College asset stripping fears eased by area review guidance

Fears that private equity firms could be allowed to asset strip failed colleges have been eased, with the publication of key area review documents by the Department for Education.

A draft version of one of the documents – the due diligence framework – seen by FE Week in June included ‘Acquisition of an FE college by a private sector organisation’ in the list of post-area review transactions, or outcomes, that could require due diligence.

This had raised the alarming prospect that private companies would be able to buy up failing colleges in the future.

But in the version finally published yesterday all reference to ‘acquisition’ had been removed.

In its place was a short paragraph entitled ‘Partnership with a training provider’, which said: “A college may look to form a strategic partnership with a training provider to better meet the needs of the local area.”

The earlier version of the document read: “Private sector organisations such as private training providers may be interested in the acquisition of FE colleges.

“They may have different benchmarks and parameters as to what is acceptable in terms of both curriculum and financial performance of the college involved.”

As reported by FE Week, these words prompted alarm from former Association of Colleges’ chief executive Martin Doel, who said that private companies should not be able to “asset strip” colleges or “pick and choose students or courses according to how much profit they might generate”. 

And shadow skills minister Gordon Marsden said it would be “wrong” if the government was “just able to run a fire sale”.

Gordon Marsden
Gordon Marsden

The due diligence framework, which is designed to help colleges carry out appropriate due diligence into any restructuring or changes emerging from area review process, was one of a number of documents published by the DfE yesterday.

According to the framework, due diligence “can be defined as the process by which one party conducts inquiries into the affairs of the other party for the purposes of timely, sufficient and accurate disclosure of all material statements/information or documents which may influence the outcome of a proposed restructuring”.

Other documents to come out yesterday included the implementation guidance, which listed the different phases involved in implementing area review recommendations, as well as key issues that colleges will have to consider.

The DfE also published updated versions of the guides to the restructuring facility, through which colleges can apply for financial support to cover the costs of implementing area review recommendations, and for sixth form colleges that want to apply to become an academy.

Separate guidance for local authorities and local enterprise partnerships on their role in the area reviews was also released yesterday.

A DfE spokesperson declined to comment on the specific reasons for the changes in the due diligence framework.

Instead she said: “There are of course going to be differences between the draft and final versions.”

Four new FE Commissioner reports published by DfE

A college has been slammed for its “dysfunctional” leadership, in one of four new FE commissioner reports to have been published by the Department for Education.

The damning report into Mid Cheshire College, dated April 2016, came after it was rated inadequate by Ofsted in January – but before the resignation of then-principal Richard Hollywood in June.

It is one of four reports into visits carried out earlier this year by Sir David Collins (pictured above) and his team, but apparently only published by the DfE on Wednesday (October 19).

The other three inspection reports are for Stafford College, City of Liverpool College and West Sussex Council.

The report into Mid Cheshire blasted the college’s leadership, and recommended placing the college into administered status.

It said the senior leadership team “as a whole appears to be dysfunctional”.

The report added: “We cannot be confident the college has sufficient capability in governance and management to resolve its problems.”

It also criticised the college for being “inward-looking, failing to take sufficient account of the changes affecting the sector”.

In a letter to college chair Sandra Middleton, dated June 14 and published alongside the report, former skills minister Nick Boles said the board should “review its own effectiveness”, and stressed the urgent need for the college to “seek merger with a strong partner”.

As reported by FE Week, the college is part of a planned four-way merger with West Cheshire College, South Cheshire College and Warrington Collegiate.

The City of Liverpool College was also reported on by the commissioner, who explained: “Following an improved Ofsted grade (‘requires improvement’) in April 2014, and improved financial performance (‘satisfactory’) in 2013/14, the college exited [initial] FE Commissioner intervention in December 2014.”

But it added: “In January 2016, the college informed the SFA of the urgent need for £2 million of exceptional financial support to cover working capital requirements in February and March 2016”, meaning further intervention by the commissioner was deemed as required.

The conclusion was ultimately encouraging for the college leadership.

It pointed out that: “Faced with a significant loss of agency funding, the college adopted a financial strategy involving both expenditure reductions and increases in income. Neither have been fully realised in-year.”

But the college “might reasonably be expected to have identified the need for support earlier in the financial year”, but “the college’s leadership also has the capacity and capability to secure the college’s financial recovery”.

West Sussex County Council came in for fierce criticism over its poor management of students safeguarding in another FE Commissioner report just out.

Its adult and community learning service is delivered under a contract for services by Aspire Sussex Limited, an independent company that “spun-off from the council in November 2012”.

The commissioner’s team was sent in following an ‘inadequate’ Ofsted rating for its most recent inspection in November 2015, which raised concern the council was not fulfilling requirements, as the contract holder, over safeguarding, and failing to “adequately manage and monitor provision”.

His report agreed and called for this to improve, stating: “The council had failed to recognise that… it retained full responsibility for standards of governance, including strategic direction and for the safeguarding and risk management of a large cohort of potentially vulnerable adults.”

“As a consequence, while Aspire has continued to deliver good teaching and learning and outcomes, the intimate connection which ought to exist between the council’s policies and intentions towards the community, and practices followed by Aspire, has been broken.”

Merger with another college was the main recommendation to come out from the FE commissioner’s intervention report into Stafford College.

It said: “That within the parameters of the current area review the college should pursue the agreed Type B merger with Newcastle-under-Lyme College.”

Most of the recommendations related to the planned merger, but also included a call for “close attention” to be “paid to addressing inefficiencies in the college”.

In his letter to Stafford College chair Mark Winnington, dated July 11, Mr Boles said: “It is clear from the stocktake assessment that good progress is being made in responding to the commissioner’s recommendations.”

SFA approve just 13% of apprentice assessment organisation applications

Organisations applying to the government’s new register of apprenticeship assessment organisations are being turned away because their plans for end-point assessment are not up to scratch, according to the new interim chief executive of the Institute for Apprenticeships, Peter Lauener.

Mr Lauener (pictured above right), who is also chief executive of the Skills Funding Agency and Education Funding Agency, told the Sub-Committee on Education, Skills and the Economy today (October 19), that the SFA has “knocked back quite a lot” of applications because they failed to meet the correct standards.

During the hour long meeting, which focused on a number of aspects of apprenticeship reform, he said: “We’ve knocked back quite a lot where we’ve said we don’t think they actually meet the laid down standards, because the quality of the end point assessment is absolutely critical to the quality of the apprenticeship.

“We’re working quite closely with a number where there has been a near miss that we expect to meet the standard for end-point assessment shortly, and there are a quite a lot of applications in the pipeline as well.”

Mr Lauener confirmed that just 21 organisations have made it onto the register so far, out of 161 applications since the start of the process.

Sally Collier, chief regulator at Ofqual (pictured above left), also addressed the topic of end-point assessments during the meeting and announced that the qualifications watchdog will be running workshops to help employers with developing assessment plans.

She warned against the “unintended consequences of creating quite complex assessments” and added that Ofqual are “looking at a series of risks to the system”.

Ms Collier said: “We’ve looked a 24 assessment plans – we’ve said that half of them, we are willing to regulate them as good standard assessments.

“What we’re saying to the other twelve is, we think you need to approach this differently, or we think the grading system needs to be slightly different, in order to bring them all up to that standard.”

The discussion comes after FE Week reported on Friday (October 14) that there are currently no approved awarding organisations for over 40 per cent of learner starts on new apprenticeship standards.

FE Week’s research showed this applies to 1,790 (42 per cent) out of the total number of starts (4,240) so far on the employer-developed programmes.

The revelation provoked Dr Sue Pember, who stood down as the civil service head of further education and skills investment in February 2013, to comment: “It is diabolical to let an apprentice start a programme, without explaining not only what the end test will contain, but where it will be, what shape it will take and who will be the organisation to oversee and manage the process.”

The Department for Education admitted to FE Week that it is struggling to recruit enough of these assessment organisations, with a spokesperson saying: “We know there is more work to be done to ensure we have the range and breadth of high quality assessment organisations we need.”

He added: “That is why we are working with the Skills Funding Agency to raise awareness of the register and encourage more assessment organisations to sign up.

“On top of this, we now require all groups of employers bidding to develop a standard to commit themselves to using it.”

Parliamentary debate approved on ‘totally unacceptable’ apprenticeship cuts

A parliamentary debate on the drastic funding cuts to apprenticeships proposed by the government and exposed by FE Week has been approved by the Backbench Business Committee.

David Lammy MP put his case for the debate to the committee on October 11, in a move that gives a significant boost to FE Week’s #SaveOurApprenticeships campaign against the cuts.

He called for a discussion based on the findings of FE Week’s exclusive analysis, which showed that apprenticeship funding for 16- to 18-year-olds in some of the most deprived areas of the country could be slashed by up to 50 per cent.

On hearing that his application had been approved today for a 90 minute debate in Westminster Hall from 9:30-11:00am on November 1, Mr Lammy commented: “It is totally unacceptable that the government published these new funding rates – amounting to cuts of up to 50 per cent – during the summer recess without parliamentary scrutiny or even proper announcement.

“I am pleased that parliament will now have an opportunity to debate apprenticeships funding, and the fact that 55 MPs from across six political parties supported my call for this debate demonstrates the strength of feeling across the house on this issue.”

He added: “I will be calling on the minister to think again before pushing forward with these cuts that will do so much damage to the life chances of young people in this country, especially those from disadvantaged backgrounds”.

When asked by MPs at the committee hearing last week why he thought a debate was needed, Mr Lammy said: “I think right across the house there’s a universal desire to support apprenticeships and to increase apprenticeships

“I’ve heard on the grapevine that there has been a bit of confusion frankly between the government and the Skills Funding Agency, but I do think it’s something that has to be flushed out and I’d hope to be able to do that as soon as possible.”

Other members who have put themselves forward to speak at the debate include Neil Carmichael, chair of the Education Select Committee, Meg Hillier, chair of the Public Accounts Committee, and former shadow education minister Nic Dakin.

The motion for the debate noted “the vital role that apprenticeships play in equipping young people with the skills they need”, and welcomed “the government’s commitment to social mobility”.

However, it expressed regret that “the Skills Funding Agency’s proposed funding rates for apprenticeships from May 1, 2017, equate to cuts of around 30 per cent on average” and “that these cuts rise to around 50 per cent for those apprentices living in the most deprived areas”.

It called for a reversal of the cuts because they “directly contradict the government’s commitment to social mobility and will jeopardise the government’s plan to create 3 million apprenticeships by 2020”.

The application for the debate followed a letter written by Mr Lammy to apprenticeships and skills minister Robert Halfon in early September, calling on the government to reverse the funding cuts.

The letter, which was motivated by FE Week’s research, was co-signed by 50 members of parliament.

Then, on September 14, FE Week launched the #SaveOurApprenticeships campaign against the cuts, at the Houses of Parliament to a packed gathering of sector leaders and senior politicians.

The campaign has gathered widespread support, including from Mr Lammy, shadow skills minister Gordon Marsden, and shadow education secretary Angela Rayner.

Long-awaited area review guidance finally published

Long-awaited area review guidance and updates have finally been published by the Department for Education – three months after they were first expected.

The implementation guidance, due diligence framework and guidance for local authorities and local enterprise partnerships were all due to have been published in July.

But they were finally released this morning, alongside updated guidance and application forms for the restructuring facility and for sixth form colleges to convert to academy status, and full details of the areas and colleges involved in waves four and five of the reviews.

A letter from FE Commissioner Sir David Collins about the progress of the area reviews to date, originally sent to college chairs and principals in August, also accompanied the newly-published documents.

Today’s publication comes after Bobbie McClelland, deputy director of the DfE’s reforming FE provision unit, told FE Week’s area review summit on July 6 that the documents were to be published before the parliamentary summer recess, which began on July 21.

But they were understood to have been held up by the widespread FE-related changes to government caused by the EU referendum in June.

Despite this, as previously reported by FE Week, a draft version of the implementation guidance had been unofficially circulating among colleges since July – sparking a row over a lack of transparency in the area review process.

And DfE officials, including Ms McClelland, apparently side-stepped ministerial sign-off on the documents earlier this month, by giving presentations on the then-unpublished documents at an Education and Training Foundation area review conference.

There is still no sign of the reports into the first wave of reviews to have completed, which are understood to include full details of each review’s recommendations.

These were also expected in July, but have yet to be published.

A DfE spokesperson denied that the guidance had been delayed.

London mayor Sadiq Khan calls for government rethink on apprenticeship funding rates

London mayor Sadiq Khan has added his voice to those calling on the government to rethink proposed apprenticeship funding rates that would see cuts of up to 50 per cent for young people in the most deprived areas.

His concerns about the effect of such drastic cuts on social mobility and on young people in the capital were outlined in a letter dated October 12 to Tottenham MP David Lammy and seen by FE Week.

“I am concerned that these proposals may be in conflict with the government’s social mobility agenda and could make it more difficult to achieve my manifesto pledge of creating a fairer and more equal city, as well as achieve my commitment to create thousands of new, high quality apprenticeships that will play a vital part in securing opportunities for young Londoners,” he wrote.

“The proposed removal of both the area cost adjustment and the disadvantage uplift may result in some of the most vulnerable people from the most deprived areas of London being excluded from accessing apprenticeship opportunities on the basis of cost, and I have responded to the government’s consultation setting out the challenges the new funding system will present to London.”

He said he asked the deputy mayor for skills, Jules Pipe, to meet with apprenticeships minister Robert Halfon to discuss the funding rates.

Mr Khan’s letter comes after growing anger from politicians, employers and providers since FE Week published its analysis of the provisional apprenticeship funding rates in August.

These showed funding for 16- to 18-year-olds in some of England’s poorest areas could drop by up to 50 per cent for starts from 1 May 2017.

Last week Mr Lammy applied for a backbench House of Commons debate on the cuts, noting that the government had “serious questions” to answer on the issue.

His debate application followed a letter from Mr Lammy, motivated by FE Week’s research and co-signed by 50 MPs, to Mr Halfon in early September calling on the government to reverse the cuts.

And on September 14, the FE Week #SaveOurApprenticeships campaign against the devastating cuts was launched at the Houses of Parliament to a packed gathering of senior leaders and politicians.

Last week senior Department for Education officials gave the clearest public indication yet that they will go at least some way to reversing the proposed huge funding cuts.

During an evidence session for the Public Accounts Committee, Jonathan Slater, permanent secretary to the DfE, said that getting the funding rate correct for young people from deprived areas “is one of the most active debates we’ve been working through” and that “we’re doing our best to get that right”.

He added this issue was “a very strong point that’s been made during the consultation phase and how we get that right is one of the most active debates we’ve been working through”.

Halfon calls UTCs “incredible” despite one in 10 already shut

Apprenticeships and skills minister Robert Halfon has dubbed the University Technical College programme “excellent”, despite ten per cent of the 14 to 19 institutions closing just six years since they were first introduced.

In his first major speech in his current role, Mr Halfon told the audience of the Edge Foundation Annual lecture: “I actually love UTCs … I think UTCs are incredible.”

Speaking at Westminster Kingsway College today (October 19), Mr Halfon said he disagreed with the comments made yesterday in a Times article, entitled ‘Technical colleges flop as they fail to recruit pupils’.

He said: “The Times in my view has got it utterly wrong.

“If you just judge a school by its exams results – fine. But what you should judge a school by is the destination and whether people get jobs and skills afterwards.”

The Times’ article echoed FE Week findings from October 7, which showed that more than 10 per cent of university technical colleges are now expected to close, only six years since the first was opened.

The latest to close its doors will be Royal Greenwich UTC in London, which Greenwich Council is converting into a secondary school at a cost of £13m.

Royal Greenwich UTC will become Greenwich Trust School from next September, just two years after it opened as a 14-to-19 institute.

FE Week analysis in February showed that the college, which has a capacity of 600, had just 257 students during the last academic year – representing a 35 per cent drop from the 397 who attended in 2014-15.

Its closure marked the fifth UTC out of 48 to shut up shop since they were launched in 2010.

Our February investigation discovered that student numbers had fallen at 40 per cent of UTCs that opened between 2010 and 2013.

Four other UTCs – UTC Lancashire, Central Bedfordshire UTC, Hackney UTC and Black Country UTC – have all closed with reports of low student numbers.

The Department for Education meanwhile confirmed last month that a proposed UTC developed in partnership with Burton and South Derbyshire College would not now open, despite the £8m the government had already spent setting it up.

Just last week, Heathrow Aviation Engineering UTC was issued a financial notice to improve due to an “apparent loss of financial control”.

The UTC, which opened in north London in September 2014, has a 600-pupil capacity, but just 231 on roll as of January.

Despite these findings, Mr Halfon commented that he welcomes the work of Lord Baker, one of the founders of the Baker Dearing Educational Trust which promotes UTCs, and added that although the UTC programme “will take time” it will “show clear benefits to students in the long term”.

He admitted, however, that UTCs “can be improved”, and said that work is being done to achieve this change.

Mr Halfon kept is focus on the destinations of UTC students, which he described as “an extraordinary result”.

He said: “Over the past year, just 0.5 per cent people who have left UTCs are – in fact I hate this word – so called ‘NEETs’.

“And 44 percent have gone on to university, 28 per cent have gone on to apprenticeship and many have done to do other things. 17 per cent I think have gone into work.

“It’s an extraordinary result if you look at it in terms of destination.”

When questioned about the problems with student recruitment in UTCs by FE Week editor Nick Linford, Mr Halfon stressed that “there are over 40 UTC colleges still”.

Responding during a question and answer session after his lecture, he said: “Lord Baker is very passionate about education starting at 14 – I am looking at that.

“There is another UTC minister as you know, Lord Nash, who looks at these things.”

He added: “My view is that we look at what works, and then take the evidence from that.”

DfE confirms Richard Atkins CBE as new FE Commissioner

Richard Atkins’ appointment as the new FE commissioner has been confirmed by the Department for Education – almost a month after FE Week first reported the news.

He will take over the role from current FE commissioner Sir David Collins, who will retire in November.

Mr Atkins was principal of Exeter College from 2002 until March 2016, and retired on a high after the college received an Ofsted grade one in 2014.

He was president of the Association of Colleges in 2014/15, appointed a CBE in the most recent New Year’s Honours list for this services to FE and became an Ofsted board member in July.

Mr Atkins said he was “delighted and honoured” to be appointed the new FE Commissioner.

“I am keen to build on the work that Sir David Collins and his team have begun over the past 2 years, and to work with colleagues in colleges to develop a high-quality and financially sustainable network of colleges across England which provide the very best technical and professional education for learners, employers and local communities,” he said.

Sir David congratulated Mr Atkins’ on his appointment, and said: “Richard will bring extensive experience of further education and skills training to the role and I am confident this will prove invaluable in continuing the work of the commissioner. I welcome him to the role.”

Apprenticeships minister Robert Halfon joined Sir David in congratulating Mr Atkins.

He said: “High-quality further education colleges are engines of social mobility, creating opportunities for people of all backgrounds to get the skills they need to succeed.

“In Exeter and Yeovil, Richard has demonstrated that he is an exceptional leader.

“I am confident that he will use his skills to improve delivery and unlock opportunities for learners across the country to go further in learning and their careers.”

Alongside Mr Atkins’ appointment, the DfE has also confirmed that current deputy commissioner Marilyn Hawkins will step down from the role alongside Sir David, after leading the completion of the area review process in London.

Three existing FE advisers – Steve Hutchinson, Cindy Rampersaud and Andrew Tyley – have been promoted to deputy commissioners, bringing the number of FE deputies to five. 

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Three-way merger becomes two-way after college pulls out

A college has pulled out of a planned three-way London merger, as the remaining two colleges announce that they still plan to pair up.

The College of Haringey, Enfield and North East London had been in discussion with Barnet and Southgate College and Waltham Forest College about a possible three-way link up, but announced today that this had now been “shelved by agreement”.

Meanwhile, the remaining two colleges announced that they would soon be consulting on proposals for a two-way merger, with a planned merge date of August 1 2017.

In a statement released today, CONEL said that the sticking point in the merger proposals had been differing approaches to governance and management.

It would have preferred an “innovative group structure” with “strong local governance and management”, while the other two colleges “expressed a preference for a traditional model of merger and feel that developing an alternative at this stage would cause unnecessary delay to their merger timetable.”

In a separate statement announcing their two-way merger plans, Barnet and Southgate College and Waltham Forest College said that they “look forward to opening discussions” with CONEL “on further collaboration and other options to support skills development across London”.

Andy Forbes, CONEL principal, said the college was confident about its future.

“We are a successful college with strong roots in our local communities and this will continue,” he said.

CONEL’s chair of governors, Keith Brown, added: “We will always be open to exploring closer collaboration with partner colleges where we feel that would further improve what we can offer to learners.

“We will therefore continue to work closely with Barnet and Southgate and Waltham Forest, and other neighbouring colleges to develop London’s education and skills provision.”

Ann Zinkin, Barnet and Southgate College chair, said: “We welcome the opportunity to collaborate with Waltham Forest College. 

“We share the same objectives of building a vibrant, high quality and financially resilient college that serves young people well and meets the wider aspirations of the local communities and businesses in the area.”

Paul Butler, the chair of Waltham Forest College, said: “A single, joined up college will give us the ability to extend our training offer and deliver a wider range of high quality courses that meet the needs of young people and local, regional and national businesses. 

“We also look forward to strengthening our ties with other neighbouring colleges as we go forwards.”

All three colleges are currently involved in the London-wide area reviews of post-16 education and training, although as part of separate reviews.

CONEL is in the central London review, while Barnet and Southgate is in the west London review and Waltham Forest College is in the east London review.

FE Week understands that all the London area reviews are expected to complete in November.