A minority of colleges are still failing to address areas of concern identified last year, FE Commissioner David Collins has warned.

In his 2014/15 annual report, Dr Collins said challenges already dealt-with by most providers were still proving problematic for others.

He said the interventions undertaken in 2014/15 suggested that there were “still a number of problems in colleges that could be considered to be ‘basic’ and highlighted in last year’s report, which the majority of the sector has long since addressed”.

In the report, Dr Collins identified a number of key areas of weakness, including the role of the clerk, governance, leadership and management, quality improvement and financial health.

He also reiterated a point made in the government’s Reviewing post-16 education and training institutions report, which expresses the need to move towards “fewer, often larger, more resilient and efficient providers”.

Dr Collins said: “After a period of intense competition between institutions, the new approach is to encourage collaboration and the creation of fewer and larger institutions that will be better placed to deliver high quality and relevant training in a more stringent environment, while creating stronger specialisation.”

He added that this would be especially significant for weaker colleges, such as those struggling financially or those with “quality issues”.

In last year’s report, Dr Collins detailed his concerns about the future of small colleges, and said “consolidation and indeed some specialisation” would be needed.

He also commented on the limited skillsets of some governing bodies, slow responses by college leaders to changing financial situations and problematic differences in the role of clerks between colleges.

This year’s annual report summarises the work of the FE Commissioner and his team through interventions from August 1, 2014 to July 31, 2015, with updates on the colleges assessed to the end of October 2015.

Over this period 21 cases were referred to the commissioner, with seven of these (33 per cent) triggered by an inadequate Ofsted inspection and 14 (67 per cent) because of “financial concerns”.

Each of the organisations visited underwent a two week intervention or review. At Redcar and Cleveland College, Lewisham Southwark College, Greenwich College and West Cheshire College, this was followed by a more detailed Structure and Prospects Appraisal (SPA).

As a result of these appraisals, the report says new partnership arrangements have been put in place at Redcar and Cleveland College, Greenwich College and West Cheshire College, while Lewisham Southwark College continues as an independent institution with an altered board membership and curriculum offer, and a new principal and management team.

During the year, six colleges were also placed into ‘administered college’ status by Skills Minister Nick Boles, following FE Commissioner intervention.

The report says Bournville College, City of Bristol College, Central Sussex College, Weymouth College, Greenwich Community College and Lewisham Southwark College have all responded to this process either by making significant changes in-house or by pursing a merger.

Weymouth College underwent what the report describes as an “accelerated recovery”, as previously reported in FE Week.

Overall, 12 colleges and four councils saw an end to formal interventions by the FE Commissioner during the year, as their problems were seen to be satisfactorily resolved (see table).

In conclusion, Dr Collins said it was “perhaps unfortunate” that the annual report of the FE Commissioner by its very nature “concentrates on those colleges that are in difficulty and therefore does not give credit to the excellent work that is being carried out throughout the sector”.

He added that it was “encouraging” that twelve colleges and four local authorities have resolved their problems.

Skills Minister Nick Boles, who wrote the foreword to the report, said he had seen “many examples of outstanding practice, some of which match the best in the world”.

He said: “For the minority of colleges where either quality or financial management is not good enough, it is essential that robust and swift action and monitoring is put in place to secure improvements for the learners and employers they serve

“Dr David Collins was appointed as FE Commissioner in November 2013 to assess the position of colleges found to be inadequate in terms of quality or financial management. I am delighted that two years on we can see the benefit of his work in institutions that have turned the corner, and are achieving stronger results.”

Former director general of the Confederation of British Industry (CBI) and UK Skills Envoy Lord Digby Jones will take over as chair of governors at Stratford Upon Avon College from January 1.

Lord Jones (pictured above), who had the top job at the CBI from 2000 to 2006, joined the college in October as a member of the board of governors.

The college announced yesterday that the cross-bench peer, who was also Minister of State for Trade & Investment from 2007 to 2008, during which time he also served as UK Skills Envoy, would be stepping up to the post of chair from the New Year.

He said: “The solution to the UK’s productivity problem, poverty gap and the nation’s finances is to maintain a supply of more, better skilled people.

“The path to self-respect and personal freedom is education. That is why I am delighted to accept the position of chair of governors.

“I share Stratford upon Avon College’s commitment to providing the best possible skill-based learning and apprenticeship opportunities, ensuring all students secure successful job opportunities.

“I am confident that by working together, we will succeed in preparing our young people for future employment and a successful career.”

The college spokesperson said that Lord Jones would “lead a drive to build links with employers across the Midlands, given his trade Ministerial and CBI background”.

“He was also on campus throughout December 16 to further strengthen his relationships with staff and students,” she added.

College principal Nicola Mannock said: “We are honoured and delighted that Lord Jones has agreed to become chair of governors.

“His wide-ranging business acumen and experience, together with his support for vocational education, have already proved great assets for the college.

“As chair, he will help us ensure that we continue to enhance the employment prospects of young people and work in collaboration with the local economy to respond to the needs of the community.”

Lord Jones’ appointment comes after the FE Commissioner, Dr David Collins, recommended the college “significantly” refreshed its board to include “a majority of new members”, following his first visit in May 2014.

Skills Minister Nick Boles wrote to Stratford Upon Avon College on October 27 to mark the end of a 17-month long intervention by the FE Commissioner, which was triggered after the Skills Funding Agency rated the college’s finances as inadequate.

The college, which has around 4,300 learners, was rated ‘good’ by Ofsted following its most recent inspection in March, which was up from its previous grade three (‘requires improvement’) rating in November 2013.

Lord Jones’ website stated that his role as UK Skills Envoy involved him “campaigning for both private and public sector employers to raise the level of skills of all of their employees to level two”.

 

The government’s apprenticeship levy may lead to “significant” job losses, the new head of the Confederation of British Industry (CBI) has said.

Carolyn Fairbairn, director-general of the CBI, said that the 0.5 per cent levy could potentially lead firms to let workers go in an interview with the Sunday Times yesterday (December 20).

Ms Fairbairn, who became the first female director-general of the business lobbying group in November this year, said that unless changes were made, it was “inevitable there will be significant job losses” in some sectors.

The levy will be applicable to businesses with a wage bill of more than £3m from April 2017, and the government hopes it will raise £3bn to fund its target of 3m apprenticeship starts by 2020.

Ms Fairbairn said: “There is a gulf in the government’s understanding of what it is doing here and the impact on sectors like retail and its most vulnerable employees.”

She added that companies are already dealing with the higher national living wage, which starts in April, as well as higher pension costs and a lack of reform for business rates.

Her comments came alongside the release of the CBI’s 18th annual survey, which found that while one in six businesses (16 per cent) believe the new apprenticeship levy is the right approach to address the UK’s skills challenges, almost half (47 per cent) expect it to be costly and bureaucratic.

The survey included 342 respondents employing around 1m employees, and was carried out between August and October 2015.

In response to the findings of the survey Ms Fairbairn said that “skills shortages remain a problem”, adding that “both the Government and businesses must contribute to building a higher skilled domestic workforce”.

On apprenticeships, she commented: “25 per cent [of survey respondents] plan to increase recruitment with 6 per cent planning to reduce it, leaving a positive balance of +19 per cent respondents looking to recruit next year, and more than a third want to see employers given greater control over the levy.”

However, she clarified that the survey was carried out before more details of the apprenticeship levy were confirmed in the Autumn Statement on November 25.

In November George Osborne confirmed that, from April 2017, employers would have to pay 0.5 per cent of their pay roll costs towards the levy — offset by a £15,000 allowance meaning that most employers would not have to pay.

At the time, Ms Fairbairn commented that the levy would be a “significant extra payroll tax on business”, but she welcomed “the creation of a levy board to give business a voice on how the money is spent”.

The levy will fund £900m of apprenticeship spending and comes with a new employer-led Institute for Apprenticeships, which will set standards and quality.

Leeds City College is looking to take on a new apprenticeship subcontractor for up to £400,000-worth of provision, despite a Skills Funding Agency plea to the sector to run more of the training directly.

The college has posted the invitation to tender on the gov.uk ‘Contracts Finder’ site.

It said that the college “is seeking to recruit an organisation to deliver apprenticeships in the health and social care business sector, with a contract value up to £400,000 of Adult Skills Budget funding”.

The closing date for applications is January 4, with the contract scheduled to start on January 25 and run until the end of July 2017.

It comes after SFA funding and programmes director Keith Smith (pictured above) warned at the Association of Colleges (AoC) conference last month, in Birmingham, that colleges should be looking to run more apprenticeships directly.

He told delegates that they would be facing a “huge challenge” when the apprenticeship levy comes into play and allowed subcontractors to received funding directly from the government.

Mr Smith said: “You might be benefiting at the moment from subcontracting bringing money in, but from April 2017 those subcontractors will take that capacity and they will get funded directly through the apprenticeship voucher system.”

Leeds City College used the gov.uk site earlier in the year to advertise “a further opportunity to join a select group of subcontractors to deliver high quality apprenticeships in the Yorkshire and Humber region, with a particular focus on the Leeds City Region and Local Enterprise Partnership priorities”.

The college said it was looking for four organisations to deliver up to £800,000 of apprenticeships in engineering, ICT, retail, business administration and health and social care at the time, but no one was awarded the contract and the opportunity was closed.

When asked by FE Week on Monday (December 14) why it was using the government tendering site to find apprenticeship subcontractors, David Gaughan, director of apprenticeships, said: “We are required to use the website by the Public Contract Regulations, 2015.

“The college engages with subcontractors in order to better meet customer needs.

“We work with providers who effectively reach priority learners in the community and who can demonstrate positive employment outcomes.”

Mr Gaughan added that the college sometimes subcontracted “to access or engage with a new range of customers, to support another provider develop capacity or quality, to provide niche delivery where the cost of developing direct delivery would be unsustainable, or to work with providers that offer sector specific Local Enterprise Partnership priority engagement”.

He added that all sub-contractors “will be subject to the college due diligence process”.

Commenting on Mr Smith’s concerns about subcontracting, Mr Gaughan said: “The college is developing capacity to deliver more apprenticeships across all of its curriculum areas and is already at advanced stages of commencing the delivery of the new Trailblazer apprenticeships as part of the apprenticeship reform programme.

“The college strategy is to reduce reliance on sub-contractors in the future,” he added.

It comes after Skills Minister Nick Boles also raised the issue of subcontracting in his speech at the AoC conference.

Mr Boles asked college leaders: “Why on earth are you letting these guys nick your lunch?” and challenged his audience to aim for FE colleges to be responsible for two thirds, instead of only one third at present, of all apprenticeship training by 2020.

When questioned this week on the issue of colleges tendering for subcontractors, a spokesperson for the SFA said: “We continue to monitor all lead providers’ subcontracting arrangements.”

 

 

City and Islington and Westminster Kingsway Colleges have announced that they plan to “merge” from August next year.

But while the move is likely to lead to services such as human resources, marketing, finance and IT being shared, governors from both colleges confirmed that the separate identities of the two colleges will be maintained — including their individual names and brands.

A spokesperson for both colleges said that that governors from City and Islington and Westminster Kingsway met on December 9 “to consider options with respect to closer collaboration” and agreed that “merger would best serve the interests of students, staff, and employers”.

Andy Wilson, principal of Westminster Kingsway College (pictured above), was asked by FE Week why they were not going down the more traditional merger route of combining brands.

He said: “It could be seen in some ways as a federation, but there is only going to be one corporation, because that’s a lot more efficient way to operate.

“The problem with a federation is that you are trying to service more than one corporation which takes a lot of effort.

“So we’ll have a single corporation but it will be like a group of colleges.

“We’re expecting to get a single allocation. And then at the corporation level we will divide that up between the two colleges. It’s early days.”

Alastair Da Costa, chair of governors at City and Islington College, said: “I am delighted that the two boards have agreed to merge.

“It is a really positive and bold move which will enable us to meet the needs of Londoners and those students who travel from other parts of the South East, to benefit from the specialist training and education that both colleges deliver.”

City and Islington College was rated as ‘outstanding’ across-the-board by Ofsted in 2008 and Westminster Kingsway received a ‘good’ overall rating in 2011.

Mr Wilson said: “Essentially the reason for creating a bigger college is so we can save some money on central services and move those resources into continuing to provide excellent teaching and learning and develop new income streams that we’re going to require in the future.”

He added that he expects services such as human resources, marketing, finance and IT to be shared once the merger has taken place, but staff numbers should remain unaffected.

The spokesperson for both colleges, however, said that “staff will benefit from a collaborative approach to curriculum development, quality and continuing professional development”.

Both colleges also said that there are currently no plans to sell any of the buildings of either college.

A shadow board, consisting of governors from both colleges, will be launched in January.

It will look into appointing a chair of the new corporation and other senior management roles in early 2016.

Mr Wilson said: “There will only be one chief executive of the new college, so the shadow board will select one of us.

“The selection will take place at the end of January or the beginning of February we hope, but we’ll stay in our current positions until the merger takes place at the end of July.”

Sir Frank McLoughlin, principal of City and Islington College (pictured right), said: “This is a governor led process.  The shadow board of the new college will have its first meeting in early January and appoint a selection committee which will then appoint the chair of the new college.

“That chair will then join the selection panel to appoint the chief executive officer (CEO) and senior staff before the new college is formed at the start of August.

“Announcements will be made into the New Year on the appointment of the new chair and chief executive.”

Based on current figures, the two colleges expect to enrol 26,500 students next academic year, and receive a combined total income of £84m.

The move comes ahead of the colleges’ involvement in the London post-16 education and training area review.

The capital was one of six regions that it was announced by the Government on December 3 would be involved in the second wave of area reviews, encompassing 34 general FE colleges and 15 sixth form colleges.

Just like the seven reviews of the first wave, in which 83 colleges are being reviewed, no school sixth forms were listed.

 

 

Sector leaders have welcomed then findings of a new Public Accounts Committee (PAC) report that raised grave concerns over the post-16 education and training area reviews process and FE finances.

The report published this morning, entitled ‘Overseeing the financial stability of the FE sector’, said it was “unclear how area-based reviews of post-16 education, which are limited in scope, will deliver a more robust and sustainable further education sector”.

It warned that the Government viewed “area-based reviews as a fix-all solution to the sector’s problems”, but they had the potential to be “haphazard”.

The comments were welcomed by Martin Doel (pictured above), chief executive of the Association of Colleges (AoC), which submitted written evidence to the enquiry.

He said: “Area reviews are limited in their scope and are too often seen as a fix-all solution to the financial pressures in the sector and it is helpful that the PAC has recognised this.”

He added: “The committee has [also] recognised the damage funding cuts have already done to colleges across England, as well as how these are exacerbated by late funding decisions.

“The AoC has called for three-year funding allocations to be introduced to allow for better planning, so the committee’s recognition of the problem is welcomed.”

The report highlighted a number of “substantial external challenges” facing colleges that were, for example exacerbated by “very late funding decisions” and “overly complex funding arrangements”.

Stewart Segal, Associations of Employment and Learning Providers chief executive, called for more focus on “minimising the amount of financial support required and maximising the money available for frontline delivery”.

He added: “It is important that the area reviews consult all providers and AELP is working with local provider networks to provide input into the discussions.”

“The [PAC] committee has rightly found that reviews must take into account the education and training provision of a local area as a whole, including school sixth forms, rather than singling colleges out.”

James Kewin, deputy chief executive of the Sixth Form Colleges Association said: “The PAC report makes a number of sensible observations about area reviews.

“To be effective, the reviews should of course include all post-16 providers on the same terms.

“Expanding the scope (to include schools) and extending the timeframe will lead to better quality recommendations and a better deal for students.”

David Hughes, chief executive at the National Institute of Adult Continuing Education, said: “I’m pleased the PAC conducted this inquiry into the financial health of FE, particularly colleges. In its response, there are two key points I hope the Government will address.

“There does need to be a recognition that funding pressures hinders the ability of colleges to innovate and deliver the policy priorities put forward by Government; big changes are needed by colleges to make a success of the apprenticeships levy, local commissioning, extension of advanced learning loans and delivering high quality English and maths to name just a few.

“Funding pressures are also impacting on quality and on the range of learning opportunities for adults and young people. Both of these directly hit the ambitions of learners.”

Meg Hillier, PAC chair and Labour MP for Hackney South and Shoreditch, said that the report’s findings were “deeply worrying for a sector which equips people with skills and qualifications that can transform their life prospects, and by extension those of the communities in which they live and work”.

Neil Carmichael, Education Select Committee chair and Conservative MP for Stroud, said: “Funding for FE has to match the Government’s ambitious goals for the FE sector and ensure colleges have the financial security to plan ahead and achieve these aims.”

Skills Minister Nick Boles said on behalf of BIS and DfE: “With early intervention from the funding agencies, the FE commissioner and locally-led area reviews, colleges will become more efficient and financially resilient.”

Skills Minister Nick Boles has revealed in the Skills Funding Letter that co-funding in the workplace will be removed from 2016/17.

The letter to Skills Funding Agency (SFA) chief executive Peter Lauener, which set out the Agency’s priorities and funding for next financial year, was published yesterday evening.

In a move which FE Week understands will save around £50m from the adult education budget (AEB), Mr Boles said: “Co-funding in the workplace is to be removed. As part of the diversification of funding, we consider that employers should fund learning that takes place in the workplace.

“The funding released by this change can be used by providers to deliver more priority learners.”

The announcement on co-funded provision, for non-apprenticeship workplace courses that the SFA only pays half the fully-funded rate for, indicates that employers could be charged a fee to make up for some or all of the difference.

But director of employment and skills at the Confederation of British Industry Neil Carberry said: “Businesses will be concerned that this move has more to do with underwriting colleges than funding high quality learning.”

He added: “The [planned new apprenticeship] levy will change who funds learning — but what’s important is that learning is relevant and effective, not where it takes place.”

According to the November Statistical First Release, in 2014/15 there were 56,100 workplace (non-apprenticeships non-English and maths) funded starts — although the figures did not say how many of these were co-funded.

Stewart Segal, chief executive of the Association of Employment and Learning Providers, said: “We have to accept that some people in the workplace that would have previously been co-funded will no longer be funded, other than through the apprenticeship programme or a loan.”

Mr Boles added, in the letter, that the Department for Business, Industry and Skills (BIS) will no longer provide a “separate community learning budget”.

“The Pound Plus strategy, introduced in community learning in 2013, must be used to deliver value for money focus public support on disadvantage and ensure that all learners pay if they can afford to do so,” he added.

“In 2016/17, I ask that you consult with local commissioners and providers to agree how to get the most from the integration of the community learning budget, in order to best meet local adult education needs.”

Sue Pember, director of policy and external relationships adult and community learning provider membership body Holex, said: “It is what we expected and have been preparing for.

“It will help adult education providers deliver what the community needs to support productivity and personal growth.

“What needs to be worked through is how the devolution areas local commissioners will operate and how to make provision relevant to local needs without creating another layer of bureaucracy, or worse introducing new unwieldy procurement processes.”

Mr Boles also elaborated on the implications of Chancellor George Osborne’s commitment announced last month to protect the “core adult skills participation budgets in cash terms, at £1.5bn”.

The letter stated that this “£1.5bn available to support adult FE outside of the costs of apprenticeship funding”, would form “a new budget we call the AEB”.

“It is a single funding line which replaces what has been three separate funding lines: funding for adult FE outside of apprenticeships (previously within the adult skills budget), community learning, and Discretionary Learner Support (DLS),” Mr Boles said.

It also said BIS “will provide information on capital funding in the new year”, which differed from the typical expectation on the department to announce the spending level by now.

Questions remain over whether moving community learning to the AEB will mean it is no longer protected, and what impact the move will have on DLS funding which the Government is predicting will be £86m this year.

More detail will also be sought be FE Week on how funding to support 19+ apprenticeships and adult education will be cut by £34m, from £373m to £239m, as stated in the letter.

 

Post-16 education and training area reviews have come in for heavy criticism in a new Public Accounts Committee (PAC) report that raises serious concern about the financial health of the sector.

The report, entitled ‘Overseeing the financial stability of the FE sector’, was published first thing this morning (Wednesday, December 16).

It follows the committee’s enquiry into FE finances, which included an evidence session on October 19 where senior figures questioned included Martin Donnelly, permanent secretary for the Department for Business, Innovation and Skills (BIS), and Peter Lauener, chief executive of the Skills Funding Agency (SFA) and Education Funding Agency (EFA).

The report said that it was “unclear how area-based reviews of post-16 education, which are limited in scope, will deliver a more robust and sustainable further education sector”.

“The departments appear to see the national programme of area-based reviews as a fix-all solution to the sector’s problems. But the reviews have the potential to be haphazard,” it added.

The report also raised concern that “with so many parties involved in running the reviews, there may be no clear process for making difficult decisions”.

It followed the government announcement on December 3 that 34 general FE colleges and 15 sixth form colleges (SFCs) would be involved in the second wave of post-16 education and training area reviews.

And just like the seven reviews of the first wave, in which 83 colleges are being reviewed, no school sixth forms were listed.

The report recommended the government should “demonstrate the area-based reviews are taking a sufficiently comprehensive look at local provision taking into account all FE providers and school sixth forms”.

It also raised grave concern about colleges’ finances.

It said the SFA had conceded that the SFA “deemed 29 colleges to be financially ‘inadequate’ in the 2013/14 academic year”, but “the agency’s latest estimates, produced in May 2015, suggest that there could be around 70 colleges in this position by the end of 2015/16”.

It added “substantial external challenges” facing colleges had been exacerbated by “very late funding decisions”, as well as “overly complex funding arrangements, whereby funding comes from many sources for different students attending the same course”.

The SFA was also singled out for being “too reactive to emerging [financial] risks”.

It recommended, for example, that the government should “review and simplify the oversight and intervention arrangements for colleges”, making them as “streamlined” as possible.

Meg Hillier (pictured above), PAC chair, said: “The government has been desperately slow off the mark to tackle a looming crisis in FE.

“This is deeply worrying for a sector which equips people with skills and qualifications that can transform their life prospects.”

Having read the report, Skills Minister Nick Boles said on behalf of BIS and DfE: “We have protected funding for FE and will be increasing real-term spending by more than a third in the next five years. “Furthermore, funding for apprenticeships will have doubled since 2010.

“With early intervention from the funding agencies, the FE commissioner and locally-led area reviews, colleges will become more efficient and financially resilient.”

An SFA spokesperson said: “We have strengthened our own approach to intervention,” she added. “It includes using a variety of data sources to assess where risk might be highest.

“In addition, for the current year we included clauses in our funding agreements with colleges that enable us to require early action to be taken before formal triggers for intervention have been breached”.

Visit http://www.publications.parliament.uk/pa/cm201516/cmselect/cmpubacc/414/41402.htm to download the report.