Office of National Statistics review of the FE sector classification

While UCU has no formal estimates of how much the benefits could be, some estimates are in the region of hundreds of thousands of pounds per college per year depending on the size of the college and number of students.   

The ONS announced its intention to review the FE sector classification earlier this year. For the purposes of the National Accounts, which is a snapshot of financial/economic activity in the country, FE is classified as being in the private sector as opposed to schools which are classified public sector.

The significance of the classification is that a public sector classification generates financial benefits, including a VAT refund scheme and National Insurance compensation, which are not available to private sector institutions. If the FE sector is reclassified it is expected to provide the sector with similar financial benefits. Because of the financial advantages associated with a public sector classification there is a high demand for ONS classification assessments.      

The ONS may announce its decision by the end of September 2022. However, UCU's concern is that the UK government may subsequently change the rules to withhold some of the financial benefits currently available to the public sector.

UCU will be keeping a close eye on this issue over the next few weeks.