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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.

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.

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.

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.

EU students will be eligible for English FE loans in 2016/17

Students from the European Union who want to study with an English FE provider in 2017/18 will still be eligible for advanced learner loans, regardless of when Brexit takes place.

The government announced this morning that EU learners applying for a place at an English “FE institutions or universities in 2017/18 will continue to be eligible for student loans and grants – and will be for the duration of their course”.

FE Week checked with the Department for Education if this will apply to advanced learner loans, which were launched for 24-plus FE learners in 2013 and extended for 19 to 23-year-olds from May, as well as borrowing for higher education courses run at colleges.

A spokesperson confirmed that it “does cover advanced learner loans”.

A DfE spokesperson said: “The decision will mean that students applying to study from 2017/18 will not only be eligible for the same funding and support as they are now, but that their eligibility will continue throughout their course, even if the UK exits the European Union during that period.”

She added the move would help give “colleges certainty over future funding, while assuring prospective students applying to study at one of the UK’s world leading universities that they will not have the terms of their funding changed if the UK leaves the EU during their studies.

“The same assurance will be available for EU students studying in FE.”

The announcement comes after prime minister Teresa May said earlier this month that she would trigger Article 50, the clause needed to start the process, by the end of March 2017.

That means the UK is unlikely to fully leave the EU by mid-2019, but the government acted now to provide clarity over FE and higher education funding for next academic year.

Julian Gravatt, assistant chief executive at the Association of Colleges, said: “The Government’s confirmation that they will continue funding for EU students studying in further education institutions in 2017/18 to continue their course is reassuring to prospective students and helpful to colleges, especially as they have already started recruiting for September 2017.‎

“Many EU nationals enrolling in college already live here.The education and training students get from college helps UK companies and public services fill skills shortages which provides wider benefits. The EU exit negotiations create lots of uncertainty about the future so it is helpful to have some short-term certainty.”

Mark Dawe, chief executive of the Association of Employment and Learning Providers, told FE Week: “This announcement is good news for the sector if it applies to advanced learner loans in particular, as any moves to provide stability over funding at the present time are to be welcomed.

He added: “The government has consulted on loans for FE and we’ve said that it should really start looking at loans for higher and degree level apprenticeships.

“The timing is right with the levy on the horizon and loans for apprentices will support ministers’ social justice agenda.”

Around 10 per cent of total advanced learner loan funding paid out last academic year by the Student Loans Company went to non-UK citizens from across the EU (£10.1m of £100.1m).

Uncertainty remains over what will happen to European Social Fund contracts as a result of Brexit negotiations— with the current round running from 2014 to 2020 worth about €3bn (£2.3bn) across England.

The ESF is cash that the UK receives, as a member state of the EU, to increase job opportunities and help people to improve their skill levels, particularly those who find it difficult to get work.

It is partly administered through the Skills Funding Agency (SFA) and its allocations in 2014/15 showed that 107 different providers received a combined total of £305,267,633 in ESF cash.

Which Party conference was more focused on apprenticeships and skills?

Skills and apprenticeships were centre stage at one of the party conferences, says Gemma Gathercole, while being relegated to the wings at the other.

By any stretch of the imagination it’s been a busy summer, from the referendum to leadership elections to the machinery of government changes. So conference season, at the start of the autumn –when almost every part of the further education system is undergoing some form of revision or review – should have been the perfect time to discuss these issues. The reality, however, was a tale of two halves.

For me the key take-away from the Labour Party conference was an internal message: a lack of focus on the issues of the day, particularly in relation to FE. Arguably, due to the need to restore party unity following a divisive summer, attention was elsewhere. In the exhibition hall, there were fewer corporate exhibitors than even last year; there appeared to be fewer fringe meetings in general and certainly the MPs were less visible. With one exception.

I must recognise and single out Gordon Marsden, who appeared to be the hardest working MP across all the fringe events. Gordon attended events covering all parts of his expansive skills, business and higher education brief. No mean feat.

However, this extraordinary effort to cover so many events masks an underlying message. The lack of visibility of other MPs indicated a lack of engagement from Labour MPs in general, over key issues that affect education, skills and productivity.

The lack of visibility of other MPs indicated a lack of engagement from Labour MPs in general

In three years of attending party conferences, we have always struggled to timetable events and to be able to cover the plethora of fringe events (seminars, debates, workshops and receptions that typically take place across the conference site and host city). This year, the number of events that were relevant for us to attend was relatively fewer and where there were a number of events on relevant topics, they tended to clash in the conference plan.

There was also limited reference to apprenticeships in speeches: just one mention from Angela Rayner and none from Jeremy Corbyn. While the broader education system was of course mentioned in their speeches, the lack of reference to approaches to current policy initiatives is a concern.

In contrast, at the Conservative conference this week education, skills and especially apprenticeships couldn’t have been higher on the agenda. As delegates ascended the staircase to the exhibition hall at the ICC, they could not miss the large space dedicated to the apprenticeship zone with FE colleges, apprentices and employers all represented. Within the exhibition hall itself, Pimlico Plumbers put their support for apprenticeships clear on their stand.

Within the fringe programme, there was an abundance of events discussing the impact of reform of the further education system. Brexit, social mobility, skills and apprenticeships were the buzzwords of conference. Robert Halfon, the new skills minister, devoted time to meeting apprentices and attended a number of
fringe events to discuss his priorities for
the role.

In her first conference speech as Education Secretary, Justine Greening was introduced by one of the apprentices from the apprentice zone, Jessica Shaw from Fujitsu. Justine Greening’s speech stated her intention to make the skills plan a big priority.

And there was one reference to apprenticeships in the Prime Minister’s speech; it may have only been about the target but words are critical real estate in conference speeches and it was important for it to be included.

There is clearly much detail still needed from the government about the massive ongoing reform programme for apprenticeships final details on levy implementation being first and foremost in this list, and critically, much more detail on the implementation of the skills plan.

But the evidence from Liverpool suggests that challenge on these issues may have to come from the sector rather than the opposition.

Movers & Shakers: Edition 185

Your weekly guide to who’s new, and who’s leaving.

Saboohi Famili has joined Epping Forest College in London as its new principal.

She joins the college following a two-year stint supporting the government of Guernsey in reshaping post-16 education in the Bailiwick.

Prior to this, Ms Famili held the position of principal at Sutton College, a provider of further and adult education, for just over four years.

Ms Famili plans to launch a programme that encourages stakeholder engagement, in order to develop a strategy for Epping Forest that works alongside the regional economy, and meets the needs of the wider community.

She hopes to create a culture of openness, innovation and enterprise, and is also keen to celebrate the diverse nationalities and faiths in the college, through planning diversity showcases and setting up displays engaging students with the Prevent agenda.

A refugee from Iran, she was forced to remain in the UK over 17 years ago, which is something she claims has shaped her “can-do” approach.

Speaking of her plans to transform the college, Ms Famili said: “My role is to turn high hopes into reality. It is what our learners, employers and community deserves, and we are going to deliver.”

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Meanwhile, Edd Brown has been appointed as operations director for quality improvement at Further Education Associates (FEA), a FE consultancy.

Headquartered in Bristol, FEA works with senior leadership teams across the FE sector to deliver services ranging from developing strategies and plans for long-term changes, to providing colleges with interim leadership and management solutions.

Mr Brown’s role will involve project-managing support programmes for colleges aiming to improve their teaching, learning and assessment practice.

He joins the FEA from his role as a teaching and learning manager at Weston College in Weston-super-Mare, which he held for six years. He spent a total of 13 years at the college, holding various roles – his first being a lecturer in sport and public services.

Speaking of his new appointment at FEA, Mr Brown said: “As a teacher I could develop the learners in my class, which was thrilling. That became thousands when I was responsible for developing teaching and learning across the college. At FEA we can now support colleges and have an impact on tens of thousands.”

Mr Brown says he is most looking forward to bringing his skills to “a national platform” in his new role.

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Jonathan Godfrey is set to retire from his position as principal of Hereford Sixth Form College at the end of the academic year, after 19 years of service.

Mr Godfrey has been at the helm of the Folly Lane campus since 1997, and during his leadership has overseen funding cuts, area reviews and a number of college accolades.

The sixth form is currently rated as ‘outstanding’ by Ofsted, and in 2006 it was awarded the prestigious ‘Learning and Skills Beacon’ status by the secretary of state for education.

Mr Godfrey says his biggest challenge during his time at the college has been dealing with funding cuts, while still maintaining a high level of education at Hereford sixth form.

Following retirement, Mr Godfrey intends to keep busy, and he’s even considering the possibility of a whole new career path. He said: “I plan to go on to something else when I leave the college. Whether that’s pursuing teaching or something else entirely, I don’t know yet.”

Area reviews: either publish guidance or extend timescales

DfE officials should be applauded, under the circumstances, for trying to support colleges as best they can by letting them see the area review guidance in draft form.

I would like to encourage them to keep the sector as informed as they possibly can, as area reviews and apprenticeship reforms press on at breakneck speed.

But Sally Hunt is also right to complain that delays with ministers signing-off on crucial documents are creating a cloak and dagger culture, with civil servants forced to covertly reveal as much as they can in advance of information being officially published.

It isn’t an ideal scenario. I understand that Robert Halfon and other ministers involved with skills want to give everything that comes before them thorough consideration, following the example of our famously careful prime minister.

But area reviews are running way behind and their own deadlines for apprenticeship reforms are incredibly tight.

Ministers either need to hasten their signing-off process, or delay implementation.

How will the new apprenticeship standards be quality assured?

We recently hosted a roundtable discussion on the benefits of the levy and our new hospitality standards, organised by our weekly trade magazine and attended by a dozen human resources directors from major national contract catering and hotel chains.

I was impressed by how these HR professionals have embraced the levy as a tool to improve their apprenticeship and staff development programmes. These multi-site and multi-brand operators have seen the levy and digital apprenticeship service as opportunities to control the diverse offerings they run through different providers and colleges across the country— which have often been operating unknown to their head office training department.

Those present enthused about the quality of the new hospitality apprenticeship standards – especially those for professional chefs. However, they were baffled as to how the quality of delivery would be controlled, and were surprised to learn that, as the employer, they would be held responsible for maintaining quality. Without any external qualification in the new hospitality standards, no-one was sure how quality of delivery would be measured, quantified or assured.

HR consulting firm People 1st has put measures into place to ensure the quality of the external assessment process, but there was nothing for programme delivery. Indeed, concerns were expressed that the apprenticeship programme could slip into a format for preparing apprentices to pass their end-point assessment tests, without providing them with the vocational skills needed for their chosen career.

Again, the role of Ofsted in the new standards was questioned. While the provider will be the first recipient of the funding in the new standards – unlike before, when the provider delivered the whole package – they now only deliver parts, provide recruitment and selection, quality-assure employers’ delivery, or even simply act as gatekeeper to the end-point assessment.

Skills training needed for civil servants

The decision to appoint Peter Lauener to temporarily head up the Institute of Apprenticeships is to be welcomed, although it weakens the premise that is independent of government. However it clearly demonstrates the paucity of top expertise Britain has in apprenticeships and work-based learning, both within the department and the SFA. While one would not expect civil servants to have actually undertaken the role for which they are implementing government policy, some expertise would help.

I’m sure the sprinkling of ex-teachers, lecturers, heads and principals in the department over the years has assisted their overall understanding of schools, colleges and universities, and of course, like their political masters, the civil service will have actually attended school and university.

Providers could second staff to the SFA

Regrettably there are no ex-apprenticeship training-provider practitioners at SFA or DfE or ETF, and no senior civil servants who undertook the apprenticeship route. This might explain some of the daft, contradictory or unworkable decisions that are emerging from SFA and DfE in the lead-up to the levy, new apprenticeship standards and end-point assessments. Several colleagues who have
left the SFA in recent years to work for private training providers continually remark that when at SFA, they had no idea
of what we actually do or the complexity of our work!

In the short timescale until the April launch, maybe some of the large providers could second suitable staff to the agency or department to ensure the levy, provider and external assessment registers, and new standards and end-point assessments are fit for purpose.

How we caused the Ofsted logo fiasco

I fear my company may have been partly to blame in the Ofsted logo fiasco. I’d asked our marketing department to promote our Ofsted grades on our publicity as I noted other training providers were doing so. When they were refused permission from Ofsted, they asked for clarification, given that other providers were doing so.

It is pleasing to hear Ofsted is reviewing its policy. Maybe if all providers and colleges were obliged to display the Ofsted logo with the latest overall grade, on all their publicity and documentation – in the same way we are required to display the EU logo – it might focus college and ITP bosses to achieve higher grades and Ofsted inspectors to justify their ratings in public… or in court.

The unstoppable rise of management apprenticeships

Management is now the third most popular apprenticeship subject, and analysis by FE Week suggests it will rocket to the top spot once the apprenticeship levy kicks in next year.

A huge 83 per cent of all 25+ higher apprenticeship frameworks are currently in management, according to the latest Department for Education data.

And the number of starts for 25+ higher management apprenticeships in the nine months between August 2015 and April 2016 has already exceeded the total for the previous 12 months, with 4,670 compared to 4,660.

This trend is not a new one. The percentage of all apprenticeships in management frameworks has increased rapidly since 2002/03, soaring from around one per cent to over 10 per cent for 2015/16.

The rise has accelerated since 24+ apprenticeships were permitted in 2007/08.

When the apprenticeship levy comes into play next April, close to 20,000 employers will have a levy pot – and for many, the easiest way to make use of this funding will be to place existing employees on management apprenticeships.

Apprenticeships and skills minister Robert Halfon has recently singled out the importance of higher and degree apprenticeships as a “ladder” to help employers bring in new talent and to improve social mobility.

But the popularity of management apprenticeships raises a new question: should large sums of government funding, much of it expected to be generated by the forthcoming levy, go on what is effectively upskilling firms’ existing managers.

Mark Dawe, the chief executive of AELP, raised concerns about the trend when FE Week showed him its analysis.

“AELP has been hearing from levy-paying employers for some months that their strategic planning in preparation for the levy includes many more apprenticeships at higher levels, in particular management training,” he said.

“AELP’s concern is the knock-on consequence of not enough levy money being available for non-levy-payers, and those exceeding their levy pot.

AELP’s concern is the knock-on consequence of not enough levy money being available for non-levy-payers, and those exceeding their levy pot

“We have regularly expressed concern about this in our correspondence to ministers, as we believe any restriction on non-levy-payer apprenticeships will have an impact on social justice and productivity.”

In July last year, a new apprenticeship standard for a chartered manager degree was launched, following its development by employers such as Barclays Bank, Sainsbury’s and Virgin Media.

The Open University is just one of the higher education institutions making the most of this new standard.

Its chartered manager degree apprenticeship will cost £22,500 per apprentice, highlighting the opportunity that now for universities – either public or private – to corner this market.

With an upper fee-limit of £9,000 for higher apprenticeships and £27,000 for degree apprenticeships in all sectors, the management standard is set to be a best seller.

According to the CFA Institute, there are 400,000 new managers a year – which would amount to around £3.6bn.

And once the Skills Funding Agency system of allocating funding is removed, there will be no ring-fence for 16-to-18 apprenticeships, meaning that companies could potentially spend their entire levy allowance on training managers aged 25 or more.

Mr Halfon told delegates at this week’s Conservative Party Conference that once the apprenticeship levy is in operation, employers might try to “game the system”, by rebranding existing training in order to claw back as much of their levy contribution as possible.

He said: “I’m not going to deny to you, inevitably there may be some gaming of
the system.

“But I don’t actually believe it will be widespread. If gaming is widespread … then of course we would look at it later on and make sure we stop it as much as possible.”

FE Week took a look at some of the universities that have jumped at the chance to offer management degree apprenticeships (below).