A West Yorkshire training provider is to have its £500,000 Skills Funding Agency contract terminated after an audit raised concern about learner records and financial dealings.

The agency confirmed to FE Week that its agreement with iCOCO Training, based in Cleckheaton, would end in early December.

However, an agency spokesperson said it was “not conducting any investigation into any matters relating to iCOCO Training”.

She said: “The decision was made following concerns about the quality of learners’ records and financial claims submitted to the agency by iCOCO that came to light during a recent audit.

“The provider was formally notified on September 10 and accordingly the contract will terminate on December 9.”

The provider offers training courses for hairdressing, customer services, business administration, child care and beauty therapy.

The agency said either party could terminate the contract with three months’ notice, without the need to give a reason.

“All learners have now been transferred to either Kirklees College or Calderdale College in order to complete their learning,” said its spokesperson.

Allisonne Reilly, managing director of iCOCO, declined to comment.

A hard-hitting report by the government’s social mobility commission has attacked college performance and recommended funding for employment outcomes rather than recruitment.

The Social Mobility and Child Poverty Commission’s 348-page document concluded: “Current policies are likely to be insufficient to address entrenched and unacceptably high levels of youth unemployment and inactivity.”

It had used damning Ofsted statistics to paint a bleak picture of colleges while calling for a wide range of changes.

Among its ten recommendations was that “colleges in the future be paid by the results they achieve for their students in the labour market and not the numbers they recruit”.

It received short shrift from Malcolm Trobe, deputy general secretary of the Association of School and College Leaders.

He said: “There are number of factors that influence how well students fare in the labour market, the obvious ones being the local economy and the career they aspire to.

“While colleges do all they can to prepare students for the world of work, they cannot be held responsible for finding jobs for them and it is unreasonable to suggest that this be used to hold them to account.”

It further suggested a “participation payment” for young people doing traineeships.

It said: “The government should consider introducing a youth credit (or participation payment), conditional on their participation in high quality work-related support and educational programmes, perhaps along the lines of current traineeships (with funding drawn out of the Bursary Fund and Child Benefit for 16 and 17-years-olds and out of Jobseeker’s Allowance for the over-18s).”

And on funding, it said: “Reforms to vocational qualifications look positive, though there remains inadequate information on courses and apprenticeships, and too little support for non-academic routes. There is also excessive complexity in local funding.”

Meanwhile, the commission, chaired by former Labour Health Secretary Alan Milburn, used Ofsted inspections to further criticise the sector.

“Ofsted inspection data lays bare the challenges for the sector, including the fact that at the end of August 2012, 1.5 million learners in the post-16 learning and skills sector were in provision that was rated less than good,” said the report, published on Thursday.

It added: “There is a need to have a far greater focus on improving the quality of further education provision, which is the largest provider of education to those who do not do well at school.”

Lynne Sedgmore, executive director of the 157 Group, hit back at the report’s findings.

She said: “Relying heavily on a snapshot of Ofsted data from more than a year ago does not provide sound enough basis for critiquing the social inclusion that colleges undertake.

“The report is missing the point of the critical work done by colleges that needs to be looked at more closely and comprehensively.

“The rich offering of FE to social mobility has been under-acknowledged in this important report.”

She added: “We support the report’s emphasis on quality as we strive for world class standards while remaining focused on the needs of the learner.

“We have long argued for a more intelligent accountability framework that includes destinations, value added and distance travelled as well as employer and learner feedback.”

The Association of Colleges declined to comment.

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Editorial: Young deserve better

The social mobility commission’s report should serve as a wake-up call to government, not a bat with which to beat colleges.

The commission is right to point out that, “current policies are likely to be insufficient to address entrenched and unacceptably high levels of youth unemployment and inactivity”.

For example, it is mind-blowing that there is no funding incentive for a traineeship provider to actually progress trainees into work.

It is also shocking that while 16 to 18 apprenticeship funding goes unspent, colleges, as previously reported by FE Week, are turning away potential 16 to 18 trainees in favour of 19 to 23-year-olds because there’s no money left for the younger age group.

And the Skills Funding Agency’s ‘job outcome payment’ for adults is a farce because it can only be paid out to providers when learners either fail their qualifications or walk away early — providing they’ve won employment.

But if your learner passes their qualification and gets a job there’s no such payment.

So there are some simple solutions that the Skills Minister can act on immediately.

Firstly, the ringfence on 16 to 18 apprenticeship funding needs to be loosened to enable colleges to access funding specifically for traineeships.

Secondly, a new single funding system for all 16 to 23-year-old traineeships that incorporates payment by results in 2014/15.

Thirdly, the agency should consult immediately on scrapping its pathetic attempt at a job outcome payment. The sector needs a funding system that fully incentivises positive adult progression.

None of this is particularly difficult and, frankly, it’s too important for all our futures to ignore.

Nick Linford, editor

Former Elmfield director Ged Syddall and Skills Funding Agency finance director Paul McGuire look set for a “no-holds-barred” grilling by MPs over allegations of apprenticeship malpractice.

It is understood they will be called before the House of Commons Business, Innovation and Skills Select Committee by the end of next month in light of an investigation into Elmfield by BBC’s Newsnight.

A senior current member of Elmfield staff is also expected to be summoned with Mr Syddall having quit as the firm’s director amid the BBC probe — although it is understood he remains majority shareholder.

The Newsnight report, supported with information uncovered by FE Week, aired on Friday, October 4, and focussed on Elmfield’s dealings with workers at supermarket giant Morrisons.

It was alleged Elmfield received agency money for apprenticeships that employees had declined. Elmfield told Newsnight that investigations had been carried out, uncovering “no evidence of malpractice,” although a further investigation had since been launched.

Committee chair Adrian Bailey told FE Week: “I am putting it to the committee that we invite Mr Sydall, Mr McGuire and a senior member of Elmfield staff to discuss allegations made and the contractual arrangements between Elmfield, Morrisons and the agency.

“I want to find out the extent of Mr Sydall’s current involvement, including details of the proportion of shares he owns in the company.

“Our questioning would be wide-ranging, no-holds-barred and include how much money he’s made from the business and its public funds.”

It would be the second time Mr Syddall has appeared before Mr Bailey’s committee. He gave evidence in April last year, when he said Elmfield’s entire income of £30m in 2011/12 came from public funds. He also defended his own £3m company dividend.

Meanwhile, Ofsted — whose inadequate grading of Elmfield in July prompted an agency notice of serious breach and a ban on new learners, along with Mr Syddall’s resignation as chief executive — carried out a two-day monitoring visit last month. It was carried out at least three months early, at the request of Skills Minister Matthew Hancock, and the resulting report, published this month, told of “reasonable” and also “significant” progress in key areas.

An Elmfield spokesperson said: “We are pleased to see that we have been able to demonstrate progress in all areas of our work examined by Ofsted in a very short space of time.”

The monitoring report, which unlike full inspection reports gives no overall grade, saw the agency lift its blanket ban on new Elmfield apprentices. But the notice of serious breach remains in place.

A spokesperson for the agency, which is still investigating apprenticeship malpractice claims against Elmfield, said: “We will assess any request from Elmfield to start new apprenticeships on a case by case basis.”

Morrisons stopped contracting with Elmfield in August, when NCG (formerly Newcastle College Group) took over the apprenticeship training contract. Neither Morrisons nor NCG are accused of any wrongdoing.

The National Institute of Adult Continuing Education (Niace) wants Pupil Premium cash from the government to fund a huge expansion in family learning across the country.

It unveiled a report today, called Family Learning Works, outlining how family education programmes improved child and adult numeracy, literacy and other key skills.

Family programmes aim to encourage family members to learn together, providing learning to both adults and children and provide progression for the adult to other learning.

They are usually delivered by teachers from FE colleges, local authorities, or charities at primary schools.

And David Hughes, Niace chief executive, has called on the government to encourage schools to spend their Pupil Premiums on family learning.

The national Pupil Premium budget was £1.875bn in 2013-14, with schools — who have freedom to spend the funding how they want — attracting £900 per disadvantaged child.

Niace would like at least 2.3 per cent of this money diverted to family learning, which would amount to £45m in England.

Mr Hughes said: “Across the country, there are examples of family learning programmes which have transformed the prospects for adults and children. But these programmes need to be the norm in every school and community.

“There is funding available to pay for this through the Pupil Premium. Family learning must be part of a national strategy, formed of local partnerships, to give adults and children from all walks of life the opportunities to become learners and reap the wide benefits of learning.”

The government launched the Pupil Premium scheme in April 2011 to help reduce inequalities between children eligible for free school meals and their peers.

Lady Howarth chaired the Niace inquiry that produced the report. She said: “Evidence shows family learning could increase the overall level of children’s development by as much as 15 per cent for those from disadvantaged groups.

“It could, in one generation, change the lives of a whole generation. We would be foolish to miss such an opportunity.”

The report called for family learning to become a key element of future government planning for improving post-16 education and adult employment prospects.

It stated: “We want family learning to be seen as an effective use of school funding, to ensure the parents and carers of children, particularly those from disadvantaged backgrounds, are offered high-quality learning opportunities.

“In addition, we want to see family learning integrated into strategies to engage those furthest from the labour market and improve employability where, evidence shows, learning can be hugely effective — perhaps more so than any other single intervention.”

Nine former employees of welfare to work provider A4e have appeared in court charged with fraud.

The six women and three men face more than 50 counts between them, including forgery, possessing an article for use in fraud and conspiracy to defraud.

Among the accused is a former contract manager, a former administrator and seven former recruiters who were employed across three A4E offices in South East England.

It is alleged that they forged documentation to support fraudulent claims to the Department for Work and Pensions for reward payments, under the Aspire to Inspire programme, which ended in July 2011. The allegations date from February 2009 and follow an investigation by the Thames Valley Police Economic Crime Unit.

A Crown Prosecution Service spokesperson said: “Under the terms of the contract, payments were made when the scheme successfully placed individuals in employment.

“It is alleged that many of the reward payments related either to people who never attended A4E or to clients whom A4E had not successfully placed in employment. The contract was to deliver motivation and training and to assist people to find employment.”

The nine defendants appeared at Slough Magistrates’ Court on Monday, October 14, where they spoke only to confirm their details. No pleas were entered.

District Judge Tan Ikram granted them each unconditional bail to appear at Reading Crown Court on Monday, October 28.

An A4e spokesperson said: “The investigation by Thames Valley Police relates to alleged incidents which date back to 2009 and were uncovered by A4e’s own internal controls.

“We referred the matter to the DWP, which then referred the allegations to the police.

“The alleged incidents all relate to old paper-based contracts which used systems that have since been replaced.

“We are fully co-operating with the police to ensure the investigation can be concluded quickly and are therefore unable to comment further on an ongoing enquiry.”

Ines Cano-Uribe, contract manager, aged 37, of Madrid, Spain, was charged with one count of forgery and one count of conspiracy to defraud

Zabar Khalil, administrator, 34, of Dolphin Road, Slough, was charged with five counts of forgery and one count of conspiracy to defraud.

Charles McDonald, recruiter, 43, of Derwent Road, Egham, was charged with seven counts of forgery, one count of possessing an article for use in fraud and two counts of making articles for use in fraud.

Nikki Foster, recruiter, 30, of High Tree Drive, Reading, was charged with 10 counts of forgery.

Julie Grimes, recruiter, 50, of Monks Way, Staines, was charged with 10 counts of forgery.

Aditi Singh, recruiter, 30, of Elmshott Lane, Slough, was charged with three counts of forgery and one count of possession of an article for use in fraud.

Bindiya Dholiwar, recruiter, 27, of Reddington Drive, Slough, was charged with seven counts of forgery.

Dean Lloyd, recruiter, 36, of Rochfords, Coffee Hall, Milton Keynes, was charged with 13 counts of forgery.

Yasmin Ahmad, recruiter, 38, of Colchester Road, Southend-on-Sea, was charged with two counts of forgery.

[Proceeding]

A “new breed of elite colleges” appears to have been hinted at in the same week as a group of providers have branded themselves Premier Colleges.

Skills Minister Matthew Hancock mentioned the word “elite” four times in a recent speech about the future of colleges.

And it is understood Mr Hancock is considering official use of the term ‘elite college’ for the best performing, which could require a particular specialism or a high level of employer engagement.

However, a spokesperson at the Department for Business, Innovation and Skills declined to comment on whether there were plans for such a new college brand.

But Mr Hancock’s comments have sparked concerns about FE appearing to become an elitist sector, with 157 Group executive director Lynne Sedgmore saying she was “very cautious” about the term.

Nevertheless, Mr Hancock’s reference to “elite colleges” came during a speech to the Edge Foundation on Tuesday, where he explained his vision for the future of FE.

In his speech, Mr Hancock said: “I want to see the emergence of a new breed of elite colleges, which lead the nation — indeed lead the world — in their area. I want to talk to you today about what reform looks like.

“About what we’ve done so far and what we’re changing. And in particular, the role colleges can play — including as elite institutions, leaders in their communities.”

Lynne Sedgmore, executive director of the 157 Group, said: “FE colleges are absolutely dedicated to maintaining the highest possible standards.

“But I’m very cautious about using the word elite — with all its connotations about exclusiveness — in a sector that is fundamentally based on social mobility, social inclusion and creating opportunities for all.”

The minister’s comments came as Skills Show sponsors grouped together to brand themselves Premier Colleges.

A Skills Show spokesperson told FE Week: “A select group of 20 of the UK’s leading and highly responsive colleges and a university, with vocational education and training at the heart of their businesses, have joined forces to form a new working association called Premier Colleges”.

All but three of the sponsors are from the Midlands.

The spokesperson added: “The colleges involved in the Premier Colleges group have not been selected — they have voluntarily invested in the [Skills] show as a public demonstration of what they contribute to FE and their commitment to the promotion of the sector,” she said.

She added: “All colleges in the group collectively cover a wide geographical area — beyond the Midlands — and all have supporting The Skills Show as a key motivation, among others that are largely specific to their individual colleges.”

The national Skills Show is being held at the NEC Birmingham on November 14 to 16.

Sixth form colleges could be about to see the end of a “longstanding inequality” on VAT after more than 70 MPs wrote to Education Secretary Michael Gove calling for a change in the law.

England’s 93 sixth form colleges currently have to pay VAT on goods and services, while schools and academies are reimbursed.

But a cross-party group of 74 MPs, led by Education Select Committee chair Graham Stuart, urged Mr Gove to support the introduction of a VAT refund scheme.

“MPs across the House feel strongly that it is wrong that sixth form colleges still have to pay VAT, when school and academies can reclaim those costs,” said Mr Stuart.

Their letter follows a pledge from David Cameron, during Prime Minister’s questions on October 9, to “look carefully at the issue”.

And now a Department for Education spokesperson has told FE Week: “In 2011/12 we ended the unfair funding between schools and colleges for post-16 students by putting both on the same funding rate. We have put in place protection until 2015, to make sure they can plan ahead.

“Colleges are treated differently to schools when it comes to VAT because of their legal status. We are looking into whether funding arrangements should be reviewed to take this into account.”

The MPs behind the letter all represent constituencies that either contain or are served by a sixth form college.

Among them are former Labour Education Secretaries David Blunkett and Alan Johnson, Liberal Democrats president Tim Farron and Green Party MP Caroline Lucas.

The VAT issue is believed to cost sixth form colleges an estimated £30m per year and, according to research from the Sixth Form Colleges’ Association (SFCA), has resulted in colleges being forced to drop courses such as modern foreign languages and further maths, as their funding reduces.

James Kewin, deputy chief executive of the SFCA, said: “We are delighted that so many MPs from across the political divide have united to campaign for an end to this longstanding inequality.

“Sixth form colleges are the most effective and efficient providers of sixth form education in England. However, changes to the way that 16 to 19 education is funded will see them lose a greater proportion of their income than any other type of sixth form provider — a VAT rebate would help sixth form colleges to maintain their high standards.

“We are not asking for anything that school and academy sixth forms do not already receive — the current VAT treatment of sixth form colleges amounts to a tax on learning that redirects funding away from the front line education of students.”

The SFCA report Unlocking the potential of Sixth Form Colleges was published on Tuesday, October 15. It highlighted how the additional investment from a VAT rebate would be used by the sector and the benefits it would bring.

It said: “At present, sixth form colleges are required to pay VAT on their purchases, but unlike schools and academies they are not reimbursed for these costs. This is a historic anomaly that the Department for Education estimates would cost £20 million per year to rectify.

“As this report highlights, the return on the government’s investment would be significant.

“In addition, it would help to rescue strategically important, but less popular courses, such as modern foreign languages and further maths, which colleges are being forced to drop as their funding reduces.”