College hit with financial notice after DfE finds dodgy subcontracting in traineeships

Clawback expected to move college from ‘outstanding’ to ‘inadequate’ financial health

Clawback expected to move college from ‘outstanding’ to ‘inadequate’ financial health

A college has been plunged into financial difficulty after an investigation found “historic” non-compliant subcontracted delivery in traineeships.

Strode College was today handed a financial notice to improve by the Department for Education due to an undisclosed clawback risk that threatens to drop the college’s financial health from ‘outstanding’ to ‘inadequate’.

The department dished out the warning notice because through the three academic years 2019/20 to 2021/22, Strode College “failed to ensure sufficient oversight of subcontracted delivery of traineeship provision”.

“This has led to funding being ‘at risk of recovery’ due to non-compliance which is likely to result in inadequate financial health”, the notice said, adding that the college is now “in intervention”.

The notice may explain why Strode College is one of a handful of colleges that still hasn’t published its accounts for 2021/22.

Strode College recorded 1,264 students undertaking traineeships in 2020/21, a big increase from 467 the year prior.

According to its most recent accounts, dated for the end of July 2021, the college had ‘outstanding’ financial health after it returned a cash operating surplus of £1.58 million.

Strode College was one of the largest providers of traineeships, having secured a £3 million contract that it subcontracted out to “specialist partners” until July 31, 2023.

The government scrapped traineeships as a stand-alone skills training programme earlier this year amid years of low starts, despite pumping hundreds of millions of pounds into the scheme during the pandemic. Traineeships can still be offered, but they’ve been integrated into adult education budget delivery.

It is not yet clear what specific subcontracting oversight issues have been identified at Strode College by the DfE.

The financial notice means that Strode College can be referred to the FE commissioner for an independent assessment.

It has also placed a requirement on the college to request permission from the DfE before entering into any new subcontracting arrangements.

Strode College principal John Revill, who joined the college in June 2022, told FE Week: “The financial notice to improve relates to historical oversight of the college’s traineeship provision for the three years 2019/20 to 2021/22. It in no way reflects on the current leadership of the college.

“The college is working closely with all agencies involved to resolve the financial notice to improve as quickly as possible.”

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