The abolition of the Skills Funding Agency (SFA) within just over a year has been proposed by a local government thinktank as it recommended devolving “various streams straight to local enterprise partnerships (Leps).”

The 66-page Next Leps: Unlocking growth across our localities report from Localis calls for the SFA to lose its £3.5bn from the Department for Business, Innovation and Skills (BIS) by 2016/17 among other far-reaching FE and skills recommendations.

It suggests that, from the same period, Education Funding Agency (EFA) spending on University Technical Colleges (UTCs) should go through Leps “to treble the number of UTCs by 2020 – including a minimum of one per Lep”.

It goes on to recommend that “should Leps deliver cost effective spend in both these areas, devolution of all post-14 skills monies should be considered in 2020”.

However, it also points out how there are 18 (almost half) Leps without FE representation on their board and that “this appears a problem in need of urgent attention” — but it gives no firm recommendation to address the issue.

Report author Richard Carr, a history lecturer at Anglia Ruskin University and a senior visiting fellow at Localis, describes the recommendations as a “Heseltine-plus approach to sub-regional growth”.

The term is a nod to the Tory peer’s October 2012 report entitled No Stone Unturned in pursuit of Growth, in which he said central government should “identify budgets”, including the skills budget worth around £17bn over four years, and “bring them together into a single pot of funding” for Leps.

And Mr Carr’s report acknowledged how, since Lord Heseltine’s recommendations, “some SFA money has already been devolved – about £500m of the SFA’s £4bn budget is in the form of European Social Fund money or capital grants which are already being packaged into the Local Growth Fund (LGF)”.

It said: “But, even ignoring the central strait-jacket around the LGF, this still leaves over £3.5bn in SFA hands.

“The most elegant solution would be to abolish the SFA and devolve its various streams straight to LEPs to meet the aims contained within their Strategic Economic Plans.

“In practice the biggest accounting adjustment here would be £2.9bn of funds ceasing to be transferred from BIS to the SFA, and expanding the LGF by that sum.”

A BIS spokesperson said it had “no plans to abolish the SFA” and Alex Pratt OBE, chair of the Bucks Lep and chair of Lep Network Management Board, told FE Week “it’s not for Leps to comment on the viability of the SFA”.

“There is however an open and legitimate debate about how we might properly devolve accountability, responsibility, capability and resources across a number of areas,” he said.

He described UTCs as “potentially valuable, but just one tactical component in a complex system which needs to both maximise the life chances of individuals and deliver the skills needs of our businesses”.

He said: “Devolving all post 14 skills funding to Leps might well prove to be the right way forward, as might devolving other centrally held budgets in other areas relevant to driving the growth we need to pay down our debts and keep our people employed.

“Personally, at this stage as one Lep chair I would not wish to have full responsibility for our colleges because not only are we not yet equipped to take this on, much of what colleges do is not about driving private sector growth, which is the dedicated focus of Leps.

“One real danger is that of mission creep where Leps could lose their focus on private sector growth.”

He added: “If every legitimate interest were to have a seat on all Lep boards we’d need to build 39 amphitheatres and nothing would get done.

“Colleges and independent learning providers would in my mind do better to align together and focus hard on making sure Lep boards are fully informed in so far as the advice and evidence they receive (most if not all have a skills board that makes recommendations).”

The BIS spokesperson said: “We welcome contributions to the debate about how we secure the right balance between support for national and local priorities, and how we deliver long term support for the UK’s key industries and economic growth.

“The reforms we have in train will ensure we have a high quality offer with much greater control in the hands of employers and learners.

“Through the successful City and Growth deals, we have increased the power and resources local leaders have to shape skills outcomes so they meet the needs of their local economies.”

Almost 50 FE colleges will take part in a £3.75m project to help ensure industry knowledge is passed on by the sector’s higher education staff.

The Association of Colleges (AoC) has been given £2.75m by the Higher Education Funding Council for England (Hefce) Catalyst Fund for a project that will see higher education staff at 47 colleges working with employers to improve their knowledge of industry and jobs.

The funding, which will be boosted further by £1m of investment from the colleges themselves and businesses, will be used by the AoC to facilitate the project, which is part of Hefce’s enhancing professional and technical education programme.

The three-year project aims to encourage teachers to make regular visits to employers and bring real-life experience and work-based projects to the classroom and will result in a new framework to enhance teaching and learning. It will involve 15 lead colleges and 32 others, listed below.

Professor Madeleine Atkins, chief executive of Hefce, said: “FE colleges have a vital role to play in the development and delivery of high-level technical knowledge and skills, which are a priority for local and national economic growth.

“Hefce is delighted to be working with the AoC and other partners on this project, which aims to bring about a step change in higher technical education scholarship and teaching practice.

“It will benefit the wider sector by deepening employer engagement, enhancing higher technical education, and improving students’ learning experiences and outcomes.

It comes after Business Secretary Vince Cable used his annual grant letter to Hefce to call on the body to work with colleges to improve technical expertise.

It also comes after Hefce announced that 74 colleges would benefit from more than £700,000 of funding to encourage young people to progress into higher education.

The Catalyst Fund money was announced at the AoC’s higher education conference this morning.

Nick Davy, higher education policy manager at the AoC, said: “There is increasing demand for employees with practical skills at a higher level, such as a foundation degree or a higher national diploma, as the labour market changes and 3.6m skilled older people will leave the workforce in the next 10 years.

“We are looking forward to working closely with the participating colleges to see how we can improve learning to ensure more graduates have the skills employers need from their staff.”

 

College leaders have called for a government National Audit Office (NAO) probe into college financial sustainability to consider the effect of a national cut of 24 per cent next year.

The government spending watchdog has announced an investigation into oversight of financial sustainability in the FE sector, focusing specifically on colleges.

The NAO, which will report on the subject in the summer, will examine the performance of the Department for Business, Innovation and Skills (BIS) and the Skills Funding Agency (SFA) and, specifically, whether sufficient monitoring of the financial health of the sector is in place to identify emerging risks.

It will also aim to identify if there is a clear framework for deciding whether and when to intervene if a college is in financial difficulty, and whether effective action is taken to manage financial health issues which arise.

The review has been welcomed by the Association of School and College Leaders (ASCL) and Association of Colleges (AoC), which both called for proposed cuts of up to 24 per cent from the non-apprenticeship part of the adult skills budget in 2015/16 to be taken into account.

Malcolm Trobe, deputy general secretary of the ASCL, said: “It is important that the NAO will be looking at key areas around the financial health of the FE sector, intervention and support for colleges with financial health issues.

“However, more important is the fact that the cuts announced last week mean that there needs to be a fundamental review of how adults can access learning and skills support. ASCL is supporting those within the FE sector who are calling for an independent, public review of how our country should develop a new system for supporting the skills needs we have as a nation.

“Given its importance, we hope that this proposal will have cross-party support to consider how to stimulate investment from individuals and employers as well as how to spend the diminished government funding.”

Julian Gravatt, assistant chief executive of the AoC, said: “We’ve discussed the study with the auditors and we’re looking forward to seeing the results. Colleges face a number of financial challenges at the moment and it would be useful to have an independent view on the manageability of the task ahead of them given the funding cuts in the pipeline.”

The University and College Union (UCU) has also called for a closer look at cuts. A spokesperson said: “The National Audit Office plays an important role in ensuring that funding bodies are operating effectively, and so this investigation is to be welcomed.

“However, in the wake of news that adult FE budgets are to be slashed by up to 24 per cent in 2015/16, it is clear that funding cuts pose the biggest risk of all to the sector.

“The NAO should focus its investigation on whether government’s prescriptive focus on apprenticeships is undermining colleges’ ability to respond to local need and sustainably fund other courses which cater for a wide range of learners.”

Other recent NAO reports on the FE sector include one released in December, which reported that a saving of just £4m from £250m to £300m of “red tape” identified in BIS’s simplification plan had been achieved, and another in September which lamented the low take-up of traineeships.

The NAO is expected to report back on its findings this summer. Its report will be followed up by a hearing of the House of Commons public accounts committee, which will also report on its own findings.

Business Secretary Vince Cable has called on the Skills Funding Agency (SFA) to crack down on “short-term tactical subcontracting”.

The warning came as part of the Skills Funding letter 2015, and followed a raft of changes to the funding rules, released at the beginning of February.

In the letter, Dr Cable (pictured above) wrote: “While we appreciate that you [SFA] have worked with the sector to enhance the controls around subcontracting in the last two years, there continues to be levels of short term tactical subcontracting that are causing concern.”

He added: “You should review the use of subcontracting with a view to recommending further action, for implementation in 2015/16, to mitigate the risks of subcontracting and to ensure funding is allocated appropriately.”

No one from the SFA was available to confirm whether this review was under way.

Dr Cable also ordered the SFA to name and shame subcontractors where provision had been so poor it had been forced to terminate the contract.

In 2013, a promised blacklist of subcontractors the SFA had forbidden prime contractors from working with failed to materialise after the SFA said it had not banned any providers.

The new rules state providers “must not subcontract to meet short-term funding objectives” and said they “must robustly manage and monitor all of your subcontractors to ensure high-quality delivery is taking place”.

An Association of Employment and Learning Providers (AELP) spokesperson told FE Week: “Issues around subcontracting are likely to be minimised if lead contractors are already fully adhering to the existing SFA rules… and if the SFA is seen to be enforcing them.”

He added AELP would like to see more contractors routinely referring to the sector’s Common Accord for supply chain management best practice.

An Association of Colleges spokesperson said: “The rules that are being put in place are an attempt to ensure all subcontracting arrangements are signed off by the board of governors.

“We will continue to work closely with the SFA to ensure rule changes are workable.”

A spokesperson for the Department for Business, Innovation and Skills (BIS) said: “The enhanced controls do not seek to reduce subcontracting, but aim to ensure all publicly-funded provision is of high quality… while protecting public money.”

An SFA spokesperson said it would “act in accordance with the skills funding letter and will continue to work closely with BIS on subcontracting policy”.

Two independent learning providers are celebrating being named on a prestigious list of the UK’s best companies to work for.

Hit Training and ACT Training have both made it onto the Sunday Times 100 “best companies to work for” list for 2015.

For Shoreham-by-Sea-based Hit Training it is the second year running it has been included, rising in the list from 92^nd place last year to 88^th this year.

Cardiff-based ACT Training has fallen from 35^th place to 64^th in its third year on the list.

Jill Whittaker (above), managing director of Hit, which was graded as good at its last Ofsted inspection in 2012, said: “Once again, inclusion in the list is an overwhelming affirmation of the vast expertise and sheer dedication that every single member of staff contributes every day.

“This year’s ranking again reflects the amazing positivity within our organisation and underlines everyone’s constant commitment to delivering quality in every aspect of their jobs.

“I know that Hit is one of the UK’s best companies to work for but now it’s been officially recognised for a second year running.

“The fact that so many of our employees chose to take part in the survey is an incredible affirmation of the amazing feel-good factor within the company and underlines HIT’s strong and flourishing business principles.”

Zoe Hall (right) is delivery director at ACT Training, which was  inspected, along with its 15 sub-contractors, in June 2012 by Estyn, the Welsh education inspectorate, which reported that it provided a “good standard of training” and had “good prospects for improvement”.

She said: “We are delighted and extremely proud to be in the Sunday Times best companies for the third time running.

“The happiness and wellbeing of our staff is hugely important to us and this reflects on the service we deliver.

“Last year we surveyed our learners to ask them what they thought of our programmes and 90 per cent rated us as excellent which we feel is attributed to having a happy and motivated workforce.”

A similar list for small companies, which last year saw defunct ILP Bright International Training and Educ8 come 12th and 51st respectively, was due to be published on Sunday, with a list of not-for-profit companies expected a week later.