DfE does ‘too much procurement’, top civil servant admits

A top skills civil servant has signalled that the Department for Education is looking to move away from tendering for independent training providers. 

Keith Smith, the DfE’s director for post-16 strategy, chaired a webcast on proposed reforms to FE funding and accountability last week and admitted his department “does do too much procurement”. 

He said: “We have a huge amount of complexity in the system for people for competing and bidding for funds. 

“We are very keen, if we can introduce a simpler system that can get us much clearer on the outcomes and success we’re trying to achieve, that actually we should have confidence in using that funding mechanism with the institutions we are funding. 

“There are some really important questions here on the funding of independent training providers as commercial organisations. It is really important we think about those two questions together.” 

Currently, independent training providers receive their adult skills funding through a mixture of direct procurement by the DfE and subcontracting from colleges or other providers. 

Colleges meanwhile receive grant funding from the DfE annually without the need to tender. 

The DfE’s FE funding and accountability consultation, which closed yesterday, proposes reforms to administering national adult streams.

It puts forward a single “skills fund”, which will bring together the adult education budget and national skills fund. 

This new system is aimed to give providers “autonomy over their budget, reduce burdens and enable them to plan strategically for the long term”, according to last week’s webcast. 

Allocated funding through the skills fund will be non-ringfenced and a lagged system will fund “real delivery – meaning there will be no reconciliation, funding on plans or clawback for under-delivery”. 

The DfE also proposes moving to multi-year funding with “simple and consistent allocations”. 

The consultation document says the department would like to consider how procurement for private providers “works and could be improved”. 

Multiple tenders have plagued the department and private providers in recent years. The AEB tender of 2017 was beset with delays and had to be completely redone after officials realised it was botched. And when the final outcomes were released most providers had their funding slashed – including one case of a 97 per cent cut. 

Providers teamed up to threaten the DfE with legal action before the agency found additional funding to top up contracts. 

Later in 2017 the DfE had more issues with its tender for non-levy apprenticeship funding. For example, the agency awarded a contract to a defunct provider but an ‘outstanding’ college was rejected. 

In 2019, the DfE delayed its European Social Fund tender three times following technical errors as well as claims the agency broke procurement rules, which led to more threats of legal action. 

And this year another AEB tender was controversially run with multiple delays. 

Other funding streams the DfE currently procures include skills bootcamps and traineeships. 

The outcome of the funding and accountability consultation is due to be published in spring 2022.