Study suggests experience of paid work while in full-time education increases job chances

Young people who experience a workplace environment while in full-time education are far more likely to land a job than those who didn’t get a taste of paid employment, a new study has suggested.

Research by the Institute for Public Policy Research (IPPR) showed the unemployment rate for young people who have left regular education with experience of paid work was 14 per cent, while for those who did not it could be up to 23 per cent.

The study, called A job for everyone: What should full employment mean in 21st century Britain? and released ahead of the latest unemployment statistics, also found that of the 1,290,000 young people not in work or full-time education, half had never had a job.

“Gaining experience of the world of work while studying is vital for the future job chances of young people,” said IPPR economic analyst Spencer Thompson.

“But fewer and fewer young people are working while learning.”

In the UK, 75 per cent of young people in all levels of education do not have a job, in contrast to the Netherlands, for example, where almost 60 per cent of young people are employed.

Before the beginning of the recession in 2007, one-in-three young people was working, but the number of young people who have never had jobs has doubled since 1998.

Mr Thompson said: “These findings show the need for a job guarantee for young people, paid at least the minimum wage, to provide them vital with experience of the workplace.

“By having job experience on their CV when they leave full-time education, young people will be at an instant and much needed advantage when entering the jobs market.”

Mr Thompson added that a job guarantee would also ensure that those who could not afford to take unpaid internships would not be disadvantaged.

According to the study, the advantage was particularly important for young people with few qualifications, as one-in-three young people with fewer than five A* to C grade GCSEs and no work experience are unemployed, compared to one-in-six with experience of work.

A spokesperson for the Association for Education and Learning Providers said: “We strongly opposed government’s removal of mandatory work experience for school pupils because we were very worried about its likely impact on the job chances of young people.”

He added that the removal of mandatory work experience increased the importance of the work experience element of the new traineeship programme.

UK Commission for Employment and Skills (UKCES) senior manager David Massey said the drop in young people taking on paid work alongside their studies was worrying.

“The ‘death of the Saturday job’ may seem trivial, but UKCES research shows that experience is what employers value most when taking on young people,” he said.

“Over the past two decades, the share of 16 to 17-year-olds in full-time education with part-time jobs has halved, from four-in-ten in 1992 to under two-in-ten now.

“Young people are less and less likely to combine work and learning, cutting off this route to gaining vital experience.”

The IPPR study is available here.

Latest figures reveal just 24 loan applications from apprentices

Just 24 apprentices have applied for 24+ Advanced Learning Loans since the scheme was launched prompting a sector head to call for “concerted action to ensure that adults are not missing out”.

Dr Fiona Aldridge, head of learning for work at the National Institute of Adult Continuing Education, spoke out as the Department for Business, Innovation and Skills (BIS) for the first time revealed apprenticeship uptake of the new loans system, launched on April 8. Courses funded by the loans start tomorrow.

“There needs to be concerted action to ensure that adults are not missing out on opportunities, particularly where advanced and higher-level apprenticeships are concerned,” said Dr Aldridge.

“The number of applications for these remains extremely low.”

She added: “Having a skilled workforce that can compete in the global market is essential for a substantial and sustained economic recovery and people of all ages and stages of their careers need access to high-quality opportunities to improve those skills.”

FE Week understands that the government initially expected around 27,000 (33 per cent) of the predicted 80,000 loans applicants for 2013/14 to be from apprentices.

However, according to the monthly update from BIS, of the 19,096 loans applications received by July 31, just 24 (0.1 per cent) were from apprentices.

A BIS spokesperson said: “We are closely monitoring application data, including applications for apprenticeships and are working with the National Apprenticeship Service and those sectors with significant volumes of 24+ advanced and higher level apprenticeships to ensure that employers and employees understand the loans that are available.

“However, we are still at a very early stage for apprenticeship applications and would expect recruitment to happen throughout the year, it is therefore too early to say what the level of applications from apprenticeships will be.”

According to the figures, just 12 higher apprenticeship loans applications were received by the Student Loans Company while a further dozen were received for advanced apprenticeship loans since April. The majority applied last month with only three apprentices registering interest before July 1— so few that figures were revealed only this month.

Overall, of the 19,096 loans applications received, which includes A levels, QAA Access to HE and QCF certificates and diplomas, 14,383 have been processed. Seventy eight per cent of applicants were female.

The majority of all applicants — 8,420 —were aged 24 to 30. Meanwhile, 6,759 were aged 31 to 40 and 3,085 were aged 41 to 50. Just 832 applicants were from applicants aged over 50.

In May, FE Week reported how three weeks into the scheme just 68 men and 270 women had requested a loan.

At the time Martin Doel, Association of Colleges’ chief executive, said deterrents included “aversion to debt” among mature students, and the “absence of a national marketing drive” for the loans.

BIS set up a £6.5m development fund to help providers with loans facilities to market the new loans.

Is subcontracting just the latest FE bubble?

With more than £850m-worth of subcontracting last academic year, Mick Fletcher looks at whether such delivery is something to be concerned about.

Some parts of FE can be awfully hard to explain to anyone outside the system or even to many of those inside who see their main role as teaching.

Indeed, some aspects are fairly easy to describe in ways that make them sound distinctly dodgy, especially if there is the slightest whiff of scandal.

The danger is that when sooner or later political scrutiny chances upon one of these darker corners, the baby will get thrown out with the bathwater and the reputation of the whole sector gets tarnished.

The world of FE subcontracting is a case in point. Most observers would be genuinely surprised to learn that many colleges routinely get more funding from the Skills Funding Agency (SFA) or the Education Funding Agency (EFA) than can be justified by the student numbers taught by their own staff.

They would be still more surprised to learn that not only do these colleges then effectively ‘buy’ student numbers from third parties to ‘earn’ their funding allocation, but that there is a whole secondary market involved in ‘selling’ students to FE with large and successful organisations set up to do just that. It sounds odd, but is it a problem?

Concerns about subcontracting often focus on the proportion of funding received by the college that is passed on to the organisation that does the real work — teaching students. On average, it seems that colleges hold nearly a quarter of the total back with instances of more than 30 per cent of funding held back from the training organisation.

Clearly the subcontractors would like to receive more with some describing the colleges as just ‘skimming easy money’ off the contract; and at the same time colleges can give an impressive rationale for their proportion quoting the need for quality control and the fact that they provide specialist services in support of the work. But where does the truth lie?

There are clearly problems if the relationship is asymmetrical. When the boot is on the other foot, as when higher education institutions subcontract work to FE colleges, the latter are quick to complain that some universities abuse their stranglehold on the power to award degrees and their close relationship with HEFCE to retain an excessive proportion of funding.

Furthermore colleges are rightly critical of higher education partners that see their subcontracting as a sort of ‘balancing tank’, letting it grow if their ‘own’ numbers fall and cutting back when their mainstream recruitment is healthy.

The bigger question about subcontracting is whether the provision delivered through that route represents value for money

There is certainly evidence that an asymmetric relationship was established in FE when, in order to save its own administrative costs, the SFA sharply raised the minimum size of contracts it was prepared to let, forcing many small providers to seek subcontracts from larger institutions. This not only meant that the new subcontractors were in a weak bargaining position, but it allowed SFA to claim it had cut costs without hurting the ‘front line’ whereas in practice the inescapable costs of administration, now recouped by the subcontracting colleges, directly reduced the funding available for learners.

In general however, it is not obvious that the proportion of funding held back by colleges is excessive. Many teaching teams within colleges would be delighted to get 75 per cent of the funding that their work earns because on average a good half of all FE funding is used to support institutional overheads — not just the buildings and the principalship, but teams of marketing managers and finance departments, quality units and MIS operatives.

In any event, most subcontracting does not take place between monopoly colleges and vulnerable small contractors, but in a fairly open market where each partner needs the other.

The bigger question about subcontracting is whether the provision delivered through that route represents value for money — is it intrinsically worthwhile? In this respect there is an uncanny resemblance between some of the work undertaken and that delivered in previous FE bubbles — the franchising scandal in the mid 1990s for example, or the excesses of Train to Gain or adult apprenticeships. So have we learned from our mistakes?

The problem of course does not lie with the colleges, but with government policy

Although there is a tighter control over qualifications eligible for funding (we no longer train thousands of so-called diving instructors as some colleges did through franchises), the bubbles each have several things in common. The focus is on lower level work, often at level one or two; it is often work-based with the risk that it is substituting for employer investment; it often involves a high proportion of distance learning (now of course described as ‘blended learning’); and, it often has a focus as much on assessment of existing skills as the teaching of new ones. None of these features are necessarily problematic; but in combination and when the work is expanded rapidly, it must give cause for concern.

It is fascinating that a cause celebre in the franchising scandal of the 1990s concerned Tesco shelf stackers while the recent adult apprenticeships bubble was highlighted by Morrisons. As the level of subcontracting grows exponentially, one wonders which supermarket has its finger in the pie this time.

The problem of course does not lie with the colleges, but with government policy that reduces education to a marketplace and measures success through crude quantitative targets. In the 1990s, government wanted growth at all costs to reduce the unit of resource.

More recently, it has wanted apprenticeships — almost at all costs — to appear to tackle unemployment and low skill.

It currently requires colleges to hit ever-increasing quality targets with limited and unstable funding so when a subcontractor offers to sell provision that seems to fit the bill, who can be surprised at its rapid expansion? A closer examination of what we are getting for our money however might reveal some nasty surprises.

Mick Fletcher is an FE Consultant

Benefits concerns over traineeship hours

The government has been pressed to launch an “urgent review” of traineeships over fears the programme could hit learner benefits, FE Week can reveal.

The Association of Employment and Learning Providers (AELP) has called for a new look at how the government’s flagship youth unemployment scheme will affect Job Seeker’s Allowance (JSA).

It is concerned that working around the Department for Work and Pensions’ (DWP) 16-hour rule — which limits the number of hours skills’ provision claimants can do in a week — will be more important than considerations surrounding the needs of learners when courses are designed.

“The rule has long been a source of contention for skills providers and in this instance means that skills elements, including maths and English provision within traineeships, will adversely impact on JSA payments if they exceed this amount per week,” said an AELP spokesperson.

“Work experience placements are treated slightly differently — placements of up to 30 hours a week are allowable within JSA regulations, but only up to a maximum of eight weeks, after which the 16-hour rule once again applies.

“The only exception to this is where an apprenticeship opportunity arises as a result of the work placement, where an extension to 12 weeks can be allowed.”

He added: “AELP believes that the cumulative effect of all this will mean that the short-term impact on a learner’s welfare benefits may in some cases be more important to the design of a traineeship than its potential effect on their future job prospects.

“Provision will therefore have to be configured around compliance with benefit rules as much as, if not in some cases more than, the needs of the learner (or even the potential employer) involved.

“We feel that this confluence of rules and regulations undermines the principle of delivering a flexible programme based on learner needs, and are pressing for an urgent review of the rules surrounding JSA and Traineeships in particular — for example by considering whether traineeships should qualify for a blanket exemption from the 16-hour rule.”

A spokesperson for the Department for Education told FE Week: “Traineeships have been designed to have the flexibility to fit with the benefits system.

“DWP policy is that JSA claimants can undertake up to 30 hours a-week work experience for a maximum of eight weeks.

“JSA claimants on traineeships will be able to spend up to 30 hours a-week on work experience, or work experience and training combined, provided that the training element is under 16 hours per week.

“Claimants will remain on JSA throughout their traineeship, unless agreement is reached between the provider and jobcentre locally to fund full-time participation via a JCP training allowance.”

A Department for Business, Innovation and Skills spokesperson told FE Week there was no exemption for traineeships, but added that the programme would be reviewed.

She did not indicate when the review would take place, but said: “Traineeships are in the first year of a staged national rollout and all aspects of delivery, including work experience, will undergo a formal evaluation.”

Traineeships were first proposed by Deputy Prime Minister Nick Clegg in June last year to help young people gain work-related skills and attitudes.

Pressure for the scheme mounted after it emerged that 979,000 16 to 24-year-olds were out of work in the three months from December to February.

The youth unemployment figures, released by the Office for National Statistics, showed a 20,000 increase on the three months from September to November.

The AELP wants to hear from providers — via enquiries@aelp.org.uk — about their experiences of traineeships and JSA compliance.

SFA publishes £283m of inter-lead subcontracting for first time

Lead providers took on nearly £300m of subcontracted provision last academic year, Skills Funding Agency (SFA) figures have revealed.

More than 1,600 subcontracting agreements, totaling £283m of funding, were in place between providers who already held their own direct contracts with the SFA.

It is the first time that the extent of inter-lead subcontracting has been disclosed by the SFA (click here to download).

Meanwhile lead providers gave out £569m of business, via 2,235 contracts, to organisations that didn’t hold direct contracts (click here to download).

However, more subcontracting could be taking place because the figures are based on self-declarations and only agreements worth £100,000 or more are included the SFA spreadsheets.

County Durham-based Learning Curve had a direct SFA contract worth £2.7m last year and was also by far the biggest subcontractor.

The firm, which has a direct SFA contract for £2m for the coming year, had £18.4m in subcontracting arrangements with 32 lead providers last year.

Tony Outhart, Learning Curve director and co-owner, said subcontracting played such a part in his business — set up with Judith Moran [Learning Curve chief executive] in 2004 — because “in the early years it was difficult to get a direct funding contract with the then-LSC [Learning and Skills Council], so the natural way forward was to work in partnership with colleges.”

He said: “Then when Train2Gain was launched we were offered direct contracts in four regions, and we have continued to grow our SFA contract year-on-year ever since.

“This year we also became a direct Education Funding Agency [EFA] provider to extend our provision to 16 to 18-year-old learners in addition to our core Adult Skills Budget-funded workplace and classroom provision.

“Although we are a directly-funded SFA/EFA provider we want to continue to build on the strategic delivery partnerships we have developed with our college partners over the past nine years.”

He added: “We are hoping to increase both our direct contracts with SFA and EFA, and at the same time continue to develop high quality, sustainable partnerships with FE colleges.”

The firm pays anywhere between 10 and 20 per cent in management fees for the provision it takes on from lead contractors.

“I think this is a fair arrangement given the QA, funding, MIS and audit support our partners provide,” added Mr Outhart.

An SFA spokesperson said Learning Curve had “quarterly opportunities to make a case for growth in relation to its direct contract”.

He said: “If and when such a case is received, we will consider it … in accordance with our published process and subject to affordability at that point in time.”

Learning Curve, which was rated as good by Ofsted in early 2009, also dishes out provision to subcontractors and is listed on the SFA website as doing so with five providers.

The next biggest subcontractor was the Skills Network, which does not have a direct SFA or EFA contract and so is not subject to full Ofsted inspection. It took £9.1m of business from 14 colleges and one independent provider last year.

Nobody from the North Yorkshire-based Skills Network was available for comment.

However, a statement by the firm on the issue of subcontracting from colleges was issued by its chief executive, Mick Cox, two months ago.

He said: “Good training providers can add value to a college’s curriculum offer, through the provision of niche services.

“We have our own contacts within relevant business communities, and our own experienced staff who understand the needs of these sectors. Colleges are able to use a training provider’s longstanding relationship with employers to build on their own employer engagement.”

The SFA spokesperson said it had conducted apprenticeships pilots over the last 12 months to see if subcontractors wanted to become lead providers.

“The organisations were invited to participate through our e-tendering portal and 62 training organisations were successful in their application for a direct contract with us as a result,” he said.

“The Skills Network did successfully apply to deliver apprenticeships through one of the pilots, but elected not to enter into a contract.”

Based on management fees of 20 per cent, and total SFA subcontractor funding of £853m via 3,883 deals, up to £170m could have been taken from front line delivery of education.

However, that figure could be even higher with a number of primes charging around 30 per cent — and FE Week has even learned of one prime charging fees of up to 35 per cent.

“We do not determine how much subcontracting a provider can undertake,” said the SFA spokesperson.

“There are clear funding rules and contract clauses that support subcontracting arrangements, however we are clear it is the responsibility of the provider to ensure that its subcontracting arrangements represent good value for money and that there is sufficient funding being allocated for the delivery of high quality education and training.

“Providers who contract directly with us are responsible for the entirety of the value of their contract and all of the provision that it funds.”

Read Mick Fletcher’s expert article about subcontacting here.

Download the AoC/AELP/LSIS Supply Chain Management Guide here.

Hairdressing award for ‘stand-out’ learner

London learner showed she was a cut above when she was named student of the year by a leading hair care brand.

College of Haringey, Enfield and North East London hairdressing student Eunice Pennant, aged 52, won the award from Afro-Caribbean hair care company Softsheen-Carson.

The award came with the chance to work backstage at Africa Fashion Week London.

Eunice said: “I was really excited.”I’m so glad for this opportunity and winning the competition has reinforced my enthusiasm for my career hairdressing.”

Eunice’s Lady Ascot design, inspired by Royal Ascot Ladies’ day, also won £500-worth of equipment for the college and £500 for herself.

Competition co-ordinator Lorna Hill said: “Eunice’s entry, which combined creative flair with technical expertise, really stood out.”

Eunice Pennant demonstrating her award winning skills

A principal first for Gateshead College

New Gateshead College principal and chief executive Judith Doyle said she was “thrilled” and “proud” to be taking up the post.

She had been deputy principal for curriculum and quality at the college for four years before taking over the role on August 1 following the retirement of Richard Thorold.

“I am thrilled to be appointed and feel privileged and proud to have been given the opportunity to lead Gateshead College,” said Ms Doyle, the college’s first female principal.

“I am really looking forward to building on Richard’s excellent work to ensure that Gateshead is the college of choice for students and employers.”

Ms Doyle has more than a quarter of a century’s experience in FE having joined the college teaching team as an English lecturer in 1987 after completing her teacher training there.

She then moved on to a role developing adult community learning provision across Gateshead, followed by senior management roles as director of teaching and learning, and assistant principal for quality, before taking up her deputy principal post.

Outgoing principal Mr Thorold said: “I am delighted to be passing on the principal’s baton to Judith and wish her the best of luck in taking the college forward to an even brighter future.

“I know the college will go on to even greater achievements under her leadership and she will be absolutely dedicated to the staff, students and community we serve.”

Robin Mackie, chair of the board of governors, said the quality of applicants for the role had been “extremely high”.

He said: “Judith is a highly talented, extremely motivated and dedicated individual who impressed with her ambition, commitment and passion for Gateshead College and the wider region.”

Ms Doyle said: “It is an exciting and challenging time to be involved in further education.

“I am absolutely focused and devoted to making sure that all students continue to receive the highest quality training to equip them with the skills and confidence that will provide the important foundations for their future success, give them the edge in the jobs market and help them to adapt to a constantly changing world.”

The college got a grade three (satisfactory) Ofsted inspection result in June last year.

Nailing the nitty-gritty

With the government looking at new funding models for apprenticeships, Suzy Gunn explains why questions of practicality and accessibility must be considered.

While most people agree solving the UK’s growing professional skills gap should be a major priority in the country’s return to healthy economic growth, exactly how this should be done is less clear.

In response to growing numbers of young people taking non-vocational degrees and finding that they do not have the skills employers need, the government has wisely placed greater emphasis upon more specific routes into employment — primarily through apprenticeships.

However, in order to truly make apprenticeships attractive and accessible to young people, it’s crucial that the practical and grass root operational foundations — the ‘nitty-gritty’ — are fully in place.

Last year, the government tasked Doug Richard with reviewing the funding structure of apprenticeships. In light of his conclusions, the Department for Business, Innovation and Skills proposed three new funding models.

As the director of a company that offers a range of apprenticeship packages to employers, training providers and learners, my experience in this area is that these can be dense and complex issues — and that the devil is often very much in the detail.

While I fully agree with Mr Richard that apprenticeships can play a vital role in meeting the needs of the economy, and that more needs to be done to incentivise employers, realistically, out of the three proposed models, I can only see one being practically and effectively implemented.

Model 1 puts the emphasis firmly on the employer, requiring it to register apprentices through an online system and then take responsibility for provider payments, expenditure and assessment reporting. It then receives direct funding from the government into its accounts. The problem is this is so heavily reliant on employers — they are busy trying to run a business and may not have the resource to be able to do full justice to the scheme. Should this prove to be the case, the potential dangers could range from providers not being paid on time, to the learners having their actual qualifications delayed due to a lack of sufficient achievement recording.

Employers clearly require well-trained staff, but in my experience they are hesitant to become overly involved in the educational/operational side of the training and would prefer to leave these aspects to the experts.

The second model utilises the PAYE system, and is also one that I have reservations about, but this time for more economic reasons.

Without knowing exact figures, one can only assume that implementing a national software infrastructure would be extremely expensive. While I do agree with investing in vocational education in principle, spending so much here, and further stretching HMRC as a means to ultimately assist the country’s financial and economic recovery, does seem slightly counter-intuitive. Indeed, even putting aside the likely cost on the public purse, there is no doubt a software infrastructure of this magnitude will inevitably present “teething issues”, that run the risk of disengaging employers completely from apprenticeships, and forcing them to find alternative solutions.

But that is the last of my pessimism, because model 3 is a one I envisage being successful. It proposes that providers should be at the centre of the funding process and allows providers to maximise their experience and expertise, and, crucially, helps develop links and relationships between employers and providers.

But even with ‘Model 3’ there will still be administrative and financial issues to determine. For example, if it is up to employers to determine their own financial contribution, will the scale of that contribution be considered to reflect the employer’s attitude towards having better-skilled employees? As such this could mean that employees could lose out on training.

Ultimately, the fact there is a serious government focus on apprenticeships is a really positive step, but if new funding structures are to be introduced, it’s absolutely crucial that they are practically robust enough to meet the needs of not just learners and employers, but our economy too.

Suzy Gunn, operations director at Active IQ

Listen to BBC Radio 4 Today programme discuss FE recruitment at 14

At 06:50 this morning the BBC Radio 4 Today programme interviewed Mike Hopkins, Principal of Middlesbrough College, and Professor Ann Hodgson, Institute of Education, about the direct recruitment of full time 14 year-olds to colleges from this September.

Listen to the interview below, and you can read more about direct recruitment to FE at 14, and which seven colleges so far have permission, here.