ABSTRACT
This chapter evaluates the second lever used by the Conservative government to bring about change in the further education sector: financial rules and procedures. Accounting practice has a preference for tangible assets, ignoring the intangible aspects of the business so important to the service sector for measuring quality. In line with new accounting practice, the linking of college funding to the process of education for a student, not the input or output, was a positive step forward. In Germany, for example, accounts are seen as only one factor in decision-making. The Japanese approach thus places accounting practices as subservient to strategy formulation and places human resources as central to product innovation. Unit cost control is an appropriate financial measure for organisations that have undifferentiated low-margin products. Paradoxically, the language of accountancy leads people to believe that it is distanced from belief and therefore applied fairly.
