DfE accounts: Apprenticeship underspend and insolvent provider write-offs revealed

A small apprenticeships underspend, nearly £20 million in dissolved training provider write-offs and exit payouts for two ministers featured in this year’s annual report and accounts for the Department for Education.

The report, published this week, explains how the Department spent its budgets in 2023-24 and explained its key risks and successes.

Here’s what you need to know…

Apprenticeships budget underspend

The department’s apprenticeships budget underspent by £17 million last year after the budget was revised down by nearly £60 million in year, as revealed by FE Week in March.

Of the £2.529 billion that was available in 2023-24 for apprenticeships, £2.512 billion was spent. This shows a much smaller underspend than the year before (2022-23) which was £96 million.

Simon Ashworth, director of policy at the Association of Employment and Learning Providers (AELP), said this shows there is limited “headroom” for Labour to add flexibilities to how the levy can be spent without “additional funds”.

Spending available for apprenticeships was supposed to rise to £2.7 billion in financial year 2024-25 – a commitment made in the last government’s spending review in 2021. DfE’s latest accounts suggest £2.66 billion is planned for this year, but a spokesperson clarified that the expected total budget for apprenticeships this year is £2.729 billion, after factoring in schemes such as the growth pilot and maths and English uplifts.

Bootcamps ‘success’

Despite celebrating “scaling up” skills bootcamp delivery, with 40,040 learners starting in 2022-23, the department is still unable to say how many complete their courses or see positive outcomes in their careers.

Statistics for the second wave of courses, delivered in 2021-22, will reportedly be published “later in 2024”, although the report fails to offer any reason for the two-year delay.

DfE’s director general for skills Julia Kinniberg wrote that the DfE has “scaled up” its priority skills programmes including, 40,000 learners in skills bootcamps in 2022-23, a 90 per cent pass rate T Levels last year and the rollout of higher technical qualifications.

However, challenges to T Level delivery and “worrying” dropout rates highlighted by officials in separate DfE reports are not referenced.

Last year’s £185 million cash boost for some colleges to “tackle [teacher] recruitment and retention issues” by helping them to match that year’s pay award for school teachers, was chalked up as win.

However, the report did not acknowledge the growing pay gap between college and school teachers, now estimated by the Association of Colleges to be an average of £10,000 per year.

Dissolved training providers

Just over £19million was written off funding owed to the Department from training providers that have gone bust.

DfE only has to declare waved claims worth over £300,000, but the accounts show four of the eight dissolved training providers were part of a chain owned and shut down by entrepreneur Angela Middleton in 2020.

Around £12.5 million was written off as funding that wasn’t recovered from Middleton’s businesses: Astute Minds Ltd (£9.9 million), MiddletonMurray Ltd (£1.4 million), FNTC Training and Consultancy (£900,000) and The Teaching and Learning Group Limited (£456,000).

A £3.4 million claim on Progress to Excellence Ltd, which was shut down in 2020 after an ‘inadequate’ Ofsted inspection, was also written off. Further write offs included £1.2 million from Logistics.com (UK) Ltd which filed for insolvency in 2021and £801,000 from PTS Training Ltd.

Special payments were made to Remit Group (£988,000) and Skillnet Ltd (£384,000) to “secure provision for already enrolled apprentices” from other providers.

Ministerial severance payments

Departing ministers Nick Gibb and Robert Halfon each received a £7,920 severance payment.

Gibb stepped down as schools minister last November, announcing he was seeking diplomatic post and would stand down as an MP.

Halfon announced his retirement from the House of Commons in March and quit as skills minister the same day.

Colleges unaccounted for

The impact of reclassifying colleges continues to impact government accounting, with an ongoing disagreement between the DfE and the Treasury over the “the most appropriate” way to report their annual spending.

At present, colleges publish their own accounts every year, after the end of the academic year.

However, this causes difficulty for the Treasury as public spending cannot be consolidated into the DfE and whole government’s accounts.

FE Week understands a trial is underway with a select group of colleges to work out how colleges can report on their finances by financial year, rather than academic year. A change in financial year-end from July to March was slated by college finance leads when it was first proposed.

Local authority SEND risk ‘critical’

Deteriorating local authority finances were made a “top-tier” risk. DfE said financial challenges in local authorities can “impede the delivery of essential support services” including SEND provision with now “critical” risks to “outcomes for the most vulnerable and exacerbating cost pressures”.

High needs cost pressures had also “worsened” in year with demand outstripping available funding “significantly.”

Fraud levels falling

The DfE saw a significant drop in detected errors and fraud, from £36 million to £10 million and from £58 million to £6 million respectively. Meanwhile, recoveries increased from £10 million to £27.5 million.

The report said: “The apparent decrease this year in detected fraud may be due to our continued efforts in fraud prevention, which have resulted in an estimated £3.1 million in prevented fraud, although once Q3 and Q4 figures are finalised we expect detected fraud levels to be similar to last year.”