Audit office examines agency’s performance

Officials from the National Audit Office are investigating the Education Funding Agency to “consider whether it is prepared to meet future challenges”.

The investigation into the Department for Education’s (DfE) delivery agency for funding and compliance is underway with a report due in the autumn.

An audit office spokesperson said: “The agency distributed more than £50bn in 2012-13 to local education providers in England to fund education and training for learners aged 3 to 19 — 3 to 25 for those with learning difficulties.

“The agency is also responsible for the oversight of financial management and governance in open academies, and for major capital programmes in the education sector.

“Our report will examine the performance of the agency to date, and consider whether it is prepared to meet future challenges.”

The spokesperson declined to comment further.

The agency was formed on April 1 last year when the functions of two non-departmental public bodies, the Young People’s Learning Agency (YPLA) and Partnerships for Schools, were brought together.

The agency was also investigated by the audit office last year, with a report published in November called Managing the expansion of the Academies Programme.

It said: “The YPLA and the agency have experienced difficulties meeting staffing requirements for administering funding and monitoring academies’ financial management and governance.”

The latest investigation comes as the audit office launched a report — Financial management in government — calling for more spending control within government departments.

Amyas Morse, head of the audit office, said: “Finance teams in departments and other public bodies have a vital role to play if the government is to deliver the planned public service reform.

“Finance managers are now being taken more seriously and playing a more central role in the efforts to provide sustainable services at lower cost.

“Savings are being made but progress in restructuring how services are being delivered is lagging.

“If the challenge of reforming the delivery of public services is to be met, then the Treasury and Finance Leadership group need to provide more effective impetus to strengthen financial management capability across government.”

An agency spokesperson declined to comment on the latest audit office investigation, which comes just over a year after a committee of MPs said DfE needed to keep a closer eye on its spending.

A report of the Public Accounts Committee concluded: “The department needs to do more work to clearly define how funding streams will be monitored, audit arrangements, and processes to support whistle-blowers.”

The DfE said at the time that steps had been taken to improve accountability.

“The DfE and agency challenge academies if they believe funds are being spent inappropriately,” said a spokesperson.

Careers report ‘ducks’ funding issues

A report that called for a “culture change” on careers guidance has been criticised for shying away from “difficult underlying issues”.

The National Careers Council’s first report, An Aspirational Nation: Creating a culture change in careers provision, featured seven recommendations including a significant expansion in the work of the National Careers Service (NCS).

“A culture change is needed in careers provision for young people and adults to address the mismatch of skills shortages and high unemployment,” said the report, launched earlier this month.

The report of the council, set up by the government in May last year, also called for face-to-face careers guidance to be available to all pupils from the age of 12 (Year 8); and for all students to have a planned progression route upon leaving school. A further recommendation was the creation of an employer-led NCS advisory board.

However, former council members Professor Tony Watts and Heather Jackson distanced themselves from the report, claiming it ducked the issue of funding.

The duo issued a joint statement that said: “We consider the report’s conspicuous omissions represent a major missed opportunity; a reluctance to address the difficult underlying issues, and a level of acquiescence with current government policies with which we would not wish to be associated.”

A council spokesperson said: “Our report acknowledged that to expand the NCS to support schools, young people and parents, would require resourcing . . . it is for the government to respond as to how this may be achieved.”

The duo walked out on the council early last month in a row over a draft of the report that went before Skills Minister Matthew Hancock.

Their damning resignation statement said the draft proposed a rebalancing of funding that allowed the Department for Education (DfE) “to escape its responsibilities”.

They claimed it suggested adult funding from the Department for Business, Innovation and Skills (BIS) — which funded the NCS with £83m in contrast to £7m from the DfE — might be used to pay for young people’s careers guidance.

Their statement on the published report said the issue had not been corrected.

“Most of the recommendations are directed not to the government but to the NCS, without any attention to how its new responsibilities are to be funded and built into NCS contracts in an accountable way,” said their statement.

The council spokesperson added: “We felt it was not appropriate to demand additional money from the DfE. It was more our task to set out the case as to why career provision was important and to make the argument to government as to why it should give this area high priority.”

Meanwhile, the council’s recommendation of an employer-led NCS advisory board was described by 157 Group executive director Lynne Sedgmore as a “positive development”.

Funding rates still a sector concern

Concerns remain about a Skills Funding Agency policy aimed at “smoothing” the impact of its new payment regime, despite it ditching plans to cut provider earnings rates by up to 25 per cent or more.

The agency wanted to introduce protection measures for colleges and training providers to stop earnings rocketing or nosediving in the next academic year.

Providers have been given a number — a ‘transition factor’ — that indicates how much of their budget under the new system they can earn.

A factor of 1.1 would increase a provider’s earnings rate by 10 per cent, while 0.9 would indicate a cut of 10 per cent — meaning that it had to do more work for the same money.

But the agency stepped away from factors that would result in earnings rate cuts just days after FE Week reported on worries within the sector. The agency said such factors would now be “reset” to 1.

The move was welcomed by the 157 Group, but concerns remain that the agency could still reduce earnings rates with policy wording that states: “We reserve the right to adjust your factor where we have evidence that it is no longer suitable from your ILR submissions or because of the change to your offer in 2012/2013 and 2013/2014.”

Peter Roberts, 157 Group chair, said: “We welcome the quick response by the agency regarding the concerns expressed by colleges over potential implications of the transition factor and confirmation that each college’s 2013/14 allocation remains unaffected.

“We will still need to ensure that the notion the agency ‘reserves the right to adjust your factor’ does not become a mandate to reduce rates at any time in the future without the careful dialogue needed.”

An agency spokesperson said: “We will reset the factors in the way we have communicated and only review that position on a case-by-case basis.”

The agency dropped its plans for cutting earnings rates after FE Week reported a Joint Information Systems Committee online forum for college finance directors in which one provider revealed its rates under the new system would be cut by 25 per cent.

“I can’t imagine that colleges are going to take this lying down,” said one forum member.

And at least one independent training provider had been given a transition factor below 0.7, FE Week understands.

But the agency dropped its plans after what it described as “feedback”.

“As part of the consultation process, we wrote to providers setting out their individual transition factor,” said the agency spokesperson.

“We asked for feedback on any implications or concerns as soon as possible. The feedback from the sector has been very helpful.

“It was clear that there would be a number of unintended consequences.

“As a result we have reset the transitional factor for those providers where earnings would have been reduced as a result of the transitional arrangement.”

She added: “We would like to stress that the 2013/2014 allocation is entirely unaffected by the transition arrangements.”

Colleges miss out on traineeship cash

Colleges look set to miss out on £12m handed over to the Skills Funding Agency (SFA) for traineeships, FE Week can reveal.

The Department for Education (DfE) has transferred the cash to agency coffers to pay specific traineeship providers through their 16 to 18 apprenticeship contracts.

The ring-fenced funding has been made available for next year to providers who only hold agency contracts, mostly private training providers.

The extra funding will not be on offer to providers with Education Funding Agency (EFA) contracts, so bypassing most colleges.

The revelation was set out in EFA letters sent to providers rated good or outstanding by Ofsted. They say: “If you hold a contract or funding agreement with the EFA only, or a contract with the EFA and a contract with the SFA for 16 to 18 apprenticeships, you will be funded to deliver by the EFA through your existing EFA contract and through the numbers included in your lagged student numbers.”

A DfE spokesperson said current funding was expected to cover traineeship costs for those with EFA contracts because the programme would “replace other level one and two programmes” that were already funded.

However, Julian Gravatt, assistant chief executive at the Association of Colleges, said he wanted to see colleges get “similar opportunities” to the private training providers.

He also wanted the traineeship age limit lifted. Currently, only people aged 16, 17 or 18 on August 31 in the relevant funding year will be able to become trainees, along with young people up to the age of 25 with learning difficulty assessments.

“Traineeships will start at the same time as the new approach to study programmes so 2013-14 will be a complicated year,” said Mr Gravatt.

“We believe that traineeships will work well if they are strongly linked to apprenticeships so we are relaxed about DfE finding a short-term fix to allow independent providers to claim funding, but we’ll be pressing to ensure colleges with strong apprenticeship programmes have similar opportunities.

“The bigger issue, though, is to ensure that trainees are able to support themselves and to remove the current age cap.”

The DfE spokesperson said: “We need to make sure that vocational training is high quality, rigorous and meeting the needs of today’s employers.

“Any good or outstanding providers — whether contracted through the EFA or the SFA — will be funded to offer young people traineeships.

“This investment of £12m . . .  will mean that the SFA’s best apprenticeship providers will now be able to offer young people traineeships as well.

“Any good or outstanding providers with an EFA contract will also be able to deliver traineeships, with the costs covered by current funding as we expect traineeships to replace other level one and two programmes.

“Where they recruit additional students, providers under a contract will be funded, while any grant-funded providers will receive an increased allocation next year.”

A spokesperson for the Association of Employment and Learning Providers said: “We welcome this money, but we’ll need more. Further funding will also be required if the programme is expanded from 19 to 24.”

An SFA spokesperson said: “Providers of 16 to 18 apprenticeships that only hold a contract with us will receive a ring-fenced budget, alongside their funding allocations received for 2013/14, to deliver the traineeship offer.”

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Funding rethink

For Michael Davis, the Richard Review got it just about right

In politics, consensus is a rare thing. And consensus on something that actually matters is even rarer. That’s why apprenticeships, with their broad cross-party support, are a cherished area of relative stability in the turbulent waters of FE and skills.

For the Prime Minister, apprenticeships should become “the new normal”. For Labour, they are for the “other” 50 per cent — the ones that don’t go to university.

It’s clear that apprenticeships enjoy an exalted position unparalled within the skills system which has been rightfully earned.

Good apprenticeships deliver strong economic returns for both employers and individuals and there is a clear consensus and commitment to continue raising apprenticeship standards.

Yet within this, the truth is that only 15 per cent of employers offer apprenticeships and only six per cent of young people are currently apprentices. We have some way to go before we can say that apprenticeships are mainstream.

Last year, total government spending on apprenticeships topped £1.4bn, yet reached less than 10 per cent of young people.

If we want to substantially raise our game in vocational training within a climate of tighter public spending constraints, it’s clear that a different approach is necessary as it is difficult to see how we can achieve another step increase in engagement in apprentices on current budgets.

Doug Richard’s review of apprenticeships proposed a number of reforms aimed at boosting quality and re-establishing apprenticeships as good jobs with training to industry recognised standards.

For me, ensuring public funding for apprenticeships flows directly to employers — as advocated in Doug’s review — is an integral part of this reform.

I believe that this has the potential to put vocational education on a long-term pathway for sustainable public investment alongside greater private investment, as has already been done to a certain extent in higher education.

At the commission, our proposal is that we need to “hardwire” good jobs for young people into how businesses think and the labour market works — and that the most effective way of doing this is to leverage more employer investment, in the broadest sense of the word, by passing the public contribution for apprenticeships directly to employers as a PAYE offset.

Vocational education, including the apprenticeship system, has been subject to many reforms, and for us to further complicate the system would be damaging. Direct payment through PAYE, however, builds upon an established system which is known and understood by all employers.

Experience shows us that tax changes are a powerful mechanism to influence employers and can help apprenticeships become a normal part of business behaviour while providing employers with a tangible return on their investment.

Moreover, in terms of employer involvement in the skills agenda, a shift to the PAYE model would position investment in training alongside other investment decisions. Public funding would move closer to the front line, improving accountability both to employers and employees. Putting purchasing power for apprenticeships in the hands of employers would make them active customers, as well as co-investors — with a vested interest in driving quality.

Creating an established vocational path for the young people who don’t go to university should be a priority, and with high level occupations set to increase in the UK, so should ensuring that our young people have the skills to match

Changing the way that we understand employer engagement can allow us to ensure investment, quality and innovation, and ultimately to secure more and better jobs.

Michael Davis, chief executive UK Commission for Employment and Skills

Think-tank calls for the return of polytechnics

The Association of Colleges has questioned the conclusions of a report calling on the government to bring back polytechnics, abolished by the Conservatives in 1992.

The final report of the Commission on the Future of Higher Education, published by think-tank IPPR, suggests that large FE colleges, in which most students are on higher education courses, could be eligible for polytechnic status.

Association deputy chief executive Gill Clipson welcomed the report’s “recognition of the distinctive role colleges play in advanced and higher vocational study”.

But she added: “It is debatable as to whether the re-introduction of the title polytechnic for some larger colleges with degree-awarding powers will send out the desired signal about the importance of vocational study; this is a question not so much about an institution’s title but of the value placed upon the distinctive, specialist, high-quality provision already on offer.”

She said it would be up to colleges as autonomous bodies to make up their minds individually.

The commission’s chair and vice-chancellor of the University of Warwick, Nigel Thrift, argued that “a different title would protect a distinctive role for higher vocational learning that was lost in 1992”.

“Polytechnic status would carve out a distinctive place in our tertiary education system for institutions that focus on providing higher level vocational qualifications,” he said.

“[It] would be a mark of vocational excellence that would send out wider signals about the importance of vocational learning . . . and would signal that the university title and the university route are not the only form of high status in our system.”

The report also recommended the introduction of new £5,000 fee-only degrees, focused in vocational learning, which would be offered to local students who would not be eligible for maintenance loans.

It also suggested a student premium of £1,000 for each student from a low participation area, or those previously eligible for free school meals.

Miss Clipson said: “The introduction of new £5,000 ‘fee-only’ degrees, focused on vocational learning and higher level apprenticeships aimed at local students, would be a welcome opportunity for colleges.”

She warned the number of places available should not be constrained as the qualifications would create the skills for economic growth.

“One of the recognised strengths of colleges delivering higher education is their ability to widen participation and engage older students with work or family commitments, or those from disadvantaged backgrounds or deprived areas, who may not otherwise be able to pursue degree level study.

“We therefore fully support the proposal for the introduction of a £1,000 student premium for those people who have previously been eligible for free school meals, or who are from areas with historically low levels of participation in higher education.”

A spokesperson for the Department for Business, Innovation and Skills said the report was “a useful contribution to the debate on how to maintain and improve the reputation of our world-class university sector”.

He added: “However, the alternative undergraduate funding models that are discussed would cost more for families, taxpayers and graduates while doing nothing to improve the student experience.”

Research to look at dip in part-time HE in FE

The Association of Colleges and the Department for Business, Innovation and Skills (BIS) are backing research into the delivery of part-time higher education courses in FE colleges.

The £246,000 programme will aim to identify barriers in recruitment to part-time degree level courses in colleges, which has been declining for the past six years. It fell nearly 40 per cent in the 2012/13 academic year.

It will also identify barriers to the expansion of higher education in colleges and make recommendations on how colleges can be enabled and supported to develop their higher education offering.

Nick Davy, the association’s higher education manager, said: “This is a significant research programme and will be crucial to widening our understanding of the underlying causes for the recent decline in part-time higher education numbers, improve colleges’ market intelligence, and inform future policymaking to expand college higher education and support strategic objectives, such as achieving degree-awarding powers.”

A statement from the association suggested that the decline could be due to the introduction and limited promotion of 24+ loans, reduced employer training budgets and the uneven spread of part-time courses.

It also suggested that younger students might have poor regard for this form of study.

Universities and Science Minister David Willetts said: “This is an important study that will help us in our drive to create a more diverse sector with more opportunities for part-time or accelerated courses, distance learning and higher level vocational study.

“FE students studying higher level qualifications are more likely than university students to be over 25, part-time and come from areas with low rates of participation in higher education.

“So it is vital that we understand what more can be done to get FE colleges to increase their higher education offer.”

Mr Davy agreed, saying: “Higher education is a core priority for many of our member colleges, the majority of which provide undergraduate and postgraduate level courses.

“The college higher education offer is distinctive in that it offers cost-effective courses close to home and has a strong track record in widening participation to people from disadvantaged backgrounds who may not have thought university was for them.”

The two-year project will be carried out by the centre for widening participation policy studies at the University of East London Continuum, which has expertise in higher vocational education.

Professor John Storan, director of Continuum, said: “This research will address both the reasons for the downturn in part-time higher education college participation and examine the factors which impact on the expansion of higher education capacity within colleges.”

The AELP wishlist for the election

Having long called for a pre-apprenticeship programme, the Association of Employment and Learning Providers can claim a victory in the government’s new traineeship scheme but, says Martin Dunford, there is much still to do

We may be two years away from a general election, but the political manoeuvring has already started.

Labour and the Liberal Democrats have had policy groups looking hard at education and skills and the Association of Employment and Learning Providers (AELP) has contributed to both.

Meanwhile, the Conservatives are increasingly pointing to the recent growth of apprenticeships as a trump card to take to the hustings.

We feel our 2013 national conference is the right time to start feeding our policy input into all of the main parties.

Our policy recommendations range from the education schools should provide to prepare young people for the world of work, to the training adults need whether they are in or out of work.

We are acutely conscious our case for the taxpayer to continue investing in skills coincides with the government’s Spending Review this month.

It was therefore reassuring to hear the Business Secretary Vince Cable tell the BBC recently that we need to be investing more in training to support the economic recovery.

At the heart of our argument is the belief state support for employment and skills programmes yields clear economic advantages.

This is especially pertinent to the future of our young people, nearly a million of whom are unemployed.

State support for employment and skills programmes yields clear economic advantages”

Our manifesto document says that to make more of these young people work-ready, they need schools to focus on a range of skills including English, maths and soft skills for employability that cover, for example, attitude, team-working and problem-solving.

Long before the current government entered office, we were making the case for a preparatory training programme that could lead to full apprenticeship or employment for young people who have left school with few or no qualifications.

So we are pleased traineeships are being introduced. However, it is disappointing they are only available to 16 to 18-year-olds, and we are already receiving feedback from members that this range limits the programme’s appeal to employers.

The government should extend the range to 24-year-olds as soon as possible.

Where statutory education has not been able to succeed for pupils (and according to the Department for Education (DfE), 40.1 per cent failed to achieve English and maths GCSEs at grade A* to C in 2012), we are advocating that government should fund basic employability skills and competencies up to level two, regardless of age, beyond which responsibility for learning should be shared between employers, learners and the state.

Another policy win for the AELP has been to persuade the DfE to introduce programmes for young people that do not stipulate qualifications as the only measure of success.

Securing a job is now regarded by the DfE as a positive outcome for a 16 to 18-year-old and the Department for Business, Innovation and Skills (BIS) and Department for Work and Pensions (DWP) now agree also.

Nevertheless, with many AELP members having contracts with all three departments, there remains scope for more coherent procurement to avoid fragmented and inconsistent contract management.

High up the government’s priority list has been the ‘quality agenda’. We have always been in the vanguard of promoting continuous improvement even for such highly successful provision as apprenticeships.

While programme review and modification will always feature, the most important element is to ensure scarce government funds are rigorously targeted on the highest priority provision (apprenticeships and traineeships) and targeted funding is made available to providers with demand from employers best able to deliver success.

The level playing field necessary for this to happen is undoubtedly better balanced than in the past, but we are not there yet. We cannot continue to have providers of any type underperforming — yet retaining funding — while others are unable to obtain the resources they need to meet the immediate demand from employers, potential apprentices and those needing a traineeship to avoid joining the unacceptably high cohort of NEETs.

Martin Dunford OBE, chief executive of Skills Training UK and chair of the Association of Employment and Learning Providers