The truth behind plans to cull 300 staff at England’s largest college group

England’s largest college group this week announced plans to slash up to 300 jobs across its two training providers to “strengthen” its “already robust provision”, but FE Week has since learnt the truth behind the move.

The redundancies consultation at Intraining and Rathbone Training, part of NCG, comes off the back of a slamming Ofsted inspection as well as an Education and Skills Funding Agency mystery audit that found major data manipulation.

FE Week understands the education watchdog recently conducted a monitoring visit of Intraining following its ‘requires improvement’ report published in June last year, which downgraded it from ‘good’.

The unfortunate effect of these proposals would be substantial redundancies

The inspectorate found no signs of improvement at the provider, and is expected to hit it with ‘insufficient’ ratings across the board when the report surfaces.

The visit was only for Intraining and not NCG as a whole, although the group is anticipating its own monitoring inspection soon as it also got downgraded to ‘requires improvement’ in June last year.

Meanwhile, Intraining was one of a number of providers to receive a short-notice audit from the ESFA. It is understood the agency is not only demanding a significant clawback from the NCG division after finding evidence of achievement rate fiddling, but contract termination is also likely.

The confusing picture of NCG’s and Intraining’s latest official data (see tables below), for 2016/17, shows their overall achievement rate for nearly 7,000 apprentices was under 60 per cent.

NCG declined to comment on Ofsted’s and the ESFA’s findings.

The college group ran itself into financial trouble in 2017/18, generating a deficit of £7 million, according to its latest accounts. This was largely because a substantial drop in apprenticeship provision.

According to the ESFA’s official data, total of 9,470 apprentices started across the whole group in 2016/17, but this declined to just 3,820 in 2017/18 – a 60 per cent drop.

The group has also seen a huge decline in subcontractors. It had 50 of these partners in 2016/17 with contracts totalling £12.3 million. NCG retained a 20 per cent top-slice to gain £2.4 million in management fees, according to figures published by the ESFA.

NCG’s divisions

But as of May 1, 2017, NCG was working with just 10 subcontractors according to their published self-declaration, with the combined total of contracts totalling just £1.3 million. If the group took a 20 per cent top-slice on average from the deals its management fee income would only be £264,997.

Intraining and Rathbone Training currently train 4,500 learners between them, of which two-thirds are apprentices. Some could be forced to find alternative providers if their 19 centres end up shutting, as NCG is proposing.

Last year, FE Week reported that staff numbers were being cut by up to a fifth, from 500 to around 400, at the providers in an effort to save £3 million and NCG Group accounts show they injected cash totalling £1 million into Intraining and £2.55 million into Rathbone Training.

“We have opened consultation with Intraining and Rathbone staff on some fundamental changes to the way in which we operate in England, including the closure of our network of training centres and a radical refocussing of our apprenticeship proposition,” a statement on the NCG website said this week.

“Intraining and Rathbone accounted for less than 20 per cent of group revenue in 2017/18. The changes we are proposing will strengthen NCG’s already robust position, supporting our ambition to invest in teaching, learning and facilities.

“The unfortunate effect of these proposals would be substantial redundancies.”

A spokesperson confirmed the providers between them currently employ 425 people and 300 jobs are now at risk.

He said that moving forward, NCG will “put the interests of learners first and support them to finish their programmes wherever possible”.

“If we proceed as currently proposed following consultation, we will in future operate a single, smaller, digitally-enabled business focussed on delivery of high-quality apprenticeships for the tech, management and professional occupations,” the spokesperson added.

NCG, which is chaired by former Education and Skills Funding Agency chief executive Peter Lauener, has experienced a turbulent couple of years.

Peter Lauener

Aside from the Ofsted visits and falling achievement rates, staff at its colleges in London have gone on strike in a row over pay, and a free school that the group sponsored, the Discovery School, was forced to close down by the government.

NCG is currently subject to intervention from the FE Commissioner owing to the Ofsted grade three, and is expecting a “diagnostic visit” before the end of the academic year.

As well as this, it is expected that the group will be dropped from the government’s final bidding round for Institutes of Technology as a result of its ‘requires improvement’ rating.

NCG’s former boss Joe Docherty resigned in October.

As revealed by FE Week earlier this month, the college group has paused recruitment for a new chief executive until the Spring, after its initial hunt proved fruitless and it turned its focus to “improving standards”.

 

Intraining hit hard by ESFA mystery audit

In early March, FE Week reported that the ESFA had undertaken mysterious funding audits at many large apprenticeship providers.

It is understood that Intraining was one of the providers visited in an effort to uncover data manipulation that would inflate achievement rates and funding levels.

At the time of the audit the ESFA refused to say what they were looking into, but have in recent days written to providers outlining their findings.

Sources close to the audit told FE Week that the ESFA found significant issues with the way Intraining apprentices had been reclassified as NCG’s and generally moved around the providers that make-up the NCG Group.

The audits also focussed on whether withdrawals and ‘breaks in learning’ were recorded in a way that would inflate both funding and achievement rates.

NCG would not comment on the audit or what is believed to be a significant sum of funding the ESFA is looking to clawback.

It is believed Intraining is one of several dozen providers hit with the mystery audits that face not only a clawback, but also being removed from the official achievement rate tables, due for publication next Thursday.

As previously reported by FE Week, this major review of apprenticeship data is expected to result in the sector being officially warned about unacceptable data practices, as was the case nearly a decade ago when the then chief executive of the funding agency published a letter to the sector.

Something similar is likely to be in the pipeline from the current top brass at the ESFA.

 

Huge decline in apprenticeship business and subcontractors

NCG Group saw a huge 5,650 (60 per cent) fall in the number of apprenticeship starts in 2017/18, according to figures published by the government.

As shown in the table below (click to enlarge), the seven of the eight providers that form the current NCG Group all suffered huge reductions. It remains unclear why apprentices were shifted onto the NCG provider, rising from 30 to 830 starts.

Intraining and to some extent Rathbone Training were heavily reliant on apprenticeship subcontracting, as shown in the table below. They had 50 subcontractors in 2016/17 generating over £12 million of which NCG Group retained £2.4 million. Since then this has sharply declined to as few as 10 subcontractors generating less than £2 million.

 

Quality concerns and lack of clarity over data

The latest published qualification achievement rate (QAR) data shows just what a complicated mess the NCG Group has got themselves into.

As the table below shows (click to enlarge), official data says the NCG provider had more than 3,000 apprentices with a very low achievement rate of 55.6 per cent.

Unofficial data also published by the government suggests the figure is 48.2 per cent for less than 2,000 starts. And if that was not strange enough, the official starts figure in 2016/17 for this provider was only 30.

FE Week understands that the ESFA is now investigating why apprentices were moved around the various provider UKPRNs, often many times.