[A complaint was received from Sunaina Mann on 31 May, in terms that our Article suggests that Ms Mann corruptly handed a secret consultancy contract to her own husband.  Ms Mann denies that there was any non-disclosure or that she promoted or oversaw the contract and says that any conflict of interest was properly taken into account.]

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

The husband of the highest-paid FE principal in the country has been paid almost £200,000 in a contract that was not declared to college governors for 18 months.

As previously reported in FE Week, Sunaina Mann (pictured below), the principal of North East Surrey College of Technology (Nescot), received a salary of £363,000 in 2015.

Now it has come to light that her husband, Jaswinder Singh Mann, was also employed as a consultant by Nescot to work on its controversial partnership in Saudi Arabia, the Jeddah Female College.

The arrangement means that the couple gained £775,000 in total from Nescot over the course of two years.

However, even though Mr Mann signed his first contract with the college on September 24, 2014, Nescot’s governors were not made aware of his role until a board meeting a year and a half later, on March 18 2016.

The college revealed to FE Week that two further contracts were signed in 2015, on June 8 and August 1, again apparently without the knowledge of the board.

A spokesperson for the college has refused to confirm or deny whether the college failed to adhere to their procurement policy.

According to Nescot’s financial statements for the year ending July 31, 2015, payments of £71,000 in 2014 and £106,000 in 2015 were made to Point Nemo Ltd,“a company “under the control of the principal and chief executive’s husband” for “consultancy in the role of NCL [Nescot Consortium Limited] Vice Dean MIS and Funding”.

Mr Mann is the only director of Point Nemo, holding 90 per cent of its shares.

But minutes from a board meeting on March 18, at which point the arrangement was made known to governors, show that “disclosure errors” regarding “related party transactions” had been made.

The minutes list recommendations made by external auditors MacIntyre Hudson, including a need for “much better quality management information and on a more timely basis”, improved controls to ensure “the accurate capture of related party transactions”, and “a comprehensive register of interests” to be updated through the year.

FE Week reported last week that Ms Mann’s 2015 pay packet was originally under-reported to the Skills Funding Agency to the tune of £27,000 plus £5,000-worth of “benefits in kind”.

Her reported salary was revised upwards – to £358,000 per year plus benefits – by the SFA earlier in May.

In a statement, Ms Mann said that “robust governance arrangements” had “removed any conflict of interest” from the college’s arrangement with her husband.

MacIntyre Hudson said it had “no comment” to make on Nescot’s financial arrangements.

Likewise, internal auditors RSM UK told FE Week: “Internal audit reports are provided to clients on a confidential basis and as such, I am afraid that we are not able to comment.”

Attempts to contact Mr Mann were unsuccessful, and there is no information about Point Nemo Ltd available online, beyond four filings which have been made with Companies House.

Following the board meeting, Ms Mann’s salary for 2014 was also restated, consequently jumping from the figure of £154,000 claimed in the initial report, to £235,000.

This £85,000 increase was made up of £46,000 in allowances and £35,000 in paid holiday.

Sally Hunt, director general of the University and College Union, said the findings were “a real concern” at a time of “severe cuts to adult education budgets”.

It is “more troubling yet”, she added, that the details of the arrangement had only come to light following an external audit.

“Too many college principals like Ms Mann have continued to enjoy bumper pay awards and sanction profligate spending on agencies for often questionable added value. It is time that ministers took action,” she said.

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “It is astounding that such a large amount of money was paid out without the knowledge of the governors, given such obvious potential for a serious conflict of interest.

“The errors in the financial statements will just compound taxpayers’ concerns and they deserve answers.”

FE Week contacted Professor Mark Hunt, chair of the college’s board of governors, to ask what action they had taken on discovering Mr Mann’s contract with the college. He provided no comment by the time of going to press.

Peter Stamps, chair of the finance and general purposes committee and a qualified accountant, was also contacted by FE Week, but declined to comment.

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Editorial : Serious money – serious questions

Nescot governors were not made aware of the contract to pay almost £200,000 to their principal’s husband for 18 months.

You would think that having been contacted by FE Week, the board members would fall over themselves to demonstrate that they had a robust governance response.

But despite written and verbal communication with several governors, including the chairman, they were not forthcoming before we went to press.

I found that disappointing given the seriousness of the issues at stake here.

As I said in an email to the chair, I used to work for a college and attended board meetings, so have a good idea how it all works.

Putting aside the complex nature of the Saudi project, were the college’s internal related party transaction and procurement policy rules broken and if so what, if anything, did the board do about it?

The college spokesperson said the college was declining to answer, but hopefully the chair will in due course.

Nick Linford

One of the architects of the controversial deal to set colleges up in Saudi Arabia is now an adviser to the FE Commissioner.

John Allen (pictured), who was principal of Lincoln College from 2000 until he retired in 2014, was appointed as adviser to Dr David Collins in December.

In his former role Mr Allen oversaw the opening of three colleges in Saudi Arabia through the government’s Colleges of Excellence programme – a deal which FE Week revealed in March resulted in a significant financial loss for Lincoln College.

Mr Allen is one of three new advisers appointed to Dr Collins’ team over recent months, while one adviser and one deputy have stepped down from their roles, a spokesperson for the Department for Business, Innovation and Skills (BIS) has admitted.

This brings Dr Collins’ team up to 22 – four deputies and 18 advisers – who support him on a workload that includes the government’s area reviews, interventions at grade four, and investigations into financially inadequate providers.

Mandy Exley, who was principal at Edinburgh College from October 2012 until May 2015, was also appointed FE adviser in December.

Edinburgh College was created in 2012 through the merger of three colleges — a process which Ms Exley oversaw.

Cindy Rampersaud, a third new FE adviser, had been deputy principal for finance and strategy at City and Islington College from 2011 and 2015, and was also appointed to Dr Collins’ team in December.

Former Tower Hamlets College principal Joanna Gaukroger meanwhile stepped down from her role as the commissioner’s deputy in March.

Ms Gaukroger was one of the first advisers appointed to the team in 2013, and was promoted to deputy following a recruitment drive last September.

The spokesperson for BIS said that Ms Gaukroger would continue to perform “ad-hoc” work as part of the area review programme.

Mark Dawe, whose appointment as FE adviser was only announced in November, stepped down from the role on February 28 – shortly before he was announced as the new chief executive of the Association of Employment and Learning Providers.

The role of FE Commissioner was created in 2013, with Dr Collins appointed commissioner in November 2013.

The government has so far published reports on his team’s interventions with 41 general FE and local authority providers.

The BIS spokesperson was unable to say which interventions or area reviews individual advisers were involved in.

“The FE Commissioner determines which of his team of deputies and advisers is best placed to work on each case based on their knowledge and experience”.

She added that the published intervention reports were “owned” by Dr Collins and did not name the advisers involved.

Four more mergers involving seven FE colleges and one sixth form college (SFC) have been proposed this week.

Three of these link-ups are the result of the Tees Valley area review, which on May 13 became only the second area review to conclude.

Meanwhile, three colleges in south-east London have confirmed that previously announced plans to join forces in August will go ahead.

This will bring the total number of mergers on the cards for this year to 29.

A statement issued by Tees Valley Combined Authority revealed proposed mergers between Middlesbrough College and Redcar and Cleveland College; Darlington College and Stockton Riverside College; and Hartlepool College and Hartlepool SFC.

No date has yet been set for any of the mergers.

Zoe Lewis, principal of Middlesbrough College, said: “Discussions at the moment are at an early stage – but extremely positive.”

Redcar and Cleveland College’s acting-principal John Chance welcomed the area review recommendations.

He said: “We are currently working with Middlesbrough College and other key partners to discuss a range of potential solutions.”

Pat Howarth, the boss of Darlington College, and Mark White, the chair designate at Stockton Riverside College, said in a joint statement: “We believe there is huge potential and a great opportunity for both colleges to work together.”

And in another joint statement, Hartlepool College’s chair Professor Aidan Mullan joined Hartlepool SFC leader Jonathan Brash in saying of the proposed merger: “We hope it will lead to some truly exciting and innovative proposals.”

Separately, the troubled Stafford College has revealed it is in talks to link up with a nearby college, three months after it was branded inadequate by Ofsted.

The college’s interim principal Ian Clinton confirmed that he was “exploring the possibility of a merger” with Newcastle-under-Lyme College.

Newcastle-under-Lyme College, which was rated good when it was last inspected in November 2013, said it was “undertaking a due diligence exercise to assess the potential benefits of a merger with Stafford College”.

Both colleges are part of the Stoke-on-Trent and Staffordshire area review, which had its first steering group meeting on February 6.

The education watchdog branded Stafford inadequate overall, as well as in three headline fields, in a report published in March.

Mr Clinton was appointed interim principal at Stafford following the departure of his predecessor Beverley Smith, who resigned in October after receiving five votes of no confidence from staff and management in June.

Meanwhile in south-east London, Bexley College has confirmed that it will be joining forces with Bromley College on August 1 as part of a three-way merger that also includes Greenwich College.

As previously reported by FE Week, Bromley and Greenwich Colleges have been federated since January.

The three colleges will form the new South East London Colleges Group and will be led by current Bromley and Greenwich principal Sam Parrett, Bromley College said in a statement.

Ms Parrett said the merger would “strengthen vocational education and apprenticeship provision across South East London, securing a sustainable future across the board”.

Bexley College principal Danny Ridgeway will be retiring when the merger goes ahead.

The three colleges are part of the London (East) area review, which had its first steering group meeting on May 10.

Sadiq Khan, the new mayor of London, has spoken out in support of the “neglected” FE sector — telling FE Week that he will be a “champion” for its work.

Mr Khan secured his new post after convincingly beating the Conservative candidate Zac Goldsmith by 1,310,143 votes to 994,614 on May 7.

He has now spoken about what he hopes to achieve for the sector.

“I was lucky to get a good education and go on to university, but I want all Londoners to have the same opportunities to get on in life that this great city gave me – whether that’s through apprenticeships, FE or other routes to employment,” said Mr Khan.

“I am going to be a champion for London’s neglected FE sector so that it can work for both Londoners and businesses.”

Mr Khan said he will also seek a skills devolution deal from the government “so that we can create high-performing colleges to meet the needs of London’s economy and help to reduce youth unemployment”.

It comes after the Association of Colleges (AoC) penned its own manifesto for the capital ahead of the election.

It called on the next mayor to support the autonomy of colleges, ensure London gets its fair share of the apprenticeships levy, and lobby for funding of English for speakers of other languages provision — among other demands.

The 157 Group also put forward a vision before the election for FE in London — in its ‘Skills for Work, Skills for London’ report, which received backing from the AoC.

It proposed single colleges acting as “hubs” for training at level three and above in key industries — forming a single point of contact for employers in that particular industry — with other colleges across London acting as “spokes”, or satellite centres.

Responding to Mr Khan’s success, Ian Pretty, chief executive of the 157 Group, said: “The 157 Group welcomes Sadiq Khan as the new mayor and very much looks forward to working with him.

“He is central to harnessing the transformational opportunities for FE in London— which come from initiatives including the area-based reviews, institutes of technology, the apprenticeship levy, new sector based delivery approaches, technical pathways and college mergers.”

He added that Mr Khan’s pursuit of a devolution deal was to be welcomed.

The Labour party was also successful on May 7 in Bristol, where Marvin Rees (pictured) swept to a shock victory as its new mayor.

Mr Rees told FE Week of his hopes for the FE sector in the city, following his election.

He said: “I want Bristol to be a city where no-one is left behind and where life chances are not determined by wealth and background. Ensuring students of all ages have access to a good education and can gain the skills they need lies as the heart of this.

“We need to provide a real choice for 16-year-olds looking to go on to FE, so making sure young people can access a full range of A-levels, apprenticeships and vocational training is high on my agenda.”

He added that good quality careers advice was “essential” for young people to make informed choices about their future.

An AoC spokesperson praised Mr Khan and Mr Rees for prioritising “skills, careers advice and apprenticeships” during their campaigns.

The Treasury is remaining tight-lipped on the size of the cash pot it has set aside for sector restructuring through post-16 area reviews — after colleges’ VAT bills were added to the list of items it is supposed to be paying for.

FE Week first revealed in February that the government was planning to set aside money, through a “restructuring facility” which sources have told FE Week is worth around £560m, to help colleges put in place any area review recommendations.

This was confirmed in early March, when the government updated its area review guidance to include details of the fund.

It was originally understood that this would be geared at helping colleges cover the cost of mergers.

FE Week subsequently learned that it would also be used to help cover the cost of sixth form colleges (SFCs) converting to academies.

And it has now emerged that colleges and SFCs hit with a VAT bill through changes in property ownership, brought about through the area review process, will also be able to claim the money from the restructuring facility.

However, the Treasury is still refusing to say how much money is in the pot.

FE Week’s latest question on the fund size was lodged on Monday (May 16), following repeated previous enquiries over the last three months

We asked how much any VAT reclaims were likely to cost and if this would limit the amount of money available to colleges to implement area review recommendations — but did not get an answer, despite chasing repeatedly over the following three days.

The initial government VAT announcement came after the chair of the all-party parliamentary group for SFCs, MP Kelvin Hopkins, wrote to the Chancellor urging him to clarify the tax rules for SFCs that convert to academy status.

The letter, dated May 4 and signed by more than 50 MPs, said SFCs that academise could have to repay VAT relief they received on buildings completed since 2011 under current HMRC rules.

It warned this could result in some SFCs paying “significantly more” VAT than ever as a result – potentially millions of pounds for some SFCs.

An SFA and EFA spokesperson said afterwards that the VAT cash would be available to colleges and SFCs “where the premise will continue to be used for educational purposes following a merger or a successful application to become an academy, following the area review process”.

After being told by FE Week that the government was still refusing to reveal the size of the restructuring fund, Shadow Skills Minister Gordon Marsden said: “This uncertainty is yet another example of how colleges are being messed around as part of the area review process.”

A Treasury spokesperson said: “We appreciate the all-party parliamentary group for SFCs highlighting the [VAT] issue, which we were already considering solutions to address.

“We are committed to ensuring that FE institutions can access the right support at the right time to put the sector on a sustainable footing.”

There are now more than 50 apprenticeship training agencies (ATAs) — but confusion surrounds how many apprentices each one is working with.

A dozen organisations were awarded a share of £7m by the National Apprenticeship Service to establish the first ATAs through a pilot scheme in 2009, as part of a drive to encourage more small employers to engage with the apprenticeship programme.

That figure has increased dramatically, climbing to 50 in January, and it now stands at 52.

ATAs, which are based on an Australian model, act as an apprentice’s employer and is able to place them at a number of smaller firms over the course of a single training programme.

They are seen as a key means of helping the government hit its target of three million apprenticeships by 2020, as it will need far more small- and medium-sized enterprises to get involved to drive up starts.

But a Freedom of Information request sent by FE Week to the Skills Funding Agency appears to have poured cold water on the government’s ambitions — as it indicated that there were just 1,370 apprenticeships starts involving ATAs in 2014/15.

Even worse, apprenticeship starts with ATAs have remained effectively stagnant for two years, with 1,340 starts in 2013/14 and 1,360 in 2012/13.

However, Jeremy Hempstead (pictured), chief executive of the Confederation of Apprenticeship Training Agencies (CoATA), disputed the figures, telling FE Week that he believes “the numbers are not accurate”.

This is “a problem that has been brought to the SFA’s attention and they have said they are investigating”, he added.

He said: “The London Apprenticeship Company alone in the year to July 2015 had 528 starts. It is CoATA’s opinion that if replicated over 40 ATAs, at an average of 400 starts per ATA, this would represent 16,000 ATA employed apprentice starts — a significant discrepancy from the SFA’s 1,370.”

FE Week went back to the SFA to ask them if it was investigating the figures, as suggested by Mr Hempstead, but the response failed to clear up the confusion.

A spokesperson for the SFA insisted that the figures were accurate, and declined to comment on whether there would be any further investigation.

He said: “The recent response to your FoI request is an accurate report of the data that we collect. It is submitted by our colleges and training providers via their ILR returns about the training delivered to ATA organisations’ apprentices.”

The spokesperson said it was the responsibility of “our colleges and training providers to ensure that the ILR learner record code is completed correctly”.

But she conceded that the SFA was “aware of some discrepancies between the data submitted on ATA apprentices via the ILR and the data held by ATAs”.

She said: “This would not affect SFA funding claims so would not constitute a breach in our contract. We will continue to work with the SFA’s provider network to ensure the ILR learner record is coded correctly to identify apprentices that are employed by an ATA.”

There is also uncertainty over the future of ATAs from April 2017, with the introduction of the apprenticeship levy.

Government guidance published in April said: “We know that some employers will want to use the funds in their digital account to pay for training of apprentices employed by an ATA.

“We will make an assessment of the pros and cons of any approach before providing further information in June.”

Governors at prisons will get direct power to hire providers for offender learning — as the Justice Secretary Michael Gove looks to replicate the decentralisation agenda he once pushed as Education Secretary.

Offender Learning and Skills Service (OLASS) contracts are currently held by three colleges and one independent learning provider, and appointed by the Skills Funding Agency (SFA).

But under Mr Gove’s new plans, prison governors will be handed responsibility for contracting from July next year, through the upcoming Prison and Courts Reform Bill.

It is not certain, however, that future contracts would only be given to FE providers, a Ministry of Justice spokesperson admitted to FE Week.

The reforms were mentioned in the Queen’s Speech on Wednesday, when she said: “Prison governors will be given unprecedented freedom and they will be able to ensure prisoners receive better education.”

The plan reflects recommendations made in an inquiry by Dame Sally Coates, which was published on Wednesday (May 18).

The transition will be overseen by Mr Gove, whose plans to hand additional powers to prison governors reflect his past efforts to shift decision-making power from local authorities to head teachers, via a massive expansion of academy schools which happened during his time at the Department for Education between 2010 and 2014.

From August 2017, Dame Coates said she would expect that “in line with the wider implementation of prison reform, we will move to all governors having full freedoms over the choice of education providers for their prisons”.

Peter Dawson, the deputy director of the Prison Reform Trust, has said he is looking forward to what he called the “academy solution” for prison learning, in an expert piece for our sister paper FE Week.

He stressed that “the willingness to place more trust in the leader of an institution opens up potential which tight central control does not”.

Dame Coates, a former head teacher, also recommended that current OLASS contracts, which are due to end in July, should be extended for another year to allow time for a phased introduction of the reforms.

The OLASS system was first rolled out across the country in 2006, and the fourth round of contracts were agreed in August 2012.

Manchester College holds them for London, the north-east, north-west, Kent and Sussex, and Yorkshire and Humber.

Barbara McDonough, chief operating officer for Novus, the college’s offender learning service, said:

“Overall we believe this report accurately reflects the challenges the sector is facing, and we welcome the recommendations.”

Milton Keynes College holds contracts in the east Midlands, west Midlands and for south central.

Jason Mansell, the college’s director of offender learning, said: “We believe that governor autonomy for the provision of education, and governor accountability for educational progress of all prisoners within their establishments, is key to driving the prioritisation and improvement of all learning consistently across the prison estate.”

No one was available to comment from Weston College, which holds the OLASS contract for the south-west of England.

People Plus, formerly known as A4E, which holds the contract for the east of England, declined to comment.