The Shadow Skills Minister has been left frustrated with a “misleading” answer to a parliamentary question he lodged over what happened to Libor fine cash for apprenticeships promised by the Prime Minister.

David Cameron announced last April that if he won the general election, his government would fund 50,000 apprenticeships and traineeships for unemployed 22 to 24-year-olds using a £200m pot from fines paid by bankers in the wake of the Libor scandal.

The Government has refused to answer a string of questions lodged by FE Week, asking what happened to the key election promise widely reported in The Sun, the Financial Times and BBC.

Shadow Skills Minister Gordon Marsden also tabled a parliamentary enquiry on the issue on February 5.

He has now received an answer, but complained to FE Week that it “didn’t answer the question”.

Mr Marsden had asked Chancellor George Osborne what progress his department had made “on incorporating the proceeds of the £227m fine imposed on Deutsche Bank, in relation to their Libor activities into a new three-year fund to create 50,000 apprenticeships”.

The response said that the Government would “be spending twice as much in cash terms on apprenticeships by 2020 compared to 2010. Spending on apprenticeships in England will be £2.5bn in 2019-20.

“The BIS spending review settlement for apprenticeships reflects the government’s commitment regarding the proceeds of the Libor fine the FCA announced in April 2015.”

After reading this, Mr Marsden told FE Week on Monday: “They [Treasury officials] didn’t answer the question, which was really quite simple. There has been a vague allusion to it [what happened to the Libor fines money], but little more which is misleading.

“We will press further on this, with further parliamentary questions if necessary, when we return to parliament next week.

“If the money really has been spent on apprenticeships and traineeships, why can’t the Government show us the figures?”

It comes after Labour leader Jeremy Corbyn told FE Week on 7 February he was confident Mr Marsden would get to the bottom of what had happened to the Libor pot, adding he “has indefatigable skills at following things through”.

FE Week also went back to the Treasury to point out that the only settlement announced in the spending review specifically for apprenticeships related to the planned new levy on large firms — which had nothing to do with Libor.

We added that Mr Cameron said in April that a specific sum (£200m from Libor fines) would be allocated to fund training for a set number (50,000) of older learners, not that it would be incorporated into wider skills funding.

But a Treasury spokesperson declined to say whether the £200m had already been spent, or if Mr Cameron’s plan to reserve it specifically for apprenticeships and traineeships for 22 to 24-year-olds had been scrapped.

The FE Commissioner has singled-out former principal Jacqui Mace (pictured) for failings at a London college that has been placed into administered status.

Dr David Collins said this in a report published on Thursday (February 18) on Stanmore College, which was led by Ms Mace until December.

A letter published on the same day, from Skills Minister Nick Boles to college chair John Howard, confirmed that he had accepted Dr Collins’ recommendation that it should be placed into administered status.

Dr Collins said his team, which inspected the college in December, had found “at all levels, [a] lack of confidence in the [former] principal’s ability to lead the college going forward”.

His report added staff and managers had been “highly critical of her [Ms Mace]”.

It also said Dr Collins’ team advised Mr Howard that Ms Mace “should not continue with an active role in the college and should not return after term ends [last December]”.

The visit by Dr Collins’ team to the 3,500-learner college, which has a current SFA allocation of £2.1m, was prompted by an inadequate Ofsted rating in November.

Following publication of the Ofsted report, the college governors took “decisive action” to replace Ms Mace “in terms of the day-to-day running of the college by an externally appointed interim principal”, Dr Collins said.

The board had agreed that Ms Mace should move to an “externally-focused” role, developing the college’s planned merger with neighbouring Harrow College, until Ms Mace’s planned retirement at the end of March, the FE Commissioner added.

But this was considered “inappropriate” by Dr Collins.

Interim principal Sarbdip Noonan told FE Week on Thursday that Ms Mace was no longer employed “in any capacity by the college”.

However, she declined to confirm if she had been sacked.

“All staff are now working in a focused and urgent way to improve the college’s quality of provision and ensure our learners are successful,” she added.

“We have every confidence that the strengths of the college will be consolidated further and the areas for improvement will be transformed to strengths.”

Four lead providers based in the north east have said they are taking steps to ensure more than 160 apprentices get qualifications after their subcontractor was said to have ceased trading.

Learning Curve Group (LCG) chief executive Brenda McLeish (pictured) told FE Week on Tuesday that her company had been informed by Sunderland-based Xiscad Training Ltd it was going into liquidation.

It means, FE Week understands, that alternative training arrangements need to be made for 164 level three and four IT professional apprentices that were with Xiscad, through subcontracting with LCG, Sunderland College, Stockton Council, and South Tyneside Council.

LCG, which employed Xiscad as a subcontractor for 97 level three and four IT professional apprentices through an SFA contract worth £1.8m as of last December, is setting up a new training centre in Sunderland next Monday, specifically for affected learners.

Ms McLeish told FE Week: “We have been working with Xiscad since 2011 with no problems. They were with us for our ‘good’ Ofsted rating [in March 2014].

“Unfortunately, on 10 February, they told us they had taken the decision to liquidate.

“We have retrieved all our apprentices’ files and record of work they have done attempted to contact every single one of them via phone, text, emails or social media.

“We are opening a brand new IT training facility in Sunderland on Monday so we can continue with their training directly.”

Nigel Harrett (pictured), the deputy principal of Sunderland College, which had an SFA contract worth £253,566 with Xiscad, said: “We are aware that Xiscad ceased trading last week.

“As a result, we have been in contact with the 35 [level three] apprentices and six on traineeships who are funded through Sunderland College, and we have also held an information, advice and guidance event for them.

“In addition, our business development team is currently working with employers to establish opportunities for the 41 people affected to be able to complete their apprenticeships and traineeships.”

Councillor John Anglin, lead member for regeneration and economy at South Tyneside Council, which had an SFA contract worth £265,216 with Xiscad, said the local authority was “doing everything we can to support those affected [21 level three apprentices]”.

“We have opened dialogue with all of our apprentices and are currently reviewing their files,” she added.

“Moving forward, we will look to appoint a new supplier to support the apprentices in completing their qualifications as well as identifying potential new employment opportunities.”

Councillor Jim Beall, cabinet member for adult services and health at Stockton Council, which had a contract worth £88,325 with Xiscad, said: “We are doing everything we can to support the 11 [level three] apprentices affected.

“Three of them have recently completed their apprenticeships and we are seeking urgent clarification as to the status of their qualifications. The remaining eight are nearing the end of their training and we are supporting them so they can complete their qualifications.”

An SFA spokesperson said: “Where our providers decide to use subcontractors, we expect these arrangements to add value to the provision and for public funding to be used to directly support learners.

“Xiscad is a subcontractor to a number of lead providers and we are working with these organisations to ensure there is minimum disruption to learners and employers and ensure continuity of training.”

The homepage of the Xiscad website was down and there was no answer on the main company phone number up to Thursday (January 18).

But when FE Week called company director Steven Carr’s mobile number, a man who answered, but refused to confirm his name, said: “I can’t comment [on the trading status of Xiscad]. It is in the hands of the insolvency people.”

However, an Insolvency Service spokesperson told FE Week before publication that it and Companies House had not yet been made aware Xiscad had folded.

The chief executive of the Skills Funding Agency (SFA) has warned providers that failing to adapt to changes in the FE sector could put their future in the market at risk.

Peter Lauener (pictured), who is also chief executive of the Education Funding Agency, described recent changes in the sector as radical and stressed the importance of providers finding ways to work with the new system, in a speech at the Skills Summit yesterday in London.

He told an audience dominated by colleges and training providers: “This is a radical, radical change programme and in any radical change programme there are some organisations, some employers that will adapt and work out the best way of working with the new system — and there are others that will take longer.”

He warned that failing to adjust to developments, such as the impending introduction of the apprenticeship levy, could jeopardise providers’ progress.

“There is risk in this, particularly probably for training organisations and for colleges if they don’t adapt to the new world,” he said.

Mr Lauener repeatedly acknowledged that the process would not be an easy one, but reassured his audience that though there were “some big, big challenges” there would also be “some big opportunities”.

“There is, I think, a lot of opportunity for innovation. Providers do need to diversify; they need to be the first port of call for employers, whether that’s colleges or independent training providers.

“That’s the biggest single difference that we’re looking to build into the system as the levy gets underway,” he said.

He told his listeners that although he saw the future as “a challenging environment”, he also looked to the next five years with “considerable optimism”.

“There will be enormous challenges for colleges, for other providers, for employers, in all this. But there will be massive opportunities as well for apprenticeship growth,” he said.

He said that with funding from the apprenticeship levy, the government target of 3m new apprenticeships by 2020 would be “an achievable target”.

“I see no reasons why that should not be achieved with the tools that have been in place and the funding that has been put in place,” he said.

When pressed in a question and answer session to expand on what the potential risks would be for providers who failed to keep up with this changing landscape, Mr Lauener replied: “In the system, the demand will come from employers and under the adult education budget will be a matter of meeting local needs.

“This will be national entitlements and other things but the exact provision needs to be right for the locality — people need to adapt to that and people who don’t adapt won’t do as well.”

He said it would be “no good” to call for a return of the old system.

“The people who don’t adapt to the market won’t have a future in the market,” he said.

The Skills Funding Agency (SFA) will reduce funding rates for the level three ‘IT, Software Web and Telecom Professionals’ apprenticeship framework by around £2,000 from April 1.

The agency warned in it’s Update bulletin this afternoon that it would be reducing the funding values for the Level 3 competence qualification.

The rate for the competence qualification published by the SFA will fall from £8,673 to £6,650, a 23 per cent reduction. For a fully-funded 16-18 year-old learner, this would equate to a fall from £9,299 to £7,131, a cut of £2,169.

The Update bulletin said that “this is part of our regular review of apprenticeship framework costs to ensure value for public funds.

“From 1 April 2016, we will reduce the funding values for new apprenticeship starts only; those already on programme will remain on their existing rates. We will change the competency aims (not knowledge, English or maths aims) for the published rate from £8,673 to £6,650, a 23 per cent reduction.”

The SFA has not reduced apprenticeship framework rates since 2012/13, after a freeze was imposed during plans for switching to the new standards funding system.

But FE Week understands the rate for ‘IT, Software Web and Telecom Professionals’, which is one of the highest for all frameworks and includes a competency, knowledge and up to three functional skills qualifications, is now considered far too high by the SFA — particularly at level three.

Funding for a 16-18 year-old learner that completes at level 3, for example, currently exceeds £15,000 and can rise to over £18,000 if delivered in central London.

“Based upon the most up to date information, the new rate is more reflective of the cost for delivering the framework, an SFA spokesperson told FE Week this morning: “We are making the change following a review, which we do periodically and when new information is available, as part of a routine review of apprenticeship framework costs.

But Stewart Segal, chief executive of the Association of Employment and Learning Providers, told FE Week he would be calling on the SFA to review the timing of its decision.

He said this “very short notice” change had not been thought through and would “inevitably disrupt starts for learners and employers”.

He added the decision was “based purely on the measurement of duration… just one aspect of the cost and quality of the framework and it should not drive the funding which is based on a complex mix of delivery factors.”

Despite the relatively high level of per apprentice funding, the level three course is, for example, not a relatively long framework.

The Tech Partnership, a network of mainly large technology firms, is the government’s Issuing Authority for the apprenticeship framework and they expect a minimum of 18 months with just a minimum of 674 guided learning hours with Functional Skills or 539 without — or, they say, as little as six months for an adult with prior attainment.

The framework is becoming increasingly popular with colleges and training providers, especially those recruiting fully funded 16 to 18-year-old learners. It had the second most starts at level three for 16 to 18-year-olds by framework last year and the number of starts have been rising rapidly since 2012/13.

The most recent published success rates are for 2013/14. They show which providers had the most leavers for this framework at level three (August 2013 to July 2014):

There were 38 providers delivering this framework, also based the latest success rate data — with the most in total being the British Army (870 leavers) and QA Limited (450 leavers).

The Tech Partnership was unable to comment ahead of publication.

Hackney Community College and Tower Hamlets College have announced plans to merge from August this year.

A spokesperson for the two London colleges said their intention is to create a “single, larger and more sustainable college” that is “better able to meet current and future local needs”.

Both colleges will keep their individual existing campuses, names and branding.

The spokesperson added: “The merger will create a significant educational provider in London, supporting the success of around 17,000 students and apprentices, 800 staff and with a combined turnover of around £40m. It will benefit from combined staff talent, facilities and financial resources.”

The new board of governors will be made up of an equal number of governors from the two existing colleges, with a new, independent chair. The governance structure of the new college will however take on a new name.

Martin Earwicker, chair of Tower Hamlets College’s board of governors, said: “We are all very excited to be at this stage of the merger process. Throughout, both corporations have been concerned with ensuring that we are able to continue to provide our respective local communities with access to high quality further education. This merger will enable us to continue to do so for many years.”

Tom Mautner, chair of Hackney Community College’s board of governors, said: “Through this merger we will be in an excellent position to achieve our shared vision of maintaining high quality and wide-ranging further education in Hackney and Tower Hamlets, and beyond. The synergy between the two colleges is very strong, with shared values and ambition, and I am confident of a successful future for the newly-merged organisation.”