MPs given clearest public indication yet of u-turn on apprenticeship funding cuts

Top skills mandarins have given the clearest public indication yet that they will reverse huge apprenticeship funding cuts exposed by FE Week for disadvantaged 16 to 18 year-olds, during a bruising encounter with the Public Accounts Committee.

The cuts were raised in this afternoon’s evidence session by Bridget Phillipson, MP for Houghton and Sunderland South, with committee chair Meg Hillier (pictured above) subsequently welcoming the response from top skills civil servants during an exclusive interview.

It comes after FE Week revealed yesterday that the Skills Funding Agency is understood to have gone some way to address the framework rate cuts in their final plans, due for publication later this month.

Ms Phillipson asked about the impact of proposed reforms that would see funding for 16- to 18-year-olds in some of England’s poorest areas cut by up to 50 per cent for starts from May 2017, as highlighted by FE Week research and our subsequent #SaveOurApprenticeships campaign.

Sir Martin Donnelly and Jonathan Slater during the hearing
Sir Martin Donnelly and Jonathan Slater during the hearing

Jonathan Slater, permanent secretary to the Department for Education, said in response 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”.

Ms Hillier told FE Week afterwards she was pleased that it “looks like the civil servants will be looking at funding for 16- to 18-year-old apprenticeships again”.

She continued: “They need to do that otherwise there will be areas of the country that will lose out on the benefits of apprenticeships.”

She warned that her committee would hold the officials to account to “make sure the money for apprenticeships is spent wisely”.

david-hill-paul2
David Hill giving evidence

Ms Hillier added her committee would hold the officials to account in the coming months to “make sure the money for apprenticeships is spent wisely”.

Earlier in the session Mr Slater was questioned on contingency planning for the apprenticeship reforms, after last month’s National Audit Office report highlighted this as an area that needed urgent attention.

Mr Slater said it had been “a good challenge from the NAO, and the team have been cracking on putting each of those into place.

He commented: “I’ve seen some very detailed contingency plans submitted since then.”

peter-lauener
Peter Lauener before the PAC

The mandarin added he had been told by the chief executive of the Infrastructure and Projects Authority, the body that oversees delivery of major projects across government, that they were “on track” for contingency planning.

Other witness at the hearing included Sir Martin Donnelly, who is now permanent secretary for the Department of International Trade, but headed-up the Department for Business, Innovation and Skills until June this year.

David Hill, director of apprenticeships at the Department for Education, and Peter Lauener, chief executive of the Skills Funding Agency and Education Funding Agency, also gave evidence.

Mr Lauener told MPs: “We consulted on the funding system for post-April 2017. It’s been a very lively consultation, lots of comments. We’re looking hard at the comments that have come back in and ministers will be considering the way ahead shortly and we expect to publish soon.” 

Employers more satisfied with private training providers than colleges

Private training providers will be patting themselves on the back this week, following Skills Funding Agency research that revealed they are significantly more popular with employers than general FE colleges.

Training providers scored a massive 83.9 per cent for employer satisfaction according to the results of the latest SFA employer satisfaction survey, while colleges’ rating was nearly ten per cent lower at 74.9 per cent.

The percentages reflect the median score for 214 colleges and 301 private training providers with sufficient employer satisfaction feedback to be counted in the ‘FE Choices’ data.

Mark Dawe, chief executive of the Association of Employment and Learning Providers, commented on the findings, saying: “These figures reflect the findings of the annual CBI skills survey and other surveys – therefore it’s hardly a surprise that independent providers account for three quarters of apprenticeship delivery.

“They are further evidence that it is futile and a waste of taxpayers’ money to try and fix the apprenticeship market to favour one set of providers over another.”

He added: “Independent training providers have always welcomed fair competition and providing we are dealing with a level playing field, they will be getting more from universities and colleges who have stepped up to the plate on employer engagement.

“No set of providers need any further subsidy to compete for apprenticeship provision.”

Mr Dawe also referred to comments from the Department for Education permanent secretary Jonathan Slater in a Public Accounts Committee evidence session on October 12, when he “repeatedly told MPs that the apprenticeship reforms would lead to a much more employer-driven system focused on quality and service”.

Mr Dawe said: “We expect employers to be able to make their choice of provider on clearly available information such as this on the Digital Account System.”

David Hughes, new chief executive at the Association of Colleges, said the result of the survey was “important feedback for colleges and providers to use to help them improve the quality of the experience for both students and employer”.

He added: “I am sure that colleges will be looking at the breakdown of this data and making sure they learn how to improve.”table-p3

For all types of provider, the Skills Funding agency survey found that 78 per cent of employers said they were satisfied with the quality of training and assessment, compared to 73 per cent last year.

A significant 80 per cent said they would recommend their provider to other prospective employers – an increase of three per cent on last year.

Furthermore, over 80 per cent of employers rated the professionalism of staff delivering their training or assessment at eight out of ten, and 79 per cent gave the same score for training courses reflecting up-to-date practices in their sector.

Employers’ ratings for how well providers understand their training needs also scored highly, with 76 per cent giving their providers eight out of ten.

The survey represented the views of more than 60,000 employers between March and July 2016, and was based on training in 2015/16.

Employers who participated in the survey were delivering apprenticeships and work based learning in a range of areas,
from construction to horticulture to animal care.

The academic year 2015/16 was the first year that employer satisfaction scores were determined by the percentage of respondents that would recommend the college or training organisation to another employer (i.e. gave a response of eight or higher out of ten to this question).

 

Hull College strike postponed following ‘positive talks’

A long-running dispute over redundancies between Hull College and the University and College Union took another twist this week, after planned staff strike action was postponed following “positive talks”.

UCU members at the college were set to walk-out on Thursday (October 13) over planned job losses.

But the union announced the day before that it had suspended the industrial action until next week (October 20).

Regional official, Julie Kelley, explained this was because there was now a chance of agreement being reached without striking.

The decision was taken “following positive talks,” she said. “Industrial action is always a last resort and we remain optimistic that this dispute can be resolved without the need for action.”

A Hull College spokesperson said: “The group can confirm that no strike action will take place [this week] and all campuses will be fully open as usual.

“This follows positive discussions with the UCU and staff to secure the required savings through a voluntary process negating any need for compulsory redundancies for academic teaching staff.”

The row follows the college’s announcement that it would make around 70 redundancies and close its three nurseries before the end of the year, to address a £2.6 million deficit.

Since 2011, the college has seen 385 job losses through redundancy, according to the UCU, who said the latest proposals “made a mockery” of what they claimed was a college promise not to cut more jobs following the last round of redundancies.

The college spokesperson said last week that it was “currently in consultation with trade unions and staff regarding a proposed redundancy programme.

“The group is also in the process of recruiting up to 45 new jobs as part of our highly successful HCUK Training commercial arm as we significantly grow our apprenticeship and commissioned work to employers.

“All of these new roles and jobs are being offered as redeployment opportunities for staff which will significantly mitigate job losses.”

Karl Turner
Karl Turner

A previous strike in May, over pay and a controversial new lesson observation system, ended in a payrise for staff and an end to the no-notice observations.

Former shadow attorney general and MP for Kingston upon Hull, Karl Turner, renewed his war of words with the college bosses last week over the planned job losses.

He told FE Week the college cutbacks would “hit students the hardest”.

The MP, who was unavailable to comment after the strike was postponed, joined college workers on the picket line five months ago, supporting the dispute over pay and the lesson observation system.

He ended up calling for an investigation into the college’s chief executive Gary Warke, after he was allegedly sent a “threatening and derogatory” letter.

The MP uploaded a copy of the letter to his blog, in which Mr Warke allegedly wrote to “express my sincere disappointment that you chose to address striking UCU members without the courtesy of informing me”, adding: “We find your actions, two days before local elections, highly inappropriate and disrespectful to the Hull College Group.”

Speaking ahead of the strike ballot in September, Mr Turner told FE Week that “redundancies have become a yearly exercise at Hull College, which will not help staff morale”.

He said: “It is deplorable that many staff found out about redundancies during the summer holidays, reducing their ability to organise effectively, and have an input in the consultation period.”

No approved assessment organisation for over half of new apprenticeships

Almost 60 per cent of apprenticeship standards cleared so far by the government for learner starts don’t have an approved assessment organisation, a Skills Funding Agency update has today revealed.

The online document showed there are only 63 standards with an approved AO to do the end point assessment.

That’s out of 147 standards that have been granted final approval by the government and are therefore available for learners to start on.

It comes after former leading skills civil servant Dr Sue Pember, said at Association of Employment and Learning Providers (AELP) annual conference in June that it was “morally wrong” to start an apprentice on a course without knowing what the end-point assessment would be.

Dr Susan Pember
Dr Sue Pember

The director of policy at adult learning provider membership body Holex, who was a senior civil servant at the Department for Business, Innovation and Skills for 12 years – including six focused on FE funding, spoke out against the lack of clarity around end-point assessment.

Dr Pember said: “I think it’s really morally wrong to start an apprentice on a programme when you don’t know how they are going to be tested at the end.

“You wouldn’t start somebody on the equivalent of an A-level without knowing the assessment at the end.”

Stephen Wright, the chief executive of the Federation of Awarding Bodies (FAB), raised concern over the summer about lack of regulation and slow progress surrounding the register of apprenticeship assessment organisations (tendering process).

He spoke out after FE Week showed in June that only three apprentice assessment organisations had been approved by the Skills Funding Agency (SFA), which first began accepting submissions to the new register in March, in the previous three months — taking the total at the time up to just 16.

Mark Dawe
Mark Dawe

Mark Dawe, chief executive of AELP, also warned about end point assessments unduly influencing teaching practices.

He said: “The end-point assessment drives behaviour and you will get teaching to the test.”

He added: “The whole thing around end-point assessment, I just think is a nightmare.

“I have heard it in so many corners now that it is a car crash that is going to happen.”

He has now called for the pace of change from old apprenticeships frameworks to new standards to be slowed down, because too many issues including how end point assessment will work remain unresolved.

He said: “The Government has committed to shutting down the frameworks over the next two years while this standards creation and approval process proceeds at pace.

“To avoid potentially disastrous consequences, AELP urges that a shutdown of a framework should only occur when the replacement standard has been properly tested and evaluated.”

Management apprenticeships – solving the productivity puzzle

FE Week’s report on the “unstoppable rise of management apprenticeships”, should be a cause for celebration as opposed to concern. For far too long management training has been a blind spot for employers – with 71 per cent of firms admitting that they fail to offer management training to first-time managers.

This is a huge mistake that urgently needs addressing. Currently UK productivity stands at 21 per cent lower than the rest of the G7, and according to OECD analysis, poor management and leadership is the number one factor affecting this total productivity gap. And research highlights how time wasted by bad management is estimated to cost business £19bn a year. This cost clearly overshadows the government’s £2.5bn budget that is pledged across the entire apprenticeship agenda by 2020.

As a nation post-Brexit, we need to be far more competitive and start investing far more in UK talent as opposed to turning to foreign workers to fill skills shortages. We clearly lack skilled managers, with historic and systemic low investment in the higher level management skills needed to drive growth. Nearly half (43 per cent) of UK managers are rated as ineffective by the people they manage, due to a lack of training.

For the sake of transparency, we must declare an interest here. The delivery of apprenticeship programmes will be through approved FE colleges, private training providers and universities, and Chartered Management Institute (CMI) qualifications and chartered status can be embedded to support these programmes. The CMI will be looking to offer an independent end-point assessment service to employers. However, as a not-for-profit professional body, we will reinvest funds from this work into our ongoing development of professional standards, in accordance with our charitable mission of creating better-led and managed organisations.

For far too long management training has been a blind spot for employers

As the only chartered professional body for management and leadership, the CMI has been supporting a strong employer-led group to pioneer the development of the trailblazer standards in management and leadership. The apprenticeship agenda offers a great opportunity for both FE colleges and private training providers, as these new standards offer pathways from level 3 team leader apprenticeships through to a chartered manager degree apprenticeship. Also in development is a masters-level degree apprenticeship for senior leaders to ensure those at the top of organisations are equipped for leading change and high performance cultures.

These programmes are being used by employers for both school leavers and for those already in the workplace. Investing in upskilling existing managers will also ensure those entering the workforce have the trickle-down impact of working for a good manager.

The rise in the number and relevance of management apprenticeships shows that leading employers are now recognising how best to drive growth. As such, it is important that the government does not restrict access to these programmes to non-levy payers. Indeed, according to the Insolvency Service statistics, poor management skills is the key reason for the high failure rate of SMEs.

As Mark Dawe, CEO of the Association of Employment and Learning Providers, rightly points out, the government needs to be careful to ensure that “critical apprenticeships such as higher level management skills for new and existing employees are also available for all employers including non-levy-payers, and those exceeding their levy pot.”

It is also important to reflect that the new high level trailblazer standards are very different to the previous apprenticeship frameworks, and require far more employer commitment to providing high quality work-based learning for the apprentices. So scaling up numbers on the new standards may take longer than the initial flurry of uptake suggest. But management will be a prize worth investing in and waiting for – if it means truly tackling our productivity puzzle.

Petra Wilton is Director of Strategy at the Chartered Management Institute

Commons debate request over funding cuts exposed by FE Week

A backbench House of Commons debate has been called for by David Lammy MP over drastic funding cuts exposed by FE Week, which inspired our #SaveOurApprenticeships campaign.

Mr Lammy (pictured above) has applied to the Backbench Business Committee to hold a three hour debate based on the findings of FE Week’s exclusive analysis, which showed that 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.

The committee meets every Tuesday at 2:30pm to consider representations from members for debates in backbench time, and Mr Lammy tweeted details of his application this morning ahead of the hearing over his application.

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

Mr Lammy said in his tweet that there were “serious questions” for the government to answer on the issue.

The motion for the debate made a point of noting “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 follows 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, the FE Week #SaveOurApprenticeships campaign against the devastating cuts was launched at the Houses of Parliament to a packed gathering of sector leaders and senior politicians.

Mr Lammy delivered a rousing speech at the launch, and responded to Theresa May’s comments from Prime Minister’s Questions, which she said she did not recognise the situation in apprenticeship funding.

He said: “It’s an absolute scandal for the PM to say she doesn’t recognise the figures. It’s her funding agency, they’re her figures.

“They are launching a two-tier system. If you are 16 to 18 in Tottenham, if you live in poorer areas, you will get a very different product indeed from those living in the leafy shires.”

He also insisted “we will force a U-turn.”

Gordon Marsden, the shadow HE and FE minister, who hosted the event, warned that the cuts are “an elephant trap in his [Mr Halfon’s] in-tray”.

Shadow education secretary Angela Rayner also backed #SaveOurApprenticeships during an FE Week rally at last month’s Labour Party Conference.

The campaign was also repeatedly name-checked during Commons education questions yesterday, by Mr Marsden who called the funding plans a “shambles”.

Apprenticeships and skills minister Robert Halfon replied: “We’ve been saving two and a half million people on apprenticeships over the past five years.

“If that’s not saving apprentices, I don’t know what is.”

 

Update: Mr Lammy put his case for the backbench debate to the Backbench Business Committee shortly after 2.30pm.

He was thanked by members for the application and told a decision will be made on whether or not to hold the debate in due course.

 

Government set for u-turn on apprenticeships funding cuts

Controversial plans to slash apprenticeship funding rates for young people in deprived areas are set to be reconsidered by the government, in what would be a huge success for FE Week’s #SaveOurApprenticeships campaign.

Jonathan Slater
Jonathan Slater

FE Week understands the Skills Funding Agency has gone some way to address the framework rate cuts in their final plans, due for publication later this month .

The u-turn follows growing anger expressed by politicians, employers and providers since FE Week analysis of the provisional rates, published 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.

The message has been driven home by our campaign launched last month in the Houses of Parliament.

It comes as a number of the most senior civil servants involved with FE and skills are preparing to answer questions before the House of Commons Public Accounts Committee.

martin-donnelly
Sir Martin Donnelly

The eagerly anticipated oral evidence session will begin at 2.30pm tomorrow, with a key witness set to be Sir Martin Donnelly, who is now permanent secretary for the Department of International Trade, but headed-up the Department for Business, Innovation and Skills until June this year.

Jonathan Slater, permanent secretary for the Department for Education, will also face questions, with David Hill, director of apprenticeships at the Department for Education, and Peter Lauener, chief executive of the Skills Funding Agency and Education Funding Agency, also set to face a grilling.

AAC 2016 at Birmingham's ICC.
David Hill

They are likely to be questioned over the findings of a damning report from the NAO, published last month, which highlighted a catalogue of failings over apprenticeships reform planning.

It urged the DfE to “do more to understand how employers, training providers and assessment bodies may respond to ongoing reforms, and develop robust ways of reacting quickly should instances of market abuse emerge”.

The NAO also urged the government to develop contingency plans for key parts of the reforms – particularly the introduction of the levy next April.

The committee hearing will come after Robert Halfon made his first appearance at Commons education questions since he became apprenticeships and skills minister in July.

peter-lauener
Peter Lauener

He was accused of dodging questions from shadow skills minister Gordon Marsden and Mary Glindon, Labour MP for North Tyneside, on what assessment had been made of the potential effect of the Department for Education’s proposed change to apprenticeship funding rates.

He was only willing to say: “We’ve continued to engage with employers and providers and we plan to publish the final policy shortly.”

Then Mr Halfon got his figures wrong, telling the House: “We will be spending more than double by 2020 – £2.5bn extra on apprentices.”

FE Week checked with the DfE what was meant by an “extra” £2.5bn, as it went against the government’s previous projection that the total levy yield in England will be £2.5bn by 2019/20 – which will be a £1bn increase from the current £1.5bn spending.

A DfE spokesperson admitted: “The minister worded this incorrectly. It came out incorrectly – the word extra should not have been added”.

What FE can expect from the autumn statement

If the prime minister’s vision of a fairer economy with better opportunities for everyone is to become reality, says Julian Gravatt, the government needs to carefully review FE funding.

The Treasury’s next autumn statement on November 23 this year will be Philip Hammond’s first as chancellor. The statement matters for everyone in FE because treasury decisions set the overall budget and direction.

What he will say in the statement is still a bit of a mystery, because Mr Hammond has kept his cards close to his chest. He told the Conservative Party conference this week that it will be hard for the government to deliver a budget surplus by 2020, but also that “fiscal consolidation” will continue. This is Treasury code for spending reductions or increases in tax, but it doesn’t necessarily mean new decisions to cut budgets. When the economy grows, fiscal consolidation happens simply because earnings rise and people pay more tax. Unfortunately we may not be facing good times.

The cornerstone of every big Treasury statement is the official economic forecast from the Office for Budget Responsibility . This includes projections for tax, spending and the deficit. The 2015 spending review turned out better than everyone expected, partly because the OBR revised its forecasts upwards and decided the country would be £27bn richer. This gave George Osborne, the former chancellor, room to revise spending cuts down from the 20 per cent target to something closer to 10 per cent. For colleges, this meant stabilisation in the two main budgets (16-to-18 and adults) and the promise of more money for apprenticeships.

A year on, times have changed. The referendum vote has caused the pound to fall in value and is expected to put a brake on economic growth in 2017 and 2018. Downward revisions to the forecasts spray red ink all over the spending plans, which may in turn require some fiscal consolidation in response.
Last year’s spending review could yet be rewritten 363 days after it was supposedly fixed for four years.

Everyone in the government talks about long-term planning, but they’re shackled to short-term targets. Brexit adds to the uncertainty but it may also force the government to behave differently when it comes to domestic policy.

The spending review could be rewritten 363 days after it was supposedly fixed for four years

For the last 15 years, the official growth forecasts benefited from a rising population of migrant workers buoyed by immigration. The prime minister’s vision of an open economy with higher borders will require something different, including a stronger focus on post-16 education and skills. AoC’s pitch in the autumn statement is that the government needs to increase spending in the short-term to move the country as a whole to a different setting.

We have made a number of specific proposals. The 16-18 funding rates should be increased to avert a funding crisis in academic and technical education. Apprenticeship funding rates and the GCSE funding condition should be reviewed. Tough issues related to pensions should be tackled rather than left to fester.

These are just some of the actions the government can take if it chooses. Without them, the economic and social problems exposed – and reinforced – by the Brexit vote will get worse rather than better.

 

AoC’s autumn statement submission is available on its website. Julian Gravatt will be hosting the AoC Funding Forum on November 17 at the AoC Annual Conference.

FE Week campaign against apprenticeship funding cuts raised in Commons

Major cuts exposed by FE Week to apprenticeships funding for 16- to 18-year-olds in some of the most deprived areas of the country has been raised during education questions, with our #SaveOurApprenticeships campaign repeatedly name-checked on the floor of the House of Commons.

Mary Glindon, Labour MP for North Tyneside (pictured above), asked during education questions what assessment had been made of the potential effect of the Department for Education’s proposed change to apprenticeship funding rates on the take-up of apprenticeships?

The question was answered by apprenticeships and skills minister Robert Halfon, who said: “The proposed apprenticeship funding policy has been designed to support an increase to the quality and the quantity of apprenticeships.

“Incentives and support for providers are included in our proposals. These will encourage the take up of many more apprenticeship opportunities by people of all ages and backgrounds, giving many people the first step on the employment ladder of opportunity.

“We’ve continued to engage with employers and providers and we plan to publish the final policy shortly.”

Shadow skills minister Gordon Marsden was then dismissive of the minister’s answer and called the plans a “shambles”.

He pushed his government counterpart for a response on the issues, and referred to FE Week’s Save our Apprenticeships campaign launch on September 14 in his question.

“He knows it’s a shambles. It’s nearly a month since he and I spoke to a full house of sector leaders in the commons and heard it from them,” Mr Marsden said.

He continued: “So with no proper impact assessment of these cuts and government’s credibility on the line, why, a month on, has he still no solutions to those cuts or funding?”

In his response Mr Halfon name-checked the campaign.

He said: “I notice that he called his campaign ‘save our apprentices’. Well, we’ve been saving two and a half million people on apprenticeships over the past five years.”

Mr Halfon continued: “If that’s not saving apprentices, I don’t know what is.

“The honourable member is ignoring the STEM uplifts, he’s ignoring the extra money spent on the apprenticeship standards, he’s ignoring the £1,000 that’s going to every employer and every provider when they hire a 16 to 18-year-old.”

The stark drop in funding exposed by our exclusive analysis had already prompted a furious backlash – with more than 600 people posting written messages pledging support for FE Week’s first official campaign.

Our findings on the impact of apprenticeship funding reform also provoked Mr Marsden and more than 50 other MPs led by Tottenham’s David Lammy to write to the government begging for a change of heart.

Mr Marsden told Labour delegates at conference that the government needed to be “very clear” that they were being “watched very carefully”, and warned they had form when it came to “disappointing 16 to 18-year-olds over apprenticeships”.

Senior politicians from across the political divide, including skills minister Robert Halfon, who defended the cuts, previously spoke at the launch of the campaign.

It took place on the same day that Theresa May was asked about the issue during Prime Minister’s Questions, when she told the Commons that she “does not recognise” that there will be cuts of 30 to 50 per cent – even though the numbers come from her own government.