Local authorities should be excluded from the large employers’ apprenticeship levy, according to proposals put forward by the Local Government Association (LGA) in response to the Enterprise Bill.

In an employment and skills update paper, the LGA encouraged members to raise concerns about the levy with MPs and called on them to highlight other ways for councils to play a positive role in delivering apprenticeships.

“[The levy] is an additional cost at a time of significant financial constraint,” the LGA said in the paper.

The paper challenges a number of aspects of the government’s Enterprise Bill, the details of which were outlined in May as part of Sajid Javid’s (pictured above) first speech as Business Secretary.

It says that with devolved funding, councils can support the apprenticeship programme in other ways, for example “through their role as employers, commissioners and procurers, and through their local economic development and place shaping functions, working with employers of all sizes and LEPs [Local Enterprise Partnerships]”.

Stewart Segal, Association of Employment and Learning Providers (AELP) chief executive, said: “The current levy proposals include all private and public employers and we know that this will create some issues for some public organisations.

“However, the public sector has been slow to take up apprenticeships themselves and they should start working with providers now to extend the opportunities they can offer.”

The view was echoed by a spokesperson for the Association of Colleges, who told FE Week: “Local authorities provide an excellent career path for young people and by providing apprenticeships they would create more career opportunities for students leaving colleges.

“It is therefore disappointing that councils do not want to pay the levy. Everyone should play their part, whether in the public or private sector.”

In its most recent briefing on the Enterprise Bill, released on October 28, the LGA also rejected proposals for mandatory apprenticeship targets for public bodies, including local authorities.

It said that with many councils under pressure to further reduce workforce numbers over the next four years, some by up to 40 per cent, they may lack the job opportunities or people to deliver apprenticeship targets.

“The local government workforce has steadily declined since 2010 and more than 600,000 people have left the sector … Councils have also reduced their workforce capacity to support and deliver training and development, and this includes apprenticeships,” it said.

The LGA added in the briefing: “There is no longer any additional capacity to run or manage apprenticeship programmes,” saying that if targets were set for local government, central government must also devolve funding to cover these these apprenticeships.

The threat of strike action was today hanging over the FE sector as talks between the Association of Colleges (AoC) and the University and College Union (UCU) failed to resolve an ongoing dispute over pay.

A spokesperson from the UCU told FE Week that although talks took place on Wednesday (October 28) to discuss the AoC’s proposal for a pay freeze in 2015/16, a conclusion proved elusive and planning for UCU strike action on November 10 would continue.

“There was a meeting between UCU and AoC but no progress was made towards resolving the dispute,” said the UCU spokesperson.

“There are no further talks planned at this stage but, as ever, we remain open to discussion.”

The UCU announced that it would strike after a ballot of members on the pay freeze proposal resulted in 74 per cent of those who voted (4,184) backing industrial action.

Michael MacNeil, UCU head of bargaining, said: ”Our members who voted clearly backed strike action and the FE committee confirmed plans for action this term.

“We intend to take strike action on Tuesday 10 November, but urge the employers to come back to the table to resolve this dispute.”

Trade union Unison also held a ballot on the potential pay freeze, with 95 per cent of its FE sector members who voted rejecting the AoC recommendation.

Unison subsequently wrote to the AoC with the result, giving warning that unless the offer was improved the union would be “in dispute” with them. It also called for an urgent meeting of the union side of the Joint National Forum to discuss next steps.

Unison was unable to comment on whether it would join any strike action at the time of publication.

The Association of Teachers & Lecturers (ATL) joined the debate with a ballot in the form of a survey, but said its members were reluctant to pursue industrial action.

When asked if it would be taking any other steps on the matter, the ATL’s national office for pay and conditions said there were no further talks planned on this year’s pay.

The AoC declined to comment.

A cash-strapped Midland college’s past financial management has been branded “not acceptable” as Skills Minister Nick Boles told it the “next few months will be critical”.

Mr Boles sent FE Commissioner Dr David Collins in to Birmingham Metropolitan College (BMet) in August, after it requested “exceptional financial support” from the Skills Funding Agency (SFA).

The move came just months after the college announced it would be axing around 15 per cent of its 1,600-strong workforce.

The college, which has around 30,000 learners, also received a ‘requires improvement’ rating at its most recent Ofsted inspection in May.

In his assessment report, published this week, Dr Collins praised the college for having taken measures to improve its financial position but criticised past management and questioned whether it would be able to get back on track quickly enough.

“Until early 2015 the standard of financial management and control in the college was not acceptable,” said Dr Collins in his report.

In his letter to accompanying Dr Collins’ report, Mr Boles said: “Although the college now has in place the expected policies and process in order to achieve quality and financial recovery, the next few months will be critical to determine whether or financial recovery can be achieved

“The college needs to focus on delivering a more sustainable financial position, while ensuring that it delivers a high quality learning offer that meets the needs of learners and employer.”

In February, following a review of its financial performance, the college “took the decision,” it said in the commissioner’s report, to replace chief operating officer (COO) Bob Pattni (picture right) with a new chief financial officer (CFO).

The new CFO found that the college’s income forecasts, including grant funding, for the year were “seriously overstated”, according to Dr Collins’ report.

The CFO’s findings prompted the board to develop a recovery plan, and the CFO also put in place a number of “major improvements”, including ensuring that its financial regulations and the structure of the finance function represent “best practice”.

In his report, Dr Collins recommends that the “existing team should be supported” in its work to “address the significant quality and financial issues it has inherited”.

His specific recommendations include reinstating a finance sub-committee until the college’s financial performance is good, and carrying out financial performance monitoring alongside quality performance monitoring at termly reviews.

Dr Collins also recommends reviewing the management of apprenticeships “to ensure a clearer focus on performance” after finding that results for 2013/14 were “very low” with 41.1 per cent of all age leavers below the minimum standards threshold.

He noted that the college had already taken steps to address this underperformance following a letter from the SFA, which gave the college £4.5m in exceptional financial support during the twelve months to July 2015.

“The college executive now appear to have regained control of the college’s finances and the work that has been undertaken to develop their recovery plan is impressive,” he added.

However, “in light of the college’s past performance” he questioned whether planned changes “can be effected sufficiently quickly to have the desired effect”.

Principal Andrew Cleaves (pictured below left), who took up post in May last year upon leaving his role as National Express international division, has revealed that 246 posts were accepted for voluntary severance, with only six staff made redundant.

Mr Cleaves said: “We are pleased that the FE Commissioner has recognised all the hard work that has been done over the past few months. He reports that our recovery plan is impressive, which reflects the fact that the college has taken a number of actions to improve our position and we have a robust plan in place.

“Since spring this year we have significantly reduced expenditure and undertaken a successful voluntary severance programme which delivered targeted savings. We have recently sold off a campus in Castle Vale and will continue to make sensible decisions to improve our efficiency and to use our estate as effectively as possible.

“It’s important to stress that our students remain our absolute priority in these challenging times. Alongside our financial plans, the FE Commissioner reports that we have responded quickly and positively to the recent Ofsted inspection and are making improvements to our teaching and learning regime.

He added: “BMet is facing its challenges with a detailed, realistic and costed plan in place that creates a stable platform for long-term stability, supported by a strong culture, focused on our students and developing our commercial capabilities.

“There is more to do, but the FE Commissioner’s report gives us confidence that we’re on the right road.  We are pleased to get his feedback to assist us with that journey.”

Mr Pattni, who became director of finance and deputy principal at Cambridge Regional College (CRC) in March last year, was not available for comment.

Skills Minister Nick Boles has tried to reassure colleges undergoing post-16 education and training area reviews that mergers were “nothing to be afraid of”.

He was told today by Shadow Consumer Affairs and Science Minister Yvonne Fovargue (pictured right) that colleges in her Makerfield constituency feared that their local Greater Manchester review launched last month with the “strong presumption” that mergers were “the only way forward”.

When the former Shadow Education Minister for Young People then asked, during the education questions in Parliament this afternoon, if other ways to achieve financial stability and good outcomes for learners would be given “serious consideration”, Mr Boles said: “We are certainly open to a whole range of options.”

But, he added: “I would disagree that there is somehow there is anything necessarily to be afraid of from mergers.

“A merger can mean that you save on a whole lot of administrative and management costs, so that you can actually put more money into paying for teachers doing the job we all want them to do.”

It comes after FE Commissioner Dr David Collins told delegates at the Higher and Further Education Show, in London on October 14, that “divorces” as well as “marriages” would be encouraged as viable options between colleges undergoing area reviews, as reported in edition 151 of FE Week.

Area reviews have so far been announced for 83 general FE colleges and sixth form colleges in the West Yorkshire, Tees Valley, Sussex Coast, Solent, Birmingham and Solihull, Greater Manchester, and Sheffield city areas.

However, a number of principals involved, along with sector leaders, have told FE Week of their concerns that school sixth forms were not necessarily subject to the reviews.

When questioned during today’s Commons hearing on the issue, Mr Boles said: “The regional school commissioner, who has responsibility for commissioning school provision in his or her area, is always going to be part of these reviews and can bring in the perspective of sixth forms in schools.

“But I don’t think he or she would think it practical to include every single school with a sixth form in this review and actually achieve a result.

“We are determined to achieve a result in a short space of time so we have strong, specialist insitutions able to achieve high quality education.”

Bob Blackman MP (pictured left) also asked Mr Boles what discussions had taken place over the “VAT treatment of SFCs”.

It comes after the government’s policy of continuing to charge SFCs VAT while schools and academies are entitled to a refund of the 20 per cent tax sparked a campaign for reform by the Sixth Form Colleges’ Association (SFCA), backed by sector leaders and dozens of MPs, before the May general election, as reported in FE Week. There has still been no change from the government so far on the issue.

But Mr Boles told MPs that he “entirely understands those arguments” and had “some sympathy with them”.

However, he said that any decision on this would lie with Chancellor George Osborne, which “we all wait for… with baited breath”.

He added that SFCs “might want to link up with groups of schools, with multi-academy trusts in order to be stronger themselves”.

An SFCA spokesperson told FE Week after the debate: “We hope that ending the unfair VAT treatment of SFCs will be a key priority in the spending review.”

She added: “We are very much in favour of academisation and the opportunity to link up with schools.”

College sector leaders will add their voices to an inquiry by the House of Lords Select Committee on Social Mobility tomorrow, discussing funding changes and how to improve employment opportunities for young people.

The witnesses will help the committee explore the choices and opportunities available to young people from age 14 in the UK education system. The evidence sessions will be the tenth and eleventh so far in the inquiry into social mobility in the transition from school to work.

The initial session will take place at 10.35am involving Pat Brennan-Barrett (pictured right), principal of Northampton College and chair of the higher education in FE Network at the Association of Colleges (AoC); and Malcolm Trobe, deputy general secretary of the Association of Schools and College Leaders (ASCL).

The second session, scheduled to begin an hour later, will focus on the development of University Technical Colleges (UTCs) and Studio Schools with witnesses David Nicholl, director of the Studio Schools Trust, and Charles Parker, chief executive of the Baker Dearing Educational Trust.

Issues the committee will explore with the witnesses include careers guidance, work experience, funding, performance measures and the role of Ofsted. The possible outcomes of the Government’s review of FE will also be discussed, as will inequality of provision for girls, black and minority ethnic (BAME) groups, and working-class boys.

The session will follow on from last week’s meeting on October 21, when the committee heard David Pollard, chair for education, skills and business support at the Federation of Small Businesses, call for the UK to define the first priority of the education system as preparing young people for work.

Maggie Walker, chief executive of awarding body Asdan, also spoke, saying that there was growing inequality and the group the committee is looking into actually encompasses the majority of young people.

Other witnesses who have contributed to the inquiry so far include former Deputy Prime Minister Nick Clegg MP; Andrew Battarbee, deputy director, vocational education strategy, Department for Business, Innovation and Skills (BIS); and Oliver Newton, head of the Apprenticeship Growth, Strategy and Legislation Team, Department for Education and BIS.

The committee was formally appointed on Thursday, June 11, “to consider social mobility in the transition from school to work”, with Baroness Corston (main picture above) as chair. It is required to report its findings by March 23.

Follow @feweek for live coverage from 10.35am.

Ofsted boss Sir Michael Wilshaw told conference delegates that FE providers dishing out “dubious qualifications of little economic relevance” were among the “guilty parties” for apprenticeships failings.

The chief inspector was in an uncompromising mood today as he addressed the Confederation of British Industry (CBI) West Midlands education and skills conference, with a speech that officially launched the publication of Ofsted’s long-awaited apprenticeships report.

“Why is it that so many local firms are forced to rely on imported skilled labour because they find it impossible to find the right capabilities locally, and who is to blame for this?” Sir Michael asked delegates at the St John’s Hotel, in Solihull.

“In my opinion there are three guilty parties: schools, FE providers and… employers.”

Sire Michael called for an overhaul of the system for delivering apprenticeships, with a focus on Germany and Switzerland as examples of good practice.

He added the “snobbery” that has seen apprenticeships packaged as “the last chance for the academically challenged” has to end.

“The fact that only five per cent of our youngsters go into an apprenticeship at 16 is little short of a national disaster and a national tragedy,” he said.

His pulled no punches when offering guidance to both educators and employers.

He advised FE providers to specialise, rather than attempt “to be all things to all men and women”.

“Our inspection evidence shows that when they focus on the curriculum, when they concentrate on specialisms that meet local employment needs — standards invariably rise,” Sir Michael added.

“We are increasingly seeing providers, especially general FE colleges, failing because they’re not engaging with local businesses and not updating their courses to match local needs.”

Sir Michael was equally unforgiving, when addressing the many employers in the audience.

He said: “It’s no good carping from the sidelines about standards, if you don’t get involved yourselves.”

He recommended that businesses should lead by example — through sponsoring academies, engaging with curriculum design, and supporting employees who act as school governors.

Addressed business leaders directly, he added: “This is my challenge to you, organise yourselves, it’s no use waiting for others to put structures in pace and then bemoaning the progress made. Use your networks and knowledge to find solutions.”

Sir Michael claimed that low level apprenticeships were “wasting public money”.

“They’re abusing the trust placed in them by government and apprentices to deliver meaningful, high quality training,” he said.

Sir Michael added that Ofsted would not “shy away” from reporting failures, and called on funding agencies and the government to “continue to be prepared to withdraw finance from those employers and providers who abuse the system”.

“I urge government to be radical in its reform of this sector. We’ve indulged in mediocrity for far too long and we should no longer accept it,” he said.

Sir Michael added: “An apprenticeship isn’t endless tea making, shelf stacking or envelope stuffing. It is not an induction course, or a six week in house training scheme. It is not a badge for doing what is already being done.

“An apprenticeship is quality training, delivered over a long period, which meets real business needs and is regularly assessed by experts.”