The Skills Funding Agency has announced rates from £500 to £900 for work placements in the government’s new traineeship programme.

Agency officials laid out payment bands of 100 to 199 hours; 200 to 499 hours; and, 500 hours-plus in a sector webinar on Monday (see slides below). They said the bands would mean training providers were funded at £500; £700; and £900, respectively (with 20% held back until there is a positive progression into work). Click here to download the full set of SFA slides.

Traineeships were first proposed by Deputy Prime Minister Nick Clegg in June last year for 16 to 24-year-olds. But there was disappointment throughout the sector in May when the first framework showed only those aged below 19 would be included in the programme, along with those with learning difficulty assessments up to academic age 25.

But the situation changed with this year’s Spending Review, when the government included the older age bracket for when they begin next month.

The revision resulted in new framework guidance this month, setting out what traineeships hoped to achieve.

This included work preparation training such as interview preparation and CV writing, training in English and maths, a high-quality work placement between six weeks and five months and training from providers who were rated outstanding or good by education inspectors Ofsted.

Skills Minister Matthew Hancock said: “Young people in Britain deserve the chance to work and get on in life which is why we’re introducing traineeships to help them get on the first rung of the ladder.

“Employers value real experience which is why I’m delighted that more than 100 businesses have come forward. I now want to urge more employers — no matter what size — to sign up to the programme and make the most of the talents of our young people.

“This is vital for our economy to compete in the global race. Traineeships are just one of the ways this government is making sure young people cross the start line.”

The new FE Commissioner is yet to be appointed despite interviews by officials from the Department for Business, Innovation and Skills (BIS), FE Week understands.

A number of candidates have already been spoken to, but none has been appointed to the role — or to any of its seven advisory posts.

“The interview and appointment process is ongoing,” said a BIS spokesperson.

It had been hoped — when the powerful new role was announced in April — that posts would be filled by June. But with that date past, no new timescale was given.

The FE Commissioner’s appointment, and that of the advisers, had been managed through the National College for Teaching and Leadership’s (NCTL) e-procurement system.

BIS and the Department for Education had wanted candidates registered on the NCTL’s operational associate framework so they could issue a request for quotation.

However, it was not clear whether the same system and requirement would apply when the posts were readvertised.

The commissioner will be able to call for a college to be shut down and will be sent in if a college is graded ‘inadequate’ by Ofsted, is in financial trouble or is failing to hit learner success targets.

They will report directly to Ministers with the aim of turning the college around within a year.

They could call for institutions to be slapped with ‘Administered College’ status, thereby losing powers such as staff changes, expenditure or transfer of assets.

They could also recommend governors be kicked out, but ultimately they could also call for a college to be dissolved.

Skills Minister Matthew Hancock announced the intervention measures under the government’s new Rigour and Responsiveness in Skills strategy.

“Where colleges are failing learners we will be knocking on their doors and take swift and effective action,” he said.

“It is a dereliction of duty to let failing colleges teach young people. We will not fail in our duty to act.

“All providers should meet tough standards of rigour and responsiveness. Through these reforms we will be able to intervene without hesitation where they fall short.”

For colleges who require improvement (one grade better than inadequate), Ofsted will provide enhanced support and work with them on a development plan.

But the new skills strategy also includes stronger action to support good and outstanding colleges.

Ten colleges in the North West have joined forces to form a joint venture company boasting a combined income of nearly half a billion pounds.

Principals have been working on the move to form the Greater Manchester Colleges Group since 2010.

It is believed to be the first of its kind in a city region and includes include Bolton College, Bury College, Hopwood Hall College, The Manchester College and Oldham College.

Salford City, Stockport, Tameside, Trafford and Wigan and Leigh colleges will also be involved in the partnership, which aims to enhance students’ job hopes.

And the partnership has moved forward after the colleges’ principals successfully secured a European funded bid worth £14m, which will play “a critical role in ensuring that the region has a skilled and educated population,” said a spokesperson.

They added that the group represented and promoted the FE sector within Greater Manchester and contributed more than £500m to the local economy each year.

Tameside College principal Peter Ryder is the group’s chair. He said: “As a group we will be continuing to work with local and regional employers to bring a greater emphasis on enterprise, entrepreneurialism and innovative thinking to the education sector.

“We aim to build capacity and excellence by developing existing provision and pulling together the expertise and specialist skills from all of the colleges involved.

“This latest development is testament to the optimism we have for the future, and our shared belief in the positive benefits for learners and the wider community of our working closely together.”

Robin Newton-Syms, the group’s partnership director, said: “Our aim is to use the new company to attract more funding into Greater Manchester and facilitate work with other organisations.

“We already have strong links with the Chamber of Commerce, private sector training providers, local authorities and the voluntary sector which is helping employers develop the skills of their workers.

“The potential now is for colleges to help shape the future of businesses, by offering effective training solutions and skills development which will enable them to grow.”

College	Million income in 2011/12	Principal
Bolton College	£29,167	Marie Gilluley
Bury College	£31,977	Charlie Deane
Hopwood Hall College	£25,755	Derek O’Toole
The Manchester College	£187,451	Jack Carney
Oldham College	£25,396	Alun Francis
Salford City College	£43,470	Martin Sim
Stockport College	£32,496	Stephen Carlisle
Tameside College	£24,405	Peter Ryder
Trafford College	£27,031	Sir Bill Moorcroft
Wigan and Leigh College	£33,621	Cath Hurst OBE
Total	£460,769

The government has accepted a recommendation that skills should be a core priority for Local Enterprise Partnerships (LEPS).

The recommendation was made by the Department for Business, Innovation and Skills Select Committee in April.

It came in a report that also said LEPs should demonstrate engagement with providers.

“We believe that skills should be a core priority,” said the committee report.

“While we acknowledge that many LEPs have got the balance right, and note the government guidelines on the subject, we have heard that some LEPs need to refocus.

“We therefore recommend that LEPs be required to demonstrate their levels of engagement with local education, in particular with skills and apprenticeship providers, FE colleges and schools.”

The government’s response to the report was published by the select committee on Thursday, July 25.

“The government accepts this recommendation,” it said.

“It is up to LEPs to determine the priorities for their areas. Some skills elements will be included in the SLGF [single local growth fund] and LEPs will have to provide details of how they intend to deliver their strategic plans.

“The government is committed to putting control over the skills system in the hands of employers and learners and ensuring that the skills system is responsive to the skills needs of local communities to support growth and jobs.

“We have put £340m directly in the hands of employers through the Employer Ownership of Skills Pilot and will support demand from learners aged 24+ through Advanced Learner Loans.

“In response to Lord Heseltine’s report, the government stated that a skills system that is responsive to local needs can help drive economic growth.

“To ensure that local businesses can shape the pipeline of talent emerging from local further education (FE) institutions, at Autumn Statement 2012, the government agreed that LEPs would have a new strategic influence over skills policy in accordance with Lord Heseltine’s analysis.

“LEPs will be responsible for setting local skills strategies and will work with the FE providers to agree how those priorities will be delivered.”

The government said LEPs had a “number of levers to strengthen their engagement with providers,” for example Chartered status for FE colleges was now dependent upon having taken into account the skills priorities of local LEPs.

“The government is reforming the delivery landscape so that employers have direct influence over qualifications and learning programmes and by ensuring that businesses and LEPs are represented strongly on college governing bodies,” added the government.

The Education Funding Agency is to start publishing information on the value of providers’ 16 to 18 delivery, FE Week can reveal.

The agency already goes public with annual allocation details, but it doesn’t release information about the value of provision actually delivered.

However, following an FE Week request for figures on the value of delivery under the Freedom of Information (FoI) Act, the agency said it was planning to release 2012/13 details this year. It was also looking at releasing the information relating to 2011/12.

“The vast majority of institutions funded by the agency, including schools, colleges and academies, are funded on a lagged basis, so the funding allocated in one year relates to the student numbers recruited in earlier years, and the funding allocated and paid is the same,” said an agency spokesperson.

“However, funding for commercial and charitable providers is reconciled against delivery, and payments are adjusted according to rules published annually in the agency funding guidance.

“We have not previously published information on delivery and payments for these providers, but are planning to do so for the first time in relation to 2012/13 once we have final audited figures from all providers, which are returned in the autumn.

“We expect this information for 2012/13 to be published around the end of 2013.

“We will also publish data for commercial and charitable providers for 2011/12 as a historical record, which we are provisionally planning to make available in August 2013.”

It follows an FE Week story this month about the amount of agency funding for independent training providers for which no delivery had taken place. They were overpaid around £20m last year, it was revealed.

Around 10 per cent of the agency’s 2011/12 budget for private sector provision for 16 to 18-year-olds was not returned, even though it wasn’t delivered.

A further 15 per cent — around £25m — was handed back.

An EFA spokesperson said it allowed providers to keep a certain amount of funding for which no provision had been delivered. But, she said, it was not true that it had paid £20m to independent training providers “for nothing”.

“In 2010/11 and 11/12 we applied a 10 per cent margin for some independent providers where they under-delivered to reflect changes to the funding system in those years. This has been reduced to 5 per cent in 2012/13,” she said.

The overpayment figures were not in the public domain — prompting the FoI request — but were seen by FE Week.

They provided a stark contrast to funding for older learners, paid for by the Skills Funding Agency (SFA) and BIS.

The SFA makes the details of its overpayments public, but it pays independent training providers strictly on delivery. Its overpayment of £91m last year therefore ended up largely in the coffers of colleges and local authorities, for example.

Kim Thorneywork, the SFA’s chief executive, said the overpayment — revealed in December — meant some providers’ allocations for 2012/13 would be reduced, and she expected “to deliver a balanced budget for the 2012/13 financial year”.

Uncertainty continues to hang over the future of K College, which is being broken up following a “failed merger”, after the tendering process was delayed.

Invitations to tender (ITT) were due to be sent out by the Skills Funding Agency between July and September to organisations interested in taking over the college’s provision.

An email sent to interested bodies said: “In order to allow organisations to better prepare their tenders, rather than requiring work to be done over the summer, when many organisations are closed as the academic year ends, we have moved the launch of the ITT to early October.”

Short-listed organisations are now due give presentations and attend interviews on their bids in October, with contracts being awarded the following two months.

The provision and estates of the college are expected to be split up and sold off after the college, formed by a merger between West Kent College and South Kent College in 2010, ran into multi-million pound debts.

The college was issued with a notice of concern by the agency, which it owes £15m.

The agency declined to say whether the debts would be transferred to the winning bidder.

It also declined to say how many providers had expressed an interest in taking over the college’s provision.

“While a procurement is running, we are not in a position to disclose any details with regard to applications,” said an agency spokesperson.

The delay in the tendering process should not prevent contracts from being awarded on time, she said, adding: “Contracts will continue to be awarded in line with the indicative timetable we have set out.”

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.

College principal Phil Frier said: “There is a lot of interest from other colleges, training providers and universities in bidding for the work currently operating across all five towns.

“This is great news and ensures the continuation of the college’s provision for the foreseeable future.”

Details of the sell-off were listed in a sales prospectus from the agency, Education Funding Agency and HEFCE.

Two open days were held on May 22 and 23, at two of the college’s five campuses, for interested parties to find out more about the college and its provision. Fifty providers registered to attend.

Proposals to reform the apprenticeship funding system have been welcomed by former Dragons’ Den investor Doug Richard, nine months after his own review called for tax breaks for employers.

Three funding ‘models’ have been proposed by the Department for Business, Innovation and Skills, the first of which is for a direct payment model where businesses register apprentices and claim government funding online.

The second is for a PAYE payment model in which businesses register apprentices online and then recover government funding through their PAYE return.

The third option, although all could be amended as part of the consultation, is a provider payment model where government funding continues to be paid to training providers, but it can only be drawn down when the employer’s financial contribution towards training has been received.

They are part of a ten-week government consultation ending on October 1 and come around nine months after the Richard Review looked at how apprenticeships in England could meet the needs of the economy.

It concluded the National Insurance or tax credit system should be used to give employers breaks as payment for training. Mr Richard said at the time such changes should be “at the heart” of apprenticeship reform.

“The funding models put forward by the Department for Business, Innovation and Skills (BIS) is precisely the steps needed to encourage more businesses to take on apprenticeships and view young people as the valuable resource they are,” said Mr Richard.

“By giving more power to employers, the new schemes will help businesses big and small have more of a say on the training their employees receive, meaning more efficient businesses and better training for apprentices.”

Neil Carberry, CBI director of education and skills, said: “This could be a watershed moment for apprenticeships, putting employers genuinely in the driving seat for the first time.

“A radical overhaul is long overdue and business has been arguing loudly for targeting funding directly through employers.

“The new system must keep red tape to a minimum if we want more firms to take on apprentices. A skills tax credit is by far the best option on paper, but needs detailed piloting to ensure the transition is smooth.”

However, there were words of caution from John Allan, the Federation of Small Businesses’ national chairman; Martin Doel, the Association of Colleges chief executive; and also Stewart Segal, the Association of Employment and Learning Providers’ chief executive.

“Getting any change to do with funding, or wider issues around apprenticeships, right is crucial,” said Mr Allan, adding: “Therefore we strongly urge government to take its time with any reforms so that they get it right first time to create a system that will last for decades to come.”

Mr Doel said: “I question the need to make further significant changes to apprenticeship funding in the middle of a recession with youth unemployment at an all-time high.”

And Mr Segal said: “We have considerable doubts over whether the PAYE proposal would actually bring more employers into the apprenticeship programme.

“In fact, it might put smaller businesses off. The co-funding option [model 3] might have merit if it properly recognises the contributions which employers make towards an apprentice’s framework achievement.”

Shadow Skills Minister Gordon Marsden said: “We will want to examine carefully all three options.

“What the government has proposed inevitably delays implementing Richard reforms and, depending which option they go for, could depart substantially from them.

“There are also no questions about the ability of small businesses to put money up front bearing in mind we need to expand their take-up of apprentices substantially.”

The first two funding models would both need the “time-consuming” construction of a new online system, but could be in place by 2016 “at the earliest”.

However, common to each is for “the employer and provider negotiating the content and price of eligible apprenticeship training”. It would replace a system of government-set national funding rates.

Skills Minister Matthew Hancock said: “By radically reforming the funding system we will allow employers to agree with training providers the content and price of training ensuring greater competition both on quality and on price.”

Responses to the consultation should be sent to apprenticeships.consultation@bis.gsi.gov.uk by October 1. Visit www.gov.uk/government/news/government-sets-out-radical-plans-to-shake-up-apprenticeship-funding for further details.