The Shadow FE Minister has described it as “deeply alarming” that government-commissioned research says apprentices do not understand how they would be affected by FE loans.

Gordon Marsden (right) spoke out after the Department of Business Innovation and Skills (BIS) revealed a report commissioned to assess how 24+ Advanced Learner Loans would affect course uptake. The loans system, due to go ahead in a few months, was introduced after study grants for learners aged over 24 were scrapped as part of austerity measures.

Mr Marsden said the research, based on findings from focus groups with Muslims, 40+ learners, apprentices and learners with disabilities, “starkly highlights the fact they (the government) have no idea what introducing loans for adult apprentices could do to either employer demand or learner behaviour”.

Under a section titled ‘likely behaviour from 2013 onward’ the report said: “Apprentices in this sample were relatively unconcerned about the impact that removal of the subsidy would have on people in their situations, but this was largely due to the fact that they assumed that employers would continue to fund courses. They did not know this for sure, however, and many eventually wondered whether apprentices would have to pay for their courses if employers did not.”

It continued: “On balance it was difficult to establish what apprentices — younger and older — are likely to do from 2013 onwards because of the lack of information about what employers would do.”

 starkly highlights the fact they (the government) have no idea what introducing loans for adult apprentices could do to either employer demand or learner behaviour”.

Mr Marsden said: “With the new system merely months away, FE Minister Matthew Hancock and BIS Ministers urgently need to engage with this issue and ensure there is not a significant drop in 24+ apprenticeship numbers.”

FE Week reported in its last edition how Mr Marsden criticised the government for not commissioning a national marketing campaign to fully inform people of the new loans system.

A BIS spokesperson said: “While some (apprentices) are understandably unsure until they have seen the details and discussed with their employers, the research did suggest that many were likely to accept this and use a 24+ Advanced Learning Loan, particularly younger groups.”

The recent BIS-commissioned report found that 24+ Advanced Learner Loans were most likely to put off older learners from studying as they were more “savvy” with money and saw study more as “nice to have”, rather than a necessity.

The University and College Union (UCU) expressed their concern over this, warning that the increased costs might exclude older and poorer people from studying.

UCU general secretary Sally Hunt said: “The government’s excuse to cut funding for adults to concentrate resources on the younger generation completely falls down when you study this report. At a time of high unemployment ministers should be looking to make it easier for people to retrain and study at college instead of coming up with new ways to price them out.”

BIS’s research concluded that younger people (between 24 and 29 years old) were most motivated to take up opportunities in FE as they thought more in the short-term and did not feel loans would put them off a course.

The Skills Funding Agency is tearing up an £800,000 training contract with a Hertfordshire-based provider amid claim the firm owes at least one subcontractor nearly £18,000.

Train 4 Work Ltd, which was allocated the contract under the agency’s Adult Skills Budget for 2012/13, was “formally notified” of the move more than two months ago.

The reason behind the termination of the contract remains unclear as FE Week was unable to contact the firm and the agency failed to say why it was taking action.

Due to operational issues within their organisation Train 4 Work was unable to pass on the agreed level of funding to Integer at the time the training programmes took place, but it has since made attempts to settle its debts.

However, Train 4 Work is understood to have suffered “operational issues,” while one former subcontractor said it was looking at having to write off the firm’s debt.

Mark Mayhew is listed on LinkedIn as the firm’s managing director — a position he has held since December 2010, it says. However, FE Week was unable to contact him.

The UK Register of Training Providers lists Peter Wilson as programme manager. He told FE Week he left the firm in June last year, but declined to comment further.

A joint statement from the agency and the National Apprenticeship Service (NAS) said: “The Skills Funding Agency took the decision to give three months’ notice to terminate the contract between the chief executive of skills funding and Train 4 Work Ltd.

“The provider was formally notified on November 1, 2012, and accordingly the contract will terminate on January 31, 2013. We do not comment on details of contractual arrangements between the agency and a provider.”

It added: “Our priority is to ensure minimal disruption to apprentices, learners and employers.

“The agency and NAS are working with Train 4 Work Ltd to ensure that all learners and apprentices are transferred to an alternative provider.”

Train 4 Work, formed in 2007, was last inspected by Ofsted in October 2010 at which point it had 312 Train to Gain learners and got a satisfactory grading.

An inspection the previous year resulted in an inadequate grading and saw the agency’s predecessor, the Learning and Skills Council, withdrew funding for new learners.

Improvements registered during a monitoring visit in January 2010 saw funding restored.

During its most recent inspection, Train 4 Work operated with three subcontractors in Oxfordshire-based security experts Skillsbank, Cornwall-based spectator safety firm Integer Training and the health and social care-related Three Counties Training, in Worcestershire.

A spokesperson for Integer Training said: “We sub contracted from Train 4 Work in 2010/11.

“Due to operational issues within their organisation Train 4 Work was unable to pass on the agreed level of funding to Integer at the time the training programmes took place, but it has since made attempts to settle its debts.

“The outstanding balance of £17,776.45 may well have to be written off.”

A Skillsbank spokesperson said it dealt with Train 4 Work for two years, ending in 2010 but declined to comment further, and FE Week could not contact Three Counties
Training.

The joint statement from the agency and NAS added: “We are contacting all affected apprentices, learners and employers to inform them of the situation and offer support and commitment as required.

“Any concerned employers, apprentices and learners can contact the agency at sfaemployerenquiries@skillsfundingagency.bis.gov.uk”

Hundreds of FE workers are facing redundancy after Pearson announced it was planning to close an adult education branch of the business with a loss of £120m.

Pearson in Practice, which is built around Melorio, a company bought by Pearson two years ago for £99.3m, is launching a 90-day consultation on the firm’s future.

Changes to apprenticeships, including a shift from programmes delivered by training providers toward programmes delivered by employers, were said to be behind the move.

“We believe Pearson in Practice no longer has a sustainable business model,” said a Pearson spokesperson.

Representatives for Pearson in Practice’s 560 members of staff are being appointed for the consultation.

Pearson in Practice has been in close dialogue with the agency and NAS to provide reassurance on the planned closure, which will take place pending an orderly wind-down period.

It is understood that 5,000 learners will be affected, but Pearson said it was “fully committed to supporting all Pearson in Practice learner and apprentices to complete their courses on their current timetables whether with Pearson in Practice or, if it is more appropriate, through transferring them to another training provider.”

Pearson chief executive John Fallon said: “We very much regret the decision to plan for closure, but we believe we have explored and exhausted all alternatives.

“Our focus in the coming months will be on working with our partners in the further education sector and industry to ensure minimum disruption to learners who are currently enrolled in one of our programmes.”

The announcement came on Monday, January 7, and will affect Pearson in Practice Technology Limited and Pearson Skills Based Learning Limited.

It will see Pearson writing off £120m, but the firm will still have a presence in the UK adult training market through TQ Holdings — a Derbyshire-based vocational and technical education provider to the defence, engineering, oil and gas and construction sectors — which it acquired in late 2011.

It is also a shareholder in Gas Logic, which provides adult training in the energy sector, and owns Pearson Work Based Learning, which last year helped deliver 170,000 apprenticeships in the UK and abroad through brands including BTec and LCCI.

“The cost of closure and impairment is expected to be around £120m and will be reflected as a loss on disposal in Pearson’s 2012 statutory accounts,” said the Pearson spokesperson.

He added: “We will continue to provide training and support for young adults who wish to develop skills and enter the UK workforce through our qualifications and curriculum businesses,particularly Pearson Work Based Learning.”

Pearson in Practice was renamed last year having previously been called Zenos, formerly a Melorio firm.

The renaming followed criticism of the apprenticeship scheme delivered by Zenos in the Panorama programme The Great Apprentice Scandal, broadcast on BBC One.

The ICT apprenticeships delivered by Zenos were said to be entirely classroom-based and could not guarantee learners a job at the end.

A joint statement on the Pearson in Practice announcement was issued by the Skills Funding Agency and National Apprenticeship Service (NAS).

It said: “Pearson in Practice has been in close dialogue with the agency and NAS to provide reassurance on the planned closure, which will take place pending an orderly wind-down period.

“Learners and apprentices will be kept fully informed as these discussions progress.”

It added: “Any affected parents, guardians, learners, apprentices or employers can contact Pearson in Practice directly.”

new governors’ chair has been appointed at the Association of Colleges after John Bingham stepped down following six years at the helm.

The Yorkshire-born telecommunications and IT specialist has been replaced by Carole Stott, chair of governors at London’s City Lit.

Association chief executive Martin Doel said: “A great deal has been achieved in the time of John’s stewardship. He was a guiding light for all of us during his time as chair.

“He brought with him deep experience and knowledge of the sector that he built up as an establishing member of the Yorkshire and Humberside Association of Colleges, and national board member from 2001.”

Mr Bingham has stepped down from the association board and has also left the governors’ board at South Yorkshire’s Thomas Rotherham College, which he also chaired, after 20 years’ service.

“While John will undoubtedly be missed by the organisation, we will continue to offer the best of services with his successor Carole Stott, who comes to us with years of experience of chairing the board of governors at City Lit,” added Mr Doel.

Ms Stott, who has been on the association governors’ board since 2008, is a qualified teacher who has taught in further education, schools and university.

She was chief executive of the National Open College Network for five years from 1999 and was a director at Credit Works from 2004 to 2012.

She currently sits on the governors’ board at the City of Bath College and has been City Lit governors’ chair since 1999. It won an outstanding grade following Ofsted inspection in 2011.

“I believe absolutely in the importance of further and adult education as a powerful force for good, capable of transforming people’s lives and promoting economic and social vitality,” said Ms Stott.

“The position of association chair offers a great opportunity to play a key role in this important and diverse sector, which touches the lives of many people and communities.”

City Lit principal Mark Malcomson said: “We are truly delighted with Carole’s appointment.

“She has been an exceptional chair of City Lit and seen us achieve Ofsted outstanding and Investors in People Gold. The association and its members are very lucky to have Carole representing us.”

Providers and employers could be set to lose funding for qualifications in a clampdown on awarding organisations that don’t register to an official learner record service.

The Skills Funding Agency wants all Ofqual-recognised awarding organisations to sign the Personal Learning Record (PLR) Awarding Organisation Agreement.

It told them all in September last year they had to sign up, and has now published a list of those yet to do so.

Going forward, we will continue to keep the issue of signing up to the PLR under review.”

The agency warned that if awarding organisations didn’t sign, funding for their qualifications “will cease from August 1”.

The situation would mean there was no agency cash for providers and employers in offering the qualifications of awarding organisations that hadn’t signed.

A statement on the agency website said: “On September 28, 2012, the chief executive of Skills Funding wrote to colleges and training organisations to advise them about the implementation of the PLR.

“This confirmed that Ofqual-recognised awarding organisations that had not signed the PLR Awarding Organisation Agreement and begun to upload achievement data would cease to be funded for new starts on their qualifications with effect from August 1, 2013.”

The PLR, managed by the Learning Records Service, launched in 2008 and enables the sharing of learner and achievement data across the education and skills sector.

The agency said 136 awarding bodies had met the requirement to be on the system by November last year.

But more than 100 qualifications — of those listed in the SFA’s spreadsheet entitled QCF Qualifications confirmed for public funding as part of the single adult skills budget (2012/13) — were identified by FE Week as at risk.

These were run by the 14 awarding bodies the agency named as yet to sign the PLR agreement.

They included the Chartered Insurance Institute (CII), WSET (Wine and Spirit Education) Awards and the Institute of Commercial Management (ICM).

A spokesperson for CII, whose qualifications include a level three certificate in equity release and a level four diploma in regulated financial planning, said: “The vast majority of our students do not fit the standard model of being on FE courses with training providers drawing down government funding.

“Going forward, we will continue to keep the issue of signing up to the PLR under review.”

Nobody from WSET Awards, whose qualifications include a level one award in spirits and a level three award in wines and spirits, was available for comment.

A spokesperson for ICM said: “The majority of our 700-plus approved centres are overseas with less than 10 per cent of centres based in the UK.

“The process of gaining recognition of our courses also involves gaining external support from the university sector rather than from the more traditional sources, for example from Sector Skills Councils.

“And our understanding is that the majority of funding is now available at the lower levels — predominantly levels one and two — and ICM offers the majority of our qualifications at levels four and above.”

 

Providers were overpaid £91m in the past academic year, the Skills Funding Agency has revealed.

Kim Thorneywork, the agency’s chief executive, announced the figure in an official letter saying that “the total amount of learning delivered in the academic year 2011/12 was … £2,874m. The agency funded £2,965m.” Click here for the full list.

She added that the overpayment meant some providers’ allocations for 2012/13 would be reduced, and the agency expected “to deliver a balanced budget for the 2012/13 financial year.”

This overpayment of nearly £100m of adult skills funding is particularly alarming”

A relaxation of reconciliation rules allowed providers to keep a greater proportion of the funding allocated for learning that was not delivered.

The overpayment has alarmed Gordon Marsden, the Shadow FE Minister.

“This overpayment of nearly £100m of adult skills funding is particularly alarming, not least given the current pressures that exist on funding across the FE sector,” he said.

Learndirect, Newcastle College and South Thames College top the list of overpaid providers.

Learndirect delivered £117,132,144 of education, but was paid a further £5,333,722.

Adrian Beddow, Learndirect spokesperson, said: “This money [overpayment] will be reinvested in the organisation as part of our long-term commitment to further improve the quality of adult skills provision and outcomes for our learners.”

Newcastle College received £38,197,511 of agency cash, £4,731,682 more than the value of the education it delivered.

A college spokesperson said: “This is a national issue and most FE providers did not fully meet their contracts, mainly due to a late change in the rules by the agency about who was eligible for fully-funded courses.

“We had the largest contract of any FE provider nationally, so naturally we also had one of the largest surpluses. However, when looked at as a proportion of our contract, the overpayment is 14 per cent, which puts us 44th in the table [based on percentage overpaid].

“Funding rules go both ways, of course, and traditionally we have often ended up subsidising those who don’t qualify for free learning at our expense. In the past few years year we have been underpaid more than £7m, providing places even when funding had been exhausted. Just on our 16 to 18 teaching this year, that will cost us around £700,000.

“As a non-profit organisation, any over-provision is invested in new services, support or facilities for our learners, such as the £42m we spent last year on a new campus for West Lancashire College and the new £24m sixth-form college we are opening this year in Newcastle. This enables us to offer the best facilities for our learners.”

South Thames College was paid £19,297,14, £2,447,968 more than the value of education it delivered.

A spokesperson said: “Despite the college delivering 98 per cent of the adult standard learner numbers in 2011/12, it achieved some £2.4m less funding for the same volume of work compared with 2010/11.

“The reduced funding resulted from changes introduced by the agency for 2011/12, in particular the changes regarding benefits categories.”

—————————————————————————

Editorial: The £91m lesson

Providers were always going to under-deliver in the 2011/12 academic year.

For example, as rightly described by South Thames College, significant changes to fee eligibility policy made achieving funding allocations impossible.

What we now know, and what wasn’t inevitable, is that the SFA has authorised £91m in overpayments

By design or not, this will help the SFA in its aim to balance its budget for the 2012/13 financial year.

No one, perhaps other than those who have received them, should be happy about these overpayments.

How can it be right, for example, that a provider allocation is increased by more than £1m during the year, then they fail to deliver courses to earn the extra funding, and yet it still keeps nearly all of it?

You’ve got to feel for providers who turned down allocation increases for fear of being unable to earn and therefore keep it.

I’m not blaming providers who under-delivered given this was a consequence of poor and under-researched policy-making on the part of government.

If there is anything to be learned from this, it’s not that under-delivery pays, it’s that the government needs to listen to the sector when it warns about how policies will play out.

Nick Linford, editor

 

More than 550 staff are facing an uncertain future after Pearson announced it was dropping its UK adult education business with a loss of £120m.

The firm revealed the plans for Pearson in Practice, which has around 5,000 learners, this morning with news of a consultation, set to last 90 days, on the future of its workers.

Pearson chief executive John Fallon said: “We very much regret the decision to plan for closure, but we believe we have explored and exhausted all alternatives.

“Our focus in the coming months will be on working with our partners in the further education sector and industry to ensure minimum disruption to learners who are currently enrolled in one of our programmes.”

Pearson in Practice has around 560 staff and all will be part of the consultation.

A company spokesperson said: “The consultation will begin soon, following the appointment of employee representatives.

“It will include discussion of the staff’s and staff representatives’ ideas regarding the business, as well as individual consultations.

“The value of the business being written off the balance sheet will be £120m and includes the estimated cost of closing the business until the end of the orderly wind-down period.”

He added: “There are no redundancy notices during this consultation, though the consultation will clearly outline the situation to staff regarding any redundancies that may follow this period.

“During this 90-day period and beyond, we will be talking to the Skills Funding Agency, and to FE colleges, other training providers and employers as part of our commitment to all learners to complete their programmes, either through Pearson in Practice during an orderly wind-down period or by transferring to other providers.”

Pearson in Practice was renamed last year having previously been called Zenos. The renaming followed criticism of the apprenticeship scheme delivered by Zenos in the Panorama programme The Great Apprentice Scandal, broadcast on BBC One.

The ICT apprenticeships delivered by Zenos were said to be entirely classroom-based and could not guarantee learners a job at the end.

Zenos had been acquired by Pearson in 2010 when it paid £99.3m for vocational training company Melorio.

A joint statement on today’s Pearson in Practice announcement was issued by the Skills Funding Agency and National Apprenticeship Service (NAS).

It said: “The agency and NAS are aware that Pearson has announced the intended closure of the Pearson in Practice arm of the company.

“Pearson in Practice has been in close dialogue with the agency and NAS to provide reassurance on the planned closure, which will take place pending an orderly wind-down period.

“The agency, NAS and Pearson in Practice’s priority is to ensure that learners and apprentices are supported and transferred to other skills and workplace training providers, and Pearson’s other work-based learning programmes, to ensure that they can complete their learning/apprenticeship with minimum disruption.

“Learners and apprentices will be kept fully informed as these discussions progress.”

It added: “Any affected parents, guardians, learners, apprentices or employers can contact Pearson in Practice directly.”

See the next print edition of FE Week for more