different approaches and processes.”
Benchmarking has sometimes been viewed as a reactionary measure to sector changes or triggered by financial health concerns, but more frequently it is now being acknowledged as a proactive discipline - used as part of a suite of management tools that provides an evidence base to inform decision making around cost, quality, and impact, employed to identify where focus needs to be applied within the organisation in order to continuously improve.
As this next evolution in the Further Education landscape gathers pace, we look forward to helping those participating organisations leverage ever-greater insights from the data available to them in order to develop the models that will elevate their performance and efficiencies. And we welcome discussion with other colleges and groups of colleges looking to emulate the approach.
If you would like to find out more about the collaborative benchmarking project, please contact Phil Moseley directly at phillip.moseley@tribalgroup.com
Participation in the 2023 collaborative benchmarking exercise for large college groups includes: LTE Group; Luminate Education Group; Newcastle College Group; Capital City College Group; and New City College.
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