Official judgement on 2012/13 provision for 16 to 19-year-olds could be weighted against those offering mainly vocational qualifications, the Association of Colleges (AoC) has warned.

The Education Funding Agency said on Friday (June 20) that it would use the minimum standards of 2011/12 for the following academic year.

Its key stage five minimum standards, which take into account 16 to 18-year-olds’ performance in A-levels and other level three academic and vocational qualifications, branded school sixth forms or colleges as underperforming if their results showed less than than 40 per cent of students achieving an average point score per entry in vocational qualifications of at least 194.

And for academic qualifications it was fewer than 40 per cent of students achieving an average point score per entry of at least 172 points.

Failing to meet the minimum standards in either academic or vocational courses would lead to colleges being given written or verbal notice to improve, and would prompt a visit from the EFA commissioner.

However, the AoC warned colleges offering more vocational qualifications could be more likely to fall foul of the rules.

Joy Mercer, AoC director of education policy, told FE Week: “Although these interim standards remain the same as last year, our original concerns persist.

“For academic qualifications the standards are fixed at an average grade D achievement, which is recognised as low achievement, whereas for many vocational qualifications the average is fixed at merit and in some qualifications a mixture of merit and distinction — this is considered by all to be a good achievement.

“This anomaly could lead to a college which delivers mainly vocational qualifications finding it more of a challenge to be above minimum standards than a school where the main programmes are A-levels.”

The agency calculates minimum standards by taking the highest average scores for both academic and vocational qualifications in the bottom 5 per cent of post-16 schools and colleges — the fifth percentile — giving the 194 figure for vocational qualifications and 172 for academic qualifications.

The agency spokesperson said: “By establishing separate measures for performance in academic and vocational qualifications, comparing like with like, we are able to build a clear picture of how institutions are performing in different areas of their level three provision.”

Standards for the 2013/14 academic year are due to be agreed in August.

Mrs Mercer added: “AoC agrees there have to be standards that support student success and progression but don’t want to see disincentives to offer vocational qualifications and challenging mixed programmes… further work needs to be done before the Department for Education makes its decision on precise measures in the autumn.

“As qualifications for 16 to 18-year-olds change in 2016 we hope minimum standards will reflect the challenges of the new qualifications.”

A Skills Funding Agency clampdown on under-delivery next academic year has prompted concerns that providers could be hit by growing “financial instability”.

The agency is cutting its tolerance of under-delivery, meaning more providers could be hit with an in-year reduction to their allocation.

This academic year, providers who were 15 per cent below their SFA contract target at November 2013 faced an in-year reduction. At February this year the tolerance level was 8 per cent and at May it was 5 per cent.

However, next academic year the levels are falling to 12 per cent, 6 per cent and 3 per cent, respectively.

Both the Association of Colleges (AoC) and the Association of Employment and Learning Providers (AELP) warned against the move.

An AoC spokesperson told FE Week: “Despite rising demands to fund apprentices, adult learners and people who are out of work, the agency has less money available in its budget.

“There’s naturally pressure on the agency to redistribute funds during the year, but there is also a risk that such decreasing of tolerance with regard to in-year reductions will add to financial instability within the sector and institutions.”

The levels, which apply to contracts worth more than £10,000, were laid out in the agency’s Operational Performance Management Rules 2014 to 2015 published on Wednesday (June 25).

Stewart Segal, AELP chief executive, said: “The current system was developed when there was more flexibility in the Adult Skills Budget. We now have restrictions on the opportunity to vire funds so it is very difficult for providers to manage delivery to four quarterly measurement points as well as managing to a financial year and an contract year.

“The reduction of the thresholds will make this management even more difficult, so the agency has to be very clear as to what the priority delivery programmes are and their decision-making must be more transparent and timely to enable providers to respond to the contract changes.

“We have had several instances where contract increases come far too late to deliver the increased volume and reductions are made in the following quarter.

“With these reduced thresholds and the new contract management system within the agency, we need a full review of how the system will work in 2014-15.

“We also believe that any system of in-year contract reviews should apply to all providers.

“Providers will have to deliver Trailblazer pilots from within their existing allocations but we hope any changes to volumes will be taken into account in the quarterly reviews.

“Those quarterly reviews must also be open and transparent and must allow providers to make a case for retaining volumes where specific circumstances affect their delivery profile.”

An agency spokesperson said: “We are seeing improved performance by providers against contract values, and have therefore adjusted the tolerances to reflect more closely the actual pattern of performance.

“As now, providers will be able to make a case for retaining contract values where they can demonstrate that their profile of delivery will differ from the performance profile.”

The Education Funding Agency (EFA) has issued a new application form for providers to dish out free school meals cash to needy learners.

The government wants disadvantaged 16 to 18-year-olds to be fed by providers — and has earmarked funds to develop kitchen facilities — or through a credit or voucher scheme for outside caterers.

However, it conceded in April some learners may have to be given cash in “exceptional circumstances” that it listed at the time — and it also said there may be even more situations where learners were handed money.

The EFA’s new document last week was aimed at providers in this latter situation. It lays out how providers, from September, can give out the minimum £2.41 per meal for special, but undefined, reasons.

Piran Dhillon, Association of Colleges public affairs officer, said: “The conditions [for cash payments] set by EFA are challenging but allow some flexibility to colleges in how they deliver the meal entitlement.”

She added: “We are pleased EFA has taken on board concerns following visits to colleges, which have resulted in some improvements to the scheme.

“This has included a higher cost per meal (£2.41 rather than the £2 suggested initially) and acceptance there needs to be exceptions to the cashless transaction rule.”

Paul Warner, Association of Employment and Learning Providers director of employment and skills, said the new guidance reflected how “a great deal of training takes place away from institutions with catering facilities”.

The number of potential fraud cases referred to the Skills Funding Agency (SFA) more than doubled between 2012-13 and 2013-14.

In the SFA’s annual report and accounts for 2013-14, it said that 108 new “allegations of financial irregularity” were considered, compared to 52 the previous financial year.

The figure for the number of allegations in 2013-14 was 132, but the SFA said 25 allegations related to one case, although it declined to identify the provider.

The report said: “Therefore, the total number of new cases considered during the period was 108.

“There were 40 cases (of which 21 were investigations) brought forward from 2012-13 and a further six allegations brought forward that had not been entered into the vetting and assessment process as at April 1, 2013.

“During 2013-14, 37 investigations were closed and, as at March 31, 2014, there were 18 investigations ongoing and 22 cases at the vetting and assessment stage.”

An SFA spokesperson told FE Week: “We are continually reviewing and strengthening our governance and business processes, particularly in relation to allegations of financial irregularity.

“At the beginning of this year, we changed the way we report on allegations and now also include those that were referred to other agencies.”

The report for 2012-13 had said that 41 allegations were brought forward from the previous year and 52 were made to March 2013.

No case was referred to the police in 2012-13, but one case was passed on to officers in 2013-14, although they decided not to take up a criminal investigation, according to the SFA.

An AoC spokesperson said: “The SFA spent more than £4bn in 2012-13 on more than 2,000 organisations via some 40 programmes.

“We see SFA’s investigation work as being necessary to protect the public purse. The issue here isn’t the number of investigations that have been conducted but what the outcomes were.”

Stewart Segal, Association of Employment and Learning Providers chief executive, said: “We fully support the zero-tolerance approach to potential fraud taken by the SFA.

“There are very few cases of fraud in the sector and as the annual report says most of the errors found in audits are misapplication of funds or where there is insufficient evidence.

“The error rates of PFA audits are around 1 per cent which shows that providers meet the complex rules of funding and evidence.

“The process for dealing with any funding issues needs to be robust, effective and transparent and it is good news that there are very few cases where there is evidence of fraud.”

The Skills Funding Agency will be hoping that long-standing problems in developing new funding software are at an end as it prepares to use the new Hub data collection system to calculate provider payments for the first time.

The agency’s revamp of its data collections and funding system was due to have been completed 11 months ago.

But it has suffered ongoing problems leading to the continued use of the old Online Data Collection (OLDC) as a crutch for its replacement, the Hub, since September.

However, the SFA has announced that the Hub will be stepping up to the plate for the R11 data return, due in by July 4, with responsibility for calculations.

An agency spokesperson said: “We intend to continue to run the two systems in parallel until we consider it appropriate to formally de-commission the old system.”

A spokesperson for the Association of Employment and Learning Providers said: “Providers seem sanguine about dealing with the issue. We hope however that a switch to a single system can be made soon.”

An Association of Colleges spokesperson said: “It’s imperative accurate information is on record and a back-up system during this transition period offers some reassurance.”