In 2013 the government moved several hundred million pounds of level three funding out of the adult skills budget, replacing some but not all of it with advanced learner loans.
At the same time, the then Skills Funding Agency decided it was a good idea to give companies, many with no history of receiving public funding, access to the Student Loans Company funding.
The result was both predictable and exposed by FE Week: misuse of funds by several firms that went bust owing millions.
An outright ban on subcontracting and heavy capping of growth requests followed.
Now, after waiting years for Ofsted to conduct 20 full inspections, we find that the overall quality at these loans-only providers is shocking.
A massive 94 per cent of learners, close to 3,000 at the time of inspection, took out these government loans for courses at providers rated grade three or four.
Of which, half the inspections were rated grade four.
Our investigation also found that Ofsted has been slow to inspect and appears publicly disengaged, with little to say about FE Week’s findings and in no rush to visit the remaining loans-only providers.
This is shocking, not only given the typical quality of the provision they are observing, but because their own inspectors have even found examples of learners that claimed to not even be aware they had taken out a loan!
At the very least, Ofsted’s new early monitoring visits to apprenticeship providers should be extended to include those only funded by loans.
The chair of the education select committee, Robert Halfon, is right to call for urgent action. But not just from Ofsted.
After we ask the DfE why some loan-only providers were not featuring in achievement data reports, they admitted that the ESFA was allowing some to not even submit data.
These figures are then hidden from Ofsted and official statistics, despite the companies being in receipt of Student Loans Company funding.
According to the DfE these providers are below a ‘threshold’, but when FE Week asked what this threshold was, at the time of going to press no answer was forthcoming.
As always we will keep seeking an answer from the DfE, as may Ofsted.