An influential cross-party group of MPs have raised concerns over the value for money offered by the membership body for university technical colleges, after its cost to the taxpayer reached £3 million.
The public accounts committee (PAC) has today published a report following a National Audit Office (NAO) inquiry last year which laid bare the extent of financial failure among UTCs.
In its report, the committee criticises the “unusual setup” of the Baker Dearing Trust (BDT) – the owner of the UTC brand – and its relationship with the Department for Education.
FE Week analysis of BDT accounts found that since the programme launched in 2010, the trust has charged and received almost £2 million in “licence fees” from the technical colleges whilst also receiving £1 million in grants from the DfE.
Meg Hillier (pictured), chair of the PAC, told FE Week the costs “smack of a far too close, special relationship with too little scrutiny from government and too much entitlement from the BDT”.
She said it was “very curious” how the BDT, which in her opinion has “not offered” value for money considering the poor performance of most UTCs, has “managed to brand a type of school and milk the taxpayer and schools just for their brand to be used”.
As revealed by FE Week in August, the annual licence fee UTCs have to pay to the BDT increased from £5,500 to £10,000 this year, despite the majority of the technical colleges struggling to survive due to dwindling student numbers. Eleven of the institutions close or announce closure to date.
The PAC grilled the DfE’s permanent secretary, Jonathan Slater, during a hearing in March on the licence fee but said in today’s report that MPs were “concerned” at an “apparent lack of interest in what UTCs are getting from paying out taxpayer’s money to the trust in this way…on top of the already generous funding that the department gave to the trust”.
The fee increase came at the same time that BDT saw a massive reduction in donations, which have been its biggest source of income since its inception. The trust’s 2017/18 accounts show it received £1.7 million in donations, but just £388,000 in 2018/19.
Hillier said it was “very suspicious” that the licence fee doubled this year, and she doesn’t know whether “they were trying to fill another hole in the budget somewhere”.
A spokesperson for the BDT defended the trust’s licence fee and claimed the increase in cost was suggested by UTCs themselves.
They said the payment goes towards BDT’s work in delivering “hands-on educational, financial, student recruitment, and multi-academy trust rebrokerage support for all UTCs, as well as fulfilling the central role of government liaison and raising the programme’s profile”.
FE Week analysis of the BDT’s accounts also show the trust has spent and declared £60,000 on a personal secretary for their chair, former education secretary and UTC architect Lord Baker since 2011.
The BDT spokesperson also defended the payments made to Baker’s diary manager, insisting the cost since represents “very good value for money”.
He explained that Baker devotes a few days per week unpaid to help UTCs and needs help to arrange his diary but also with drafting letters and speeches.
The personal secretary is still on BDT’s books, but they have been furloughed during the Covid-19 pandemic.
The £1 million grants paid by the DfE to BDT were for the trust to support the opening and running of UTCs. The grants stopped last year.
The UTC model, originally for students aged 14 to 19, has been fraught with setbacks since its inception.
The PAC’s report cited many of the findings from the NAO’s inquiry, which found £792 million was spent on the programme between 2010/11 and 2018/19.
The majority of this was capital funding but the DfE has also propped up financially struggling UTCs with £36.8 million in extra cash between 2015-16 and 2018-19, most of which will not be paid back.
The report also found that the 48 UTCs open as of January 2019 were operating on average at just 45 per cent of capacity, and in terms of quality, over half of UTCs were rated as less than ‘good’ by Ofsted in October 2019.
Despite the DfE launching a three-year programme to improve the financial and educational performance of UTCs in 2017, the PAC said ministers still do not have a clear vision for UTCs in the future, and is a “long way from achieving its aim of improving the financial performance of UTCs by summer 2020”.
Hillier concluded that the taxpayer is paying over the odds for the UTC programme where good results are “alarmingly thin on the ground”.
Her committee has called on the government to set “clear” three-year financial targets for each UTC and close those that do not meet them.
They also want the DfE work with UTCs to “obtain the information necessary to gain assurance about the value schools are getting from the licence fee they pay to the BDT”, and write to the committee with its findings within three months.
A DfE spokesperson said: “This government is committed to improving technical education and strong UTCs have a key role to play this, helping to build the invaluable skills our country needs now and in the future, as well as supporting the recovery of our economy in light of the pandemic.
“UTCs are still relatively new and we have always sought to make improvements and address challenges that individual UTCs may face.”
They added that ministers will be considering the committee’s recommendations in respect of the value for money that UTCs are getting from their payments to BDT.