Ofsted has undergone a “sea change” in the way it looks at college finances, according to a principal who got two good ratings among his headline fields and yet emerged with an inadequate result overall.

Weymouth College, visited by FE Commissioner Dr David Collins over its finances just under a year ago, got grade two findings for outcomes for learners and also quality of teaching, learning and assessment.

But it got a grade four rating overall, and also for effectiveness of leadership and management, with inspectors reporting that “poor strategic management and the failure by governors to hold the previous principal and other senior managers to account in monitoring the financial performance of the college have resulted in a significant budget deficit”.

The report was published on February 18 — three months after Dr Collins called for change at Ofsted if it was to “be more useful” after it rated Bournville College’s leadership outstanding despite a “critical cash position”.

The college had been rated good overall by the education watchdog in May, before Dr Collins visited three months later with an SFA notice of concern having been issued three months before Ofsted went in.

And the Weymouth College report mentioned “finances” or “financial” 18 times, but neither appeared in Bournville’s report.

The difference has led 3,843-learner Weymouth College acting principal Nigel Evans to believe the change Dr Collins called for was now in place.

“It is extremely unusual to have two out of three headline fields rated as good and be inadequate overall,” Mr Evans told FE Week.

“This probably marks a sea change in how Ofsted makes its judgements. It previously used to concentrate on academic performance.

“I think we are probably unlucky to have been assessed at this time, but have to accept the judgement as one of our briefs is to manage our finances.”

Nevertheless, an Ofsted spokesperson denied it had changed the way it considers financial issues when grading.

“Ofsted inspectors use their professional judgement when coming to conclusions about a provider,” he said, but declined to comment on whether this made inspections too subjective.

The situation has resulted in a call for more clarity on how Ofsted looks at finances.

Gill Clipson, deputy chief executive at the Association of Colleges, said: “Ofsted currently judges the effectiveness of an institution in terms of the performance of students.

“If judgements are now being made on financial performance then we need clarity about the criteria that are being used and assurance about the expertise of the inspectors.”

Ofsted declined to comment on whether it would update its guidance.

It come after Weymouth’s previous principal, Liz Myles, was suspended in November — around six months after Dr Collins identified “significant weaknesses” in leadership.

He visited after the Skills Funding Agency assessed college finances as inadequate and he recommended, among other things, that “the principal should engage a ‘peer mentor’ with a good financial track record to assist her in dealing with the college’s present financial situation”.

A college spokesperson told FE Week Ms Myles would be “leaving Weymouth College following her resignation due to retirement being accepted by the board of governors”.

No date has been confirmed for when her permanent replacement will be announced.

Only one other provider has been rated as inadequate overall while receiving good judgements in the same two headline fields as Weymouth.

The report, on Gloucestershire’s Ruskin Mill College, part of the Ruskin Mill Educational Trust Ltd charity which had 110 learners when it was inspected in March last year, did not mention finances either.

 

The Association of Colleges (AoC) has supported Skills Funding Agency plans to make its funding system more “predictable” after it emerged that just 14 per cent of providers issued with a shock clawback warning were actually be asked to repay.

Una Bennett, deputy director for funding systems for the Skills Funding Agency (SFA), wrote to 699 providers before Christmas warning they might have to repay against “provision that has been incorrectly claimed”.

Providers were later emailed by funding and programmes director Keith Smith, who apologised for the “premature” warning and asked them to go over submitted ILR data and tell the SFA before the end of last month if they needed to make any repayments.

And the SFA revealed on Wednesday (February 25) that it estimated a total of £500,000 needed to be repaid by 98 providers and it had “resolved the identified issues” with the remaining 601 who wouldn’t have to return any 2013/14 cash.

An SFA spokesperson said: “This work has also highlighted the need for simplifying the system further and we will be working with the sector to do this.”

Julian Gravatt, assistant chief executive of the AoC, told FE Week: “It is important that data errors are corrected.

“Helpfully, the SFA acknowledge that there is more work to do to make their funding system more predictable.

“Given that the adult skills budget is currently in freefall, this task has become more urgent.”

Association of Employment and Learning Providers (AELP) chief executive Stewart Segal said he was “pleased that the vast majority of providers will not be subject to a clawback”.

“We hope that in the cases where one is required, providers will have an opportunity to discuss the final calculations,” he said.

“We also hope that cashflow issues will be taken into account to protect the learners.”

Ms Bennett’s letter provoked an outraged response on the SFA’s Feconnect online forum, where users complained her correspondence was sent after the SFA’s own auditors signed-off provider accounts last autumn and did not specify how much needed to be repaid.

The subsequent apology by Mr Smith also came under fire on the forum, with one user complaining that she had suffered “sleepless nights” over the issue.

The SFA spokesperson said: “We would like to thank the sector for working with us to ensure that   data submitted is accurate. This is important to ensure that any funds incorrectly claimed in error can be recycled back into the system, under our performance management processes, to ensure all public funds are maximised.”

Failure to promote apprenticeships and traineeships should result in the sack for careers advisers, House of Commons Education Select Committee chair Graham Stuart has said.

During a debate secured by the Association of Colleges and All-Party Parliamentary Group for FE and lifelong learning chair Stephen Lloyd MP, Mr Stuart said schools needed a bigger incentive to offer comprehensive careers advice, including non-academic routes.

He said: “The heart of the problem is a simple one, in my opinion — it doesn’t come out in the myriad of reports that have been produced on this subject or indeed in enough speeches given by colleagues in this chamber. The problem is there are insufficient incentives for schools to take it seriously.”

He added: “We have got to change the accountability regime to a high-stakes environment in which you very easily get publicly humiliated or sacked.”

His comments on February 25 came after the 2011 Education Act made it an explicit requirement of schools to promote apprenticeships and traineeships in careers advice, and Mr Stuart said the majority of schools were failing to get it right.

“The central issue is that schools aren’t incentivised to take it seriously and they have some perverse incentives like filling their sixth form places which means they won’t even let colleges in,” he said.

Shadow Junior Education Minister Yvonne Fovargue agreed and paid tribute to the work of South Gloucestershire and Stroud College.

She said: “The fact is that we need more than an unenforced duty on schools, which simply leads to buck-passing. One-in-three teachers says they do not have the right expertise and resources to adequately provide effective information, advice and guidance.”

She added: “I visited the Bristol campus of South Gloucestershire and Stroud College the other month. The college has an excellent careers hub, working with schools across the area — independent schools, academies, state-controlled schools and primary schools — and providing one-to-one advice from professional careers advisers, which it employs.

“The college is the point of contact for all employers, it works with the local enterprise partnership, and it is considering expanding its service. It is an excellent model for the careers advice of the future.”

Main pic: Graham Stuart & Yvonne Fovargue

 

A 17-year-old learner put School Reform Minister Nick Gibb and Shadow Education Secretary Tristram Hunt on the spot as he called for VAT “justice” at a Sixth Form Colleges’ Association (SFCA) parliamentary reception.

Callum Fairhurst, who is studying business, history and politics A-levels at Long Road Sixth Form College, in Cambridge, delivered a powerful speech at the event, aiming his final remarks directly at Mr Gibb and Mr Hunt, who were both in the audience.

Around 160 guests, including principals, governors and other MPs, heard Callum raise the key SFCA issue, with the government continuing to charge sixth form colleges (SFCs) VAT while schools and academies get a 20 per cent refund.

“Academies don’t have to pay VAT and I think that’s right. SFCs that attach to schools don’t have to pay VAT and I agree with that,” he said.

“It’s not fair [that SFCs have to pay]. Nick, Tristram — if there is one thing you take from what I say, it should be that you need to drop the learning tax. What I’m asking isn’t for a favour — it’s for justice to be served.”

Mr Gibb later told him: “We want to do something about it. The issue is how to fund it. It’s an anomaly we would like to address, but it would be costly.”

Mr Hunt also declined to provide a guarantee that his party would drop VAT for SFCs if it won the general election on May 7 when questioned after the student’s speech by FE Week.

However, he had earlier told guests during his own address: “When we enter government we will immediately get to work to see if we can find the funds which I know bedevil your sector in terms of VAT. There’s no logic to it, there’s no defence of it.”

James Kewin, SFCA deputy chief executive, said: “Callum was absolutely right to urge Mr Gibb and Mr Hunt to drop the learning tax — redirecting funding away from the front line education of students to pay VAT is nonsensical.”

He added: “We now need all political parties to make a firm commitment to drop the learning tax.”

The aim of the event, held in the House of Commons Terrace Pavilion overlooking the River Thames, was to celebrate the achievements of SFCs and provide a chance for networking between principals and governors.

It was hosted by Labour MP Kelvin Hopkins, chair of the all-party parliamentary group for SFCs and vice-chair of governors at Luton Sixth Form College. He called for more SFCs in his speech, which opened the event.

He said: “There are many wonderful SFCs, many of them represented here today. They do a brilliant job but are still not fully appreciated by government. That’s why I hope the government and opposition members here today will take note.

“They should be nurtured and treasured by all who care about education and the success of our young people. I have argued that the government should, rather than just seeking to look after them, establish more SFCs and expand the sector.”

David Igoe, SFCA chief executive, praised the achievements of sector staff.

He said: “You represent your staff who do such wonderful work for the 160,000 16 to 18-year-old young people being educated in SFCs at this moment.

“We outperform all other state funded and non-selected sectors on nearly every important indicator. We do it at a price and in a style that represents the very best value to the tax payer and the treasury.”

But he warned: “This event is both an opportunity for celebration of our success and to issue a plea to policy makers for fairer treatment [over VAT payments] because you know and I know that we are in real danger now of being squeezed to breaking point.”

The SFCA’s Drop the Learning Tax campaign petition launched before Christmas and has been signed by more than 14,500 people including Oscar-winning actor Colin Firth, X Factor presenter Dermot O’Leary and Education Select Committee chair Graham Stuart.

And the event, on February 24, came the day after a House of Lords debate on the issue in which Baroness King said: “My Lords, is it not strange, not to mention unjust, that a 16-year-old studying at a secondary school receives more funding than a 16 year-old studying exactly the same subjects at a SFC [because SFCs pay VAT]?

“Is this not doubly strange when research shows that sixth form colleges provide better education outcomes and better value for money and do more to improve social mobility?”

And Skills Minister Nick Boles said he was prepared to discuss the matter with the “fierce” Treasury as he answered Mr Hopkins during an education questions session at the House of Commons in January.

 

Apprenticeship employers were among the latest round of offenders named and shamed for failing to pay the national minimum wage.

Business Minister Jo Swinson (pictured) named 70 employers who had failed to pay the minimum wage. They owed workers a total of more than £157,000 and have been hit with more than £70,000 in financial penalties.

A BIS spokesperson told FE Week that “some of the employee underpayment cases did involve apprentices” but she declined to identify individuals or each of the firms.

It brings the total number of companies identified as minimum wage offenders to 162 since the naming and shaming regime came into force in October two years ago.

Ms Swinson said: “Naming and shaming gives a clear warning to employers who ignore the rules, that they will face reputational consequences as well as financial penalties.”

She added “We are helping workers recover the hundreds of thousands of pounds in pay owed to them as well as raising awareness to make sure workers are paid fairly in the first place.”

The government has also announced a £3m increase in HM Revenue & Customs’ £9.2m minimum wage enforcement budget to help fund more than 70 extra compliance officers.

A proposed 2.6 per cent rise in the National Minimum Wage for apprentices has been branded “measly” by National Union of Students (NUS) vice president for FE Joe Vinson (pictured below)

The Low Pay Commission (LPC) has put a £2.80 an-hour minimum to the government while rejecting Business Secretary Vince Cable’s proposal to shift apprentices up onto a par with the 16 and 17-year-olds’ rate — currently at £3.79 an-hour.

The LPC argued that such a move could affect 200,000 apprentices with the cost to employers hitting at least £160m each year, possibly “much more”.

Mr Vinson said: “A measly 2.6 per cent increase from £2.73 to £2.80 an-hour for apprentices in their first year and those aged 16 to 18 will do nothing to help the cost of living crisis that apprentices are currently facing.

“It’s appalling to see a rejection of raising the apprentice minimum wage to the 16 to 17-year-old rate. The fact the LPC admits that a rise would benefit nearly 200,000 apprentices is an overwhelming reason to do it.”

Just days before the LPC recommendations were released the NUS had already issued a damning report on the issue of apprentice pay, labelling the current minimum wage of £2.73 an-hour “exploitative”.

The 21-page Forget Me Not report (pictured below right) painted a bleak picture of apprentice finances and called for the scrapping of the apprentice minimum wage, arguing that learners “should be entitled to at least the national minimum wage for their age”.

It also recommended, among other things, free transport for all 16 to 19-year-oldsand extending the bursaries available to students in FE to apprentices. Mr Vinson said: “Paying apprentices such an exploitative wage has led to the situation we are in at the moment, where apprentices are forced to work in the evening to make enough to live and run up huge credit card debts because they’re excluded from student bank accounts.”

With the Apprentice Pay Survey 2014 having showed how younger apprentices were being hit hardest by minimum wage non-compliance as nearly a quarter were underpaid, the LPC said it had been asked by Dr Cable to consider whether the structure of the apprentice rate could be simplified in “order to improve compliance”.

It agreed with the Business Secretary that higher-level apprentices should earn the ‘normal’ worker national minimum wage, for which a 20p rise to £6.70 was recommended, but said there were “significant risks” in merging the apprentice rate with that 16 and 17-year-olds.

“It would mean an unprecedentedly large increase in the value of the rate, of between 39 and 88 per cent,” said the report.

It added: “The cost to employers would be at least £160m each year and could be much more. That would be around half the total cost of the recommended increase in the adult rate, and at a time when there are other funding pressures on employers in England from possible mandatory cash contributions to training.”

The Department for Business, Innovation and Skills said it had “gone all out to support apprentices”.

A spokesperson said: “The government will now consider the LPC’s recommendations and respond in March. Once the government has responded, the regulations to change the rates will be debated in Parliament before the new rates are introduced on October 1.”

 

Shadow Skills Minister Liam Byrne has pledged a Labour Government would not raid the 16 to 19 budget to pay for early years’ or schools provision.

Labour had promised to include 16 to 19 provision within an education budget ringfence, which currently ends at 16, but had not previously committed to protecting it from being raided for other provision.

However, at the City & Guilds’ Skills Debate For Prosperity and Growth at London’s Mansion House on Wednesday (February 26), Mr Byrne went one step further, saying the 16 to 19 budget would be protected within the ringfence.

He told FE Week Labour “would not” take from the 16 to 19 budget to fund other learning within the same ringfence, adding the party’s policy was “about an £8bn spend on FE 16 to 19 provision”.

“If you protect it in real terms, that means you grow the 16 to 19 budget by £400m over the course of the next parliament,” he said.

The Liberal Democrats were the first to announce a plan to include 16 to 19 provision in the education budget ringfence but stopped short of pledging specific protection within the ringfence, although in June a spokesperson said that to move large amounts of money from one end of the wider age group to the other was not “consistent with the policy”.

Education Secretary Nicky Morgan has said the Conservatives would maintain the ringfence for five to 16-year-olds earlier, but did not commit to protection for early years or FE budgets.

Mr Byrne’s comments followed a Question Time-style panel debate, which also included Skills Minister Nick Boles, Liberal Democrat Sal Brinton, Confederation of British Industry director general John Cridland, Trades’ Union Congress general secretary Frances O’Grady, and was chaired by journalist Andrew Neil.

The debate, in front of an audience of around 150, focussed on how to solve the skills gap — an issue which Mr Neil said was “vital to our future and our economy”.

On the eve of the release of the skills funding letter [see front], many audience members raised questions about how the FE sector would continue to deliver the training needed to boost UK skills in the face of predicted cuts.

Although the contents of the letter had not yet been revealed, Mr Boles said: “I don’t suppose it’ll surprise anyone to learn that there are some biggish cuts to everything except apprenticeships.”

However, he pointed to government protection and growth of apprenticeships.

He said: “If you are in the business of providing FE, and you moved into apprenticeships in a big way, then you have moved into a fuller stream of government funding, but if you have stayed traditional full time FE and not diversified then you will have had to make some very difficult cuts in budgets.”

Mr Cridland also called for changes to full time vocational qualifications and to GCSEs.

He said: “If the participation age is being raised to 18, what is the point of having terminal exams at 16?

“We should abolish GCSEs and rebrand high quality vocational qualifications as vocational A-levels — they are a recognised gold standard.”

Ms O’Grady said there had been too much change in the system under successive governments saying skills problems were “deep-rooted and long-running but the last thing many of us want is another rearranging of the deck chairs”.

However, Mr Boles argued there had been “a certain amount of consensus and continuity” between recent governments.

“The most important element of that is on the increasing importance of English and maths, without which nothing else works,” he said.

“David Blunkett years ago started his review focussing on English and maths and we’ve carried out reviews and we’re insisting everyone continuing English and maths until they reach a certain standard.”

Lady Brinton told FE Week a focus on literacy should include English for Speakers of Other Languages (Esol) provision, but said the funding should be directed through Local Enterprise Partnerships.

“Then the funding can respond to local needs — there’s no point in providing the same level of Esol in Cornwall and Devon as there is in inner-city Birmingham,” she said.

Ms O’Grady also called for employers to be made to offer more workplace training.

“A third of employers don’t train at all,” she said.

“We need to recognise that the voluntary approach to investment in skills has failed.

“The picture on employer investment has not shifted substantially and in fact is getting worse so we need to tackle the idea that if left to the market there will be a rescue because frankly there isn’t.”

 

Professor Alison Wolf has called for more to be done to involve employers in college assessment and delivery after the government reported for the last time on progress in implementing reforms in her 2011 review of vocational education.

She also stood by her study programmes recommendation, which has prompted a rise in the number of learners taking up English and maths in an effort to gain at least a C grade GCSE or equivalent.

One of Professor Wolf’s recommendations for colleges was that the “assessment and awarding processes used for vocational awards should involve local employers on a regular basis”.

But, she told FE Week: “I’m not sure what else government could have done because our bizarre system it is to a large extent up to the awarding bodies and after that to Ofsted, but I don’t feel we have made as much progress as I would have liked in getting employers really involved in the assessment and delivery in 16 to 18 vocational education in colleges.

“I want us to get to a place, as in say Denmark or indeed France, that when you are doing your final exams on a level two or three vocational, occupational qualification, it is routine that employers are involved, not at the national level, but the local level.”

Professor Wolf defended study programmes, which were implemented last August and have seen the number of learners aged 16 to 19 requiring additional English and maths tuition rocket, adding: “I certainly didn’t expect learners to be put in for four GCSE resits in the course of two years, but I think that’s right.”

Of the 27 recommendations made by Professor Wolf in 2011, the government claims 20 are in place, another is partly enacted, while six are in the process of implementation.

Professor Wolf said: “I would not have expected, from my knowledge of government, that so many of my recommendations would have been put through with thought, and care and speed, and they were.”

Deborah Ribchester, senior 14 to 19 curriculum policy manager at the Association of Colleges (AoC), said study programmes had presented colleges with a “major challenge” in finding extra teachers and exam facilities, but that she recognised “the benefit it will bring to students”. She said: “Continuous professional development for maths teachers, also recommended by Professor Wolf, means staff will be better able to support these students.”

 

Association of Colleges chief executive Martin Doel (pictured) has told of his fears that more job losses could be about to sweep away FE and skills staff after it was announced provider budgets would be slashed by up to 24 per cent.

He said that with the average college having made 105 redundancies since 2009/10, he feared for the workforce as providers sought to balance their budgets in light of the latest government cut to FE and skills funding.

The Adult Skills Budget (ASB) is to fall 11 per cent next financial year, it was revealed on Thursday (February 26), and Skills Funding Agency (SFA) chief executive Peter Lauener has predicted this will translate to a 17 per cent cut next academic year.

But with £770m of apprenticeship money protected, and traineeship and English and maths funding prioritised, those who offer little or none of this provision could see their allocation, due out in just over a fortnight, fall by up to a quarter — even bigger than last year’s 15 per cent cut.

Mr Doel said the cuts were a “further blow to colleges and their current and future students”.

He said: “An additional major concern is how colleges, after suffering such considerable cuts, can continue to attract and retain the best staff. It is worth noting that the average college has made 105 redundancies since 2009/10 and we fear this figure will grow.”

The comments were echoed by Malcolm Trobe, deputy general secretary of the Association of School and College Leaders, who said: “The effect on colleges is potentially devastating. This sector has already suffered massive real terms cuts in funding and this announcement will put it under even greater financial pressure. It threatens the very financial stability of some colleges.”

Stewart Segal, chief executive of the Association of Employment and Learning Providers, said that with the apprenticeship protected “we need to see growth during the year if we are to meet employer demand”.

Some providers, he said, are at an early stage of developing their traineeship programmes and therefore their “carry-over will mean that they will require a higher budget for next year”. He further warned there would be “huge pressure on the rest of the budgets” with English and maths also prioritised, “inevitably resulting in some groups of learners not being able to access funding and this could include high priority groups such as the unemployed”.

Shadow Skills Minister Liam Byrne meanwhile accused the Conservatives of “hollowing out” the ASB, while University and College Union (UCU) general secretary Sally Hunt described the cuts as an “act of wilful vandalism that will decimate FE as we know it today.”

David Hughes, chief executive of the National Institute of Adult Continuing Education (Niace), said: “It is staggering that there is not more outcry about this drastic and sustained reduction in funding particularly given the clear consensus about the genuine threat that crippling skills gaps and shortages pose for UK economic growth.”

And Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL), said the cut “looked like nothing less than a deliberate attempt to destroy the sector”. “It has already been battered by excessive cuts,” she said.

Joe Vinson, National Union of Students’ vice president for FE, said: “It’s appalling the government wants to reduce investment in skills when we need to stimulate the economy and give people the opportunity to gain work.”

Dr Lynne Sedgmore CBE, executive director of the 157 Group, said the predicted cuts meant she was looking at “new forms of social investment to sustain the future of high quality and accessible skills training for all”.

“We are working with the government to ascertain where legislative change may be needed in order to achieve this vision and to support the simplification of processes that may currently prevent innovation,” she said.

A spokesperson for the Department for Business, Innovation and Skills conceded the cuts would be “challenging for the sector”.

But, she said: “The sector was made aware at the time of the last spending review that government funding was reducing and of the need to look to generate other income streams, creating sustainable business models for the future. Private investment in skills training is high so government funding — although important — is not the only
funding available.”

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Editor’s comment

There was no real surprise in the 5 per cent overall budget cut and little shock at the 11 per cent fall in the next financial year’s adult skills budget.

The SFA said this would look like translating into a 17 per cent cut to academic year allocations — but apprenticeships, traineeships and English and maths are the government order of the day so if you provide little or none of these expect your funding to fall by up to a quarter.

And while some question why these are prioritised, others question why higher education appears relatively unscathed and others still ask why older learners under BIS’s care aren’t afforded the same funding protection as that enjoyed by (some) DfE learners.

It’s not as if current funding levels are having no effect — just ask retiring157 Group executive director Dr Lynne Sedgmore to tell you about the rumour of 50 colleges in financial turmoil.

Jobs and provision might offer uncomfortable savings, but just how much more can be cut?

FE and skills has long been trying to shake off the Cinderella sector cliché, but what the government is instead discarding without the sector’s consent is its proud position as the ‘second chance’ saloon for adults to get on in life.

Chris Henwood

chris.henwood@feweek.co.uk