As the Managing Editor of FE Week, the publication which was first to highlight the tens of thousands of Morrisons’ adult apprenticeships being delivered by Elmfield Training in an average of 28 weeks, it feels right to summarise the coverage on the same day that BBC Panorama broadcast their own investigation. Also, yesterday the Minister for FE announced that from August 2012 all apprenticeships, regardless of age, will need to last at least 12 months.

The evidence below strongly points to a significant example of how the coalition government, Skills Funding Agency and National Apprenticeship Service have all pursued apprenticeship growth and ignored obvious signs of Train to Gain rebadging and ‘deadweight’. In essence what the public funding was actually spent on was the delivery of short assessment based apprenticeships to existing adult employees at a large employer that not only paid nothing, but said they would have done it without the funding anyway.

The background

Elmfield Training first came to the attention of FE Week when it was found that their call centre apprenticeships, under the Synapse brand, were openly being advertised as 12 weeks in duration. We published a ‘concern at 12 week apprenticeships’ article in June 2011, and within a few weeks the Synapse website simply stated they no longer offer apprenticeships (although the ‘Synapse academy’ is still referred to on the Elmfield Training contact us website page). FE Week also noticed that the website for the qualification awarding organisation Skillsfirst looked similar to the Elmfield website, and they operated out of the same building in Birmingham. Companies House confirmed that the founder and owner of Elmfield Training, Gerard Syddall, had also established Skillsfirst in 2009.

One year Elmfield job to monitor the ‘certification of 100,000 Morrisons colleagues’

At the same time as FE Week was writing about Synapse, Elmfield Training were also advertising a 12 month fixed term contract for a data analyst that would ‘keep up to date reports on the sign up, assessment, sign off and certification of 100,000 Morrisons colleagues’. Click here to see the advert.

From zero to nearly 18,000 apprenticeship starts aged 25+ at Morrisons in nine months

A Skills Funding Agency response to a Freedom of Information request made by FE Week, dated 29 June 2011,  stated that Elmfield Training had not delivered any apprenticeships at Morrisons for those aged 25+ in the 2009/10 academic year. However, the FoI response also said that in the first nine months of the 2010/11 academic year they had started 17,870 apprentices aged 25+ on ‘Level 2 with over 99% delivered in retail’. In the same period they had started just 290 apprenticeships aged 16-18 and 2,220 apprenticeships aged 19-24.  Click here to download the SFA FoI response in full.

Duration planned as 56 weeks but taking on average 28 weeks

The FoI also stated that whilst the planned duration was 56 weeks the Elmfield Training apprenticeships were taking on average exactly half that, 28 weeks (six months). Read the FE Week article published on June 30 2011 here.

Elmfield Training 19+ apprenticeship allocation increases mid-year from £9m to £27m

The Skills Funding Agency allocation spreadsheets show that at the start of the 2010/11 academic year Elmfield Training had a £23,860,293 allocation with the North West region. This included £9,33,478 for 19+ apprenticeships. The quarter two revised allocation shows that their allocation had been increased to £42,896,356 including a rise to £26,941,086 for 19+ apprenticeships. Therefore within six months of having their first direct contract with the SFA, Elmfield Training saw their 19+ apprenticeship allocation increase from just over £9 million to nearly £27 million. Given the funding for apprenticeships is paid in full for early completers, it strongly suggests much of this allocation increase relates to the Morrisons provision, as it was being delivered in half the planned time.

Elmfield Training has first Ofsted of their own, and graded ‘Satisfactory’

It came as a surprise to us at FE Week that not only was Elmfield Training’s first direct contract with the Skills Funding Agency worth over £42 million by 2010/11 quarter 2, but they had never been inspected by Ofsted as a direct provider. After our initial enquiries in June, Elmfield were inspected by Ofsted on 25 July 2011. The report (click here) graded the provider 3 out of 4, and included the statement: “Elmfield has strong ambitions for the development of the business and has managed the corporate infrastructure well to respond to the significant increase in the size of the business. However, the ambition for learners in retail programmes is not sufficiently challenging.” and “At Morrisons, learners access a training programme that is well structured. The quality of assessment is satisfactory overall, with learners in business, administration and law benefiting from well-planned assessment. Retail employees undertake a timely initial assessment of their literacy and numeracy needs but the results are not always used to develop their individual knowledge further.” It later added: “The provision adequately meets the needs of retail learners. They are very positive about the qualifications they achieve. However, progression routes are underdeveloped” and “The quality of information, advice and specialist support for retail learners is not adequate. Induction does not provide enough programme information to prospective learners. Elmfield’s strategy for providing specialist support is also underdeveloped.”

More assessment than training (rebadging of Train to Gain)?

The Ofsted report quotes suggest that the Elmfield Training programme at Morrisons is satisfactory at the assessment of learners, but less so at other aspects such as developing knowledge or specialist support. This is corroborated by Morrisons themselves. At the BIS Select Committee session the Morrisons HR Director claimed that the supermarket does the training, and Elmfield over-sees the national accreditation. If it is simply an assessment based model of apprenticeship delivery, with little off-the-job training, this would explain the ‘efficiencies’ (thus profit) and ability to deliver in an average of 28 weeks.

The Elmfield Training £12.3m (36%) profit, £3m post-tax dividend and ‘luxury homes’

Mr Gerard Syddall, the founder and 95 per cent shareholder of Elmfield Training, told the BIS Select Committee on 27th March 2012 that all company income came from the Skills Funding Agency (i.e. none of the employers they work with pay them a training fee), and there was much discussion about their last set of accounts filed with Companies House (see profit and loss figures below). Click here for the FE Week write-up. The TES also published an article (click here) in November 2011, which detailed ‘luxury homes’ purchased by Elmfield Training, a topic not raised by the BIS Select Committee.

Deadweight confirmed at the BIS Select Committee

It is not a nice term, but ‘deadweight’ is used to describe government funded training that would have happened regardless of the public money. The Train to Gain scheme was heavily criticised for deadweight, and at the BIS Select Committee hearing on 27th March 2012 the HR director of Morrisons confirmed that their training would have happened anyway, with or without the Skills Funding Agency funding.

Two questions for the government:

1. Why did such a large volume with a single employer not go through a tendering process to secure best value and an employer contribution? In fact, why was Elmfield Training given an allocation at all given most large employers (eg McDonalds and BT) have their own Skills Funding Agency contract? The National Employer Service could have negotiated rates, rather than contributed to an Elmfield Training 36 per cent profit margin (Gerard Syddall told the BIS Select Committee he could not to be blamed for his profits given the Skills Funding Agency paid national rates).

2. Given the vast majority of Morrisons’ apprenticeships were for existing staff, and Morrisons does not make a cash contribution to Elmfield Training, does this not break European rules on State Aid?

What next?

History has shown us that the owners of very large training providers look to sell-up and move on before profit margins are squeezed by changes to over-generous rates and or rules. FE Week is led to believe that Gerard Syddall is already in discussions with at least one company to that effect.

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