The Department for Education (DfE) has “lost its last line of defence” in dismissing sixth form colleges’ pleas to be exempt from VAT with a policy change on academy borrowing, it has been claimed.

While all providers receive the same funding per learner for those aged 16 to 19, the government has previously said sixth form colleges pay VAT because they can borrow money, whereas academies don’t have to pay VAT with the trade-off that they can’t borrow money.

But Sixth Form Colleges’ Association (SFCA) deputy chief executive James Kewin told FE Week that a recent DfE move to allow academies to borrow from its condition improvement fund (CIF) meant sixth form colleges no longer received the special treatment that supposedly justified the VAT requirement.

He therefore thinks the change in academies policy on borrowing should be met with a change in sixth form college policy on VAT.

“The government’s last line of defence on the VAT argument has been to point to the borrowing powers of sixth form colleges and suggest that this offsets the range of funding inequalities between us and academies,” said Mr Kewin.

“The government’s position has always been shaky, but this latest development means it is now completely indefensible.”

In a briefing paper on the policy change, the DfE said: “Academies are currently not permitted to take out loans without the permission of the Secretary of State, which is rarely granted.

“However, this year, through the CIF, academies and colleges can take out a loan for all or part of the project costs to demonstrate their commitment to the proposed scheme. Academies and colleges can choose the size of loan they want to take, and the timescale (up to a maximum of 10 years) over which they want to repay it.

“Repayments – made through a reduction of the revenue funding paid to the academy or college – will be recycled back into capital budgets to maximise the impact of the available funding in the long run. There is no obligation to take out a loan as part of the overall funding package; applicants should consider carefully what is most appropriate for their academy or college, and the consequences and affordability of any loan.”

For more, see edition 117 of FE Week, dated Monday, November 10.

A senior civil servant has defended a government policy not to enforce the raising of the participation age during a grilling from MPs.

Since September 2013, it has been a legal requirement for young people to remain in education, employment or training until the end of the year in which they turn 17. The age of participation will rise again to 18 next September.

In the law which brought about the change, the government was given the power to fine employers which take on 16 and 17-year-olds without them being enrolled in training. It can also technically take action against young people and their parents through local councils, but has so far declined to do so.

But in a hearing of the House of Commons public accounts committee, the first in a series about 16 to 18-year-old participation in education and training, Department for Education Permanent Secretary Chris Wormald was pressed on why that enforcement was not taking place.

He said: “We didn’t activate one clause of the legislation. The view that was taken on that was that we wanted the main focus of raising participation to be voluntary.”

But he was interrupted by committee chair Margaret Hodge, who cited evidence from a recent National Audit Office report which showed the policy was yielding favourable results.

She said: “I understand that, but what [the report] says is that the new legislation includes powers to enforce the raising of the participation age, however, the government has decided not to bring this part of the law into force.

“So the very thing which, looking at the report, looks as if it has had the greatest impact on participation, you then take a decision not to enforce what appears to us to be the most effective bit.”

Mr Wormald replied: “We wanted the focus of activity in this area to be voluntary because we would rather people participated by choice, rather than by enforcement.

“We were seeing really quite good evidence straight away of participation rates rising without enforcement, so I think the question of why we would want to enforce when what we wanted to see was happening anyway was pertinent.”

For a full report, see edition 117 of FE Week.

Employers and training providers have been invited to enter their apprentice teams for the 2015 Brathay Challenge — a gruelling annual test of mental and physical stamina.

The competition, now in its fourth year, tests teambuilding, leadership, fundraising, logistical and communications skills through a series of work-related challenges.

Regional heats will be held from January to April before eight teams of apprentices are picked to compete in the final at the Brathay Trust’s headquarters by Lake Windermere, in the Lake District, from July 6 to 8.

Applications opened today (November 3) and will close on December 12.

Teams of nine apprentices can be made up from a single employer, a group of small businesses, an industry sector or training providers.

Godfrey Owen, chief executive of the Brathay Trust, said: “The challenge provides apprentices with the opportunity to develop a huge range of skills with previous competitors reporting improved teambuilding, leadership, logistical and communications skills.

“Employers [who previously entered teams] reported that they saw improved skills among the competing apprentices and increased local profile of their organisations through positive publicity and corporate social responsibility opportunities.

“We look forward to both apprentices and employers reaping these benefits in the 2015 search for the apprentice team of the year.”

More than 110 teams and 1,000 apprentices entered the 2014 challenge.

They raised £30,000 for charities, visited more than 360 schools to talk about the benefits of apprenticeships, delivered 60 community projects, and secured commitments from more than 50 new businesses to start offering apprenticeships.

Eight teams from across the country descended on the Lake District to complete a series of tests of their problem solving and physical abilities for the final in June.

They were timed completing problem-solving challenges, including an event which involved working as a team to identify a series of shapes while blindfolded.

Physical tests included orienteering around 10km up Loughrigg Mountain, canoeing, balancing on metal chords suspended 20ft above the ground and rowing 16km across Lake Windermere in whaler boats.

It was won by a team of level two to five apprentices, based at offices and factories across the midlands and north of England, from food and soft drinks firm PepsiCo. A team from Innovia Films, Cumbria, won the competition the year before.

Sue Husband, director of the National Apprenticeship Service, said: “The quality of work from the teams that take part in the challenge shows employers and the wider community the impressive work apprentices can achieve.

“It is important that employers recognise opportunities like the Brathay Challenge as a chance to let their great apprentices shine.”

Visit Brathay.org.uk/challenge to enter.

 

Main pic from left: PepsiCo team members Sam Kelly, Leigh Bell, Jonathan Baxendale, and Daniel Stenburg pictured in the whaling boat

 

The future of the Skills Funding Agency (SFA) has been brought into question with Education Funding Agency (EFA) chief Peter Lauener taking on the running of both bodies in a move hailed by sector leaders as heralding a more “joined-up” approach.

Current EFA chief executive Mr Lauener replaces SFA interim boss Keith Smith from today, but the government has already denied the appointment indicates a merger of the two funding bodies. However, the move has nevertheless led to speculation about the potential for closer working, or even merger.

Former Association of Employment and Learning Providers chief executive Graham Hoyle posted on Twitter: “Great move. Up to Peter to develop a case for merger after the General Election and argue from the inside.”

David Hughes, chief executive of the National Institute of Adult Continuing Education, said: “This signals a more joined-up approach to learning and skills from the government, something we called for in our general election manifesto in June. Bringing together the leadership of the EFA and SFA is a significant step in the right direction.”

Peter Pendle, chief executive of AMiE (Association of Managers in Education) – the leadership arm of the Association of Teachers and Lecturers, said: “Peter’s knowledge and openness to collaborative working could very well increase the chances of a more integrated sector.”

Dr Lynne Sedgmore, executive director of the 157 Group, said: “Having one chief executive for both agencies will surely help bring about the consistency of approach for which many in FE have long argued. While we recognise the announcement does not indicate a merging of the agencies, we welcome the signal it most certainly gives that funding for our whole education system must be looked at in the round and through the same lens.”

Malcolm Trobe, deputy general secretary of the Association of School and College Leaders, said: “We already have a very good working relationship with Peter through his current role at the EFA and we look forward to continuing working with him in this new additional role. The bringing together of these two roles is a very logical step by the Coalition and should help coordinate the work of the Department for Business, Innovation and Skills and the Department for Education.”

Mr Lauener has been chief executive of the EFA since it was formed in April 2012, having also been chief executive of predecessor organisation the Young People’s Learning Agency (YPLA).

“I am delighted to take on this [SFA] role and am looking forward to the challenge of making a difference in the skills sector,” he said. “I have a long-standing interest and commitment to apprenticeships and skills and I am keen to be involved in the next stage of reform.”

Skills Minister Nick Boles said: “Peter brings a wealth of experience in skills and in working with employers. In his new role leading both SFA and EFA, he will join up our programme of reform across the education and skills sector.”

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Editor’s Comment

One chief, one agency

 

Despite a denial to the contrary, the appointment of Education Funding Agency (EFA) chief executive Peter Lauener to the same role at the Skills Funding Agency (SFA) will lead to speculation about the two organisations’ independent existence.

A return to the days of a single body that funds under and over 18 education and training would certainly offer hope of the coherent approach to the FE and skills sector so longed-for by many.

And it looks all the more likely with the same chief executive heading the two bodies that separately fund the two age groups, from two different government departments.

A reduction in bureaucracy, with one agency rather than two, is an obvious benefit not only for government, but also providers, who would only need one conversation. Less confusion over who funds what would also be welcome.

Not to mention the fact it would end the absurd situation of different funding methodologies for learners on the same courses — possibly even sat next to each other in the same classroom.

So if this is, despite what government says, a move towards merger then we do, as Mr Hughes from Niace says, appear to be moving in the “right direction”.

Urgent government action is required after FE loans caused a “collapse” in the number of older people taking level three and four courses, the National Institute of Adult Continuing Education (Niace) has claimed.

Latest figures released this week by the Department for Business, Innovation and Skills (BIS) showed there were 15,330 applications in September for FE loans, which currently only apply to learners aged at least 24 and studying at level three or four.

The total number of applications for the current academic year up until September 30 was 43,830 — which was 12 per cent less than 49,651 applications up to the same date last year for 2013/14.

Niace chief executive David Hughes (pictured) said the latest figures indicated the number of level three and four learners aged 24 and over had crashed since FE loans were first introduced in April last year.

Figures previously released by the government in the Statistical First Release (SFR), showed that 401,300 people from that age group took level three and four courses, including apprenticeships, in 2012/13.

But only 57,100 people from the same age bracket paid for courses at those levels with a loan in 2013/14, with a further 53,500 people aged 25 and above taking level three and four apprenticeships.

Mr Hughes said the latest FE loans figures, which did not take account of apprenticeship starts so far for 2014/15 as they are are not funded by FE loans, “are a clear warning that last year was not a blip”.

He added: “We call to the government to do something about this urgently. Otherwise, the prospects of there being enough highly-skilled people to do the jobs – now and in the future — that employers are desperate to fill, look bleak.

“The real issue [with the latest FE loans figures] is the collapse in the number of people taking part in learning at levels three and four.

“Huge numbers of people are no longer participating in learning that will help them to get on in life and in careers which will help the economy to grow.”

It comes after the government launched a consultation in June on plans to extend FE loans to cover 19 to 23-year-olds and make them available for level two qualifications.

Government pays half the course cost for 19 to 23-year-olds staying at levels two and three.

But learners would end up having to repay the full cost under the loans system — which currently only applies to learners aged at least 24 and studying level three or four vocational courses, but not apprenticeships.

A spokesperson for the Association of Employment and Learning Providers (AELP) said: “The latest [FE loans] data underlines why securing the right outcome from the government’s recent consultation is so important.

“Most loans are taken out either to progress in a well-paid career or where the learner does not expect to have to pay back the loan.

“AELP believes that detailed research is needed on understanding those affected by the proposals to see how extending loans would affect take-up across a range of sectors so that the government can better assess the long-term financial impact of offering loans instead of co-funding.”

A BIS spokesperson said: “We will continue to monitor take-up and work with the sector to help them share best practice on how providers have made loans work for them.

“The consultation on expanding and simplifying advanced learning loans has now closed and the government will issue a response in late autumn.”