The Great Education Gamble: Why Losing Polytechnics and Starving FE Colleges Was a Mistake

Back in 2000, I was Chair of the Board of Governors of Dunstable Further Education College. It was a very difficult time, as FE colleges were desperately short of resources and struggling to teach practical qualifications using outdated, often non-functioning equipment. I remember being part of the FE colleges' delegation that went to the Houses of Parliament to meet with Margaret Hodge, then the Minister responsible for FE colleges in the Tony Blair government. It was a very unsatisfactory meeting, and we came away with nothing but platitudes. I am remembering this occasion because it followed in the wake of a momentous decision regarding the future of post-school education that focused on higher education and, in my opinion, took a wrong turn in denying the FE colleges of appropriate funding.

It started with Mrs Thatcher, who aimed to reform higher education by creating a more economically productive and accountable university system, but the method she chose to achieve this was a significant and controversial paradox. Rather than creating the free market she rhetorically championed, she ended up imposing one of the most centralised state controls over universities in British history.

The 1992 Further and Higher Education Act, passed by John Major's Conservative government, effectively abolished the polytechnics by allowing them to rebrand as universities. At the same time, this reform ripped further education colleges away from local authority control and thrust them into a competitive market. The intention was to expand access, improve efficiency, and end a perceived two- tier hierarchy: the argument was that the two-tier system of universities and polytechnics undervalued the latter, making them very difficult to market. The reality, seen from the vantage point of three decades, is that the policy came at a serious cost: one, I would argue, that has left Britain with a higher education system that is more uniform than it should be and a further education sector that has been systematically starved.

Don't get me wrong, the binary system that existed before 1992 had flaws. The traditional universities were research-intensive, autonomous, and enjoyed a prestige that the polytechnics, with their vocational mission and local authority oversight, could not match. The two-tier hierarchy was real, and, because of the elite cultural snobbery of the UK, it was also damaging to the status of the polytechnics. But the solution was not simply to rename institutions and declare the problem solved. Abolishing the binary system without preserving the distinct virtues of each sector was a blunt instrument where subtle reform was needed.

The polytechnics had genuine strengths that were lost in the rush to university status. They had strong ties to local employers, close relationships with their communities, and a teaching-focused mission that did not require them to chase research metrics. When they became universities, many felt pressure to imitate traditional universities, to pursue research funding, and to offer conventional degrees, rather than developing their distinctive vocational offering. The question of whether simply renaming institutions actually served students or employers better has rarely been answered. I, along with many others, would argue that the vocational mission was devalued rather than elevated.

Meanwhile, the further education colleges, which had never been part of the binary system, were collateral damage. The 1992 Act removed hundreds of FE colleges from local education authority control and made them independent corporations funded directly by the central government. This was a radical act of centralisation from a Conservative government that claimed to believe in localism. The funding followed the student, and colleges had to compete for contracts to deliver specific, approved qualifications. This forced them to prioritise quantifiable achievements over broader educational aims such as basic skills, return to learning, and community education, as these were harder to measure, but essential to local needs. The new funding system was also highly complex, requiring colleges to hire significant numbers of non-academic staff to handle claims and audits, an unfunded administrative burden that diverted resources from teaching. Once again, revealing how centralised systems damage relations with local communities – one size does not fit all (dare I mention the NHS).

As I stated above, the ideological groundwork for these changes was laid by Mrs Thatcher, even if the 1992 Act was passed under John Major. It was Thatcher who attacked local authority power, introduced market mechanisms into education, and pressured universities to be more efficient. Major largely followed the trajectory she had set. There is a telling moment in the historical record, as after losing power, Thatcher confessed that her "unintended centralisation" had led "many distinguished academics to think that Thatcherism meant a philistine subordination of scholarship to the Treasury". That is, by anyone's imagination, a remarkable admission. The drive for accountability resulted in the Treasury dictating academic priorities, fostering a culture of bureaucracy, and, I believe, a perpetual crisis in morale.

Those who defend the 1992 reforms point to the expansion of higher education. The number of young people going to university increased dramatically, and it can be claimed that the new universities brought fresh vitality to cities across the UK. I can accept that this was a positive. However, I think expansion could have happened without the structural upheaval. It is also worth noting that the shift towards student loans and tuition fees, which began under Major and accelerated dramatically under Blair, was arguably as consequential as the changes to institutional status. The way these seismic changes affected funding was disastrous, and the financial pressure on FE colleges has been relentless.

The Labour Party also supported many of these changes, with Tony Blair famously arguing that more than fifty per cent of school leavers should attend university. Not necessarily a wrong ambition, but there was no financial strategy to enable this to happen without distorted and unbalanced outcomes. Therefore, the consequence of the 1992 Act was not a purely partisan disaster, but that does not make the outcome less regrettable. The further education sector was starved of resources and forced to become a market actor rather than a community resource. One of the causes of the UK’s shortage of technical skills is an education system that prioritises academic pathways. Analysis from the Institute for Fiscal Studies shows that government spending on FE continues to fall. Present expenditure is below 2010/11 levels, with funding per student still 10% lower than it was over a decade ago. At the same time, real-term funding for adult education has been particularly hard hit, having halved between 2011 and 2020 before a partial but incomplete recovery. The impact of this disinvestment is direct: colleges struggle to pay competitive salaries, making it difficult to attract and retain skilled teaching staff, which in turn limits their capacity to deliver the high-quality courses needed. There is a significant "missing middle" of workers with intermediate technical qualifications, something the FE colleges and the old polytechnics, who lost their distinctive mission, delivered.

Is the new landscape in HE and FE a mistake? I have to say, yes. Although it can be argued that the expansion of higher education was a good thing, there are too many graduates in mismatched roles and too few people with the practical skills that industry urgently needs. The vocational mission was weakened, local accountability was destroyed, and further education colleges have never fully recovered. The 1992 reforms were not a simple mistake, but they were a series of radical changes whose full impact was only truly understood after they were implemented. Understanding that impact now, we should ask whether the gains were worth the loss. My experience and the evidence suggest they were not.