Learndirect topslices almost £50m from subcontractors over two years as average management fee rises to 36 per cent

Figures that the Skills Funding Agency (SFA) demanded be published by today have revealed that Learndirect top-sliced almost £50m from deals with its subcontractors in the last two years.

The Sheffield-based provider retained 31 per cent (£24.3m) of total funding (£77.7m) for its 73 subcontractors in 2013/14, as previously reported by FE Week.

But management fee details on the former publicly-owned firm’s website, which the SFA demanded be published by today by all lead contractors, show that last academic year it retained an even higher proportion — 36 per cent of total funding (£68.1m) from 75 subcontractors.

The numbers show that, despite being allocated £9.5m less total funding last year than in 2013/14, it maintained a £24m topslice by increasing the average management fee from 31 per cent in 2013/14 to 36 per cent last year when it earned £24.2m in management fees.

It brought the total retained by Learndirect in management fees over the last two academic years to just over £48.5m from a 33.6 per cent topslice.

A Learndirect spokesperson told FE Week: “We work in partnership with an extensive range of suppliers, each providing contract-specific services. We procure services at a charge from these suppliers. We do not subcontract the whole delivery to third party suppliers and then charge a fee.

“The suppliers deliver Learndirect-branded services using our systems and products in line with the delivery standards laid down by Learndirect. We provide marketing, the content, and the quality, audit and contract management framework within which they sit.

“The level of charges depends on the contract being delivered and the role of the supplier in question. Partners have schedules outlining the fees payable to them for their role in the delivery of each contract, and these rates are published to them prior to contracting and are available on our supplier support portal throughout the year.  The range of charges published on the learndirect website reflects the full year to July 2015.

While Learndirect has met the SFA requirement to publish it management fee details, the figure itself will be uncomfortably close to the 40 per cent SFA chief executive Peter Lauener (pictured below right) has said he would find unjustifiable.

Mr Lauener told FE Week editor Chris Henwood in an exclusive interview last year that he “would find it quite hard to see a set of arrangements that would justify a 40 per cent management fee, because it’s kind of obvious that what is taken as a management fee is not going to frontline education or training”.

Lauener 245

The SFA threatened in September to suspend public money for lead providers who failed to publish what they charged each of their subcontractors in 2013/14 and 2014/15, as reported by FE Week.

It came after the SFA rule requiring providers to specify how much they charge subcontractors in management fees was introduced in August last year, before FE Week found four months later that it was being ignored by a number of providers.

A notable offender at the time included the country’s biggest SFA contractor and former publicly-owned provider Learndirect — although the firm subsequently uploaded its 2013/14 figures before Christmas, which showed it had retained 31 per cent (£24.3m) of total funding (£77.7m) for its 73 subcontractors.

“The mix of services provided by our suppliers varies year-on-year, dependent on learner needs, which accounts for any variation between 13/14 and 14/15,” said the Learndirect spokesperson.

The SFA wants information on management fees available on websites, and to include current supply chain fees and charges policy. It also wants the relevant weblinks provided on 2015 to 2016 subcontractor declaration forms.

The rule was introduced following a long campaign against excessive top slicing by FE Week that was launched in the paper’s pilot edition in June 2011.

The SFA warned providers in September that “we will suspend your payments” if information is not made public by the deadline.

An SFA spokesperson said at the time that “all colleges and other training organisations which subcontract must publish the actual funding paid and retained for each of their subcontractors in the [provider] funding years 2013 to 2014 and 2014 to 2015”.

The SFA isyet to comment on the Learndirect figures for 2014/15.

Click here to see how much Learndirect charged each of its subcontractors in management fees for 2013/14 and 2014/15.

Where does your college sit in the FE Week 2015/16 adult apprenticeship allocations table?

The exclusive front page story in FE Week edition 154 on startlingly low levels of apprenticeship delivery among some colleges promised more details would be published later.

The full list of apprenticeship allocations for general FE colleges was published in edition 155 and can be seen below.

Click here for an expert piece on colleges’ delivery of adult apprenticeships from Association of Colleges senior skills manager Teresa Frith.

Source: Figures from SFA FoI responses and college category defined as ‘General FE and Tertiary’ as listed in 2015/16 EFA allocations

 

Golden night for City of Glasgow College as Skills Show competition winners announced

City of Glasgow College emerged the big winner from Skills Show 2015 in Birmingham as it claimed eight medals, including four golds — the most for any provider.

The Saturday closing ceremony, which marked the culmination of national skills competitions finals, also saw the announcement of most of the long squad (pictured above) ahead of the next WorldSkills competition in Abu Dhabi in 2017.

City of Glasgow College’s four gold medals were in beauty therapy (body), confectionery, culinary arts and health & social care. It also won two silver medals, in network systems administrator and confectionery, and two bronzes, in culinary arts and network infrastructure technician.

North East Surrey College of Technology was next up with three golds before Northern Ireland’s Southern Regional College and also North West Regional College were tied on two golds with Wales’s Coleg Cambria and also Coleg Sir Gar, Scotland’s New College Lanarkshire and England’s Mid Kent College and Highbury College Portsmouth.

Around 700 people attended the awards event, held at the Birmingham NEC, which had earlier featured opening speeches by Dr Neil Bentley, chief executive of organisers Find a Future and Peter Lauener, chief executive of the Skills Funding Agency and the Education Funding Agency.

“As the UK’s official delegate for WorldSkills competitions I know I’ve seen young people with the potential to succeed in the heat of international competition, when the next WorldSkills event is held in Abu Dhabi in 2017,” said Mr Lauener.

“Every competitor I’ve seen this week in Birmingham knows that they have the skills which will give them a good career,” he said.

“They will create wealth and prosperity for themselves and their families and their communities, all because of their skills.”

Dr Bentley said: “I am certain that those who make it on to that plane to Abu Dhabi will fly the flag for the UK with pride.”

The names of most of those who will make up Squad UK were also announced at the end of the night. These 200 people, who were selected on the basis of their success at UK Skills 2015 and 2014, will begin training with the aim of representing Team UK at WorldSkills Abu Dhabi in October 2017.

The results of the bricklaying, roofing – slate and tiling, and plastering competitions have not yet been announced.

According to Find a Future, the competition organisers, the delay was because “it will be necessary to re-verify the results of these competitions”. The winners in these competitions are expected to be announced on Wednesday (November 25).

SFA names 14 providers whose funding contracts were terminated early

Fourteen training providers with combined allocations of nearly £6.9m in adult skills budget (ASB) and almost £5.8m for 16 to 18 apprenticeships had their contracts with the Skills Funding Agency (SFA) terminated early in 2014/15, it has been revealed.

Of these providers named by the SFA on November 16, six had combined ASB and 16 to 18 apprenticeship allocations totaling more than £1m.

The SFA may terminate a funding agreement for a number of reasons including, an SFA spokesperson SFA, “where there are quality issues, an Ofsted grade four or where we have other evidence of poor quality delivery or serious breach of the contract”.

Building Engineering Services Training Ltd (BEST), which provides training and apprenticeships in the building services engineering sector, had its contract with the SFA terminated following an inadequate rating from Ofsted in June.

Tony Howard, acting head of BEST, which was allocated £531,389 in ASB and £1,440,872 for 16 to 18 apprenticeships, said the organisation had since entered into a “strategic relationship” with another training provider.

“We are also developing a new concept and model for apprenticeships to answer employer engagement and ownership issues for the future,” said Mr Howard.

John Budu-Aggrey, director of Alpha Building Services Engineering (Alpha BSE), said its most recent Ofsted inspection in November 2014, which resulted in an inadequate rating, did not accurately reflect the full range of what they did.

“We have young people who dropped out of school, who don’t have grade C.

We take them through level one.

We give them employability skills, Functional Skills,” said Mr Budu-Aggrey.

Alpha BSE, based in London, was allocated £67,556 in ASB and £718,776 for 16 to 18 apprenticeships in 2014/15.

“We are doing only fee paying courses now,” added Mr Budu-Aggrey.

Four of the 14 providers are no longer operating, with Companies House records showing they were in liquidation.

They were MIC Skills & Employability, Targeted Training Projects, Visage School of Beauty Career Development Center. Business Impact UK was listed as in the process of winding down, while the annual return of Venture Learning was overdue.

FE Week was unable to contact Venture Learning.

All six of these had been rated inadequate overall at their most recent Ofsted inspections.

A further six, with a combined ASB allocation of £4m and a combined 16 to 18 apprenticeship allocation of £1.71m, declined to comment.

These six providers, all of which were rated inadequate by Ofsted at their most recent inspections except for one which did not have an Ofsted report, were Barford Education and Training (North East); Blue Training; Herbert of Liverpool (Training) Ltd; Kats Learning; Four Counties Training, and ABA Training (which had not been rated by Ofsted).

The SFA spokesperson was unable to confirm when each of the funding agreements was terminated.

The final claims for 2014/15, which will show how much each provider was paid, are being calculated and will be published next month, the spokesperson said.

Lady Alison Wolf issues ‘headless chickens’ warning over Government’s 3m apprenticeship target

Government adviser Professor Lady Alison Wolf (pictured above) has admitted harbouring serious doubts about David Cameron’s 3m apprenticeship starts target labelling it “a big mistake”.

She told the House of Lords Social Mobility Committee that the target meant Whitehall officials would be “rushing around like a headless chicken” to achieve it.

She appeared before the committee on Tuesday (November 18) to give evidence on social mobility in the transition from school to work and was quizzed on the government’s apprenticeship target, which it aims to hit by 2020.

“I think the target is a big mistake and I am really worried about the target”, said Lady Wolf.

“Everything that I see makes me more worried because you put a target inside a government department and everyone starts rushing around like a headless chicken trying to figure out ways of meeting it.”

She described it as an “enormous target” and added that if there was an apprenticeship programme of that size then “you would actually be ending up in a situation where every young person in the country became an apprentice”.

Lady Wolf said reaching the target was “extremely unlikely” and if the Government “go on and on about it — it will distort everything else and the price will be the quality of what we are getting”.

She also commented on the idea to have even more apprentices than the previous government seems to her as “extraordinary”.

She said: “I also don’t think they [Government] are budgeting for it because they said they will put money in and will fund the SMEs and if you look at what the spend per apprentice was in the last five years it was a level of spending for which you could only afford to do large number of the low quality apprenticeships.”

Lady Wolf said she found it hard to believe in this current fiscal climate that there was the money to meet the target and still have high quality.

She added that colleges should very clearly be the place that apprenticeship training took place and she would stop the “hundreds and thousands” of small providers coming in, saying “it just doesn’t work”.

The evidence session came a week after the committee questioned Ofsted chief inspector Sir Michael Wilshaw on promoting vocational routes.

The next House of Lords Social Mobility Committee hearing is due to take place on Wednesday, November 25, with witnesses yet to be announced.

‘Keep out of it’ – AELP boss Stewart Segal warns Skills Minister Nick Boles off apprenticeships

Skills Minister Nick Boles has been urged to stay out of apprenticeship delivery business after telling college principals that independent learning providers (ILPs) were “nicking” their lunch.

Association of Employment and Learning Providers chief executive Stewart Segal hit back at Mr Boles who told Association of Colleges (AoC) conference delegates that ILPs were better than colleges at securing apprenticeship funding.

Mr Boles, during a keynote speech at the ICC Birmingham on Tuesday (November 17), challenged colleges to go from delivering a third of all apprenticeships to two-thirds and told principals: “As your friend, I have to ask you this, why on earth are you letting these guys [ILPs] nick your lunch?”

Mr Segal was unhappy with the Minister’s comments and told FE Week: “I don’t think it is a question of anybody nicking anybody’s work.

“The market will decide and employers and learners will choose the best provider for them and the one that can deliver their best programme.”

“I don’t think the minister should get involved in which percentage of what figure is delivered by which type of provider,” he added.

It comes after FE Week revealed low levels of college take-up on apprenticeship delivery at many colleges.

Skills Funding Agency figures obtained under the Freedom of Information Act showed that colleges, on average, have 27 per cent of their 2015/16 Adult Skills Budget allocated to apprenticeships, compared with 60 per cent at other providers.

But the college figure varies significantly across the country, with London colleges averaging just 12 per cent, as reported in FE Week on November 13.

Mr Boles also told AoC conference delegates: “Total government spending on apprenticeships grew by £400m, or nearly 30 per cent, between 2009/10 and 2015/16.

“In 2009/10 the taxpayer was investing every year £1.1m in apprenticeship training but in 2015/16 it will be £1.5bn.

“We need to help you take advantage of that funding stream. I want to help you give ILPs a very good run for their money and secure a much larger share of that funding.”

Mr Boles added that even if the government hit its 3m apprenticeship starts target by 2020 “we will still have fewer apprentices per 1,000 of population than almost any of our European competitors and if it works for them and makes them productive I don’t think we should shrink from it”.

“The new apprenticeship levy will provide substantial additional resources to fund training,” he added.

Network for Black and Asian Professionals chief executive Rajinder Mann blames ‘squeeze on the public purse’ for network’s demise

The loss of two key contracts worth £164,000 led directly to the demise of the Network for Black and Asian Professionals (NBAP), according to its chief executive Rajinder Mann (pictured above).

Speaking exclusively to FE Week, Ms Mann (pictured above) said the loss of a contract with the National College for Teaching and Leadership (NCTL), worth £130,000, and another contract with the Education and Training Foundation (ETF) worth £34,000 meant that the NBAP was no longer financially sustainable.

“Because of the squeeze on the public purse, those programmes have not been funded and as a result of the lack of funding we could no longer sustain ourselves, despite having cut back and cut back,” said Ms Mann, who was the subject of an FE Week profile article a year ago.

Membership income, which had been “going down over the last couple of years”, only “formed about 20 per cent of our income” and “would not have covered the remaining NBAP chief executive blames ‘squeeze on the public purse’ for network’s demise overheads”, she said.

“Our organisation had a role to play, and it’s a very, very sad day for the sector,” she added. NBAP members learned of the NBAP’s closure earlier in a heartfelt letter from Ms Mann.

In the letter, Ms Mann said the closure was the “result of the current political environment and the austerity cuts in the public sector”.

Earlier this year, as reported in FE Week, Ms Mann called for colleges to make the promotion of black, Asian and minority ethnic (BAME) a priority, following a drop in the number of BAME principals in the FE sector from 17 in 2012/13 to 12 this year.

That number has now fallen further to 11, said Ms Mann.

“With the area reviews taking place, I think our learners are going to be further disadvantaged, BAME learners in particular, because it will be the black staff who’ll get affected,” she said.

The NCTL contract, which Ms Mann said the NBAP lost in May due to “the agenda for localism”, was “to deliver the Ofsted mentoring, Ofsted shadowing programme and also a variety of other mentoring, career development workshops,” she said.

A spokesperson for the Department for Education (DfE) said that the NBAP had been funded through the Department for Business, Innovation and Skills (BIS) rather than the DfE.

A BIS spokesperson was unable to confirm details of the contract it had with the NBAP.

The NBAP was funded by the ETF in 2013/14 and 2014/15 to deliver a professional development programme for BAME staff, which included career development, mentoring and shadowing, an ETF spokesperson said. Earlier this month, the ETF issued an invitation to tender for a range of CPD work, including supporting BAME leaders and emerging leaders.

“NBAP would have been an obvious candidate to bid for this new work,” the spokesperson said, adding that the ETF was “concerned” to learn of the NBAP’s closure.

“It is imperative for the sector that the aims and objectives which the NBAP has pursued tirelessly over recent years are taken forward and their successes are built on,” the spokesperson said.

Click here for an expert piece on the NBAP by Meredith White, learner experience manager at Westminster Kingsway College.


Campaign call for NBAP

Network for Black and Asian Professionals (NBAP) chief executive Rajinder Mann called on college leaders to launch a campaign to save the organisation.

She spoke out after a number of black and Asian FE leaders told of their concerns about the NBAP’s closure during an Association of Colleges (AoC) conference breakout session hosted by the NBAP on Tuesday (November 17).

Ms Mann said: “We still want to see an organisation that addresses not just the training, but support and guidance for black and Asian people looking to go into leadership roles in FE.

“I’m a firm believer in achieving this through targeted intervention. The NBAP could still deliver that. Go out there, start a campaign.”

Anthony Bravo, principal of Basingstoke College of Technology, had earier said during the session that “something has got to be done — it can’t end like this”.

Ayub Khan, interim chief executive of the Further Education Trust for Leadership, said a replacement organisation was needed because “you have to have black and Asian people in leadership positions in colleges, so they’re representative of the communities they serve”.

Meredith White, learner experience manager at Westminster Kingsway College, said: “We went through a phase when racism went underground, but it’s in the open again increasingly. It’s important that groups like NBAP are around to help counter this.”

Busy day at the Skills Show for Theo Paphitis with visit to the hairdressers and the kitchen — and even the operating table

Skills Show patron Theo Paphitis had a busy day in the hair salon today under the watchful eye of celebrity hairdresser Nicky Clarke and was also put to work in the kitchen knocking out some delicious pasta — he even tried his hand at an operating table.
Paphitis and Randall

The former BBC Dragons’ Den star took part in a masterclass with the hairdresser to the stars and also former WorldSkills UK competitor Eleni Constantinou, whose efforts in Sao Paulo, Brazil, this summer earned her a medallion of excellence.

After 20 minutes with the scissors, Theo was off to learn to learn some tricks of the restaurant trade as he made tagliatelle with renowned London chef Theo Randall at the University College Birmingham demonstration kitchen.

And the challenges didn’t stop there on day two of the Skills Show at Birmingham’s NEC as he visited the Operating Theatre Live stand and later jokingly tweeted: “Would you trust this man with a scalpel??”

But he managed to take a few moments out of his busy crash course schedule of careers guidance to sing the praises of the Skills Show and urged young people and business to get involved.

“Get yourself down here — it’s th most amazing inspirational event where you’ve got hundreds of employers, hundreds of opportunities to try things and hundreds of careers that you probably didn’t even know existed,” he said.

“If you want to be inspired about your future or are wondering ‘what am I going to do with my future’, then get down to the Skills Show. You might just see the beginning of a great career path.”

20.11.15 - Birmingham. Theo Paphitis enjoying a lesson in hairdressing from celebrity hairstylist Nicky Clarke on The Street Spotlight Stage during his visit to the Skills Show 2015, held at the NEC, Birmingham. Photo: Professional Images/@ProfImages
From left: Eleni Constantinou, hairdresser model, Theo Paphitis and Nicky Clarke

He added: “And businesses should get involved with the Skills Show because this is their opportunity to inspire the next generation into their world; into the skills shortage that we know exists in our businesses and you can actually make a difference and possibly find the next generation that’s going to make your business grow.”

Tomorrow marks the last day of the Skills Show, which enjoyed a visit from Business Secretary Sajid Javid yesterday.

He said: “For everyone that’s come along — everyone that’s made this happen — thank you for what you’ve done.

“This is going to be a huge experience for so many young people. It’s going to be inspiring to them all, and I wish you all the very best.”

Further education and skills sector bodies welcome Chartered Status membership

The Association of Colleges (AoC) and the Association of Employment and Learning Providers (AELP) have welcomed news that FE providers can finally sign up for Chartered Status.

The Chartered Institution for Further Education (CIFE), which was granted the Great Seal of the Realm in October having been set up in 2013, announced on November 17 that colleges and independent learning providers (ILPs) could apply for membership.

Providers who wish to become CIFE members must pay a £3,000 non-refundable fee to have their application reviewed.

The annual subscription fee for successful applicants is £5,000.

David Corke, director of education and skills policy at the AoC, said: “The Chartered Institution for Further Education is in its infancy and we’ll be keen to ensure it provides genuine added value to colleges and their current and future students.

“We look forward to discussing this with CIFE’s representatives.”

Stewart Segal, chief executive of the AELP, said: “Any initiative to improve the external perception of the sector is welcome.

“Training providers have to be committed to the quality of their delivery and will consider a number of approaches including the Chartered Institute of FE.”

CIFE regulations and guidance for applicants, available on its website, detail the standards that colleges and training providers need to meet in order to join.

To be considered for membership, colleges and training providers must have an overall rating of good or outstanding at their most recent Ofsted inspection, and be in receipt of public funding from the Skills Funding Agency (SFA).

Colleges and ILPs must also show how they can meet the CIFE quality standards, covering a range of areas including teaching and learning, governance, finance and engagement with the local community and employers.

“This is another significant step along the road to the development of a Royal Chartered body in the FE sector,” said Lord Lingfield, chair of CIFE.

“There is still much to be done but we have reached the point when we should open our doors to organisational members, and bring together those high performing organisations who are key to shaping the sector’s future.”

Plans were originally drawn up, by the Department for Business, Innovation and Skills, for the Royal seal of approval to be granted to high-achieving FE institutions in July 2012.

It was almost another year before the appointment of Lord Lingfield as chair of the IfE.

In March last year, he told FE Week he expected “negotiations to be completed within months” that would allow for the quality mark to be launched.

But an FE Week survey on the mark, carried out two months later, uncovered concern that the Chartered Status initiative could simply “sink without trace, before further worries earlier this year that it had “stalled” after no sign of movement.

Click here for more details on applying for Chartered Status.