FE Minister gets the final word

The skills minister has been scrutinised by the Department for Business, Innovation and Skills (BIS) Select Committee in the last evidence session of their inquiry into apprenticeships.

John Hayes MP, speaking in Westminster last week, was quick to defend the rapid expansion in new apprentices aged 25 and above, as well as the apprenticeship scheme delivered by Elmfield Training at Morrisons.

“Unless we up skill and re-skill the existing workforce – the people over 25 – we simply won’t catch up with our competitors,” Mr Hayes said.

“I chose to make apprenticeships the vehicle to do that.”

He added: “But I do think that there would be an issue if that displaced younger apprentices.

“There’s been a 12.8 per cent growth in under 19 apprenticeships, there’s been a 69.3 per cent growth in 19 to 24 apprenticeships, so while it’s true that 25 apprenticeships have grown most, they’ve done so from a low base, and not at the expense of growth in other areas.

“If that were to happen, I would have concerns.”

The BIS Select Committee were quick to question Mr Hayes about whether the increase in adult apprentices could be attributed to existing employees.

 If I felt that apprenticeships were merely being used to accredit existing competencies, then I would be concerned”

The skills minister replied: “The overwhelming majority of 25+ apprenticeships are already employed, but I simply strike this warning note on that – the real issue is how many are employed for how long.

“So if people were employed for a year or two years, they were new employees and the training was part of their induction with the skills necessary to do their job.

“That would be rather different to those who have been with a company for a very long time and were looking to use an apprenticeship to up skill.”

He added: “Both are legitimate, but they’re also rather different.”

The skills minister also defended the new 12 month minimum duration for all apprenticeships, due to be implemented in August, as a measure to improve additionality and remove unnecessary ‘dead-weight’.

“If I felt that apprenticeships were merely being used to accredit existing competencies, then I would be concerned,” Mr Hayes told the Committee.

“I think it’s absolutely right that apprenticeships, whoever does them, add to skills and that’s partly about the rigor of the system and one of the reasons why I extended the time for adult apprentices.”

He added: “A lot of people think I’ve been too tough on this…some of the learning providers said ‘well there’s been so much prior attainment amongst older people, there will be so much greater employability skills then there might be for a 16 year-old, so these apprenticeships can be completed in a shorter time’.

“But I actually insisted and I resisted that argument in order to ensure that what was taught and tested was meaningful and additional.”

Ann McKechin, MP for Glasgow North and a member of the BIS Select Committee, questioned Mr Hayes at length about the apprenticeship scheme delivered by Elmfield Training at Morrisons.

She said: “Morrisons is one of our major retailers with a turnover of over £1 billion a year – or probably much in excess of that – so I think the taxpayer is going to ask why shouldn’t Morrisons be paying for this?”

However, Mr Hayes defended the scheme resolutely and said it had “a number of things to recommend it”.

“Morrisons has employed 49,500 people since 2009 (who were) extra people or new people,” he said.

Of course people who supply goods and services to government make profits”

“Fifty per cent of them were previously unemployed, 50 per cent had no level 2 qualification, and 25 per cent had no qualification at all – many of those are now being put on apprenticeships.

“Eighty-four per cent of the Morrisons apprentices have numeracy and literacy problems – all of which are being tackled by their apprenticeship program, given as I said every apprenticeship must head towards a GCSE equivalent in maths and english.”

The skills minister later added that he didn’t want to be associated with a view that Morrisons apprenticeships “are not adding value”.

Ann McKechin followed up her question by asking the minister how the government valuated benefits made ‘in-kind’ by employers.

“My concern is when we took evidence from NAS, and the Skills Funding Agency (SFA), they said they had no criteria for assessing benefits in-kind,” she said.

“They had no guidance of which they issued about how to value benefit in-kind, and yet employers are, if the employee is over 19, supposed to contribute a significant share, either in cash or benefit in-kind.”

The minister said his Department had research relating to the issue which they would be happy to provide the Committee at a later date.

Ann McKechin also questioned the skills minister about the significant profits taken by Elmfield Training, one of the providers which delivers apprenticeships at Morrisons.

Mr Hayes replied: “If government took the view that none of the organisations in which it deals or collaborated to deliver public programmes, should not make profits, my goodness we would have to close down a great deal of what any government has ever done.

“So of course people who supply goods and services to government make profits.

“That is the nature of the relationship between the public and the private sector.”

Mr Hayes also told the Committee that while the apprenticeship programme was filling “a much bigger footprint” than before, other types of vocational training shouldn’t be forgotten.

“I think there is a case for other work based training apart from apprenticeships,” he said.

“Of course as long as that training is meaningful and rigorous, it deserves its place in the sun too.

“Much of what FE colleges do, much of what businesses do, exists outside the apprenticeship framework.”

The minister suggested that more employers, particularly SMEs and medium-sized businesses, could be brought into the apprenticeship programme.

Mr Hayes said the first step was to ensure “that the apprenticeship frameworks match real commercial need”, and were created in a way that reflected the interests of employers.

The second step, he said, was to engage them through schemes such as the new Employer Ownership pilot, which is offering firms direct funding from a ‘pot’ worth up to £250 million.

“We said to employers, we want you to get involved in shaping the skills system,” Mr Hayes said.

“We’ve just had the responses to that invitation…employers working with education providers to look at how they can shape apprenticeships, as well as new and fresh ways to match their needs.”

Short apprenticeships offer “no real benefit,” say MPs

Apprenticeships delivered in six months or less offer “no real benefit” to learners or employers, according to a report published by the Public Accounts Committee (PAC).

Margaret Hodge MP, who chaired the panel, says she is concerned that roughly one in five apprenticeships (19 per cent) were delivered in six months or less during 2010/11.

“The danger is that apprenticeships lasting such a short time are of no real benefit to either the individuals who take part or employers and could devalue the programme,” Ms Hodge said.

“I am pleased therefore that the skills minister announced recently that adult apprenticeships will last a minimum of six months and normally at least 12 months.”

However, the growth in adult apprenticeships has been branded a “success” by the PAC.

The panel of backbench MPs says the Department for Business, Innovation and Skills (BIS) “has done very well” to more than quadruple the number of adult apprentices in the four years leading up to 2010/11.

“We recognise the significant achievement of the Department and its partners in raising both the number of adult apprentices and the percentage who successfully complete their apprenticeship,” the report reads.

The report later suggests that the National Apprenticeship Service (NAS) could be overpaying private training providers due to “out-of-date” funding rates.

“The Service does not know what level of profits providers are making on different types of apprenticeships,” the report reads.

“Nor does it know whether it is subsidising some apprenticeships more than others.”

It later adds: “There is also evidence to suggest some providers are providing training without receiving the expected contribution from employers.

“The Service should work closely with the Agency to link the funding it provides more closely with the delivery costs.”

Ms Hodge said: “If the Service is to get better at targeting of resources, it needs to understand better which apprenticeships in which sectors deliver the best value for money.

“It doesn’t currently know what levels of profit the providers are making and whether it is paying them too much for some types of apprenticeship.”

The PAC report also calls for a structural review of the NAS and Skills Funding Agency (SFA) to ensure there is “minimal duplication” in their responsibilities

“The relationship between the NAS and SFA remains unclear,” the report reads.

“The way in which the two bodies interact, and the question of who is responsible and accountable for what, still needs to be clarified.

“This will be particularly important to settle during 2012, given the Department needs to appoint new permanent chief executives in each body.”

The skills minister, speaking at an evidence session held by the BIS Select Committee for their inquiry into apprenticeships last week, admitted there was “an argument for changing the way the SFA is structured.”

“No government gets all these things right and I remember when we were in opposition looking at the SFA and the NAS, talking about whether that was the right structure and whether the existing arrangements with the SFA, where it’s an external body – not a permanent body – was right,” Mr Hayes told the Committee.

“I’ve increasingly come to the view that we need to bring that more in-house…and we’re looking very closely at that now.”

Short apprenticeships offer “no real benefit,” say MPs

Apprenticeships delivered in six months or less offer “no real benefit” to learners or employers, according to a report published by the Public Accounts Committee (PAC).

Margaret Hodge MP, who chaired the panel, says she is concerned that roughly one in five apprenticeships (19 per cent) were delivered in six months or less during 2010/11.

“The danger is that apprenticeships lasting such a short time are of no real benefit to either the individuals who take part or employers and could devalue the programme,” Ms Hodge said.

“I am pleased therefore that the skills minister announced recently that adult apprenticeships will last a minimum of six months and normally at least 12 months.”

However, the growth in adult apprenticeships has been branded a “success” by the PAC.

The panel of backbench MPs says the Department for Business, Innovation and Skills (BIS) “has done very well” to more than quadruple the number of adult apprentices in the four years leading up to 2010/11.

“We recognise the significant achievement of the Department and its partners in raising both the number of adult apprentices and the percentage who successfully complete their apprenticeship,” the report reads.

The relationship between the NAS and SFA remains unclear”

The report later suggests that the National Apprenticeship Service (NAS) could be overpaying private training providers due to “out-of-date” funding rates.

“The Service does not know what level of profits providers are making on different types of apprenticeships,” the report reads.

“Nor does it know whether it is subsidising some apprenticeships more than others.”

It later adds: “There is also evidence to suggest some providers are providing training without receiving the expected contribution from employers.

“The Service should work closely with the Agency to link the funding it provides more closely with the delivery costs.”

Ms Hodge said: “If the Service is to get better at targeting of resources, it needs to understand better which apprenticeships in which sectors deliver the best value for money.

“It doesn’t currently know what levels of profit the providers are making and whether it is paying them too much for some types of apprenticeship.”

The PAC report also calls for a structural review of the NAS and Skills Funding Agency (SFA) to ensure there is “minimal duplication” in their responsibilities.

“The relationship between the NAS and SFA remains unclear,” the report reads.

“The way in which the two bodies interact, and the question of who is responsible and accountable for what, still needs to be clarified.

“This will be particularly important to settle during 2012, given the Department needs to appoint new permanent chief executives in each body.”

The skills minister, speaking at an evidence session held by the BIS Select Committee for their inquiry into apprenticeships last week, admitted there was “an argument for changing the way the SFA is structured.”

“No government gets all these things right and I remember when we were in opposition looking at the SFA and the NAS, talking about whether that was the right structure and whether the existing arrangements with the SFA, where it’s an external body – not a permanent body – was right,” Mr Hayes told the Committee.

“I’ve increasingly come to the view that we need to bring that more in-house…and we’re looking very closely at that now.”

SFA staff shortlisted for top job

Staff at the Skills Funding Agency (SFA) have been informed that three members of its executive team are in line to replace Geoff Russell as the chief executive.

FE Week understands that the shortlisted candidates are Verity Bullough, Kim Thorneywork and Marinos Paphitis.

Mr Russell announced his decision to step down in January, having informed the SFA in August last year. It came just a month after the Agency was stripped of its statutory post holder status by the government. He agreed to remain in his position until the end of July to oversee the restructuring of the Agency.

The executive director of capacity and infrastructure, Ms Bullough, joined the organisation in 2000. Previously she had been working as a senior adviser at the North London Training and Enterprise Council (NLTEC).

She has held a number of senior positions within the SFA, including national director of funding, planning and performance, and has worked in education since gaining a law degree from Oxford University.

Ms Thorneywork was recently promoted to be the executive director of delivery in May 2011 and leads its work on funding policy, investment and provider performance. She moved to the Agency to be the area director for Coventry and Warwickshire in 2006, after having worked as an inspector for Ofsted and a science teacher in Walsall.

When the SFA replaced the Learning and Skills Council in April 2010 she became the senior account director for the west midlands, with a portfolio of 33 FE colleges and over 160 training organisations.

The executive director for the south, Mr Paphitis, has responsibility for all aspects of stakeholder and provider relationships in the south of England. Additionally, he has been responsible for the Wiltshire, Swindon and Gloucestershire area, as well as Somerset. During his time in the south west, Mr Paphitis led the development and performance of apprenticeships. Prior to joining the SFA in 2001 he worked as a director of the National Contracts Service, which later became the National Employer Service.

His brother is Theo Paphitis, best known for his starring role on the BBC’s Dragons’ Den.

On the same day in January that Mr Russell made his announcement, Simon Waugh said he was stepping down as the chief executive of the National Apprenticeship Service (NAS) and he left at the end of March.

When the story broke, Gordon Marsden, the shadow minister for FE, skills and regional growth, criticised the department for Business Innovation and Skills for not having found a successor for Mr Russell, despite him having informed the government a few months beforehand.

A spokesperson for the Department for Business, Innovation and Skills (BIS) told FE Week: “We wont be make any comment while the recruitment process is ongoing but we will let you know when we are ready to make an announcement.”

FE loans met with “widespread dismay”

Only one in ten adults say they would “definitely” take out a loan to study a level 3 course in FE, according to research commissioned by the Department for Business, Innovation and Skills (BIS).

The study, carried out by the social research agency TNS BMRB, found that 42 per cent of respondents would be unlikely to take out a “24+ Advanced Learning Loan” in the next two or three years.

The findings add to growing concerns about the impact of the new policy, which will affect all learners aged 24 or above and studying at level 3 or higher in the 2013/14 academic year.

Gordon Marsden MP, shadow minister for FE, skills and regional growth, told FE Week: “There were some statistics in this that were very disturbing in terms of what they indicate about the resistance to taking up loans.”

Toni Pearce, vice-president (FE) for the National Union of Students (NUS), added: “It would be a national tragedy if those who have been shut out of education in the past were even further deterred from taking up life-changing routes to learning by the creation of new financial barriers.”

A report published by the Department says TNS BMRB surveyed 405 potential learners, aged between 23 and 64, who completed a full level 2 course in the 2010/11 academic year.

One in ten respondents (12 per cent) who declared they would be progressing to a level 3 course in the next two or three years said they would “definitely” take out a loan, while a further 21 per cent said they “probably” would.

John Hayes MP, minister of state for FE, skills and lifelong learning, told FE Week: “I thought the research was helpful and encouraging – I wouldn’t go too far with this – but encouraging, and provided a useful platform for us to gauge how we now move forward.”

He added: “The interesting thing about the (research) was that there was less fear, ultimately, about loans then some might have claimed.

“Clearly most people said they would continue with their learning and they would take loans as part of the package.”

However, more than 40 per cent of respondents who wanted to study a level 3 qualification in the next two or three years said they either “definitely” or “probably” wouldn’t take out a loan.

Jon Richards, the national secretary for education at Unison, said: “The government must now stop and listen, otherwise it risks inflicting chaos on the further education sector.

“Many learners are going to be priced out of education and skills altogether.

“Ministers should therefore call an immediate halt to their ill-thought out fees policy.”

The research was commissioned by BIS to find out how learners would react to the new FE loans policy, as well as how best to ensure its impact “on learners’ choices and options is minimised’.”

The study, which also included group debates with more than 200 people, found that most potential learners met the idea of an FE loan with “widespread dismay”.

The report states: “(It was) common for respondents to feel that the emotional and financial costs of a loan would outweigh the uncertain and in all likelihood deferred benefits of FE, and suggested that they would have to reconsider taking a course on this basis.”

It later adds: “Only a small minority of ‘career advancers’ did not immediately reject the idea, as they felt their course was their only way forward for their chosen career, so were unwilling to consider alternatives to FE and abandon their plans.”

However, the research by TNS BMRB also found that learners were more supportive of the policy when they were provided with further information.

“When the facts around the link between income and repayment are communicated clearly and immediately, that repayments are low and affordable and that this is a loan from government and not a bank, this research suggests the reaction was much more positive and the impact on course take-up would be greatly reduced,” the report states.

Matthew Coffey, National Director at Ofsted, responds to FE Week analysis

I read with interest the article in FE week on a sample of colleges from the 157 group and their inspection judgements.

The first, and most important, point to make is that the inspection framework (CIF) has not changed. The article suggests that a new common inspection framework was introduced in September 2011. It wasn’t. We are introducing a new CIF in September 2012. Our final public consultation on the new framework has just closed and we are planning to publish it at the end of the month.

It may of course be entirely correct that colleges are being inspected for the first time under the 2009 framework. I also accept that our approach to the selection of providers for inspection has changed since 2009.

Selected analysis over a short timeframe will not give a fair representation of the state of the nation”

In 2009/10 around a quarter of providers were selected for inspection based on our published risk assessment process.

This increased to around half of providers in 2010/11 but excluded outstanding providers.

This year we have maintained the selection ratio although outstanding providers have also been assessed, and indeed some have been selected for inspection.

The consequence of this proportionate approach to inspection must not be underestimated. Selected analysis over a short timeframe will not give a fair representation of the state of the nation.

However, this should not detract from the key messages coming out of inspections at the moment. Teaching and learning continues to be a key issue as does the rigor of self-assessment.

I won’t attempt to write an annual report in this space but instead direct you to our quarterly published data which can be found on our website.

Individual published inspection reports explain the evidence behind our grades. Reports also contain details on how providers can improve.

Click here for updated FE Week Ofsted grade analysis, which includes the three most recent results

 

By Matthew Coffey

Arrests over apprenticeship subcontractor

Serious Fraud Office swoop in on Luis Michael Training, former partner of Sparsholt College

Three men have been arrested as part of an investigation into Luis Michael Training (LMT), a sub-contractor that used to deliver football-based apprenticeships.

The Serious Fraud Office (SFO) says the individuals were arrested as part of a search operation on four homes and a business property.

A 29 year-old man was arrested in Southport, along with a 51 year-old man in Cardiff and a 52 year-old man in Heywood, Manchester.

All three men have since been interviewed and released without charge on unconditional bail.

The SFO says the search operation involved 52 of its investigators and 20 police officers from the Gwent, South Wales, Greater Manchester and Merseyside police forces.

LMT was a training provider which enrolled, assessed and verified apprenticeships for young people at football clubs such as Leeds, Millwall and Nottingham Forest.

The accusations against the sub-contractor, which was based in Newport and run by former Welsh football international Mark Aizlewood, relate to their work between 2009 and 2011.

An SFO statement reads: “It is believed that LMT fraudulently overstated the number of students and apprenticeships that they had placed. The suspected offences include fraudulent trading, false accounting and forgery.”

LMT, who worked as a subcontractor for eight further education colleges including Sparsholt College and South Thames College, are suspected to have made fraudulent claims worth over £1.6 million.

The SFO statement adds: “It is suspected that LMT produced false documentation, including registration papers, progress reviews and coaching examination certificates to falsely show to further education colleges and examining boards that training and apprenticeship placements had been successfully achieved and completed.”

A spokesperson for the Skills Funding Agency (SFA) told FE Week: “Although we don’t hold the contractual relationships with Luis Michael Training we do have a duty to protect public funds and learners.

“Since 2010 we have worked with the lead provider who held the contractual relationship to ensure learners were supported and public funds not spent in accordance with the contractual arrangements that the lead provider has with the Agency have been clawed back.”

Sparsholt College held the largest contract with LMT, and said they were unable to make any comment which may prejudice the SFO investigation.

However, a spokesperson for the college told FE Week: “We have been proactive in reporting our concerns to the police and latterly working closely to support SFO enquiries.”

Colleges which delivered training with LMT have been asked to give money back to the SFA.

When asked about Sparsholt College, the SFA spokesperson added: “The Agency has recovered funds from the lead provider.

“We cannot disclose the amount as it is confidential between us and the College.

A Freedom of Information (FOI) request by FE Week has revealed that the SFA’s Investigation Unit is currently handling 14 live allegations of misuse of funds.

However, only one of these is being considered by the police.

Three arrested in SFO investigation

Three men have been arrested as part of an investigation into Luis Michael Training, a company which used to deliver football-based apprenticeships.

The Serious Fraud Office (SFO) says the individuals were arrested as part of a search operation on four homes and a business property early this morning.

Two of the men who were arrested have been interviewed and released without charge on unconditional bail.

The SFO says the third man is still being interviewed, but will also be released under similar circumstances.

The search operation involved 52 SFO investigators and 20 police officers from the Gwent, South Wales, Greater Manchester and Merseyside police forces.

Luis Michael Training was a training provider, funded by the Skills Funding Agency (SFA), which enrolled, assessed and verified apprenticeships and NVQ programmes for young people through football clubs.

A press release issued by the SFO reads: “It is suspected that LMT produced false documentation, including registration papers, progress reviews and coaching examination certificates to falsely show to further education colleges and examining boards that training and apprenticeship placements had been successfully achieved and completed.”

It later adds: “It is believed that LMT fraudulently overstated the number of students and apprenticeships that they had placed.

“The suspected offences include fraudulent trading, false accounting and forgery.”

(A full report will be in the next edition of FE Week)

Time is right for UK further education providers to locate in India

The time is right for UK-based educational establishments in the further education sector to consider locating in India.

India’s education sector is growing rapidly and it is estimated that by 2020 the country will need 35,000 FE colleges and about 800 universities to cater for demand for courses from the local population, of which more than 60% are under 25 years of age. 100% Foreign Direct Investment (FDI) is now permissible in the sector and the new Foreign Educational Institutions Bill is soon to become law in India.

Having recently provided recommendations on the Bill to the Indian Government, it is clear that these changes represent a tremendous opportunity for forward thinking FE institutions.

They may wish to set up joint ventures or create their own independently-run campuses within India’s thriving educational establishment.

This opportunity is particularly compelling when you consider the impact of austerity measures on the sector in the UK. A growing number of colleges are in the process of setting up offices in India to lead their student recruitment initiatives and some are already collaborating with Indian colleges to offer dual course programmes.

Others are considering basing themselves in India and in some instances they are taking advantage of ready-made locations that have been created within new, recently-constructed townships.

Most colleges that are interested in entry to the Indian market are choosing to set up joint ventures with established local partners or with major infrastructure companies. However, there are a number of potential pitfalls they need to be aware of.

The potential gains are phenomenal, but the regulatory landscape in India’s education sector is complex and strict rules apply about how many local tutors must be used, for example.

In addition, regardless which route a college prefers to take, it is important to use legal experts with specialist knowledge of how to conduct negotiations in India in order to fulfill the necessary property and finance-related compliance criteria and meet the requirements set out in the incoming legislation.

Viplavi Mahendra is a corporate lawyer and co-chair of Team India at Shakespeares