Ofsted criticised for delaying 3aaa inspection despite multiple warning signs

Ofsted delayed inspecting the beleaguered Aspire Achieve Advance for years despite its achievement rates plummeting when apprentice numbers nearly quadrupled and severe safeguarding concerns were brought forward by a whistleblower.

An FE Week investigation has uncovered the serious failing by the education watchdog, which has now come under fire from chair of the influential Public Accounts Committee, Meg Hillier, who fears the situation mirrors the Learndirect scandal.

The apprenticeship giant, commonly known as 3aaa, was rated ‘outstanding’ by Ofsted in October 2014.

Ofsted should have gone in sooner given the sudden plummet in results

Inspectors went back into the provider this year and were due to give it another grade one before declaring the inspection “incomplete” following the launch of a second Education and Skills Funding Agency investigation into its achievement rates.

Since then its co-founders have resigned, the agency has suspended it from recruiting apprentices and the company has put itself up for sale – but is falsely claiming it achieved an ‘outstanding’ Ofsted rating in May 2018 and is using that as a key selling point.

In the education watchdog’s 2014 report, 3aaa was lauded for its overall success rates being “high” while rates for completion within the expected timescale were “extremely high”.

Its achievement rates for 2014/15 sat at 82 per cent for teaching a cohort of 560 apprentices.

But a year later when the provider’s apprenticeship numbers nearly quadrupled to just under 2,000 its success rate plummeted to 65 per cent – a 17 percentage point drop.

It placed 3aaa below the national average and close to the government’s minimum standard of 62 per cent.

On top of this, in 2016, the government launched its first investigation into 3aaa and found dozens of funding and success rate “overclaims”. Ofsted was, however, kept in the dark about this significant but confidential report.

But FE Week’s investigation also discovered the watchdog failed to act on serious safeguarding concerns from a whistleblower in May 2017. The complaint was also sent to the ESFA who joined Ofsted in telling the person to take the matter up with the provider instead of taking action, even though the whistleblower was a 3aaa employee and feared losing their job.

An Ofsted document published in May 2018 states that ‘good’ and ‘outstanding’ FE providers will be risk assessed based on their “achievement rate data, complaints about provision, and the size and complexity of the provider and any recent changes to these”.

If red flags against those factors are raised then a full inspection should be triggered.

When asked why it failed to go back into 3aaa earlier than this year, Ofsted blamed a lack of funding from the Department for Education for not having enough resource, as well as a change in the way the Education and Skills Funding Agency reported achievement rates.

3aaa previously, however, admitted to FE Week that its success rates drop was nothing to do with the change in algorithm, it was simply a decline in performance.

A spokesperson for the inspectorate said it was still “waiting for further information before deciding when to complete” its current inspection of 3aaa.

We all pay our taxes to get a decent service and people are profiting and not delivering

“No judgement about a provider is final until the inspection has been fully completed, and a report has been published,” she added.

Ms Hillier was sympathetic to the inspectorate for its lack of resource but criticised it for not going in sooner considering the private provider was growing through taxpayers’ money.

She told FE Week it reminded her of the Learndirect saga – where the inspectorate delayed revisiting the nation’s largest FE provider when it put itself up for sale even though its achievement rates plunged and learners suffered from poor training while its government skills contracts grew to £100 million.

When Ofsted finally came knocking, four years after being rated ‘good’, Learndirect was branded ‘inadequate’ and eventually had its government skills contracts taken away.

3aaa’s apprenticeship allocations have grown rapidly since being launched by co-founders Peter Marples and Di McEvoy-Robinson, who resigned from the company last month, in 2008.

Direct ESFA funding has increased from just £390,000 in 2012/13 to more than £31 million in 2017/18.

 

Ofsted’s defence

“Our risk assessment process at the time did identify a decline in performance at this provider during the 2015/16 performance year; achievement rates fell to 65 per cent,” a spokesperson said.

“However, it is worth being aware of the wider context that year, when achievement rates declined nationally to 67 per cent following the strengthening of achievement rate reporting rules introduced by the funding agency.

“As this was the first time performance had declined in this provider, and as performance was around that of similar providers, and not in the bottom 20 per cent of all providers, we did not select this provider for inspection. Ofsted has limited resources and needs to prioritise inspection to providers that are in most need.

“When performance data for 2016/17 was published and risk-assessment completed, although the provider’s performance data had improved to above national rates, our risk assessment process did identify two consecutive years of performance data that suggested the provider was no longer outstanding.

“This data, together with other risk factors led to the provider being selected for inspection. Our risk assessment process is kept under continual review and any lessons learned are incorporated into revised methodology.

“We believe the approach taken to the inspection of this provider is appropriate and proportionate. Inspection and risk-assessment is not all about one year’s data.”

 

PAC chair lays into Ofsted and DfE

The head of the Public Accounts Committee hit out at Ofsted for not going in “sooner” when 3aaa’s success rates sank but learner numbers and apprenticeship funding surged.

“Frankly this is our money, we all pay our taxes to get a decent service and people are profiting and not delivering,” Meg Hiller told FE Week.

Following the Learndirect fiasco last year, the PAC criticised Ofsted for not taking “full account of the company’s size and the consequences for learners of its declining performance”.

Meg Hillier

It recommended the watchdog “urgently” revisits how it “prioritises its use of resources and the different type of risk attached to a private sector failure, in a way that takes account of risks to high numbers of learners and the changing provider-base in FE”.

“Ofsted should have gone in sooner given the sudden plummet in results,” Ms Hillier said when shown the evidence of 3aaa’s size and declining performance.

“If a provider is growing that fast then that should also trigger an inspection.”

Ms Hillier extended her condemnation to the Department for Education for “handing out taxpayers’ money” to private providers without giving the education watchdog “proper resource to inspect them”.

“The resources they [Ofsted] have got are stretched ridiculously thin,” she said.

“They have all these new [apprenticeship] providers they need to keep an eye on and they’re inspecting schools less frequently.

“If we are going to have a market set up like this then we have got to make sure we have the proper safeguards and regulation to do so.”

She continued to lay into the government: “The government should be wary of handing out taxpayers’ money for a private provider to expand.

“You wouldn’t ask someone who is building an extension on your home to suddenly build a new house next door without doing some major checks on their capabilities of doing that.

“It is the learners who get caught up in the middle of this.”

 

Ofsted kept in the dark about damning KPMG report

Ofsted was kept hidden from a damning government investigation into 3aaa in 2016, which found dozens of funding and success rate “overclaims”.

FE Week revealed last week that the investigation, carried out by auditing firm KPGM and code named “Project Vanilla”, was conducted in the same year that the Department for Education gave the provider a £7 million apprenticeships contract increase.

Prompted by a whistleblower, claims about 3aaa included: incorrect start dates resulting in failure to reach minimum duration; incorrect use of “break in learning” status which is inflating success rates; apprentices with long periods without learning activity.

The probe found dozens of “errors which support the allegations or which have an impact on funding of success rates”.

FE Week understands the investigation resulted in the company paying back a substantial six figure sum.

Despite the significant findings of the report, Ofsted was never informed of its existence.

When asked for a response to the KPMG report, a spokesperson for the inspectorate would only say: “We can confirm that Ofsted has no record of being informed about the investigation carried out in 2016.”

FE Week asked the DfE why it hid the report from Ofsted. “We do not comment on individual provider investigations,” is all they would say.

 

Whistleblower’s concerns batted away

A whistleblower raised “serious concerns” about safeguarding of 3aaa “learners’ personal data” in May last year, but both Ofsted and the Education and Skills Funding Agency refused to act on them.

Instead, the person was told to take up the issue with the company itself, even though they were a staff member and feared any complaint would put their job at risk.

The whistleblower said learners were not “protected against safeguarding issues on the internet, such as those detailed in the prevent duty, as we no longer have any form of web filtering”.

“We also have no firewalls in any academy, or even up in the head office where the computers that hold all the student data are,” they added.

“We have had complaints from our students that the site they upload their work to is not even secure – google advises them of this each time they log on, but so far IT have taken no action as far as I can tell.

“None of the laptops used by staff are encrypted – these have got student information on them – what happens if they get stolen?”

The whistleblower concluded: “The company presents a great facade claiming grade one Ofsted, but underneath the surface there are huge issues which need investigating, which will tell a very different story.”

In response to the concerns, the ESFA said: “We understand that you have not issued a formal complaint to the training provider. Therefore, we would not be able to formally investigate your concerns.”

Ofsted also told the whistleblower to “formally raise your concerns through the provider’s own complaint process” but said “a summary of your concerns will be available to the lead inspector for consideration at the provider’s next inspection to assist with their inspection planning or at the next monitoring visit where these are taking place”.

When quizzed by FE Week about the situation, Ofsted confirmed the whistleblower’s complaints were passed onto the 3aaa inspection team.

A spokesperson added: “Ofsted’s role is to inspect and report as we find. We are unable to investigate individual complaints about FE providers – this falls to the Education and Skills Funding Agency.

“Complaints of this kind when received by Ofsted are held so that inspectors can access them when it comes to the next inspection. They are one source of information, that will be considered alongside a range of other information, before arriving at inspection judgements.”

 

3aaa up for sale

3aaa has put itself up for sale with the government’s backing, but is falsely claiming it achieved an ‘outstanding’ Ofsted rating in May 2018 and is using it as a key selling point.

The company hired accountancy firm BDO to seek potential bidders and the deadline for indicative offers was October 4.

There are however concerns that the sale will further delay Ofsted’s reinspection of 3aaa, like it did for Learndirect.

The watchdog originally planned to visit Learndirect at the start of November 2016, but agreed to defer its inspection when the provider claimed it was negotiating the sale of its apprenticeships business.

This sale never actually went through but delayed inspection for four months.

Following its inquiry into Learndirect, the Public Accounts Committee told Ofsted to develop a “specific deferral policy for commercial providers, to ensure that learners’ interests always take priority over the pursuit of profit”.

At the time Ofsted said it will “always put the interests of learners before any commercial considerations”.

3aaa finalised a significant cash loan of around £5 million in April 2018 from Beechbrook Capital.

FE Week understands that one reason for the sale is because the terms of that loan have been broken and the lender wants to claim their money back.

It is also understood that the ESFA is supportive of the sale on the basis that its co-founders, Peter Marples and Di McEvoy-Robinson, will not benefit from it financially.

An “investment opportunity” document, code named ‘Project Alphabet’, has been obtained by FE Week and states: “The ESFA has placed a temporary block on new learners whilst an investigation is undertaken in to achievement rates, prompting the shareholders to seek an exit.”

A separate “overview information” document about the sale, claims that the business “delivers the highest quality learning provision with all areas graded outstanding in the draft Ofsted report (May 2018)”.