Elmfield director Ged Syddall walks during Newsnight probe — but remains majority shareholder

Former Elmfield Training Ltd chief executive Ged Syddall (pictured) has quit as the firm’s director — but remains its majority shareholder — during a BBC investigation into alleged malpractice.

A Newsnight probe, supported with information uncovered by FE Week, was due to be aired tomorrow night (Friday October 4), focussing on Elmfield’s dealings with workers at supermarket giant Morrisons. 

The Newsnight investigation was carried out by BBC presenter Shelley Joffre (pictured)

Newsnight will allege that Elmfield received public money for courses that employees had declined to take.

A spokesperson for Elmfield made a statement to Newsnight, seen by FE Week, which claims investigations had already been carried out and had uncovered “no evidence of malpractice”.

Nevertheless, he told Newsnight: “The board and management of Elmfield take the view that the alleged behaviour described in the selection of emails obtained by Newsnight is unacceptable.

“Accordingly, we have asked an independent firm to carry out a further review.

“This will identify key learning points of how the Morrisons contract was operated and provide recommendations to us as a new board, to ensure that similar mistakes don’t happen again.”

He added: “Elmfield is announcing changes to its board of directors in order to serve the best interests of its learners, clients and funding partners.

“The majority shareholder, Ged Syddall, has ceased to be a director of Elmfield as of September 27.”

The Skills Funding Agency valued Elmfield’s delivery of Morrison’s apprenticeship contract at £64m from August 2009 to April this year, an FE Week Freedom of Information request to the agency uncovered. Including its Morrison provision and non-apprenticeship programmes, Elmfield delivered £108m-worth of provision to its 379 client businesses for the same period.

An agency spokesperson said: “We have received allegations regarding Elmfield.

“We take any allegation against an organisation involved in the delivery of skills extremely seriously.

“We are currently investigating the credibility of these claims and we are not able to comment on specific details during a live investigation.”

She added: “Should any whistleblower have information of irregularity in relation to public funds provided by the agency, we would encourage them to contact us directly and their evidence will then be considered in line with our investigations procedure.”

Mr Syddall resigned as chief executive in July after Ofsted inspectors gave Elmfield a grade four inspection result the previous month having come across “unacceptably low” results.

After ten years in post, and having founded the Cheshire-based independent training provider, he said he took “full responsibility” for the grade.

He said: “Despite many positive findings the business has received low grades and ultimately as chief executive I take full responsibility for that.

“I have therefore resigned as chief executive with immediate effect.”

The grading also saw the agency issue the firm with a notice of serious breach.

A condition of the notice is that Elmfield cannot start any new learners with either new or existing employers or apply for growth.

“Success rates in the apprenticeship programmes experienced a considerable decline last year and a high proportion of learners within the Morrisons’ contract did not complete the full framework,” said the Ofsted report.

“Furthermore, the number of learners who completed their apprenticeship in the planned time fell to an unacceptably low level of 33 per cent.”

The inspection report came just months after FE Week reported how Elmfield’s success rates showed just 47.5 per cent of its 13,420 leavers in the retail and wholesale sector, aged 25+, walked away with an apprenticeship certificate in 2011/12.

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.

Ofsted inspectors will return to Elmfield in the autumn to see if it has improved.

In April 2012, Mr Sydall gave evidence to the House of Commons Business, Innovation and Skills Select Committee.

He told MPs that Elmfield’s entire income of £30m in 2011/12 came from public funds and he defended his £3m dividend.

In the same month, Elmfield appeared as part of a Panorama investigation called The Great Apprentice Scandal.

Hundreds ‘fail’ to comply with wage rule

High street fast food business Subway was among hundreds of employers on the National Apprenticeship Service (NAS) website advertising jobs that paid less than the national minimum wage, FE Week has discovered.

The legally-required amount that employers must pay apprentices went up 3p to £2.68 on October 1.

But many jobs — with start dates well into the month — were being advertised on the website at the old rate.

 There needs to be some serious thought about how people will be attracted to taking up an apprenticeship when wages are just £2.68 an-hour.”

Two such posts were with Subway and were for “customer service apprentice/sandwich artist” in Newcastle Upon Tyne.

The one-year apprenticeships would have paid £79.50 for 30 hours’ work — which equates to £2.65 an-hour.

A Subway spokesperson told FE Week the advert had been produced from out-of-date records. It has since been amended to £80.40 a-week — which equates to £2.68 an-hour.

She said: “All our stores are independently owned and operated by franchisees. As part of their franchise agreement, franchisees are responsible for all employment matters.

“Franchisees are required to comply with employment law when recruiting, contracting and in all dealings with employees.”

A NAS spokesperson said: “Training organisations, employers and apprentices have been made aware of the [minimum wage] increase.”

However, on the day the minimum wage went up there were more than 600 NAS website adverts, some with multiple apprentice posts, where employers would break the law.
Possible start dates for the underpaying posts ran right up to October 28.

Joe Vinson, National Union of Students vice president for FE, said: “It is scandalous that companies offering apprenticeships may be offering below a wage that is already incredibly low.

“Apprenticeships should offer an opportunity to gain valuable skills and an insight into the reality of the workplace, as well as enabling you to study for qualifications to further your future.
“However, there needs to be some serious thought about how people will be attracted to taking up an apprenticeship when wages are just £2.68 an-hour.”

Just over a month ago the government announced it would be making it easier to name-and-shame underpaying apprentice bosses.

The clampdown, which applies to non-apprentices too, came into effect this month. It comes in addition to financial penalties, of up to £5,000, employers face if they fail to pay adequately.

Frances O’Grady, TUC general secretary, told FE Week: “The significant minority of employers who dodge the minimum wage have not only ripped off young apprentices, they are also tarnishing the apprenticeship brand that government, unions and employers have so worked so hard to revitalise in the last decade.”

According to the Low Pay Commission annual report this year, data suggests that more than 27 per cent of apprentices were paid less than their minimum wage last year, compared with 20 per cent in 2011.

Non-compliance, it added, appeared most prevalent among employers of young apprentices — 40 per cent of all 16 to 17-year-old apprentices were thought to be paid less than £2.65 an-hour, and 25 per cent of all 18 to 20-year-old apprentices were thought to be on less than £2.65 an-hour.

Meanwhile, the government’s apprentice pay survey for 2012 is yet to be published. A spokesperson at the Department for Business, Innovations and Skills said: “The survey has no set date and will be published in due course.”

Apprenticeship tax credits

Download your free copy of the FE Week 16-page special report on the PAYE proposal in the government’s apprenticeship funding consultation, sponsored by Pearson.

Click here to download (10mb)

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Introduction

Time has been called on a consultation into the most radical reform proposals for apprenticeship funding in generations.

The government have confirmed around 350 responses from across the FE skills sector have entered the ring, contributing their views on three possible models for future funding arrangements, which the government hopes will attract more employers to the apprenticeships programme.

The first was a model of direct payment to the employer, the second would allow employers to claim back spending on apprentices through tax credits, and the third would leave funding in the hands of training providers.

Allowing firms to claim back costs through the Pay As You Earn (PAYE) system was always going to be the most divisive option.

It was clear from the moment this was proposed through former Dragon’s Den investor Doug Richard’s review, in December last year, that we might have a split decision.

That is why we decided to focus this week’s 16 page hard-hitting supplement on the fight of the 21st century — at least

in the FE world — over tax credits proposals.

It’s the option FE Week understands has the support of Skills Minister Matthew Hancock, although he was unable to comment while the results of the consultation, which closed on Tuesday, October 1, were still being compiled.

But acting as referee, FE Week has drawn together here some ‘fors’ and ‘againsts’ in debate over use of the PAYE system.

So, seconds out, round one — and in the “red” anti-PAYE corner we have training providers worried about losing control of finances, and organisations representing small businesses, who fear it will put small and medium-sized enterprises off taking on trainees, because of possible added paperwork.

However, there are also several big hitters in the “green” pro-tax credits corner, including the Confederation of British Industry, which insists the simplicity and familiarity of PAYE would attract more businesses to apprenticeships.

The funding model the government eventually settles on will be a key factor influencing the fate of cross-party efforts to drive apprenticeships to new heights.

Foundation rejects non-competitive bids

The Education and Training Foundation is binning contract bids it received under its old non-competitive tendering process.

Foundation interim chief executive Peter Davies told FE Week last month that contracts would have to be awarded through a competitive process in future.

And now, because of this, a number of bids already submitted for a share of the foundation’s £18m government funding, to carry out research and development, are being binned.

We have always been keen to be an open and transparent organisation and these values underpin the way we want to commission delivery.”

The announcement was made in a letter published on Thursday on the foundation’s website and was the result of a board meeting on Friday, September 27.

“We will not be able to proceed with the majority of the bids for work the foundation has received from across the sector, some of which we initially asked for, which were more speculative in nature,” it said in the letter, co-signed by Mr Davies and foundation interim chair David Hughes.

It follows £75,000-worth of contracts being awarded to member organisations such as the Association of Colleges and the National Institute of Adult Continuing Education through a non-competitive process. It is understood these contracts will remain in place.

But, it said in the letter: “We have always been keen to be an open and transparent organisation and these values underpin the way we want to commission delivery.”

To achieve this, non-competitive processes with only a single bid would only happen “in exceptional circumstances”.

The letter continued: “All other work will be subject to competition, either through separate open tenders or framework agreements.”

It went on to say the foundation, the FE and skills sector’s self-improvement body, would not commission work based on speculative bids from organisations.

However, such bids may be used to generate tenders “if the proposal fits with our objectives and agreed overall plans”.

“Accordingly, It added that, to avoid disruption, the foundation would be looking at some limited “continuation programmes and pump priming activities” for which it would offer three to nine-month contracts. These contracts could then be extended through a competitive tendering process.

“In this way, we can balance the need to keep work happening, with the need to be open and fair in our commissioning,” the letter said.

Areas eligible for these short contracts would be programmes of work which had previously been funded by the Learning and Skills Improvement Service, the Skills Funding Agency, and the Department for Business, Innovation and Skills (BIS).

Other eligible projects included those in line with the foundation’s “mission” and key priorities or where the body of work was finished but “needs some further limited activity to ensure it is available to the foundation or the sector”.

It was acknowledged that time would have been wasted putting together bids that are binned, but certain organisations had submitted proposals the foundation still wanted to pursue.

These could end up composing documents explaining their ideas and inviting other bodies to bid for contracts to turn them into reality.

They would be free to enter the bidding process, but the letter warned there would be no bias towards them winning the contracts.

Contracts that could be put up for tender in the near future cover Teach Too, traineeship and apprenticeship support programmes, National Occupational Standards for teachers and practitioner-led research projects.

Government funding for the foundation, excluding VAT, is £18.8m for August to April next year, and the same figure again for 2014-15.

Why create a barrier to apprenticeships?

Teresa Frith compares different visions for the future of apprenticeships.

The Husbands Review of apprenticeships is, at first glance, wife of the Richard Review.

It also takes what, by all measures, is a successful government-supported initiative and seeks to introduce radical change.

It would be a brave person who claimed there is nothing wrong with the current apprenticeship system.

But equally, it would be unfair to say that there are not quite a few babies in this particular bathwater.

It appears the Government and Her Majesty’s Opposition are united in their belief apprenticeships are very important, and in their desire for radical change.

The recommendation to call only programmes at level three and above apprenticeships clearly deals with the wish to seek parity with A-levels and higher study, as well as the need to have a system that compares favourably with our European neighbours.

As with the Richard recommendations, doesn’t this just further expand choice for the academically able?”

But, as with the Richard recommendations, doesn’t this just further expand choice for the academically able?

If at 16, a young person is capable of study at level three, they may well look more favourably on a route that takes them straight into employment.

But what of those who are aged 16 to 24 and not ready to study at this level? They will be unable to access an apprenticeship and need to take what could be perceived as an inferior route towards their goal. Will employers view these young people, who need extra time and support to become job-ready, as equally worthy of their efforts?

If we want to smarten up the apprenticeship brand, there needs to be a comprehensive, funded offer that ensures young people have a range of access routes that feed directly into the apprenticeship, without fear of additional stigma.

The development of employer-led bodies that genuinely represent the needs of businesses and young people across a sector would be a fantastic achievement for any administration.

Those of you who have been around a while can probably remember numerous attempts by past ministers to achieve this with limited degrees of success.

Husbands and Richard both agree on a key role for employers in the design of apprenticeships and giving them a strong say in funding.  The basic design would be undertaken by “sector employers” in both visions. Richard favours more “company-specific” input, but there is little to choose between them.

So what about the money? Again both agree that a significant shift is needed here.

Employers need to become embroiled in the funding process in the Richard vision; Husbands favours the employer-led institutions, or similar.

So we can create more than 150,000 funded bodies (Richard) or a bunch of sector-led mini-skills funding agencies, as suitable replacements for the existing single structure — well “single” if we just consider apprenticeship funding, all of which comes via the Skills Funding Agency.

If all £1.5bn is transferred from the existing system to support employers in either vision to deliver the beefed-up apprenticeships, I’m struggling to see how we will fund the level one and two provision that will be needed to help young people to progress to an apprenticeship.

Like the current apprenticeship system, there is much to be applauded in both the Husbands and Richard reviews and maybe, just maybe, we might get what we seek if we take some serious time to test and evaluate what is being suggested, recognise the need for partnership rather than control and try to keep our eyes on the prize, rather than the cash flow.

Teresa Frith, senior skills policy manager, Association of Colleges

 

Nine make it through in sale of troubled K College

Nine organisations have been asked to develop their bids to take over provision at the troubled K College, FE Week can reveal.

They have been whittled down from 30 organisations, including colleges and private firms, who sent the Skills Funding Agency a total of 87 expressions of interest (EIs).

They want to take on elements of the Kent-based college (pictured above, with former principal Bill Fearon), which is being broken up following a failed merger, from August next year.

An agency spokesperson told FE Week: “Working with the Education Funding Agency and the Higher Education Funding Council for England, we have now reviewed the EIs submitted for the education and skills provision in South and West Kent, currently delivered by K College, the first stage in the competition process.

“We now move to the second stage of the competition process and have invited nine organisations to prepare and submit full tenders to us, to demonstrate how they will fully meet the needs of the area and deliver high quality provision from August 1, 2014, while maintaining continuity for existing learners.”

The college was formed following a merger between West Kent College and South Kent College in 2010, but ran up at least £15m in debt to the agency, which has issued it with a notice of concern.

Phil Frier, who became interim principal of the college in January following the resignation of former principal Mr Fearon, has conceded the merger failed.

But the college now looks likely to be broken up, depending on the nature of the winning bid or bids.

Seven parts of the college’s provision are on offer, including 16 to 19 provision in Dover, Folkestone or Ashford, Tonbridge and Tunbridge Wells grouped together and 19+ provision in these three areas.
Higher Education Funding Council for England (HEFCE) directly-funded provision at Ashford and Tonbridge is also up for grabs.

The first, EI, stage of the tendering process was initially supposed to have been completed in August.

But it was delayed by the agency “in order to allow organisations to better prepare their tenders” as many organisations would be closed over the summer, according to an email sent to interested bodies.

That resulted in the second stage of the process, where invitations to tender (ITT) were due to be sent out by the agency between July and September, being pushed back to this month.

However, the delay should not prevent contracts from being awarded on time, an agency spokesperson told FE Week in July. They said: “Contracts will continue to be awarded in line with the indicative timetable we have set out.”

The nine short-listed organisations, who have made through to the ITT stage, are due give presentations and attend interviews on their bids later this month, with contracts being awarded the following two months.

The agency spokesperson said: “K College will continue to deliver provision to new and existing learners throughout this process.”

The agency is refusing to disclose any details with regard to applications while the procurement is running. It has also declined to say whether college debts would be transferred to the winning bidder.

However, K College revealed that the nine parties which had been given invitations to tender included a range of colleges, private and not-for-profit providers.

The names announced by the college were:

  • Canterbury College
  • East Kent College
  • Hadlow College
  • Highbury College
  • Mid Kent College
  • Newcastle College Group
  • SEETEC Business Technology Centre Ltd
  • Ixion Group Contracts Ltd

FE Week believes the ninth organisation invited to tender has pulled out.

Bravo principal in 120 breathtaking kickboxing bouts for charity

The principal of Basingstoke College of Technology (BCoT) today took part in 120 two minute kickboxing fights to raise funds for the The Royal Marsden Cancer Charity.

Anthony Bravo is 6 foot 5 inches tall and was National Association of Kickboxing Champion in 1995, 1996 and 1997 (each year winner of two out of the three categories: Points, Light Continuous and Full Contact) as well as national karate champion in 1996 (doing kickboxing).

The tournament today took place at the Croydon Phoenix School of Martial Arts in London, where this year they have raised over £30,000 for The Royal Marsden Cancer Charity, making the total in excess of £200,000.

Mr Bravo was appointed as principal at BCoT in 2009, and before that was the principal of the new Crossways Sixth Form Academy in Lewisham, London. In July the further education college improved from an Ofsted ‘satisfactory’ to an overall ‘good’ grade.

Mr Bravo is also a regular tweeter, so to keep up to speed with all his moves follow @anthonybravo 

Below are pictures by Nick Linford, FE Week editor, of Mr Bravo in action today, the first of which is with Master Instructor Stephen Brooks, 7th Dan Karate, and head of Phoenix Martial Arts in Croydon.

To make a donation visit Mr Bravo’s webpage here.

Major challenges ahead to make Labours plans into reality

Steve Besley offers a Policy Watch perspective on Labour’s proposals on apprenticeships.

We’ve had world class qualifications for the academic system, now we have a call for “a universal gold standard for apprenticeships”.

This would be based on a level three threshold with minimum durations, dedicated time for off the job training and greater employer control over funding and standards.

Details can be found in Labour’s independent skills taskforce’s first report on apprenticeships, published at the start of this year’s party conference.

The Taskforce’s two other reports, due in the autumn, will cover school-work transition and vocational learning in FE, but for the moment the emphasis is on apprenticeships.

Renaming level two training would require considerable work to ensure such a credible route can be put together”

This report supports the growing trend towards direct funding for employers, calling for a large chunk of the current £1.5billion apprenticeship budget to be handed over, but with two conditions.

These are firstly that the funding should be used to develop sector-led workforce development strategies, with apprenticeship targets thrown in for good measure, and secondly, that employers should work with local bodies.

The local join aspect needs a bit more working up and there’s no mention of how 16 to 18 year old provision would fit in, but the message is clear and reinforced in the report’s title – “A something-for-something deal with employers”.

In the long-term, the report’s sympathies lie with the use of tax incentives.

National Insurance relief for small employers, many would argue, would be a better bet than the current youth contract approach.

The report is also keen on employers and employees, rather than ministers, leading on training policy.

This is a tricky area, as it needs some structures for this to happen and the skills system is not short of structural change.

The report’s answer is to give the UK Commission for Employment and Skills a leading role in making the current system work better, rather than attempt to create anything particularly new.

As the architects of the current Employer Ownership Pilots, there is an obvious logic here although the commission may need support.

The model proposed is a hub and spoke one where the UK Commission for Employment and Skills builds the capacity of sector bodies, which in turn work to improve training at a local level.

The third core proposal is the development of a universal gold standard to help re-define just what an apprenticeship is.

There’s been lots of concern recently about the apprenticeship brand and whether it has been tarnished by being allowed to drift into other forms of training.

The report’s answer is to pull in the esteemed Rhineland model of a high-quality, employer-defined, level three qualification and use that as the model to aim for.

Given that so many apprenticeships here at the moment are at level two, this raises the question “what should happen to such training?”

The report states level two training should be renamed as a traineeship or similar and re-designed to ensure all young people who want to progress to higher level training are able to do so.

This may happen in due course, but it would require considerable work to ensure such a credible route can be put together.  The government is already circling this area, partly through its work on 16 to 19 accountability and partly through its review of adult vocational qualifications. However, it remains the next big challenge for policy makers.

Steve Besley, head of policy at Pearson and author of Policy Watch

 

Hancock tries out the apprentice high life

Skills Minister Matthew Hancock exchanged his suit for overalls to find out what life was like for an apprentice engineer as part of a job swap scheme.

Mr Hancock switched places with City & Guilds apprenticeship champion of the year Jenny Westworth, aged 23, who works at BAE Systems.

He said: “It was fantastic to swap jobs with Jenny and understand first-hand what it is like to be an apprentice.”

Earlier in the year Jenny visited Westminster to experience being a minister.

She said: “It was a real honour to have an opportunity to be a minister for the day but I was also proud to show the Minister what I’ve achieved as a result of my apprenticeship at BAE Systems.”