A man has been jailed for 15 months for defrauding New College Swindon out of almost £43,000 of Skills Funding Agency (SFA) cash — after he faked certificates that wrongly showed students had completed assessments.

Leonard Hay, of Cochran Close, Churchdown, was the manager of his own one-man company Update, Training and Vocational Services (UTVS), based in Churchdown, which operated as a subcontractor for New College Swindon.

He was sentenced to 15 months behind bars at Gloucester Crown Court, after pleading guilty to committing fraud between May 2013 and June 2014, with police calling his behaviour “deplorable”.

The Crown Prosecution Service subsequently told FE Week on Tuesday (May 10) that Hay had sent fake certificates falsely claiming that more than 40 level two and level three laboratory technician apprentices had “completed” their studies — and pocketed £42,863 in resulting payment.

A CPS spokesperson said: “Hay stated that a number [of students] had succeeded, and sent certificates to the college confirming that.

“The college then paid Leonard Hay, but the certificates were fake, and the named persons did not complete their assessments.”

A spokesperson for the college told FE Week that it had taken immediate action in 2014 as soon as it realised what Hay had been doing.

She said: “We were saddened by this incident and disappointed for the affected students.

“The college picked up the fraud through its robust control processes when staff spotted anomalies in the paperwork and certificates that were submitted.

“We took immediate action in informing the police and the SFA and had Gateway Assure in to audit our processes in dealing with subcontractors.”

She added the college had tried its best to help learners affected.

“Some of them worked in NHS organisations and some in private organisations.

“Where students have remained in the NHS sector, New College has been working very hard with them and their employers nationally to ensure that they can complete their awards and gain certification.

“This is an ongoing process as we’ve had to start assessment from scratch with them.

“Of the 44 [students affected], 22 had left their organisations, or changed roles, or were not interested in completing, and we are still working with the other 22.”

Investigating officer DC Simon Shaw was scathing in his criticism of Hay.

He told FE Week: “This case featured the theft of a considerable amount of money from the taxpayer.

“Equally deplorable, Mr Hay badly let down many students, who believed he was guiding them to a professional qualification.

“Hundreds of hours of their hard work was wasted as Hay kept the funding money for himself, leaving his students high and dry.”

A Skills Funding Agency spokesperson said: “In 2014, New College Swindon made the SFA aware that they were investigating fraudulent activity at Update Educational Services Ltd, one of their subcontractors.

“The college kept the SFA regularly informed of outcomes and the SFA reviewed the college’s audit report to provide us with assurance that public funds were protected and learner needs were being met.”

The government must do more to promote the newly-expanded FE learner loans, to avoid the danger of low take-up at the start of the new academic year, the Association of Colleges (AoC) has said.

The government announced that it would expand FE tuition fee loans to learners aged between 19 and 23 at levels three and four, and 19 and above at levels five and six, during last November’s Budget.

Applications for the new advanced learner loans will open on Monday (May 16) for courses starting from August 1.

But an AoC spokesperson told FE Week that “the government needs to do more to promote the scheme nationally, in the way they have for university loans and tuition fees”.

She said it would be “likely that take-up of the new loans will be fairly low in autumn 2016”, but suggested the numbers would “pick up once the scheme gets established”.

FE Week reported in February that the responsibility for promoting the new loans would lie with providers, after the government admitted it had no budget to market them.

Take-up of the existing FE loans for learners aged 24 and above at levels three and four has remained low since they were launched in 2013.

Figures published by the Department for Business, Innovation and Skills (BIS) in February showed that there had been 56,950 24+ loan applications so far in 2015/16, just up on the 55,100 application which had been made at the same time last year.

And figures published last October showed that just 38 per cent of the £397m budgeted for FE loans in 2014/15 was awarded, meaning that providers missed out on £250m in loan cash.

Loans for apprenticeships were scrapped soon after they were launched — after the Student Loans Company received just 404 applications in seven months.

And new research published on Thursday by BIS found that numbers of 24+ learners on courses eligible for loan funding dropped 31 per cent in the first year the loans were available.

A BIS spokesperson acknowledged that take-up of the new loans would be low at first.

She said: “We appreciate it may take a little time for colleges and training providers to adjust to the expanded loans system, but we expect to see greater pick-up in the future.”

While the government does not have targets for numbers of learners taking out a loan, the spokesperson said that “over time” the new loans would lead to “an additional 40,000 learners studying for high-level technical qualifications”.

She added: “We have expanded advanced-learner loans so they are available to everyone aged 19 and over studying at level three to level six, and have ensured there are sufficient funds available to allow for increased take-up.”

The loans expansion comes at the same time as the government is consulting on introducing maintenance loans for FE learners aged 19 and above at levels four to six.

The consultation opened on Mar 24 and runs until June 16.

The government has announced a taskforce to help more people with learning disabilities to access apprenticeships — but admitted that it has yet to finalise the people who will make it up even though it is meeting this month.

The announcement comes just two weeks after shadow skills minister Gordon Marsden put a written question to his government counterpart Nick Boles (pictured), asking “which groups he has met with and plans to meet with to discuss the importance of apprenticeships and other technical education for young people with disabilities”.

The taskforce was announced on Monday (May 9), and current plans are to meet three times during May and June — “once to identify issues, then to explore solutions and finally to form recommendations to make to ministers”.

The taskforce will be led by Paul Maynard, the Conservative MP for Blackpool North and Cleveleys, and will include employers, training providers, charities and educational experts. However, a spokesperson for the Department for Work and Pensions (DWP) has admitted that the group’s full roster was “yet to be decided”, adding that it “will be announced soon”.

FE Week understands the Association of Employment and Learning Providers (AELP) has been invited to take part.

The government said the taskforce is designed to support the drive to create three million new apprenticeships by 2020, and halve the disability employment gap.

Only six per cent of people with learning difficulties are currently in employment, according to government statistics.

Learning and Work Institute chief executive David Hughes (pictured) has also expressed interest in the initiative.

He said: “Apprenticeships can and should be an attractive and inclusive route into work and training for people with learning difficulties and disabilities. I look forward to helping the taskforce.”

For shadow skills minister Gordon Marsden (pictured left), the taskforce has been a long time coming and the announcement “follows sustained campaigning from Labour and disability groups”.

He said: “We have already submitted agenda thoughts for this taskforce.

“These include issues around dyslexia, low current support for disabled people from DWP, and the need for the new Institute for Apprenticeships actively to take up access for disabled groups as a high priority.”

Philip Connolly, policy and development manager for Disability Rights UK (DR UK), welcomed the taskforce’s creation, but said his organisation “would wish to see it have a broader focus that also includes older potential apprentices and disabled people with fluctuating conditions”.

He said that DR UK had not been invited to get involved in the taskforce, but had been asked by ministers for its views.

Mr Connolly added: “We are concerned about the make-up of the taskforce, and wish to see disabled people, particularly people with learning disabilities, in the membership.”

Dr Caroline Allen, (pictured) chief executive officer of Orchard Hill College & Academy Trust, a family of specialist providers, also warned that “changes to the apprenticeships framework will need to be carefully thought through, to ensure they provide the flexibilities needed to make this positive initiative successful”.

Tim Nicholls, policy manager at the National Autistic Society, said that unemployment remained “a huge problem” for autistic people in particular.

He said: “We’ve been campaigning on this issue with autistic people,
encouraging the government to do more to increase employers’ understanding of autism, and the small changes they can make to open up the workplace to autistic people. Apprenticeships should play a key part in this.”

The first ever standalone university technical college (UTC) to be hit with a financial improvement notice must draw up a recovery plan and explain how it will increase student numbers.

The notice to Daventry UTC was sent to trust chair Professor Nick Petford on April 14, but was only officially published by the Education Funding Agency (EFA) on May 6.

The EFA issued the notice “as a consequence of the trust failing to balance its budget” and because the UTC was forced to seek “additional financial support”.

Daventry, a 14-to-19 vocational institution, was ordered to provide a “robust deficit recovery plan” based on “realistic pupil numbers” and to outline how it intends to attract sufficient pupils to “ensure future viability during the recovery period and beyond”.

Figures obtained by FE Week through Freedom of Information requests made earlier this year show that Daventry has been running at 25 per cent capacity this academic year.

It had just 151 students enrolled in 2015/16, down from 169 in 2014/15 — despite a capacity of 600.

Reflecting on the notice to improve, the principal of Daventry UTC, David Edmondson, told FE Week: “Lower student numbers than anticipated has impacted upon the income stream during our establishment.”

But he added: “A robust plan is in place to address this.”

This news comes after a separate academy trust, which administers one UTC, was handed a financial notice to improve in March, as reported by our sister paper FE Week.

Bright Futures Educational Trust, which runs nine schools in the north-west, including Wigan UTC, was told it must improve its “weak financial position and financial management” or face closure.

The trust was ordered to repay an advance of funds it received from the EFA to plug finances at Wigan UTC and another of its schools, and achieve a balanced budget by 2017/18.

Publication of the Daventry UTC notice came days after UTC Lancashire became the fourth college of its kind to announce it would be closing its doors due to low student numbers.

It said in a statement on May 3 it would close for good at the end of this term — just three years after it opened — due to difficulties in enrolling enough students “to secure future financial viability”.

Central Bedfordshire UTC announced in March that it would close in August, after admitting it had not been able to attract sufficient pupils.

Hackney UTC closed in July 2014 after problems attracting learners, and Black Country UTC closed its doors in August 2015 after a “disappointing” Ofsted inspection and low student numbers.

Charles Parker, chief executive of the Baker Dearing Trust, which promotes UTCs, said: “It is still early days for many UTCs and recruiting students aged 14, which requires them to change schools, remains a challenge in some areas.”

He added: “Over time most UTCs are becoming an established part of the local community, with high enrolment rates.”

A second standalone university technical college (UTC) has been handed a financial notice to improve over an “apparent loss of financial control”.

The notice to Buckinghamshire UTC was sent to interim principal Tony Withell on May 5 and published by the Education Funding Agency (EFA) today (May 13).

It was issued as a result of the 14 to 19 vocational institution “accruing a significant deficit” and “experiencing cashflow difficulties for 2016/17” which would require an advance of EFA funding, and failing to ensure “robust financial management, control and oversight”.

In a letter to accompany the notice, Sue Baldwin, the EFA’s director for academies and maintained schools, said: “I must be clear however that we are concerned by the apparent loss of financial control, the failure of the trust to balance its budget and the circumstances in which the requested advance for 2016-17 has become necessary.”

Mr Withell told FE Week: “Good financial management at Buckinghamshire UTC is an absolute priority and we are in discussions with the EFA about this matter.”

He added: “We have ambitious targets for recruitment for the autumn; in the meantime we continue to deliver a high quality technical education pathway for our students, equipping them with the skills and knowledge they need to go onto higher education, training or employment.”

Figures obtained by FE Week through Freedom of Information (FOI) requests made earlier this year show that Buckinghamshire UTC has been running at just 21.7 per cent capacity this academic year.

It had just 130 students enrolled in 2015/16, down from 150 in 2014/15 — despite a capacity of 600.

Today’s notice now means that the five UTCs with the lowest numbers of learners relative to overall capacity, as shown by FE Week’s FOI figures based on UTCs that opened between 2010 and 2013, have all either announced they are to close or are in financial difficulties.

Daventry UTC, which, with 151 out of a possible 600 learners, is 25 per cent full became the first standalone college of its kind to be issued a financial improvement notice, published by the EFA last Friday (May 5).

UTC Lancashire, which has 113 out of a possible 800 learners, meaning that it’s just 14.1 per cent full, announced on May 3 that it would be shutting up shop in August.

That announcement came after Central Bedfordshire UTC, which is 16.8 per cent full with just 101 out of a possible 600 learners, announced in March that it would close in August.

And the trust that Wigan UTC is part of, Bright Futures Educational Trust, was hit with a financial notice to improve in March. Wigan UTC has lowest proportion of learners compared to capacity, at 70 out of 500, or 14 per cent.

Today’s notice to Buckinghamshire UTC ordered it to carry out an “external review of financial management and governance” by June 30.

This review should look at whether it “has the right mix of skills and experience to oversee the financial recovery and ensure value for money” and consider “the option of joining a multi-academy trust”.

The notice also ordered the college to “urgently review” its finances and to have its financial recovery plan validated by “someone with both educational and financial expertise” to “test the viability of your curriculum offer against the financial constraints”.

LATEST: Nescot accepts former £360k a year principal was unfairly dismissed

The college with the best-paid principal in the country initially understated her salary to the Skills Funding Agency (SFA) by £27,000 — before accurate figures revealed that she earns £358,000 a year.

The salary of Sunaina Mann, principal and chief executive officer of the North East Surrey College of Technology (Nescot) Group, was initially listed as £331,000 in 2014/15, according to data made available by the SFA in March.

However in updated data released on May 11, Ms Mann’s salary took a considerable jump of £27,000, up to a total of £358,000.

This figure — which the college has confirmed to FE Week is still being paid — makes Ms Mann the highest-paid principal in the SFA’s college accounts.

Her salary is almost three times the average wage — around £130,000 — paid to college leaders over the same period.

A spokesperson for Nescot confirmed that there had been no recent changes to Ms Mann’s role, and claimed that the initial, lower figure had come from “the college’s draft financial statements at the time”.

She said: “In the first version of the college accounts data, released in March 2016, the salary of the principal and chief executive was shown as £331,000, which was the figure included in the college’s draft financial statements at the time.”

Ms Mann’s current salary has risen 139 per cent since 2013/14, when she was paid £150,000, according to the SFA.

Nescot is currently in its third year of involvement with the Saudi Arabian Colleges of Excellence programme.

In September 2013, Nescot set up a female college in Jeddah as part of the scheme, which promotes technical and vocational education in the region.

FE Week asked Nescot about the programme when the original salary figures were released in March.

At the time, a spokesperson for Nescot said she was paid more.

“Sunaina Mann is the principal and CEO of the Nescot Group, which includes Nescot and the Jeddah College of Excellence. Her salary in 2014/5 was £363,000,” she said.

Clarifying the situation this week, the spokesperson confirmed that the £363,000 “referred to in March 2016 included £5,000 of benefits in kind, as confirmed in the published audited financial statements. These benefits relate to private medical insurance”.

Natalie Bennett, the leader of the Green party, meanwhile complained about college principals’ salaries at a parliamentary event on Wednesday (May 11).

She said: “There’re a few people in FE who really haven’t got much to worry about.

“Some college heads are on more than £200,000 a year. I’d love to know how you could possibly think about justifying that.

“They’re actually paid more than the Prime Minister. I know running an FE college is a very difficult job, particularly at the moment, but I’m not sure it’s more difficult than being the Prime Minister.”

A controversial new data dashboard could cut costs incurred by the Skills Funding Agency (SFA) by almost two thirds — but FE leaders fear the extra financial burden will simply fall on them.

The Qualification Achievement Rate (QAR) data dashboard was branded a “fiasco” by sector bosses in an FE Week story last month, when they suggested the changes had been a waste of money.

In its answer to FE Week’s Freedom of Information request over development costs, the SFA said that the QAR’s ‘Birst’ data dashboard cost a one-off sum of £153,000 to develop in 2014/15, but would subsequently require only £58,000 per year to run.

The SFA claims that this should result in annual savings of 65 per cent, when compared with the £164,000 the old system cost in 2013/14, using multiple PDF annual reports that were sent out to providers.

However, sector representatives told FE Week that they are worried the new dashboard could shift the burdens of time and expense onto them.

One college principal, who did not want to be named, blasted the new database, saying: “This may have produced a significant cost saving for the SFA, but savings for the sector as a whole including the providers might not be so clear.”

There is a possibility, he insisted, that the new system would actually create more work for providers, as they hunt for the relevant information among listings for many other organisations.

If this were the case, he said, “all the SFA have done is made central savings and passed the expense onto the provider, with the net effect that the sector is actually worse off because of these changes”.

Meanwhile Stephen Hewitt (pictured below), strategic funding and examinations manager at Morley College, said that the length of time that “senior management spend looking for things on the portal that previously would have been clear in front of them on old PDF-style reports” could add major time costs.

In April, FE Week reported that the SFA would be improving its tool for viewing QARs, following complaints from providers about missing information.

Graham Taylor, principal and chief executive of New College Swindon made his feelings known in an article for FE Week in April, when he described the changes as a “fiasco” which have arrived after “an interminable delay”.

“It’s full of unnecessary terminology changes,” he wrote.

A spokesperson for the SFA said the 2014/15 QAR reports were developed through the data dashboard “as part of on-going SFA budget constraints and drive for efficiency savings”.

She said: “Traditionally providers would have received approximately 900+ PDF reports via a large zip file hosted on the provider gateway.

“This method of production and deployment was both inefficient and costly.”

The SFA consulted with providers in September last year on “the design of an alternative reporting solution”.

The result of this consultation, she said, means that “the cost of the new reporting solution, although higher in the first year, still offers significant savings over the traditional reporting method.

“Hosting Birst through the HUB is part of SFA’s strategic solution of which QAR is but one product that uses this service.

“Therefore there are no additional costs in hosting QAR in the HUB.”

> ‘Valuable analysis’ shows 20 per cent of adult funding being spent on learners outside region of the provider
> Skills Minister warns SFA that ‘contracts spanning multiple geographic areas…may become less appropriate’

Ahead of funding devolution, exclusive FE Week analysis of Skills Funding Agency figures published this week has found close to £300m (20 per cent) of adult funding, excluding apprenticeships, is being delivered to learners living outside the region in which their provider is based.

The average out of area funding for colleges in 2014/15 was 16 per cent, with ten colleges using more than half of their budget for learners not living in their region.

This revelation comes after Nick Boles also said in his grant letter to the Skills Funding Agency (SFA) that Adult Education Budget “devolution deals will provide specific localities with the power to make their own funding decisions and it may become less appropriate to let large national contracts spanning multiple geographic areas”.

The warning was passed onto providers by SFA boss Peter Lauener when he shared the out-of-area figures and said in his 2016/17 allocation letter to providers that: “As we move to local commissioning and devolution, commissioners will expect local resources to be deployed to support their local area.”

The figures, shown here for the first time by provider type, also show more than half (58 per cent) of all private provider learners came from beyond their head office areas — which amounts to £115.5m funding.

The figures produced a passionate reaction from providers highlighted by FE Week as most vulnerable to the reforms, and bolstered the Association of Colleges’ call for delay to the reforms.

Janet Meenaghan, principal and chief executive of New College Stamford, which had 72 per cent of funding for out of region learners, said: “As a college which is sited in the south of Lincolnshire, but located close to the borders of four other counties, devolution poses particular issues for us.

“Employers, students and parents don’t recognise boundary lines on maps. They want to access high quality education and training which best suits their needs.”
John Taylor, joint managing director at Birmingham-based Access to Music Ltd, which had an even higher proportion of learner funding out of region (87 per cent) warned: “This could lead to a ‘postcode lottery’ for students studying with us.

“We would strongly urge a pause on implementation to allow further consultation.”

James Bishop, managing director of West Berkshire-based The Skills Partnership Limited, with 100 per cent out of home region learners, said its administrative hub office location was “generally of secondary importance”.

This compared to “establishing if we could demonstrate we were able to respond effectively to a particular region’s priority training requirements”.

The highest proportion (76 per cent) for a college was for Eastleigh College, and principal Jan Edrich said: “It’s in the interests of employers and economic growth that this delivery is not compromised by the implementation of overly restrictive commissioning arrangements.”

But Dan O’Keefe, managing director at TQ Training, which had 99 per cent out of area learners, said: “We have been based in Northamptonshire for 21 years, and the location was chosen as it’s in the middle of the country, so it enables us to service clients across England.

“The proposed [devolution] approach is not dissimilar to regional contracts which existed until 2010, where providers would have up to nine contracts for each of the nine different regions.”

Mark Dawe, chief executive of the Association for Employment and Learning Providers, said: “FE Week’s valuable analysis clearly shows the complexity of local and national provision, which includes specialism and the need to meet the demands of regional and national employers.

“It’s very important devolution and the area reviews take account of this.”

The Association of Colleges would not be drawn on the matter this week, other than to say: “It is up to each college to decide how they deliver their non-apprenticeship adult courses to ensure the most suitable provision for their students and employers.”

But its assistant chief executive Julian Gravatt admitted in Edition 173 he was concerned the government had not finalised how devolution would work for provider groups based in multiple regions.

He said: “It would be better to delay the budget devolution rather than move ahead with half-completed plans.”

It is unclear the extent that the out of region figures result from subcontracting, but Mr Lauener also told providers: “In understanding the pattern of delivery, you should give specific consideration to the provision you sub-contract and how much of it is outside your immediate commissioning area(s).

“We will share information on where your sub-contracted provision is delivered with areas that have a skills devolution agreement or a skills incentive pilot.”

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Editorial: Out-of-area but not out-of-time

Those of us in FE with even short memories will remember that the Learning and Skills Council (LSC) was scrapped, along with 47 local LSC councils, to remove their planning role.

It is therefore something of a return to the past with devolution of the Adult Education Budget (AEB), with providers facing even greater learner postcode scrutiny.

But new SFA figures crunched by us this week expose the challenge new local commissioners will face.

When they get their hands on the budget, why would they want to pass it on to providers spending it on learners living in another area?

They won’t, so in the absence of a national provider funding system we can expect major upheaval, particularly for colleges and training providers based near to area boundaries.

The end result may be a better one, with less subcontracting and more focus on colleges, in particular, supporting their local community.

But the SFA figures understate the issue, as they are based on the nine regions in England rather than the near 40 commissioning areas.

Any provider expecting a degree of stability over the coming years from the £1.5bn AEB budget will be sorely disappointed.

Devolved commissioning will be complex and the potential for unintended consequences are great.

So before opaque chaos reigns, if not delay then let’s at least be sure there is sufficient time for well-run consultations and pilots.

Nick Linford