"The wealth of bourgeois society, at first sight, presents itself as an immense accumulation of commodities, its unit being a single commodity. Every commodity, however, has a twofold aspect - use-value and exchange-value. - Karl Marx (1).

"In his Capital, Marx first analyses the simplest, most ordinary and fundamental, most common and everyday relation of bourgeois (commodity) society, a relation encountered billions of times, viz. the exchange of commodities. In this very simple phenomenon (in this "cell" of bourgeois society) analysis reveals all the contradiction (or the germs of all the contradictions) of modern society." - V.I. Lenin (2).

A commodity is any good or service produced by people which both satisfies some human need, i.e. it has use-value, and which is sold on the market for money, i.e. it has exchange-value. It is my contention that since April 1993 in Britain further education has been transformed into a commodity and that the inevitable outcome of this is to generate an antagonistic relationship between senior management and staff in colleges.

When further education was under the control of local authorities it was not a commodity. Colleges provided the education and training needed by individuals and employers. The service provided certainly had use-value as shown by the fact that people came on courses and, for the most part, of their own volition. The great bulk of the finance for providing this education came from central government via local authorities. Very little of the finance came from fees paid by students which were usually nominal. Most of a college's revenue did not come from selling courses to customers and so the service provided did not have exchange-value. Thus before April 1993 further education in Britain was not a commodity.

Colleges had to operate within the financial parameters and policy guidelines laid down by central and local government. However the level of funding per student taught varied very considerably as between different local education authorities (3). The number and grades of teaching staff in a college was determined by a formula which was applied on a nationwide basis. This formula specified for a college the total number of teaching staff and the proportion at different grades according to the total amount of teaching work done and the academic levels of the work done. The greater the proportion of work done at "higher" academic levels the greater the proportion of staff on higher grades of appointment (4). Similarly, although there was no national formula, the number, types and levels of non-teaching staff would be roughly determined by the amount of teaching work a college was doing. Central government supplied the necessary funds for local authorities to pay staff salaries.

This system meant that the academic personnel in a college, and to some extent the support staff, had a common interest in maximising the amount of teaching work done by the college. Not only would this ensure job security but it would provide opportunities for promotion to higher grades of appointment as the amount and level of teaching work done increased. Not only would Main Grade Lecturers have opportunities to become Senior and Principal Lecturers but Department Heads, Vice-Principals and Principals would move up the Management Spine. Similar considerations applied to nonteaching staff. Every employee of a college, ranging from the Principal through to a part-time cleaner, had a vested interest in ensuring that the amount of teaching work done was maximised. The structure of the system was such that the personnel within it had a strong motivation to maximise the college's provision of education and training; in other words to maximise the provision of educational use-values.

It might be claimed that this system might have resulted in a certain laxity on the part of those within it, that at a certain point they might be happy to rest on their laurels and not pursue new developments with the vigour they had shown in the past. However factors external to colleges tended to militate against such a state of affairs. The profound changes in the economy and occupational structure during the last quarter of a century have brought about very considerable changes in the types and amounts of vocational education and training required by employers and students. Simply in order to stand still and survive teaching staff have had to make extensive changes in both the subject areas and the modes of delivery of the education and training they offered. Also the introduction of new courses, such as BTEC, and the revision of existing ones, such as A Levels, have placed continuous demands on teaching staff. An additional incentive for the personnel in particular colleges to stay on the ball was that it was usually the case that not far away was another college which would seize upon any opportunities offered by the failure of a neighbouring college to adapt to current changes and resulting demands. Thus there was a limited amount of market competition between colleges but this was usually constrained and regulated by the further education policy guidelines of the education authority in control of the colleges in a given area. While it is not being claimed that the organisation of further education prior to 1993 was ideal, it is nonetheless a gross distortion to claim that it was some sort of sleepy backwater urgently in need of exposure to the cold winds of the market in order to reinvigorate it.

What emerges from the above presentation is that the system of administration which was operative within colleges before April 1993 was of a kind whereby built into it there were no inherent antagonisms between the teaching staff at different levels. All levels of teaching personnel, from the Principal down to Main Grade Lecturer, had a common interest in maximising the amount and academic level of the teaching work carried out by a college. The structural organisation of colleges was of a kind whereby there were no inherent, systemic features which would inevitably lead to an antagonistic relationship between senior and junior personnel. This, of course, did not mean that there were not certain conflicts present within colleges. There was a certain amount of rivalry between departments over allocation of funds for facilites, equipment and personnel. Also there was an element of competitiveness among lecturers over securing promotions. Nonetheless these conflicts were essentially secondary and not inherent, structurally determined features of the system.

For several years before 1993 changes in the administration and funding of further education were taking place in preparation for colleges becoming "independent" corporations, no longer under local authority control, as from 1st. April 1993. The introduction of a new system of funding administered by a quango, the Further Education Funding Council, has been in operation since that time. The case to be presented here is that the new system of financial administration is transforming education into a commodity, something which has both use-value and exchange-value, and that an important outcome of this change is to create an inherently antagonistic relationship of conflict within colleges between senior management and other staff.

Under the new system further education corporations are required to operate like business firms whereby they manage all aspects of their income and expenditure and have to make these balance in their annual accounts. Colleges are not supposed to incur deficits but if this does occur then a loan has to be secured from a bank and be repaid. Ideally a college will manage its affairs such that it ends up with a financial surplus at the end of each year. The business model which now informs college organisation is reflected in the fact that principals are now called "Chief Executives" and that most colleges have appointed accountants and personnel managers.

The basis upon which the FEFC provides annually assessed funds to each college is determined by a formula which in its essence links income to amount of teaching work done (5). Every category and aspect of educational provision is converted into funding-units which are worth so much money per

unit. At present the actual monetary value of a funding unit varies between colleges. This is because historically the costs per student taught varied widely between colleges, a reflection of the fact that hitherto it was use-value rather than exchange-value which predominated in the provision of further education. This inter-college difference in costs has been taken into account in the FEFC's funding of colleges during the transitional period of the new system coming into operation. However for higher cost colleges the values of their funding units are being progressively reduced each year so as to bring about a convergence towards a standard amount of funding unit for all colleges. In addition the national average level of funding per student taught being provided by the FEFC is being progressively reduced. That is, colleges are under pressure to provide more education for less money. Also colleges can apply to the FEFC for capital grants to pay for new buildings and equipment. The great bulk of a college's finance comes from the FEFC but there are other sources of finance such as the TECs, schemes for local and national government and the EU. Also a college is at liberty to generate funds from other sources such as doing training work for business firms, etc..

An essential feature of any developed system of commodity production is that concrete labour is transformed into abstract labour. In order to educate and train students colleges need to employ personnel with a wide range of skills, i.e. many different types of concrete labour. These include teachers, administrators, technicians, secretaries, clerks, caterers, maintenance and cleaning personnel. The types and levels of skills of these employees are very varied and they are paid at different rates Together with expenditures on buildings, equipment, materials, fuel etc. the salaries paid to these employees constitute the cost of production of further education.

Part of the process of transforming further education into a system of commodity production is to turn this concrete labour into abstract labour. The means by which this is being done is the funding methodology which is being adopted by the FEFC. The introduction of the funding-unit whereby a standard money price will be established throughout the country for a given type of course converts the heterogeneous concrete labour of college personnel, with differing purchase prices (wages), into homogeneous abstract labour with a universally standard price of purchase. Thus a standard price will emerge for a student successfully completing a given type of course. Given that the FEFC will continue to provide the greatest part of colleges' income it is likely that these prices will set the general levels around which other bodies such as the TECs are willing to purchase education and training.

It might be objected that under the new system further education does not really become a commodity because those consuming it, students and their employers in some cases, are not for the most part paying for it. Even when fees are paid these do not usually amount to the full cost of the education received. Thus, it is argued, further education is still a public service provided free or at nominal cost to its consumers. Students as consumers do not exercise the monetary purchasing power which is a normal feature of markets for commodities. However the reality of the situation is that the FEFC is acting as a surrogate purchaser for students. Given that the FEFC's funding formula is primarily based on numbers of students taught, it follows that a college's income will largely be based on how many students it can attract and retain. It is students who choose what course they will study and where; then the FEFC picks up the tab at a price set by the FEFC. The role of the FEFC is rather like that of a parent giving a child a certain amount of pocket money to spend as the child pleases. The child exercises choice of purchase but it is the parent who really pays the bills.

Some New Right educational theorists do, of course, advocate a system whereby students would be given vouchers which would entitle them to "purchase" a certain amount of further education thus, it is claimed,

making the consumers of FE sovereign. This, it is said, would "empower" students in a way which would force colleges to be more sensitive to and attentive to students' actual needs. In fact such a system would make little or no difference to the operation of the new system. In effect students do at present possess such a voucher but it is held by the FEFC and handed over to the college a student chooses to attend (6). The emerging market for further education is one where a state body, the FEFC, exercises price control by setting a universal price for an educational commodity of a particular type, e.g. a GCE A Level course, a GNVQ Intermediate course, etc.. Price controls are quite compatible with the operation of a system of commodity production and exchange as is shown by the fact there have been periods when the State has exercised such a system in general, e.g. in the 1960s and 70s in Britain. Where colleges do compete with each other, as explicitly intended by the FEFC, is on the "quality" of the education and training offered. The idea is that not only will students gravitate towards colleges which achieve relatively high pass rates but which also offer other incentives such as free books, equipment and travel, attractive premises, leisure facilities, etc.. This is already happening with some colleges actually offering prospective students cash sums if they sign onto courses. From the point of view of senior management in individual colleges, this competitive pressure increases the cost of production of the further education they are providing.

Under the old system for administering further education the supply of funds from the state to colleges to pay staff and buy equipment was simply the means whereby students were provided with education and training. The general aim of colleges, as pointed out above, was to maximise educational use-values and it was in the interests of all college personnel to do so.

Under the new system the general aim of colleges, if they are to survive, has to be to maximise the number of funding units obtained and income from other sources. That is, the provision of education and training is now simply the means whereby the maximisation of money income, exchange-value, is brought about. It is the accumulation of dead matter, money, rather than the development of living people which has become the end of further education; it is truly alienated to the cash nexus.

Although further education has been transformed into a commodity it has not as yet become a system of commodity production in all respects. The market for further education is very monopolistic with the FEFC purchasing the great bulk of it. The price at which the FEFC purchases FE from colleges is not in fact one which has been set, as with most other commodities, by the operation of impersonal market forces. Rather the price being set, as expressed in the monetary value of funding units, is determined by the administrative fiat of the FEFC. The general aim, of course, is to drive the price down as far as possible. Staff in colleges are, on the whole, well aware that it is this state body which is setting the price at which FE is purchased and that the price is not determined by the operation of impersonal market forces. Thus unlike the employees of a normal business firm who may be faced with redundancies and wage cuts because demand for the firm's products is falling, college staff are aware that it is a specific body of people who decide at what price FE is purchased. In other words, the phenomenon of commodity fetishism, whereby people experience the operations of the market for commodities as the result of impersonal, natural forces which they are powerless to influence, does not prevail. However some FE teachers see themselves as powerless to influence the decisions and operations of the capitalist state and its constituent bodies, such as the FEFC, and to that extent are subjectively in a state of alienation. However it is only a minority who perceive things in this way and the rest do think that they can have a greater or lesser degree of influence on FEFC policy.

Another aspect of the commodification of further education is the growing emphasis on the various courses provided having a vocational character by providing students with the types of knowledge and skills relevant to employment. This trend, which has been underway since the late 1970's, began with BTEC courses and training schemes for unemployed young people, such as the Youth Opportunities Programme and its successors, and has come to be known as the new vocationalism (7). The introduction of GNVQ courses in the 1990's is a further stage in this growing vocationalisation of further education. While further education has always had a strong vocational side there is less emphasis now on education as promoting general, personal development as a preparation for life in modern society and more emphasis on education as a preparation for economic life, work. In so far as further education courses do equip students with knowledge and skills for which there is a potential demand in the labour market, enable them to obtain paid employment, then a product with both use-value and exchange value is being created. Thus the commodity of further education is used to produce a further commodity, labour power.

Under the old FE system the task of the Governing Body, Principal and Senior Staff in a college was to administer it in a way in which, given current state policy and financial constraints, the provision of educational use values was maximised. The general measure of success of a college was how many students were enrolled and successfully completed courses. Under the new system the task of Senior Management, (as principals and their senior staff like to be known), is to maximise college income and minimise its expenditure with the aim of making a surplus, i.e. to create exchange-value and make a profit. A complete inversion of the aim of colleges has occurred. Of course, New Right thinkers would claim that there is no incompatibility between making a profit and maximising useful educational provision. On the contrary they argue that aiming to make a profit is the most effective way of achieving the educational goals. However this contention is very dubious as the operation of internal market within the National Health Service has shown.

The new system means that the dominant preoccupation of college senior management must be to maximise income and minimise costs. Maximising income can mainly be achieved by recruiting the largest possible number of students onto courses, retaining them and achieving good pass rates. Other opportunities for generating income, such as hiring out premises, are very limited. In order to attract students onto courses there is a trend in the direction of offering various fringe benefits, such as free travel and books, and this increases the costs of providing the courses. Also considerable resources, both human and material, now go into marketing activities and these further increase the costs of production of further education. Furthermore, however successful a particular college may be at attracting students at the expense of other colleges the potential market for further education is fairly limited. Colleges have had difficulties in meeting the FEFC's growth targets and very significant further increases in

the volume of work done do not seem all that likely. The drive to attract more students to a college is quite a costly business. It could even turn out to be counterproductive if it results in finance being diverted from the actual provision of courses into promotional activities, bringing about a deterioration in the quality of courses and thus a decline in the reputation of the college and a consequent fall in student enrolments. While vigorous efforts to attract students to a college are certainly an important part of ensuring viability and survival this is not the only consideration for senior management.

Under the new system a college's income is much more tightly related to the actual amount of teaching work done than was the case under the old system. True, under the old system there was a rough correspondence between the total amount and levels of teaching work done and college income. However the amount of teaching work done was not the only criterion for funding and the ultimate responsibility for college finances lay with the local authority. It was not unusual for colleges to exceed their annual budget and the local authority made good the deficit. Not only does the new system require senior personnel to take full operational responsibility for the financial management of a college but it also has another very pertinent consequence, namely that it is the activity of teaching staff, their labour power, which effectively determines the income of a college. It is only teaching students, with a very few minor exceptions, which directly generates income. All costs incurred in running a college, both human and non-human, have to be met out of the income generated by selling the labour power of teaching staff to the FEFC and other bodies and individuals. Under the old system the budget of a college, as drawn up by the local authority, contained definite amounts of money for paying the salaries of different types of personnel, buying materials and equipment, paying for fuel and other services, etc. and the task of senior management was to try to make sure that expenditures on different items did not exceed the budgetted amounts. The new system is radically different because its very structure means that senior management have to focus upon how they can use teaching staff in such a way as to maximise revenue and at the same time keep all costs in the college to a minimum.

In the technical sense it is only from personnel directly engaged in teaching that there is the possibility of generating more income than they cost to employ, of creating a money profit or surplus value. (Surplus value is the difference between the value of the commodities produced by employees and the value of the wages they receive.) Thus only teaching staff are, in the technical sense of the term, productive labour, i.e.directly productive of surplus value. All the other personnel employed in a college are, on the whole, necessary for teachers to be able to carry out their work but their employment entails financial costs, does not directly generate any surplus value and thus, in the technical sense, is unproductive labour. An example will illustrate the point. A laboratory technician is employed to carry out tasks necessary for teachers to teach. If there is no laboratory technician then the teachers will have to spend part of their working time carrying out these tasks rather than teaching. Under the new system it only makes financial sense to employ the lab technician if the cost of employing him is less than the extra income which is generated by the teachers spending all of their time, instead of only a part, directly teaching students and thus earning funding units. If the cost of paying the lab technician is greater than the extra income teachers can bring in as a result of his employment then this obviously reduces the amount of surplus value generated. The same consideration applies to other personnel such as secretarial and administrative employees. Indeed it applies to senior management as well because they too are not directly engaged in teaching.

It follows that the income of a college will be maximised by effectively and efficiently employing the largest possible number of teachers. Its expenditure will be kept to a minimum by reducing the employment of other personnel to the minimum necessary for the efficient operation of the teachers and by reducing expenditure on non-human resources such as materials and fuel to a minimum. (Of course, while the amount of exchangevalue will be increased by cutting back on non-teaching staff it may well, at the same time, be the case that the amount of educational use-value produced by a college is reduced because of a consequent fall in the quality of its provision for students.) As "service enterprises" the majority of the expenditure of FE colleges is on the salaries of various personnel rather than other non-human costs. Typically at least sixty percent of expenditure goes on salaries ranging up to over eighty per cent in some colleges. The current conventional wisdom among college principals seems to be that a financially healthy college is one where salary costs are kept to the lowest possible proportion of total expenditure. Clearly, as has just been shown, this is not the case because it is the employment of teachers that actually generates college income. However college principals are, like most people living under capitalism, dominated by bourgeois ideology and thus do not recognise that the source of profits in an enterprise, of surplus value, is the direct employment of productive labour. However this belief which they propagate to their teaching staff has an ideological function in so far as it succeeds in making the teachers believe that they are the problem when in fact they are the solution. The impression is given that the employment of "expensive" teaching staff is a burden on the college when in fact it is the only significant source of its income. (See the Appendix.)

Given that college income directly depends on the activity of teaching staff, it follows that senior management are impelled to try to get teachers to do as much teaching as possible for the minimum possible salary. There are a number of ways in which this can be attempted:

1. Increasing absolute surplus value

If the hours of work of teachers are increased but without an increase in salary then obviously this will generate more income, provided that extra students are available to be taught. If a commensurate increase in student numbers does not occur then this will lead to the redundancy of some teachers thus reducing the cost of carrying out a given amount of teaching work. This, of course, is precisely what college managements are trying to do by introducing new contracts of employment which seek to increase the number of teaching hours per year required of staff. Teaching staff are resisting this change, this increase in the rate at which they are exploited. The outcome of this struggle remains to be seen. Another aspect of this approach is to abolish the practice of allowing teachers reduced contact hours for carrying out various administrative and developmental tasks while still requiring these duties to be done.

However there is a definite limit to the number of hours which it it possible to get out of teachers. If they are required to do more hours than they can teach effectively then the quality of courses will decline with poor pass rates and, as the word gets around, poor recruitment onto courses. Also, if teachers are under great pressure from an excessive workload then they will spend more time off sick and temporary staff will have to be employed thus pushing up costs.

Another way of increasing absolute surplus value is to hold down salaries. A breakdown of national negotiations on salaries could well result in levels of pay failing to keep pace with rates of inflation. If there is pay bargaining at college level then those colleges where teaching staff have no effective trade union organisation might well set the norm as far as the FEFC is concerned and funding of colleges would be based on zero or insignificant annual pay increases.

2. Increasing relative surplus value

Another approach is to increase the intensity of the teaching work done. This can be done in two ways. One approach is to increase the average number of students in a group. Already this is happening with techniques such as the "lead lecture" whereby mass lectures are supplemented by smaller supporting seminars. (It is ironic that the very same people who not long ago were scathingly dismissive of "traditional" teaching methods should suddenly have developed an enthusiasm for the lecture.) Another approach is to reduce the number of contact hours allocated for teaching a given programme of study. This means that each teacher has to teach more courses than hitherto. In many colleges courses which used to have over

twenty contact hours per week are now down to around fifteen hours per week. Very often if students have very limited contact time with teachers they experience difficulties with their studies and thus teachers spend non-timetabled time outside of class helping students, time for which the teachers are not being paid.

Increasing relative surplus value in these ways means that each teacher earns more funding units for the college. However there are limits to the extent to which this can be done. There is a definite limit to the size of group that one teacher can handle. Indeed the size of the rooms in most colleges does not permit class sizes of more than around twenty-five! Similarly if the number of hours of tuition students receive to cover given ground is reduced very much then they simply will not pass their courses. Also students will gravitate away from colleges where increasing relative surplus value is pushed to its limits because of the poor quality of tuition being provided.

3. Restructuring the labour force

This method of increasing surplus value has two aspects: reducing pay rates for teachers and reducing the number of non-teaching staff. One approach here is to increase the proportion of teaching done by part-time teachers. They do not have to be paid in the vacations and hitherto employers had no obligations to pay pension contributions. Also the other costs, such as provision of staff room space, etc., were cheaper for part-time as compared with full-time staff. However a recent European Court ruling has decreed that part-time employees must have the same rights and benefits as full-time employees and so the cost advantage of part-time staff over full-time staff is considerably diminished. Even so the College Employers Forum have attempted to introduce a new contract of employment for part-time teachers which gives them greater security of tenure than hitherto but a rate of pay per hour of teaching considerably less than current rates. An attempt to get round the European Court ruling has been the setting up of a firm called Education Lecturer Services which aims to employ teachers on rates of pay considerably less than the standard national rates and then contract them out to colleges.

Another approach is to appoint teachers at a low point on the Main Lecturer Scale with a bar after only a few increments. Also the number of Senior Lecturer and Principal Lecturer posts is falling as when holders of such posts leave or retire they are replaced by lower grade personnel. "Middle management" personnel such as department and faculty heads are increasingly appointed on the lower part of the Management Spine - the trend towards a "flatter management structure".

In some colleges senior management have succeeded in introducing "instructors" to teach students in workshop situations. These personnel are usually paid about half of what Main Grade Lecturers receive. College managements try to justify this practice by claiming that supervising students in workshop activities does not require the same level of knowledge and skill as classroom teaching and, sometimes, that such instructors are being supervised by lecturers. Whether or not there is any truth in this dubious assertion it is certainly the case that these instructors are doing exactly the same pedagogical work as was hitherto done by lecturers. The implicit, emergent model here is one where there are teaching teams consisting of several instructors led by one lecturer. "Workshop situations" are already being redefined from referring to areas such as engineering and construction to include fields such as computing, catering, business studies, etc.. Part of the new contract for teachers that the CEF want to impose is not just extra teaching hours but also extra hours of non-teaching duties on college premises. It has not been entirely clear just what it is proposed that teachers would do in this time but one possibility is that they would be preparing programmes of teaching materials - learning packs, etc. - which would then be administered by instructors.

One thing is for sure and that is there is no shortage of supply of suitably qualified people who would be prepared to take on teaching work for pay and conditions of employment considerably worse than at present. Given the massive expansion of higher education in recent years and mass unemployment there is in existence now a very considerable reserve army of intellectual labour. Only vigorous trade union activity on the part of FE teachers to protect their pay and conditions can prevent them becoming diluted.

It has already been pointed out that employing non-teaching staff is simply a cost of production and does not in itself generate surplus value but serves to facilitate teachers doing that by earning funding units for the college. With the severing of links with local authorities colleges have had to carry out more administrative tasks for themselves. Also the detailed data required by the FEFC entails a considerable amount of administrative and clerical work. Thus the trend has been towards colleges having more and not less non-teaching staff. Obviously this increases costs. In order to contain and even reverse this trend college managements may try to get teachers to undertake some of these tasks. After all, the CEF style contract demands considerably more non-teaching time on college premises from teaching staff. One possibility is to try to force teachers to take on work previously done by technicians and administrators and thus dispense with some of these personnel.

4. Technological innovation

Given the very definite limits to increasing surplus value provided by the three approaches outlined so far, it is not surprising that the main way in which most business firms try to maintain and increase profits is by introducing new forces of production which increase productivity, i.e. the amount of goods and services produced by an employee in a given amount of time. If this can be done without a commensurate rise in wages and other costs and the selling price of the commodities does not fall then this obviously will increase the rate of surplus value.

There have been attempts to apply technological innovations to increase the productivity of teachers. Back in the nineteen sixties there was a short-lived enthusiasm for programmed learning texts and teaching machines. These were not even very adequate as a substitute for teachers and conventional books let alone as a more effective alternative and were quickly forgotten. In the nineteen eighties and nineties computers have become widespread in further education but teaching programmes have so far been rather crude and limited. Similarly interactive video and self-supported learning packs have very definite limitations. Developments in educational technology, e.g. the use of photocopying and desk top publishing, have enabled teachers to carry out their pedagogical work more effectively rather than providing substitutes for living teachers.

A fairly recent attempt to increase the productivity of teachers has been "resource-based learning". The basic idea here is that by the use of aids such as learning packs and resource centres a given number of students can be taught in less time by fewer teachers. However there are very definite limitations to this approach, especially as the proportion of the post-sixteen age group in further education rises. It seems likely that this is resulting in a growing number of students entering further education who are not very educationally developed and/or highly committed to their studies. Consequently many of these students are neither able nor willing to work effectively using this approach given the high degree of personal autonomy it requires. Thus there are very definite limits on the degree to which resource-based learning can increase teacher productivity.

The fact of the matter is that in teaching, as in many "service industries" requiring a high level of professional skill, the application of technological innovations to bringing about increases in productivity is very limited. Practical experience and psychological research has shown that the most effective way in which students can be helped to learn is by means of first hand contact with teachers. A reduction in the amount of such personal attention from teachers quickly runs into the problem of students not learning effectively. It will be a very long time before information technology develops to the point where machines can even begin to emulate the kind of intellectual processes involved in the social interaction taking place between teachers and students. Thus it is clear that technological innovation has little to offer college senior managements in the way of increasing the amount of surplus value they extract from their teaching staff. Their emphasis will be on the first three methods of increasing surplus value.

It might seem, given the analysis presented so far, that college senior management have no other function than to extract as much surplus value as possible from teaching staff and to keep costs, including the employment of non-teaching staff, to a minimum. However this is not entirely the case. Senior management also carry out the same tasks they had under the old system, namely administering the college as a whole and conducting its external affairs. In so far as the carrying out of this work is necessary for teachers and other personnel to carry out their normal tasks then it contributes towards the effective teaching of students, i.e. the creation of educational use-values. Just as with other college employees it is necessary to pay people a salary to do such work.

However, as has been shown, a lot of the time and energy of senior management is increasingly going into realising the exchange-value for which education can be sold and trying to obtain the maximum rate of surplus value from exploiting teaching staff. This side of their activity is not socially necessary for the effective provision of further education. The beneficiaries are not staff or students but the state, which is able to reduce its costs of providing FE, and senior management themselves. Payment of senior management at levels above that of teaching staff is difficult to explain in terms of claiming that such posts require levels of ability and effort greater than that necessary for teaching staff to do their jobs competently and thus without higher salaries no one would do these jobs. When, as has happened in some colleges, a senior post becomes vacant and is advertised on a lower pay scale than hitherto there does not seem to be a shortage of suitable applicants.

There is only one possible source for that part of the salaries of senior management which is significantly above the pay level of teaching staff and that is the surplus value obtained from paying teachers less than the value of the educational commodity they produce. That is, the relationship between senior management and teaching staff in colleges is now one of exploitation. This is just as surely the case as in a business firm where the profits of shareholders and the large salaries of senior managers are obtained by paying other employees less than the value of the commodities they produce. The new further education system has, by turning education into a commodity, succeeded in introducing a characteristic feature of the capitalist economy in general, i.e. the making of profits for a few at the expense of the many.

It might be objected that under the old system senior personnel in colleges received salaries considerably greater than teaching staff and yet no one claimed this entailed exploitation. The difference is, of course, that under the old system the funding methodology was such that senior management did not have to find sufficient funds to pay their own salaries by exploiting teaching staff whereas under the new system they have no choice except to do so if their salaries are to remain significantly above those of teachers. Already some principals have succeeded in persuading their governing bodies to allow them to draw very much higher salaries than hitherto, well in excess of £50,000 per year. Also in some colleges the governors were getting in on the act by awarding themselves substantial "directors' fees", typically of several thousand pounds per year, although this has been stopped for the time being.

This objectively exploitative relationship between senior management and teaching staff in colleges is the material basis for a necessarily antagonistic relationship of conflict between these two parties. This antagonism exists independently of whatever subjective intentions may be held by the two parties to this relationship, just as is the case in the capitalist economy as a whole. However decent and humane senior management may want to be in their treatment of the teaching (and other) staff they have no choice, if the college is to survive and they are to receive their high salaries, except to apply the various methods outlined here for exploiting teachers. Similarly FE teachers have no choice, if they are to retain reasonable pay and tolerable conditions of employment, except to resist this exploitation and to do so by recourse to various forms of industrial action, however objectionable they may have previously believed this to be.

Of course, senior management do not want to see themselves as exploiters. Indeed many of them are people who embrace some sort of progressive, social democratic outlook, however vague, and tend to vote Labour. Nonetheless, if they are to be able to carry out their oppressive and exploitative role adequately then their ideological outlook has to undergo some transformation. Typically the way they handle this is to define the situation as one where it is impossible to challenge the state's FE policy and so the best thing to do is to try to make the system work. Resistance by teaching staff to changes such as new contracts is defined as being part of a general reluctance to embrace any sort of changes in further education. Senior management view themselves as wanting to provide a "quality service" for the "customers" (students) and that this is being obstructed by hidebound teachers who are stuck in their old ways. Part of this ideological obfuscation is The Charter for Further Education (8) which proclaims that "further choice and quality" are guaranteed for the "customers" while at the same time class sizes are being increased and course contact hours cut. College management claim they are acting for "the good of the college" and that staff are being very short-sighted in resisting the new system. Indeed the threat of the college having to close unless drastic changes in conditions of employment are accepted is frequently made in order to try to scare staff into submission. Some FE teachers have, to a greater or lesser extent, been taken in by this FE management ideology and have accepted inferior new contracts. It remains to be seen whether or not the reality of having to work to these conditions undermines their adherence to this false consciousness.

There are two main factors which impel college senior management to increase their exploitation of teaching staff: the falling levels of the funding units provided by the FEFC and management's own desire to reward themselves handsomely. The commodification of further education has not and cannot result in it becoming a commodity whose value is fully determined by impersonal market forces. This is because the FEFC is the major purchaser of FE and the price paid is not determined by the market but is a conscious policy decision made by the government. An educated labour force is certainly something that capitalist employers need but experience has shown that the market operates such that if left to their own devices employers do not train a sufficent number of employees with the range of knowledge and skills required by the modern economy. Thus the state, which after all is primarily concerned with safeguarding the interests of the capitalist class, provides most of the education and training which employers require of their employees. Teachers, especially in FE with its strong vocational orientation, are engaged in helping to produce a very important commodity indeed; educated labour power, without which a capitalist economy in particular and capitalist society in general cannot operate. One advantage for capitalist employers of this system is that it is mainly employees themselves, rather than employers, who pay through their taxes for their education and training.

There has been a massive expansion of further and higher education in Britain in recent years. This has occurred because of a widespread belief among the ruling capitalist class and their political representatives that the competitive performance of the British economy in the context of an increasingly integrated world economy is dependent upon having a workforce trained and educated to the same high levels as in other advanced capitalist countries. Since the late nineteen seventies there has been a renewed emphasis on education as a preparation for work, the "new vocationalism". Of course this policy is directed at ensuring not just that people have the knowledge and skills required by a changing occupational structure but also to instill in them the "enterprise culture", an ideological orientation which encourages people to accept the more rapacious, looting sort of capitalism as normal and desirable.

The expansion of further and higher education is exacerbating a more general problem faced by the capitalist state, namely that during a period of economic depression it is having considerable difficulty finding sufficient income to meeting growing expenditure. In particular there has been a massive increase in the amount of social security benefits paid out as a result of mass unemployment. Also an ageing population places considerable demands on social security expenditure and on social services and health care budgets. This growing difficulty in balancing state income and expenditure is sometimes referred to as the fiscal crisis of the state (9). Any future government in Britain will be faced with this problem just as much as the present one and so will want to keep the level of FE funding units to a minimum. It is an illusion to imagine that the policy of any future Labour government, especially given the Labour Party's adoption of new right policies, will be significantly different in this respect.

Thus there is likely to be a continuing requirement from government on the FEFC for it to keep the value of the funding unit as low as possible. There will be a tendency for the FEFC to take as its guide in setting the value of the funding unit those colleges where costs of production are least and they will be the ones where staff are exploited the most. With a reduction in the value of the funding unit pressure would be placed on other college managements to follow suit by increasing the degree to which they exploit their staff.

However there are some constraints on just how low the funding unit can be set. Clearly there are definite physical limits to the amount of work both teaching and non-teaching staff can possibly do, even if they are prepared to knuckle under and do anything management demands. Also the standard of learning would deteriorate after a certain point of increasing the exploitation of teachers and so students would not pass courses. Already there is widespread concern about increasing levels of stress among further education teachers. External examining bodies such as BTEC and City and Guilds provide some check here in so far as they maintain their educational standards. Of course, in the past there have been suggestions that some examining bodies have let educational standards fall so as not to alienate students and teachers from their courses. At present there is much controversy about the new NVQ and GNVQ courses in this respect. It remainsto be seen whether or not examining bodies would accommodate themselves to what could be accomplished with a diminishing quantity and quality of tuition.

Whether they like it or not, college senior managements are under pressure to oppress and exploit their staff and those that fail to do so are likely to be unable to balance the books and thus face the possibility of dismissal. However quite apart from this it has already been shown that at least part of their salaries necessarily come out of the surplus value obtained from the employment of teaching staff. The higher the level of salaries college management persuade the governors to allow them to receive, the greater must be the degree to which they exploit teachers. Already there is talk of salaries "comparable with management in industry". Now it has become very clear in recent years that there is virtually no limit to the size of salary top managers in business firms will award themselves if they have the opportunity. As is shown by notorious cases where managers of firms with falling levels of profitability have taken huge pay rises, there is no limit to the greed generated by the capitalist system. Thus we may expect to see senior management finding all sorts of spurious reasons to give themselves rises - "productivity bonuses" and the like - but these will only be possible if they are successful at increasing the rate of exploitation of teaching staff.

The degree to which senior management succeed in oppressing and exploiting further education teaching staff will be determined by industrial and political struggle. Whatever the outcome, one thing is for sure; all the time further education remains a commodity there will be continuing, antagonistic struggle within colleges between senior management and teaching staff.

A more formal presentation of this matter is as follows. Let the income of a college during a given period (P) be expressed as:

P = c + v + s

where:

c = constant capital, i.e. non-wage costs including materials, fuel, depreciation on equipment and buildings, etc. plus the salaries of the unproductive labour of the non-teaching staff.

v = variable capital, i.e. the cost of salaries paid for the productive labour of the teaching staff.

s = value of surplus labour (surplus value), i.e. profits.

The annual expenditure of a college consists of the constant capital laid out together with the variable capital paid out. Constant capital, as defined above, consists of expenditure on items whose value is incorporated into the commodity produced but whose value does not increase, i.e. it stays constant. This includes expenditure on materials, fuel, and the depreciation on equipment and buildings. It also includes the salaries of support staff and senior management because as they are unproductive labour it is not possible for them to create more value than they cost. Variable capital is the cost of salaries paid to productive labour, in this case the teaching staff, who are capable of producing more value than they cost to employ, i.e. the amount of value incorporated into the commodity as a result of the employment of these personnel is a varying amount greater than the amount of value expended on their employment. The ratio between constant capital (c) and variable capital (v) in an enterprise is called the organic composition of capital and is expressed as:

__c_

c + v

The rate of profit of a college is expressed as:

__s_

c + v

The rate of surplus value (i.e. rate of exploitation) of the teaching staff is expressed as:__s_v + sIt follows that with a given rate of surplus value, a rising organic composition of capital will result in a falling rate of profit. In such circumstances college management might well consider it necessary to increase the rate of surplus value so as to try prevent the rate of profit from falling. In effect, if a higher proportion of a college's expenditure is spent on materials, equipment and buildings it simply exacerbates the necessity to exploit teaching staff even more.

(1) MARX, K., A Contribution to the Critique of Political Economy, Progress Publishers, Moscow, 1970, p. 27.

(2) LENIN, V.I., Collected Works, Vol. 38: Philosophical Notebooks, Progress Publishers, Moscow, 1972, pp. 360-1.

(3) For the last financial year when funds were channelled through the LEA's, 1992/3, the funding per full-time equivalent student ranged from £1,486 through to £4,664 with a median figure of £2,444. See FURTHER EDUCATION FUNDING COUNCIL, Circular Ref. No. 93/09, 29/03/93, p. 5. The FEFC's funding methodology envisages a progressive convergence towards all colleges receiving funding at the same level for each fulltime equivalent student on a given type of course.

(4) This system is described in LOCKE, M., et al, eds., College Administration: A Handbook, 2nd. Ed., Longman, 1988, Section 2.2.

(5) The current funding methodology is described in FURTHER EDUCATION FUNDING COUNCIL, Guidance on the Recurrent Funding Methodology 1994-5, February 1994.

(6) As from autumn 1995 YT trainees are to be issued with vouchers, with a sum of money printed on them, for "buying" courses. However this is a meaningless fiction since the voucher simply entitles the young person to go on an appropriate course.

(7) See BATES, I. et al, Schooling for the Dole?: The New Vocationalism, Macmillan, 1984 for early discussion and analysis of this trend.

(8) DEPARTMENT FOR EDUCATION, The Charter for Further Education, 1993.

(9) O'CONNOR, J., The Fiscal Crisis of the State, St. James Press, 1973.