By the time FE Commissioner Dr David Collins had identified the historic “deterioration in New College Nottingham’s (NCN’s) financial position,” actions to rectify the situation were already in place and working. Dawn Whitemore explains how the college has successfully continued with efforts to balance the books.

A year ago, I found myself in the unenviable position of being three months into my new role as principal, facing a £2.7m underlying budget deficit.

As a college we had already begun to tackle this head on, but decided that it was important to request support early and took the unusual step of highlighting our position to the FE Commissioner Dr David Collins, pre-empting a notice of concern from the Skills Funding Agency.

Dr Collins and his team joined us in February, by which time we were already implementing our robust financial recovery plan, and following his ratification of our approach, we continued our course to take us back into the black.

I feel it is important to highlight that although Dr Collin’s team were extremely challenging, their support was invaluable in helping us chart the course to recovery.

What a difference a year makes. The turnaround we’ve made has been remarkable — we exceeded our planned surplus in 2014/15 by delivering a £0.6m underlying surplus and, despite further government funding cuts of £3.8m, we’re on track to achieve our planned £1m surplus this academic year.

One of the most difficult challenges that any college has when faced with implementing a financial recovery programme is ensuring that quality and the learner experience is not compromised.

What is most pleasing is that we have been able to turn around our financial difficulties while still investing in teaching and learning, which has resulted in a further increase in success rates.

We exceeded our planned surplus in 2014/15 by delivering a £0.6m underlying surplus and, despite further government funding cuts of £3.8m, we’re on track to achieve our planned £1m surplus this academic year

We have achieved an 86 per cent overall success rate — a 2 per cent improvement on last year — and a 14 per cent increase in our apprenticeship success rate. Our English and maths results are also something we can be incredibly proud of.

We achieved what we set out to because we had a strict focus on our core business. We have continued to ask ourselves at every stage: what’s in it for the learner? We did not allow ourselves to be distracted or diverted from our goal to deliver first class education and skills.

This approach has been embraced by the wider college, with staff appreciating the clarity and consistency. I have to say my team has gone the extra mile to deliver what we set out to do.

As a principal, you can’t ask for a better endorsement than that of your learners, and this year’s college learner survey has proven that this revitalised focus has paid off. My learners have told me they love college and are proud to be part of NCN and I can’t ask for more than that.

However, it has also been heartening to have support from the sector and our stakeholders. This month I received letters from Dr Collins and Skills Minister Nick Boles congratulating us on our hard work and confirming we’re no longer subject to intervention by the FE Commissioner’s office, alongside a letter from our bank describing our financial recovery as ‘first class’.

But this is not the time to sit back and rest on our laurels. Like most, if not all, FE Week readers, I followed the Chancellor’s Spending Review with interest, bracing myself for dire consequences for the sector. Early indications are that the overall picture will not be as detrimental to FE as first thought, however, the devil is always in the detail.

It is our responsibility to ensure that our sector is financially sustainable and continues to prioritise learning and skills development. We must focus on running our businesses like businesses so we can stay agile and resilient to whatever changes may come in the future.

Those changes are already on the horizon here in Nottingham and many other cities across the country. In Nottingham we have committed to a single FE proposition, and the work we have done on delivering a positive financial outlook will give the new college the best possible start.

We’ve all got ambitions — ambitions for our institutions, and bold ambitions from our government for our sector and I’m 100 per cent committed to achieving them.

However, my ambitions are, and have always been, to help each and every one of my learners achieve theirs.

Shadow Skills Minister Gordon Marsden was a key speaker in an Opposition Day debate last week as he aired FE funding concerns, and Wednesday’s Budget did nothing to ease those concerns, as he explains.

On Wednesday we saw the broad campaign I and others have put on government on FE funding, not least in our Opposition Day debate last week, forcing Chancellor George Osborne to pause on accelerating further cuts on those already suffered.

But ministers are still leaving FE without the proper, strategic support it needs to fulfil the aspirations of young and older learners.

The Chancellor tried to imply he’d protect FE funding. But a cash terms freeze in 16 to 19 funding and adult skills is a cut in real terms.

Freezing 16 to 19 funding for four years, at a time when colleges are facing huge upheaval and instability from area reviews is a recipe for continuing crises.

The Treasury’s Blue Book accompanying the Spending Review says there will be further savings here if young people have two-year courses reduced to one-year. The net effect is less money and more barriers to opportunities for our young people.

And what of the darker corners in Osborne’s statement? The Treasury’s Blue Book tries to claim the core adult skills budget is protected at £1.5bn. What’s this made up of? Is it counting the new loans scheme for 19 to 23-year-olds which may not be taken up? The experience with 24+ loans suggests potential real problems in using them.

Freezing 16 to 19 funding for four years, at a time when colleges are facing huge upheaval and instability from area reviews is a recipe for continuing crises

Neither the Chancellor nor BIS’s own press release explained the change. What will it mean for 19 to 23-year-olds being able to access free level three training?

The Treasury document referred to 40,000 learners affected by loans but currently 217,000 19 to 24-year-olds are taking these courses.

We urgently need to know who is affected and the status of free level three training. Restricting or abolishing grants will be a huge disincentive to young people in this vulnerable age group.

The Chancellor’s announcement on the apprenticeship levy leaves huge questions. Is this a potential ‘big bang’ fiasco? It needs to go forward carefully with measured agreement from the various sectors.

It must protect SMEs and also current investment in apprenticeships, making sure great existing schemes run by companies don’t get crowded out. It must be genuine extra money, not simply a further disguised BIS funding cut, and one where companies and their employees are reassured and incentivised.

Allowing sixth corm colleges VAT relief by becoming academies would benefit them financially. But it’s critical their success and innovation isn’t curbed by micromanagement from the Department for Education or meddling with the accountability and standards they currently deliver.

As I said during our Opposition Day debate on FE last week in the House of Commons, the government’s rhetoric on skills and training is simply not matched by its actions.

It talks the talk on energising technical and professional skills, then fails to deliver a strong mechanism for level four work experience in schools. It claims to be focused on productivity, but then undermines those key drivers of growth — colleges and providers — by rushed area reviews.

It pontificates about social mobility opportunities and equalities, but then roll out a series of cuts in Esol and adult skills, for example, often leaving the disadvantaged even further removed from good jobs and training, while colleges and schools are left struggling to fund the infrastructure for disabled young learners and other groups.

Ministers have failed to learn the negative cumulative effect of such cuts — as we saw with EMA — in stifling opportunities and social mobility.

I told Skills Minister Nick Boles in our Commons debate: ‘If the government will the ends, they must will the means. Otherwise, meanness and lack of focus will leave thousands of young people at risk of having their life chances shredded by the ignorance or incompetence of this government.’

For now they’ve been forced to row back on some of this. But they need to be watched like hawks – so learners, younger and older, and the FE sector, don’t fall off the cliff.

The national 16 to 18 A*-C pass rates in 14/15 were 35.8 per cent (38.9 per cent) for GCSE maths and 35.1 per cent (37.9 per cent) for English — a drop of 3.1pp and 2.8pp respectively on 13/14.

Success rates are published soon and they’ll be down too.

That’s because these GCSEs (and Functional Skills if entry grade is below D) are now mandatory for youngsters without the C grade.

Are pass rates around 35 per cent good enough given that after 11 years of schooling many learners didn’t get the C grade and, for some, that’s after several attempts? Learner numbers rocketed across FE and schools — maths GCSE up 30 per cent to 130,979 on 13/14, English up 23 per cent to 97,163.

We have 819 learners taking GCSE English and 839 in maths — it’s big business for most FE colleges and 45 per cent up for us on two years ago

English and maths are vital and underpin most things we do. I’ve no problem with them being mandatory for everyone who hasn’t reached the C grade.

So why the new tolerance rule? The retrospective tolerance rule is perverse.

We’ll now lose half the funding for learners under the tolerance threshold. Rumour has it that the sector (all post-16 provision — school sixth forms too) would have lost £100m last year on the 100 per cent rule.

Most colleges gave learners the opportunity to progress and would not sacrifice funding in such difficult financial times. Did some providers run away from the challenge just to preserve success rates?

This year we have 819 learners taking GCSE English and 839 in maths — it’s big business for most FE colleges and 45 per cent up for us on two years ago.

When you factor in mandatory Functional Skills — 700 young learners taking English and the same number taking maths at level two or below and the high numbers of adults taking (free) English and maths then this reduced our overall college success rate by 1.6pp.

Fortunately we improved the rest of our work but we still ended up on 86.1 per cent — 0.8pp below last year. And 100 per cent of our learners who needed to be were on programme, but some simply refused to engage. Most colleges who played by the rules will report a fall.

By the way, I wish we could charge adults — ‘skin in the game’ improves retention, but we’ll always waive fees for the needy. I’m a fan of giving learners different routes to stardom. For example, the pilot core maths syllabus is a good ‘applied’ alternative to the standard maths A-level.

What’s wrong with having an applied/ employer-approved alternative level two maths syllabus, keeping the same standard and rigour as the GCSE? The Functional Skills level two should be a level two and not a grade D.

The FE sector excels in second chance and provision that is different to school. Don’t assume that school leavers have plateaued in their learning. We can add value. Or are we just looking to duck a challenge?

Others say yes, we can motivate disenchanted learners if we try new and different ways of teaching and show that the content and learning is relevant — essential life skills — then we’re in with a chance. We have to change learner (and staff) mindsets from ‘have to’ to ‘want to’.

Make sure every teacher knows the English and maths syllabi so that they can include and reference in their own subjects. Do lots of staff CPD and use on-line learning materials to complement (not replace) the teacher — there’s some great stuff out there.

Get your inspirational teachers to run sessions to multiple groups — their enthusiasm will rub off on more learners.

And make the subjects fun — reduce the fear factor. Work with schools to offer struggling 14-year-olds a three-year GCSE programme with the final year at college. Schools need to recognise that FE can help learner progress. If you have any bright ideas to raise achievements to Shanghai levels let me know. We’ve got to get this right. We owe it to our learners and their career prospects.

With the CITB having operated a training levy in the construction sector for half a century, it’s view of Chancellor George Osborne’s levy announcement on Wednesday (November 25) was formed of experience. Steve Radley outlines the CITB view of the Budget.

Chancellor George Osborne’s Spending Review statement has provided more clarity on the government’s approach to apprenticeships that includes a fair amount of good news for employers but at the same time leaves a number of questions unanswered.

As we examine its plans, the key questions are will it help to deliver more apprenticeship starts and will more employees complete high quality and relevant apprenticeships?

As an organisation with 50 years’ experience of running a levy, we previously identified a number of yardsticks for the apprenticeship levy.

These included whether the money it raised would be ring-fenced to support high quality training; whether employers feel a sense of ownership; and, whether it helps firms of different sizes to work together to invest in apprenticeships.

The Chancellor’s announcement looks to have ticked the first two boxes but we still need to hear a fair bit more on the last point.

We will be consulting industry and gauge attitudes towards making the apprenticeships levy and existing construction levy work in tandem

Starting first with the apprenticeship levy, the £15k allowance to offset against the levy payment means that only 2 per cent of UK employers will contribute to it, according to the chancellor.

Given the long-tail of small employers within construction, we estimate that just over 700 firms out of 325,000 in the industry will be liable — just 0.2 per cent.

With firms only paying the 0.5 per cent on paybills of £3m and more, the average rate paid by many firms will be significantly lower than the 0.5 per cent marginal rate.

The government has also taken steps to ensure that the apprenticeship levy directs support toward higher quality apprenticeships.

It has effectively agreed a settlement that matches the greater contribution required by employers with giving them a greater say over standards.

Importantly, the new Institute for Apprenticeships, which will be independent of government and led by employers, will regulate the quality of apprenticeships.

The Treasury’s commitment that ‘funding caps will be significantly higher for programmes which have high costs and are of high quality’ will also support employers in sectors such as construction where the average cost of an apprenticeship is £26,000, compared to health and social care where it costs less than a quarter of that.

The Statement also addressed some of employers’ concerns over the capacity of the FE sector to deliver high quality training by protecting core education funding in cash terms and maintaining the base rate of funding for all students aged 16 to 19.

However, a number of questions remain unanswered. These include the rate of support for apprentices under the age of 19 — close to six-in-ten of all apprenticeships are in construction.

For smaller firms not paying the levy, there are also important issues to resolve. These include the support available for smaller companies and whether firms paying the apprenticeships levy will be able to pass their digital vouchers on to other firms in their supply chains.

These are critical issues, given that some 60 per cent of construction apprenticeships are delivered by firms with fewer than 50 employees. With the government also announcing ambitious targets to build more homes, we need an approach that helps the major home builders and their supply chains to work to build a more skilled workforce.

The apprenticeship levy also poses challenges for organisations like CITB that already run one. The most important is whether the existing levies are still needed and whether employers will be prepared to pay them.

Our consultations with employers found most of them answering yes on both counts. However, with employers now working out what they must pay to the government, we will be consulting industry and gauge attitudes towards making the apprenticeships levy and existing construction levy work in tandem.

In construction we need a highly skilled workforce to build the new homes, roads and energy infrastructure that the Chancellor announced. We now need to ensure the apprenticeship levy helps to deliver this.