ESFA accused of ‘hidden agenda’ as AEB providers reveal ‘horrendous’ bid rejections

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The government has been accused of using the adult education budget tender process to “manoeuvre its hidden agenda” of shrinking the private provider market – as leaders spoke out about “horrendous” bid rejections.

Several long-running providers told FE Week they were left “infuriated” after their applications were denied owing to “missing” documents that were in fact attached. Others were rejected for using abbreviated words that are typically used in procurements.

Another was rejected because one of the many documents requested was corrupted, others cross-referenced near-identical bids which received completely different outcomes, and many were denied full marks despite receiving “ridiculously” positive feedback.

The providers, some of which are now being forced to close, believe this was the Education and Skills Funding Agency’s (ESFA’s) first step in slashing the independent training provider market, which was described as “crowded” in this year’s FE white paper.

A few providers considered launching legal challenges but decided against the action owing to costs.

Results for the heavily delayed national adult education budget (AEB) procurement were finally communicated to the sector in mid-June – just two weeks before contracts commenced.

In total £74 million was allocated, which was down by a fifth on the £92 million in the last AEB tender from 2017.

FE Week analysis shows the number of private providers with a direct ESFA AEB contract has now shrunk by almost 60 per cent, from 208 to 88. In total, 581 providers submitted bids.

Half (44) of the 88 winners did not previously hold a procured AEB contract with the ESFA. Of these, 14 did not hold any contract with the agency last year and have never been inspected by Ofsted.

ESFA claims bid marking was ‘fair’

After being shown the provider complaints by FE Week, the ESFA said the procurement was a “fair and open competition” and maintained that all bids were “assessed in line with the published evaluation criteria and methodology”.

It added that the agency had “communicated our intention” to have “fewer, larger direct ESFA-funded AEB contracts at market engagement events in January 2021 and as part of the invitation to tender”.

The ESFA claims that by having fewer, larger contracts, providers will be “better able to support the quality of the learning, dedicating funding to the front line, rather than management costs and maximising the opportunity that AEB offers learners as they progress to higher-level qualifications and employment”.

Despite the agency’s desire for there to be substantially less subcontracting in FE, most training providers who spoke to FE Week and previously held direct contracts said the ESFA’s own officials were now encouraging them to start subcontracting instead.

Although most wished not to go on the record for fear that the ESFA would make it harder for them to win contracts in future, a few were able to discuss their tender experience anonymously.

“We dropped very few marks and all the feedback was ridiculously positive on what we submitted, however we didn’t get any funding,” one said.

“We hit a brick wall when trying to get further feedback on how we dropped marks or getting a re-mark. Basically, there was no real rationale or consistency and no consistent approach across the country.

“It is well known we do a lot of subcontracting with incredible achievement, amazing learner and employer satisfaction, and really positive partner feedback. Surely this was the chance for the ESFA to help a shift to direct delivery.”

‘The feedback we got was infuriating’

One long-running training provider told FE Week it was denied a contract because it abbreviated some words to combat the “crazy” low character count – 3,500 – it could use for each question. For example, it wrote “vs” rather than “versus”.

The ESFA also told the provider that the bid was “missing” some documents, which were actually attached to the bid when the provider challenged this.

“The feedback we got was pretty horrendous and infuriating,” the provider’s chief executive told FE Week.

“I was quite animated with the agency because they were saying there were bits not in there which were. And our team always abbreviates words in tender bids and we have never had a problem with that before.”

In its appeal to the ESFA, the provider also cross-referenced its AEB bid with its one for traineeships, which was successful. Despite some of the answers being “almost the same” and the provider spending “more time” on the AEB bid, the agency refused to remark its bid.

As a result of the contract rejection, the provider had to make its AEB team redundant just days before they were meant to start the academic year.

The chief executive said there was a “hidden agenda” to shrink the independent training provider base in AEB.

“The agency has allocated billions out to the FE college sector and only £73 million to the ITPs. They made a conscious decision to shrink the allocation at a time when the country needs more adult provision. I think they have tried to use the bid process to manoeuvre this.

“Even with providers that have got great track records in delivering AEB, they found reasons – not valid reasons, but reasons for kicking them out.”

Another provider which has delivered government-funded adult education courses for 15 years told FE Week its bid was rejected because one of its files was “corrupted”.

“The agency never tried to contact us to ask for it to be re-sent,” the provider’s chief executive said.

They appealed against the process after being informed that this was the reason it was rejected, rather than because of the quality of the bid.

The chief executive explained: “There’s no ‘woe is me’ here. I appealed on the basis that you would expect a provider of 15 years with a good track record, if they have miss-submitted a file, to receive a phone call to say, ‘hey, you have not submitted that right’ and ask for another.

“I would have no problem with being turned down after that. Just give me a chance to have the same process as everyone else.”

The chief executive said they “understood” the drive by government to push the AEB towards colleges, but it would be “nice if that was an overt policy so that everybody knew where they stood. We could stop wasting our time bidding for these things.”

High Court challenge was debated by provider

One provider that has been running for more than 20 years told FE Week its bid was rejected due to insufficient detail in the volumes of delivery it proposed. However, there was a spreadsheet on volumes attached to the bid that the ESFA asked to be submitted separately.

“Why would I use my 3,500 characters for this question by repeating what I’ve put in the volume spreadsheet?” a spokesperson for the provider said.

On top of this, the chief executive of this provider reviewed a near-identical bid and found disparities in the ESFA’s assessment.

“The bids received different outcomes from each of the questions. We had the same statement in both bids. One of them said, ‘the bidder has demonstrated how they will deliver this’ and the other said it ‘lacked detail’.”

The provider’s spokesperson said it felt as though the agency had an “agenda from the start and they’ve done what they can to make it fit their purpose. It’s not a fair process. The only way that I can possibly fight it is to employ a barrister and take it to the High Court, which we can’t do.”

A small Nottinghamshire-based training provider called CEATA, which delivers both engineering apprenticeships and adult education courses to the unemployed, has had to close after the ESFA rejected its bid.

Seven staff have lost their jobs and 35 apprentices are trying to find alternative providers to complete their training.

The provider’s general manager, Karen Hodgson, told FE Week that the ESFA’s feedback was “nit-picky” as she believes they failed on “word-search checks”.

She explained: “There was a question about remote and part-time learning. I explained that our health and safety resources are all available on a remote platform on demand and described our delivery model as flexible. But, because I didn’t use the word they wanted – part-time– they claimed our answer was not clear.”

Hodgson added: “Being denied an AEB contract has impacted the business’ capacity to carry on. So our really good apprenticeships, with above 90 per cent achievement rates, are also gone.”

She believes the ESFA was “just out to reduce the number of ITPs that were getting direct funding, and they have succeeded”.

Bid writers disagree about the agency’s alleged ‘hidden agenda’

David Kitchen, managing director of consultancy firm The Leadership Team, which was used by several providers in this tender to write bids, told FE Week that the feedback structure from the ESFA varied “significantly from provider to provider seemingly marked very differently in each region”. It was “inconsistent”, he added.

He said his company’s view was that there is a “drive to reduce the number of ITPs and this procurement process is evidence of that”.

But Jim Carley, managing director of Carley Consult Ltd which also helped many applicants to write their bids, disagreed.

“I’ve not seen anything that would suggest that the design of the ESFA’s AEB procurement this time around put bidders at a disadvantage compared to previous competitions, or that the ESFA may have had some form of hidden agenda to reduce the ITP market,” he said.

He added: “With a high volume of bids, the ESFA probably had a large team of evaluators, and a resultant very challenging moderation task.

“This very likely resulted in some instances of inconsistency in the scoring process between different evaluators. Bidders could, of course, appeal their original scores, which some successfully did. It is therefore very hard to say whether or not any isolated scoring inconsistencies had a material impact on the competition as a whole.”

In fact, the ESFA used more staff in this procurement than the last AEB and non-levy tender debacles despite receiving fewer bids, according to data supplied by the agency to FE Week via a freedom of information request (see table).

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Association of Employment and Learning Providers chief executive Jane Hickie described the “deliberate reduction” in the number of ITPs delivering AEB as a “bad case of misguided dogma when employers and adult learners need a good spread of provision across sectors and the country as part of the pandemic retraining and recovery effort”.

Asked if it was concerned that 14 of the 88 winning bidders had never been inspected by Ofsted, the DfE reiterated its policy that new providers will normally have an early monitoring visit from the inspectorate, but that these could take two years to be conducted.

The DfE added that, as the government transitions to the reforms set out in the Skills for Jobs white paper, ITPs will “continue to have an important role to play in delivering adult training and skills”.



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