A new Skills Funding Agency (SFA) requirement for lead contractors to pay for an external audit of their subcontracting arrangements will “create the need for hundreds of additional reports,” Association of Colleges assistant chief executive Julian Gravatt (pictured) has warned.

He said the requirement, contained in funding agreements for 2015/16 and requesting ‘annual subcontracting assurance,’ was already carried out internally by providers as “good practice”.

A notice has been sent by the SFA to lead providers about the new clause, which requires lead providers that “subcontract more than a defined level of provision to obtain a report from an external auditor that provides assurance on the arrangements in place to manage and control their subcontractors”.

Lead providers must also provide “a certificate confirming that the report provides satisfactory assurance,” according to the notice, which has not been sent to subcontractors but is available on feweek.co.uk.

“It is good practice for college audit committees to get an internal auditor to look at their education and training subcontracts, but it is not necessary for the SFA to be so prescriptive on the issue,” said Mr Gravatt.

He added the new clause would “create the need for hundreds of additional reports for colleges and larger training providers”.

Policy Consortium member and Institute of Education senior research associate Mick Fletcher said: “It seems to me to be another example of passing a job and the associated costs to providers because the SFA no longer has the resources to provide proper oversight of the sector.

“Lead providers will no doubt pass the extra cost to their subcontractors and ultimately it will come out of resources intended for learners — there is nowhere else.

“Meanwhile, the government will continue to claim that cutting ‘back office’ staff at the SFA doesn’t affect the front line.”

And Association of Employment and Learning Providers chief executive Stewart Segal also questioned the need for the new clause.

“The external assurance can be integrated into the existing assurance process, including financial and process audits, and we believe

it should not add significant costs to the process,” he said.

“We will continue to discuss the implementation of these new requirements with the SFA.”

The SFA declin declined to comment on criticism of the new clause. It is understood that information in the notice will be incorporated into future published guidance.

• CBI calls for ‘clarity’ on Trailblazer assessments

• AELP warns against new starts without knowing costs

 

The Confederation of British Industry (CBI) has hit out over fears that companies and providers could be hit by costly new apprenticeship exams with big awarding organisations (AOs) yet to say what they’ll charge.

In an exclusive interview with FE Week Neil Carberry (pictured above left), CBI director for employment and skills, said businesses had been increasingly concerned about rumoured end-point assessment costs.

Three AOs have so far been approved by the Skills Funding Agency (SFA) but none has so far set a price.

And Association of Employment and Learning Providers (AELP) chief executive Stewart Segal (pictured above right) has gone even further and cautioned members, saying they “should be aware of the cost of assessment before they take on any new starts”.

Mr Carberry said: “What is important is giving businesses and providers clarity as soon as possible on the new assessment system and associated costs.

“Companies are concerned that assessment costs for trailblazers are proportionate.

“We have been getting more worried that government inspired end assessment criteria are driving up costs for trailblazers.”

It comes with provisional government figures this month showing 400 starts under the new standards in 2014/15.

Each Trailblazer group has to include an estimate of costs when they submit their assessment plans — but this information is not published.

However, a number of published assessment plans include some reference to potential costs.

The level three electrician standard includes an AM2 test which “will be approximately £700”.

Meanwhile, the Tech Partnership, the employer-led network behind both the network engineer and software developer Trailblazer apprenticeships said in its assessment plan that “our aim is that assessment costs will be 10 to 15 per cent of the total cost of the apprenticeship”. This would give a “direct cost of assessment of three days of assessor per apprentice”.

Terry Fennell, group operations director at the Food and Drink Training and Education Council Group of Companies, told FE Week that the Butchery Employer Trailblazer group had estimated the end point assessment cost for the butcher standard to be around £600.

Despite the uncertainty over assessment fees, providers are expected to include costs when claiming funding from the SFA.

A City and Guilds spokesperson told FE Week: “We are still working with trailblazer groups to decide the pricing structure for end assessment apprenticeships.”

A spokesperson for Pearson said it was “too early at this point” to have information about how much they would charge.

An OCR spokesperson said: “It’s too early to say what OCR will be charging as nothing has been finalised.”

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Editor’s comment

I agree with Stewart

This week Sajid Javid, the Secretary of State at the Department for Innovation and Skills (BIS), told the select committee he felt it necessary to support the introduction of an apprenticeship levy because the new ‘higher quality’ standards were more expensive than the current frameworks.

Cheap portfolios with tick box assessor observations are out, to be replaced in many cases by attendance at an approved test centre.

This new end point assessment, in the case of the network engineer standard for example, will last a full week at a test centre.

Significantly upping the cost of assessment isn’t necessarily a bad thing. If employers see a real value from any corresponding increase in the quality of training and rigor of assessment to achieve a pass, merit or distinction.

But it raises some important questions, such as; how can providers responsibly negotiate fees with employers if they don’t know the cost of assessment? If only one assessment organisation gets approved for a standard what is their incentive to offer a competitive price? And, who will pay for the apprentice travel and accommodation for assessment centres and who will pay for expensive assessment resists if the learner fails to attend or pass?

Steward Segal, the chief executive of the AELP, is right.

Providers need to down their trailblazer tools and stick to the current frameworks until these questions are answered.

Chris Henwood
FE Week editor
chris.henwood@feweeek.co.uk

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Click here to download Nick Linford’s Trailblazer funding slides, presented at the AELP Autumn Conference

Boris Johnson (pictured) has been given a key role in deciding the future of London’s FE colleges, FE Week can reveal.

The London mayor will, it is understood, lead the capital’s post-16 education area review, which is yet to be officially announced.

A City Hall spokesperson told FE Week that Mr Johnson, who is also the MP for Uxbridge and South Ruislip, had already taken a leading role in preparations for the review.

He said: “The mayor is working with borough leaders, government and the skills sector, using the area review process to help deliver our vision to strengthen post-16 skills and education in London.

“It is vitally important that businesses can access workers with the right knowledge and skills if the capital is to maintain its current strong position as a global hub for business, talent and creativity.”

The government has said the reviews were “designed to achieve a transition towards fewer, larger, more resilient and efficient providers, and more effective collaboration across institution types”.

It announced the second lot of the first round of reviews on September 25, involving 21 general FE colleges and 13 sixth forms colleges (SFCs) in the Tees Valley, Sussex Coast and Solent regions.

Twenty two general FE colleges and 16 SFCs were announced in the first round of reviews for Birmingham and Solihull, Greater Manchester and the Sheffield City region, announced on September 8.

College governors’ board chairs, joined by either their chief executives or principals, and officials from local authorities take part in each steering group.

Members of local enterprise partnerships (Leps), the FE Commissioner, the Sixth Form College Commissioner and Regional Schools Commissioners, and Department for Education and Department for Business, Innovation and Skills (BIS) officials will also attend.

The Greater Manchester group chair is chief executive of Trafford City Council Theresa Grant, but FE Commissioner Dr David Collins is chairing the five other steering groups.

It is understood Mr Johnson will be working with London Borough leaders in his role. There will be little opportunity for delay, with his term of office set to end in May.

The government has said that more area reviews would be announced “shortly”.

However, a BIS spokesperson declined to comment on when the London area review would be announced, or how many general FE and SFCs would be involved.

The government is expected to face calls to boost FE budgets with funding from the higher education sector in a new report.

The Policy Exchange is due to publish its report on Monday (October 19) and it is thought the conclusions will include a rebalancing of government finances towards the two sectors.

It comes after Jonathan Simons, head of education at the right-leaning think-tank, which counts Skills Minister Nick Boles as founder, said the Department for Business, Innovation and Skills (BIS) should divert cash from universities to help FE, which is “falling over”.

In an exclusive interview with FE Week, and expanding on his above comments from the Northern Rocks pedagogy conference in Leeds in June, he said the government needed to ensure value for money for “all students, regardless of what route they take”.

Mr Simons said: “In advance of a challenging spending review, we need to think hard about how we best spend all available government funds. When it comes to post-secondary education, the field is currently skewed in favour of higher education.”

The Skills Funding Agency announced in July that FE providers faced a cut of 3.9 per cent on their non-apprenticeship adult skills budgets between August and March 2016.

It came on top of cuts of up to 24 per cent already made to adult skills budgets earlier this year.

Mr Simons said: “When the adult skills budget is being cut by 24 per cent in 2015/16, and at the same time the higher education sector reports discretionary reserves for 2013/14 equivalent to just under half of their entire annual income, I’d expect BIS to think hard and work with colleges, universities, employers and training providers to ensure value for money in education for all students after the age of 18, regardless of what route they take and which qualifications they study.”

A BIS spokesperson said: “Any funding decisions will be made following the spending review.”

Mr Simons’ comments come with the adult skills budget having been cut by 24 per cent since 2009-10. And, according to the National Audit Office, more than one-in-four of the entire FE college network could effectively go bankrupt within 12 months.

Image: cartoon from edition 142 of FE Week

Seven general FE colleges and four sixth form colleges (SFCs) will be involved in a post-16 education and training area review for West Yorkshire announced by the government this morning.

It is set to launch on November 16 and West Yorkshire will be the seventh and final English region involved in the first wave of such area reviews, a Department for Business, Innovation and Skills spokesperson said.

It comes after the government announced that 43 general FE colleges and 29 SFCs would be included in reviews for the Tees Valley, Sussex Coast, Solent, Birmingham and Solihull, Greater Manchester, and Sheffield city areas.

Skills Minister Nick Boles said this morning: “We are developing an FE system which creates a productive, innovative and competitive workforce for the 21st century.

“This review will support the hard work of FE teachers and lecturers in the West Yorkshire area, and give local people and businesses a greater say over how and what young people are taught.”

The chair for the West Yorkshire steering group, which will hold its first meeting on Monday November 16, has yet to be announced.

Just like the six area reviews previously announced, West Yorkshire’s will not directly involve any school sixth forms or independent learning providers.

It comes as FE Week has revealed today that London Mayor Boris Johnson will play a leading role in the London area review, details of which are yet to be announced.

There was previous criticism from sector leaders last month over the reviews not directly including school and academy post-16 providers.

They included James Kewin, deputy chief executive of the Sixth Form Colleges Association, who told FE Week: “A genuine process of area based reviews would be extremely welcome, as it would scrutinise the performance and viability of all 16 to 19 providers — including school and academy sixth forms.”

There was further criticism, reported in FE Week on October 2, that the steering groups for the area reviews already announced were “unwieldy”, with numbers per group potentially swelling to 45.

Each review will start with an assessment of the economic and educational needs of the area, and the implications for post-16 education and training provision, also including school sixth forms and independent learning providers.

The reviews will then focus on the current structure of FE and SFCs, although a BIS spokesperson has previously told FE Week that “there will be opportunities for other institutions (including schools and independent providers) to opt in to this stage of the analysis”.

The first group of area reviews to be announced, as reported in FE Week on September 8, covered 22 FE colleges and 16 SFCs in Birmingham and Solihull, Greater Manchester, and Sheffield. More reviews, involving 21 FE colleges and 13 SFCs, were announced on September 25 for the Tees Valley, Sussex Coast and Solent regions.

The colleges involved in the latest review are yet to comment.

Here are the colleges involved in the West Yorkshire area review announced by the government:

FE Colleges

Bradford College

Calderdale College

Kirklees College

Leeds City College

Leeds College of Building

Shipley College

Wakefield College

Sixth form colleges

Greenhead College

Huddersfield New College

New College Pontefract

Notre Dame Catholic Sixth Form College

The difficulty faced by small to medium-sized enterprises (SMEs) in running apprenticeships was raised with members of the House of Commons Business, Innovation and Skills Select Committee.

Stephen Ibbotson, director of business at the Institute of Chartered Accountants, told the committee, which held its first evidence session, chaired by Hartlepool MP Iain Wright (pictured above) looking at the government’s Productivity Plan on Tuesday (October 13), that SMEs were generally supportive of apprenticeships.

But, he said, for others, getting an apprentice “can be detrimental to productivity because it takes experienced people to work with them, and they also sometimes struggle to get the calibre of apprentice they want”.

The Productivity Plan outlines, among other things, a number of apprenticeship-related measures including the large employers’ levy and employment targets for public sector bodies in order to increase skills.

However, Allan Cook, ATKINS chairman and vice president of the Royal Academy Engineering, told committee MPs that — while apprenticeships were a “big part of the solution” to the skills shortage in engineering — businesses, and particularly SMEs, found it very difficult to navigate the different government initiatives.

“The coordination that has to exist between education — FE, higher education — and industry, helped by the government, is absolutely essential. It has to be a holistic approach,” he said.

Miguel Coelho, fellow, Institute for Government, expressed concerned over the government’s focus on apprenticeship targets.

“The quantity seems to have been one of the persistent problems we’ve had over the years — a focus on quantity and not on quality,” he said.

In contrast, he added, the evidence from countries such as Germany and Austria, which have long-standing apprenticeship programmes, “suggests that the really interesting thing about vocational education is when you have three-year degrees”.

Quality must not be compromised in the government’s drive to create 3m apprenticeships by 2020, members of the House of Lords said in a debate on ‘the availability and quality of apprenticeships’.

The debate was opened by Labour peer Lady Prosser (pictured above), former deputy general secretary of the Transport and General Workers’ Union and ex-president of the Trades Union Congress, with a further 20 peers speaking on the topic, including a rebuttal from Conservative peer the Earl of Coutown.

In her opening speech, Lady Prosser said the government’s plans to create 3m apprenticeships by 2010 “must not be a proposal for never mind the quality — feel the width”, adding that companies should both commit to apprenticeships and work to bring in underrepresented groups of students.

Conservative peer Lord Lingfield, chairman of the Charted Institution for Further Education, supported the view, saying: “To be effective these must be really good quality apprenticeships, many we hope will be at level three, and recognised widely as such by students, teachers parents and employers.”

He added that work must be done to promote the reputation of apprenticeships, to ensure they are seen as a “viable and worthwhile alternative and a sure course towards employment” rather than a “second or third order option”.

Lord Lingfield highlighted the Apprentice Development Centre in Derbyshire, run as a partnership between Toyota and Burton & South Derbyshire College, as an example of a provider that is well recognised for delivering high quality apprenticeships.

Other issues raised in the debate included the gender imbalance between levels of training and job prospects, the need to ensure that apprenticeships are accessible for students with special educational needs, and the role of FE colleges in assisting the delivery of apprenticeships, in light of funding cuts.

The debate, on Thursday (October 1), came three days after Lords held the second reading of the Enterprise Bill, which contains levy proposals and plans for public sector bodies to have apprenticeship targets.

Liberal Democrat Lord Stoneham of Droxford said he was “deeply disappointed” with the bill, adding: “Its appearance suggested that the government has spent the summer wandering around looking for things to put into it.”

He said the problem of encouraging the small business sector to take on new apprentices without “weighing them down with the bureaucracy of government incentive schemes and costs,” had not been addressed, and the government should also be focusing more on tackling the “30,000 annual shortage of engineers going into training”.

Labour’s Baroness Donaghy said that though the commitment on paper was welcome, the apprenticeship levy could turn out to be “a tax on training” that might displace training budgets for existing workers.

She also questioned what the government’s plans were for negotiations with employers and unions on the implementation of the apprenticeship targets.

“If you force the NHS to take on more apprentices, where there is insufficient staffing capacity to provide the right supervision and mentoring, it could be very risky,” she said.

“The types of roles for which apprenticeships exist do not necessarily match up with the job vacancies.

“A health care assistant for example in the NHS, wishing to be a nurse, cannot currently do so through an apprenticeship and would require funding to support their progression.”