Clawback ‘possible’ on £91m overpayment

Providers who shared in a £91m Skills Funding Agency overpayment could yet be asked to hand back some of the cash while current allocations could also be reduced, FE Week can reveal.

The agency published details this month of providers who received funding for education in the 2011/12 academic year that they had not delivered.

The overall figure totted up to £91m and the agency said it was looking at cutting 2012/13 allocations — but it has since said it was also “in discussions” separately with a view to seeking clawback.

An agency spokesperson said: “The agency published figures for the end-of-year performance position for colleges and training organisations for the academic year 2011/12 in December 2012.

“Where the published data shows that a college or training organisation has funds against which it has not delivered, the agency is in discussions with each provider about the use or return of any funding not delivered.

“The agency continues to ensure funding is used for the direct benefit of learners and employers.”

The agency declined to name the providers affected and those who could be asked to pay money back.

Learndirect, Newcastle College and South Thames College topped the list of overpaid providers.

Learndirect delivered £117,132,144 of education, but was paid a further £5,333,722.

An agency spokesperson said it had been in talks with the Sheffield-based firm and that its funding was now assessed differently with it having turned private. It was bought from the Ufi Charitable Trust in 2011 by LDC for around £40m.

“While Learndirect is now a private provider, this did not apply to the whole of the academic year 2011/12,” she said.

“Discussions are taking place with Learndirect, as with all providers, about the use of or return of funding not delivered.

“Learndirect now operates under new terms and conditions and is paid like all other private training organisations on actual delivery.”

A Learndirect spokesperson said they “discuss regularly with the SFA the use of funding,” adding: “We have offered to use funding from last year to help support the current demand for Learndirect provision.”

Newcastle College received £38,197,511 of agency cash, £4,731,682 more than the value of the education it delivered.

A spokesperson said the overpayment was “a national issue and most FE providers did not fully meet their contracts, mainly due to a late change in the rules by the agency about who was eligible for fully-funded courses.”

He added: “We had the largest contract of any FE provider nationally, so naturally we also had one of the largest surpluses. However, when looked at as a proportion of our contract, the overpayment is 14 per cent, which puts us 44th in the table [based on percentage overpaid].”

However, he said it was “not appropriate us to comment further at this stage [on potentially paying the agency back].”

South Thames College was paid £19,297,14, £2,447,968 more than the value of education it delivered.

A spokesperson said it had nothing to add to its initial statement on the overpayment itself, which read: “Despite the college delivering 98 per cent of the adult standard learner numbers in 2011/12, it achieved some £2.4m less funding for the same volume of work compared with 2010/11.

“The reduced funding resulted from changes introduced by the agency for 2011/12, in particular the changes regarding benefits categories.”