The mayoral authority in Liverpool has defended the outcome of a recent adult education budget (AEB) tender after receiving complaints that many “out-of-area” providers won contracts.
Sixteen training providers won procured contracts in the Liverpool City Region’s latest AEB competition, which concluded last week and was worth £70 million in total over the next five years.
This is a reduction on the 19 training providers with procured contracts in the last bidding round in 2019, but still equates to the same level of funding – £14 million per year.
However over half of the current providers, who were successful in the previous tender, have not been awarded contracts this time. A network of providers for the area said the results “throw into very sharp focus some worrying trends and concerns for learning providers locally”.
The Greater Merseyside Learning Providers Federation (GMLPF) claimed that only eight of the 16 winning providers are “headquartered here or have strong local roots” in a statement to Liverpool mayor Steve Rotheram (pictured).
GMLPF chief executive Ian Lomas said the results reveal a “worrying reliance on, and shift towards, contracting with larger, national and out-of-area learning providers”. The loss of local knowledge and expertise will, his federation believes, erode the Liverpool provider base and the region’s ability to respond to local skills needs – the opposite effect of what devolution of the AEB was intended.
His analysis alleges that some of the winning providers are traditionally placed in areas like Birmingham, Manchester and even as far as Barking, London.
One training provider in Liverpool who lost their AEB contract in this tender, who did not wish to be named, told FE Week they are now having to shut down and make 22 local people redundant.
‘The main goal of devolution is to put local people in the lead’
Sue Pember, the policy director at adult education provider network HOLEX, warned that using out-of-area providers “is a major issue and undermines localism and the levelling up agenda”.
She told FE Week: “The main goal of devolution is to put local people in the lead and building and strengthening local infrastructure and institutions. The key to strengthening localities is government funding should stay in the intended area, that it goes to fund local salaries, local services and businesses and, if there is a delivery gap, local institutions are supported to capacity build and fill that gap.”
Defending the tender outcome, a spokesperson for the Liverpool City Region said their officers carried out a “fair, rigorous, and transparent procurement process, as required by law, using anonymised bids, skilled evaluators, and a robust moderation process”.
The spokesperson said the “majority” of the 16 successful providers have a history of delivery in the Liverpool City Region through either devolved AEB funding, Department for Work and Pensions funding, ESFA funded provision or other funding streams such as skills bootcamps.
“The combined authority has a limited pot of money to spend on skills and must award contracts to the organisations that submit the best bids, demonstrating the best value for money for local people,” they added. “Unfortunately, the nature of procurement exercises of this scale means that some applicants will not be successful.”
The spokesperson also said the combined authority expects some of the unsuccessful bidders to continue to deliver training in the city region as subcontractors – a practice that central government and other AEB devolved areas like London are trying to significantly reduce.
Lomas said his federation has already heard of successful out-of-area providers contacting unsuccessful local providers to help deliver their programmes on a subcontract basis – pointing out that subcontracting often comes with a high management fee cost that diverts funding from reaching local residents.
Liverpool City Region took control of the AEB for its area, worth over £54 million annually, in 2019. The remainder of the budget is allocated to grant-funded training providers like colleges.
It was one of six combined authorities to join the Greater London Authority in securing the first devolution deals for adult education funding.
Pember said that going forward, combined authorities should only use out-of-area providers where they can “demonstrate that local institutions cannot fill that gap”.
This way, she added, funding “stays in the area and goes to support local salaries, institutions and businesses, which in turn will help build and sustain strong communities and grow the local economy”.
But Jane Hickie, chief executive of the Association of Employment and Learning Providers, defended the use of national providers within combined authority areas.
“Commissioning for devolved adult education budgets should be about establishing which providers can best meet local need and have a strong track record of delivery – regardless of where they are primarily based,” she said.
“By their very nature independent training providers are agile in their approach and can quickly meet the needs of learners and employers in the locality.”
List of Liverpool AEB tender winners:
Vocational Skills Solutions Limited
Realise Learning and Employment Limited
The Growth Company Limited
Genesis Training Group
Crosby Management Training Ltd
Innovative Alliance Ltd
Back 2 Work Complete Training
NetCom Training Ltd
PeoplePlus Group Ltd
Total Training Provision Ltd
Northwest Education & Training Ltd
Aspire Education Academy Ltd
The Learning Foundry
Women’s Technology Training Limited
St Helens Chamber
Waltham International College Ltd