Stephen Gibbons, Claudia Hupkau, Sandra McNally, Henry Overman
About half of school leavers in England attend colleges of
Further Education (FE), though these colleges are often considered the poor
relation of schools and universities, enrolling lower achieving students and spending
less per student (Britton et
al. 2019). Capital expenditure accounts for about 10 per cent of FE College
expenditure and in the 2020 budget the UK government committed £1.5 billion
over five years to bring college facilities up to a good level.
Will this investment make much of a difference to student
outcomes? In a Centre for Vocational Education Research (CVER) paper published today, we suggest
that it will help - getting more students to a good upper secondary
qualification, increasing enrolment in higher-education and even improving
employment outcomes.
Our analysis uses information on capital expenditure
programmes undertaken between 2006 and 2009, linking this to administrative
data on individual educational and labour market outcomes up to 2017 (using the
DfE Longitudinal Educational Outcomes data). We focus on large capital projects
only. We find that these projects take about three years to complete and that
changes in student outcomes take place at that time or the year after. We find
that large capital grants increase the share of students enrolled on upper
secondary courses that lead to “good” qualifications such as A-levels or BTECs (i.e.
at Level 3). This matters because less than half of young learners entering FE colleges
progress to these courses (Hupkau et al.
2016). Level 3 qualifications are
associated with higher earnings (McIntosh and
Morris, 2016) and are a pre-requisite for university. Conditional on
enrolment, large capital grants do not affect achievement. This is a still a
good outcome because it shows that enrolments go up with no (negative) effect
on achievement rates. Investment in capital projects also affects the probability
of enrolling in higher education. The magnitude of effect is within the same
ballpark as Machin
et al. (2020) who consider the effect of marginally achieving a good grade
in GCSE English on enrolment to upper secondary education and university
degrees. Furthermore, any benefits from capital projects affect multiple
cohorts of students.
These effects persist even after we allow for the fact that
FE colleges see a marked change in student composition after the completion of
capital projects – they attract students with higher prior achievement and a
higher proportion of “non-poor” students (i.e. who did not receive free school
meals when in school) – although there is no overall increase in the number of
students. There is also a higher probability that students will achieve
sustained employment. Effects are usually larger for the largest grants.
There are several reasons why capital expenditure may have
these effects. First, substantial capital expenditure on new equipment,
laboratories or workshops may improve learning on courses that rely on specific
and costly assets (for instance, engineering). Second, better buildings may
improve the learning experience. Safe, clean, and appealing learning
environments – with no overcrowding, good lighting and heating - could improve
concentration and lead to greater student and teacher morale and effort. On the other hand, large capital expenditure
projects may be disruptive and positive effects may take time to materialise.
As we show, these positive effects also partly reflect changes in the
composition of student intake – improving outcomes for colleges that receive
grants but not necessarily for the whole system.
Our study takes advantage of two features of the data and
the way the capital expenditure program was implemented to better get at the
causal impact of expenditure on outcomes. First, we use rich data on
student-level outcomes and characteristics, which allows us to show that
improved outcomes don’t simply reflect improved intakes. Second, we show that
improved outcomes aren’t explained by expenditure being targeted at colleges
that were already improving. Results improve at investing colleges even when
compared to a control group of colleges that will benefit from investment in
the near future.
Our study is one of very few to evaluate the effect of
capital expenditure for students in post-secondary education. Most academic
studies evaluate effects in schools, mostly in the US. Our use of micro-data,
and our careful attention to causality – allow us to go beyond the government’s
own analysis of FE capital expenditure (Business
Innovation and Skills, 2012) – which only found small effects on student
numbers and no effect on achievement or retention. Our study suggests that
these effects were under-estimated.
Our results show that capital investment in college
infrastructure has a visible effect on student outcomes within a reasonable
timeframe. Investing in capital infrastructure can benefit many cohorts of
students and is best considered a long-term investment. These results are,
however, reassuring for policy makers who may be more concerned about
short-term returns as they show that for large capital projects, the benefits
materialise as soon as the project is complete.
