Insolvency regime will make sector financially sustainable

The insolvency regime proposed in the new bill will make sure colleges are delivering as a productive businesses as well as effective training providers, says Ian Pretty

The government’s Technical and Further Education Bill sets out proposals for a new insolvency regime for FE colleges. This is a big moment for a sector increasingly pushed to be more commercial and find better and more diverse revenue streams while simultaneously delivering the best, more productive learner experience possible.

It is no secret that there are colleges within our sector who through lack of students, lack of adequate facilities or lack of revenue are not achieving these goals. These colleges must change to live up to the promise of what further education should be, whether that be through a merger, a change in leadership, or a new strategic direction, but an option that has previously not been open to FE is that of insolvency.

The logic behind this is simple, if a college were allowed to close the provision for learners in that area would be threatened. In my view if a college is not able to fulfil its duties then the provision for learners is already threatened, already subpar, and something has to give.

The insolvency regime proposed by the government addresses an issue nearly twenty-five years in the making, when FE Colleges were transferred out of local government a new type of corporation was created but with no provision for what to do if that corporation fails to remain solvent. The central government has become a funder of last resort when these situations arise so as to protect learner access, but there is a better way, one that has been used across other public services where a continuation of service is essential such as energy, railways, housing and the post office.

Reliance on government funding has had its day in FE

A Special Administration Regime, with protecting learner access at its core, is the right way forward for the FE sector. It may never be used, and is a rare occurrence across other sectors, but it is vital that the option exist. Market forces affect colleges just as they do any business, and colleges must be responsive to them. The possibility of insolvency for colleges may force them to aim for bigger surpluses, control staff costs and cut capital spending, but also to seek new revenue streams, become more commercial and entrepreneurial. Reliance on government funding has had its day in FE, and that day is ending as funding sources change and decrease. For colleges to continue to offer the high quality provision they must, they need to look outside traditional funding sources and the Special Administration Regime may prompt them to do just that.

There are of course areas we would like to see great thought given as this bill proceeds through the Commons and then onto the Lords in the New Year. The first must be the absolute protection of the learner and an assurance that the service will continue even if, in extreme cases, the service provider does not. This must be done with thoughtfulness and care as there is no easy answer to issues such as how to ensure access for learners in rural areas, continued access to specific courses without prohibitive travel, continuity of provision and teachers during the course if the college is closing. These issues would be for the Special Administrator to facilitate answers to, and the bill addresses the importance of learner protection throughout, but they are issues that parliament should think carefully about.

Secondly, the possibility of insolvency for FE colleges may make partners such as banks, the Local Government Pension Scheme and other trading partners nervous and therefore either less likely to engage or more likely to insist on protections that are not helpful or realistic for the college. The government has a responsibility in the implementation of the insolvency regime to make sure that by offering a solution to one set of problems for financially unhealthy colleges, they are not creating another for financially healthy ones.

These challenges are not insurmountable, and the benefit of an insolvency regime to the sector is undeniable. At its best, the opportunity presented by this bill could ensure that each college across the country is delivering in the best way possible for its local community, as a productive business as well as an effective training provider.

Ian Pretty is chief executive of the Collab Group

Time to celebrate many achievements of colleges, Halfon tells conference

The achievements of the FE sector are a cause for huge celebration, apprenticeships and skills minister Robert Halfon has told college leaders.

He was upbeat in a speech this afternoon to the Association of Colleges annual conference, in Birmingham, stressing that every town should be proud of its college.

Mr Halfon, who was given the ministerial brief in July, said he was fed up with people talking down their local FE hubs.

 “We should be celebrating our FE Sector, celebrating our principals, governors, teachers, and students,” he continued.

“We should celebrate the fact that FE colleges can help so many of those on low incomes get the qualifications they need.”

The Tory Harlow MP spoke glowingly about his local college.

He said: “I’m proud to say that my views have been shaped by my own local college in Harlow over the years since I was elected as their MP.

“I have been inspired by the transformative effect the college has had on the community itself.

“I believe that colleges are not only beacons of education, but also civic institutions at the heart of our communities.

“That is why I have visited Harlow College 50 times since 2010, and why I intend to visit many more.”

Looking at the national picture, he added: “We should be proud: Out of 385 colleges; 19 per cent are outstanding, and 61 per cent are good.

“But even more significant are the statistics showing the destinations of adult students who complete FE courses: 64 per cent get jobs, 20 per cent go into further learning, and 4 per cent go on to university. 

“Now what I want is for colleges to be at the front of queue as providers for employers [of apprenticeships].”

Shadow skills ministers Gordon Marsden earlier painted a contrasting picture.

He told delegates: “The decline of the financial health [among colleges] has been quicker than many expected. Many are under pressure.

“There is so much potential in adult skills and lifelong learning, but still it seems this government is not doing enough to help.”

He referred to FE Week’s recent successful campaign for more apprenticeship funding, but said the wider situation was still uncertain.

“With the dire situation for some colleges, as well as area reviews, mergers remain high on the government agenda,” he said. “Now we have insolvency [for colleges] on the agenda.”

He warned that any resulting closures could result in students having to travel much longer distance to access post-16 education.

New FE Commissioner Richard Atkins CBE also delivered a keynote speech.

The former Exeter College principal said: “I want as many colleges as possible to be good or outstanding, and every time my team is involved in area reviews or interventions, the ultimate aim is to help establish as many high-quality institutions as possible.”

He indicated that he will be on the side of the sector through his interventions as FE Commissioner.

He said: “I’m not a civil servant. My role is to provide independent advice and guidance. We want to work with you. We’re kind of ‘how did it happen’ people, ‘what can we do to put it right’?

But he said: “It really is important that you learn the lessons and keep talking with people from other colleges here and learning from them.”

“The pressure to work together for communities is going to continue. If you do think you’ve got through it [area reviews] unscathed and can now continue in splendid isolation, I would caution you against this.”

His overall view of the sector was thought positive, and he said: “Most colleges are doing well. I do not believe the sector is in a complete mess. Sometimes they have financial challenges, some many other challenges, but most are doing well. I think that’s an important, positive message.”

Greening appeals for reforms support from across ‘technical education family’

The first Association of Colleges conference address by Justine Greening, as education secretary, saw her appeal for support with delivering reforms from across the “technical education family”.

Ms Greening, who was appointed to the post in July, called for widespread backing for the apprenticeship levy launch next April, and a slimmed down “high quality” post-16 FE system delivered in the wake of the government’s Skills Plan.

“Now is the time to focus on skills and finally put technical education on a par with academic education,” she said. “It is going to take a lot of hard work and I hope in time we can create a consensus on how we can deliver.”

“I want to see the technical education sector work collectively. It will mean FE colleges working alongside new national colleges, helping us to drive up higher level qualifications for level four and five.”

The first two of five planned new government-backed national colleges have opened to students this academic year, after £80 million was allocated by the government for the development of high level specialist training centres.

Apprenticeships and skills minister Robert Halfon last month officially opened the National College for Digital Skills, in Tottenham Hale.

And the National College for the Creative and Cultural Industries, based in Purfleet, Essex, opened to students last month.

“They [national colleges] need to be hubs with connections stretching out to FE colleges.

“They have to help bring on everyone else, similarly with University Technical Colleges, they are in the nascent stage at the moment. We need to see how the system as a whole can work together.”

The story with UTCs, which begin technical-based education post-14, has been less successful so far – with many struggling to attract sufficient student numbers.

In July Ofsted’s former chief inspector Sir Michael Wilshaw slammed UTCs, telling them that they need to make “radical improvement” if the model is to survive.

It followed FE Week research in February, which found that forty per cent of those that opened between 2010 and 2013 saw student numbers fall for the last academic year.

Host Steph McGovern also quizzed the minister on how to make schools give better careers advice on FE opportunities, as too many are focused at the moment on retaining students for their own sixth forms.

She replied: “I think we can make sure that funding is spare and students get a good idea of what is available outside of schools. Those conversations need to be backed up by the reality of a really strong offer.”

She did however concede that there is “a lot more we can do” around careers advice.

“The most important thing is around having the right strategy,” Ms Greening added. “I will then look at what it will take to ensure that is offered in schools consistently.”

Ms Greening also reflected on her own family’s experience of education.

She said: “I know from my own life what a difference education makes. When I look back at my family, my dad had no education and no skills and ended up filling vending machines.

“Although he was a great dad to me, there was so much more he could have given. Education was a liberation for me, but a trap for him.

“We need to step up now with vocational education. Most people don’t in the end follow an academic route as they leave secondary school. We have to make sure that the route they follow is every bit as strong as the academic route.”

Funding threshold will be extended, EFA director announces

Ministers have decided to extend the five per cent threshold of tolerance on the condition of funding rule into 2017/18 allocations, the director at the Education Funding Agency announced today.

Peter Mucklow told delegates at the Association of Colleges conference this afternoon (November 16) that the decision was made in recognition of the “huge effort” made by colleges and other providers on English and maths.

The condition of funding rule states that any 16 to 18-year-old student that does not have a grade C in English and maths, and fails to enrol in the subjects, would be removed in full from the funding allocations for the next-but-one academic year.

But in September last year the Department for Education announced that it would not fully apply this rule for the 2016/17 allocations, which were based on enrolments for 2014/15.

It said that the penalty would be halved, and only apply to providers where more than five per cent of relevant students (by value) did not comply with the funding condition.

Mr Mucklow said today that this tolerance would also apply to 2017/18 allocations, based on enrolments in 2015/16.

He said: “We said we would keep that under review, and ministers have decided to extend for 17/18 that threshold of tolerance, so that it applies in exactly the same way in that year.”

He continued: “The level of compliance across the whole of the English and maths condition of funding remains at 97 per cent, in terms of that 15/16 performance.

“So it’s recognising that huge effort that colleges and other institutions have gone to ensuring that students have that opportunity and ministers decided to extend that tolerance into the 17/18 allocations year.”

Julian Gravatt, Association of Colleges assistant chief executive, welcomed Mr Mucklow’s announcement.

“We are pleased that the government will be extending the tolerance on the condition of funding for one year for these subjects and this is something we called for in our autumn statement submission,” he said.

“The decision recognises the progress that colleges have made in enrolling young people on English and maths courses.”

Skills Show is the ‘future’ of Britain, Halfon says

The Skills Show is the “future of our country” that will help bridge a growing skills gap with world-class apprenticeships, Robert Halfon has said.

The apprenticeship and skills minister (pictured right) visited the fourth annual Skills Show this morning as the three-day event at Birmingham’s NEC kicked off.

Standing alongside Neil Bentley (pictured left), chief executive of WorldSkills UK – the organisation that runs the Skills Show, he said it was “one of the most important days in the skills calendar” that encompassed the very people that would help address the country’s skills deficit.

“There is a skills deficit – but we are acknowledging that and doing everything we can to improve it,” the minister said.

“It’s incredibly important to support days like this [the Skills Show] ….we are going to become an apprentice and skills nation – that is my dream.

“We must have the best skills in this country to compete with the rest of the World.

“In this hall [the NEC] is the best of Britain in terms of skills and apprenticeships – and this what our country is going to become.”

This year’s Skills Show is expected to be the biggest yet with more than 90,000 people walking through the NEC’s doors over the next three days.

The show has 530 apprentices and learners taking part in 61 different skills competitions, 50 hands-on activities, and careers advice from employers including Jaguar Land Rover, NHS Careers, IBM and the BBC.

Mr Halfon said of the show: “It is incredible. This is one of the most important days in the skills calendar.

“There is the best of Britain in this room.

“We’ve got hundreds of companies here, the public sector, skills competitors and people demonstrating skills. This is the best of the UK – this is the future of our country right here.

“You can hardly get in due the number of young children and students here – seeing what’s on offer.

“I cannot work my Sky Remote and there are young people here building robots. We have got international companies here…we have the public sector…I think it is important that we have the best skills and apprenticeships that we can offer.”

Read our full preview for what else visitors can expect at this year’s Skills Show here.

Colleges are heading towards a ‘crisis point’ in student mental health, AoC president warns

Colleges are heading to “crisis point” in mental health after more than 85 per cent reported an increase in the need for student psychological and emotional well-being help, the president of the AoC has warned.

To combat the growing problem, Ian Ashman (pictured), president of the AoC, announced a ‘year of mental health’ in colleges at the organisation’s annual conference in Birmingham today.

Addressing delegates Mr Ashman warned colleges are heading to a “crisis point” in mental health.

“It is no longer an issue about which we can play lip service,” he said. “The government has a moral, legal and economic obligation to make sure there is proper mental health support provided to everyone across the country.”

The AoC conducted its latest mental health survey in June last year where 85 per cent of colleges reported an increase in the mental health needs of students.

Latest government figures found by the AoC show 77 per cent of NHS Clinical Commissioning Groups have frozen or cut their child and adolescent mental health services or CAMHS budgets.

The association added that while many colleges across the country “work well” with their local service providers, too many are also are ignored.

“National mental health guidance too often mentions schools but doesn’t consider the needs of colleges.”

During the ‘year of mental health’, the AoC is encouraging colleges to “drive a step change in the level of support that mental health agencies provide to students, both young people and adults” as well as focusing on sharing good practice across colleges.

This support is “vital” according to Mr Ashman, who said some students have told him they are “alive today because of the mental health support they received in college and the therapeutic value of their course”.

During his term as AoC president, Mr Ashman said he will be calling on the government to partner with NHS England and Health Education England to promote good practice in engagement with colleges by local commissioners and service providers.

He will also call on mental health service providers in every area to link with their local college, accept more students referred for support and to place health funded staff in every college.

Mr Ashman also wants every college to review their practice against the best in colleges and to engage with local mental health services.

He added: “Colleges work for their communities. Let us stand together to smash the stigma of mental health. People with mental health issues are not alone and are being supported by colleges.”

Social Mobility Commission calls for school sixth form extension

The Social Mobility Commission has called for school sixth form provision to be extended and given a role in supporting FE colleges to deliver the new Skills Plan.

It has this morning published a fourth annual report – “The State of the Nation” – which warns Britain has a “deep social mobility problem which is getting worse for an entire generation of young people”.

The commission – chaired by former Labour cabinet minister Alan Milburn (pictured) – said the problem stems from “fundamental barriers including an unfair education system”.

The report found young people from low income homes with similar GCSEs to their “better-off classmates” are one third more likely to drop out of education at 16 and 30 per cent less likely to study A-levels that could get them into a top university.

To tackle the issue, the commission called on the government to extend school sixth form provision and schools given a role in supporting FE colleges to deliver the skills plan.

The recommendation is likely to be controversial in the FE sector after the Association of Colleges recently won a landmark judicial review overturning the Department for Education’s decision to fund a new small sixth form at Abbs Cross Academy and Arts College, in Hornchurch, Essex.

The case came about after the government set out new rules in April restricting the ability of academies to open sixth forms following criticism that previous policies have led to small sixth forms opening in areas without demand, consequently damaging existing post-16 institutions by taking their pupils or becoming financially unviable.

Schools must now be rated good by Ofsted and prove they will have more than 200 pupils in a new sixth form and offer a broad curriculum, with at least 15 A-levels across a range of subjects.

But Tim Coulson, regional schools commissioner for the East of England and North East London, failed to follow the government’s own rules after approving the request of the Abbs Cross Academy and Arts College, rated inadequate by Ofsted, from the Loxford School Trust, which took over the school in February.

The government’s Skills Plan, which was unveiled in July and will involve replacing 20,000 post-16 vocational qualifications with 15 new “high-quality routes”, was hot topic yesterday at the AoC’s annual conference in Birmingham.

Key government skills advisor Lord Sainsbury urged ministers to take a more realistic view of the cost of high quality technical education and increase funding, as it implements recommendations on a slimmed down system.

Sir David Carter, national schools commissioner, also spoke at the conference who said a more general approach to supporting all types of education was needed, with schools and colleges co-operating more.

Today’s “The State of the Nation” report also recommends the government scrap low quality apprenticeships, and said the number of 16-18 year olds not in education, employment or training should be zero by 2022.

The commission also said a single UCAS-style portal should be developed over the next four years so that young people can “make better choices about their post-school futures”.

Colleges can thrive despite ‘blizzard of changes’, AoC boss tells delegates

This year’s “blizzard of changes” will not stop the Association of Colleges pushing for progress over the coming months, new chief executive David Hughes has told a packed audience in his key note speech at this year’s annual conference.

Mr Hughes acknowledged that the FE sector had faced the challenges of Brexit and the appointment of new ministers – but the new chief executive, who took up his role in September, remains “optimistic”.

He reassured conference delegates that “colleges really are vital to our economy and out society”, adding “it’s time to be confident about our place in the education system and ambitious for the three million people we serve”.

He also highlighted that there will be a review of the AoC during the conference.

“We must be more transparent and engaging … much more ambitious and confident in what we are asking for”, he said.

reg-yatesMr Hughes said he believed the new education secretary Justine Greening and skills minister Robert Halfon share “a passion for this sector”, and told the audience that now is the time for colleges to “be in the spotlight”.

“I think we’re in a position to be listened to probably for the first time in years,” he added.

However, he made it clear that he thinks the state of funding for FE is still unacceptable, describing the current system as “grossly unfair”.

“We need to keep putting the case for more funding for our sector,” he said.

He also spoke about problems in English and maths teaching and the impact this has on the FE sector, with colleges “taking the brunt of a system that doesn’t work until 16 and doesn’t work after that”.

Mr Hughes said the AoC will “open up a consultation in the next week or so” and is asking college leaders for “your experiences of English and maths”.

“You want to be working with us to be setting the agenda,” he said to the audience.carole-stott

The introductory session of the AoC 2016 conference at the ICC in Birmingham also featured speeches from Carole Stott, chair of AoC, and Reggie Yates, AoC gold award winner, broadcaster and former FE student.

Ms Stott welcomed the full hall to the conference and spoke of the importance of FE.

“We are a primary route to success for millions of people,” she said.

Mr Yates spoke enthusiastically with host Steph McGovern about his own experience of FE, and the positive impact that his time at City and Islington College had on his 26-year career in broadcasting.

He also commented on plans to do more mentoring in the New Year saying that working with AoC on this project would be “fantastic”.

He advised college leaders to “invest in the individual not in the whole”, adding “no two people have the same dream”.

Lord Sainsbury demands more cash for technical education

Key government skills advisor Lord Sainsbury has urged ministers to take a more realistic view of the cost of high quality technical education and increase funding, as it implements recommendations on a slimmed down system.

His ‘Report of the Independent Panel on Technical Education’ was a key influence on the government’s subsequent skills plan, which will involve replacing 20,000 post-16 vocational qualifications with 15 new “high-quality routes”.

The comments come after former skills minister Nick Boles indicated there would not be more funding made available to make a success of the skills plan back in July.

Lord Sainsbury told delegates today at the Association of Colleges annual conference, in Birmingham, that his scheme stood more chance of succeeding than other botched government reforms in the past.

However, he stressed the new “high quality” system will need to be properly funded if it is to rival continental systems, particularly in Germany.

When asked by a delegate how he would secure the extra cash, he said: “All I can do is point out what cost is needed and do everything I can to convince the minister that this is needed. You only need to compare to more successful systems (overseas) in how much more they spend to see this.”

He added: “I want to suggest that my report has a better chance because we began by doing what I would do in business by looking at other systems and what we can learn from them.

“One needs to have a national system of qualifications that is well understood and generally accepted.

“Over 22,000 qualifications are currently on offer. Some commentators have joked about the confusing world of post-16 education as ‘if you are not confused about it then you don’t understand it’.”

He added that any talk of government being able to endow the system with parity of esteem without first ensuring its genuine currency with employers is “nonsense”, and also called for a big improvement in careers advice to help convince students vocational training’s a viable option.

Lord Sainsbury also stressed that some 16-year-olds will not be ready for the technical qualifications or A-levels, so they will require a “transition year” which also needs paying for.

Sir David Carter, national schools commissioner, also delivered a speech on the work he does.

He spoke to sixth form colleges looking to join multi academy trusts, stating it should not be viewed as the be-all-and-end-all for improving education standards.

He added a more general approach to supporting all types of education was needed, with schools and colleges co-operating more.

He said: “If we don’t have young people who leave schools with a thirst for more knowledge, to learn skills, they will find it very difficult over the next 50 years.

“I want to make sure that the trusts that we have can answer the key question – is my child getting a better education as a result of being in this multi academy trust than they were before.

“I would like to see the trusts identifying 10 year career plans for teachers. We need to capture that long term knowledge and put it back into the system so we don’t lose it forever.

“One of my responsibilities and my schools commissioner colleagues is to know what me mean by intervening. How do we capture the intellegience around the data to understand what the school really needs. Then it’s the diagnosis – ensuring we give them the best solutions.”