Firms primed for new status after success on apprentices

Two Midland-based training providers have made the shift from delivering apprenticeships for lead providers to dealing directly with the Skills Funding Agency following success in a pilot scheme.

Leicestershire’s Steve Walker Associates (SWA) and Derbyshire’s Aspire Achieve Advance (3AAA) have become prime contractors for the first time after winning deals with the agency.

The reward follows the two firms’ successes in a pilot launched in July that aimed to boost apprenticeship numbers for 16 to 24-year-olds. And an agency spokesperson said other subcontractors could be in line for similar shifts to prime contractor status.

We’re very, very proud that we have been awarded our first prime contract and we’re determined to hit our targets and hopefully go beyond them,”

It comes eight years after SWA was established and just four years after 3AAA, which said it had 150 workers and a turnover of nearly £17m for 2011/21, was set up. Martin Rennison, operations director at SWA, said his firm’s £500k prime contract would deliver around 150 apprenticeships.

It runs apprenticeships covering IT, warehouse and storage, and business administration, among others. It had five subcontractor deals in May with lead providers including Wincanton and DHL, totalling just over £1m.

“We’re very, very proud that we have been awarded our first prime contract and we’re determined to hit our targets and hopefully go beyond them,” said Mr Rennison.

The cost of 3AAA’s new prime contract was not disclosed by the firm to FE Week. It had nine subcontractor deals in May with lead providers including Bedford College, Walsall College and South Staffordshire College, totalling nearly £10m.

Di McEvoy-Robinson, joint director at 3AAA, said: “We have worked hard for this recognition. There are few providers who are successful each year in securing their own contract and we have gone through a rigorous competitive tender process. Most importantly it is an endorsement of the quality of our delivery and services to apprentices.”

An agency spokesperson, who also declined to reveal the size of 3AAA’s new prime contract, said: “3AAA was one of a number of organisations that were successful in a recent pilot procurement to expand apprenticeships.

“The organisations invited into the pilot were based on a number of criteria including holding aggregate subcontract values of over £500k as declared on the subcontractor register published on the agency’s website on May 31, had passed the due diligence assurance gateway as at May 2012 and selected apprenticeships as a programme area they wanted to deliver.

“The pilot was a procurement exercise and was operated within procurement guidelines and managed through the Agency’s e tendering portal. All organisations that applied were informed of the decisions in relation to their application through the e-tendering portal in September 2012. The agency operated the normal stand still period for procurement decisions and is unable to comment further until contracts have been signed.”

She added: “Contracts are currently being finalised. We will publish on our website the contract values as part of the regular refresh of our contracting position.”

Colleges underdeliver by ‘£45m to £60m’

The Association of Colleges (AoC) has estimated that colleges failed to deliver between £45m and £60m of adult provision last year as a result of policy changes.

It warned funding may need to be returned in 2013, despite a change in reconciliation rules announced this month that allow underdelivering colleges to hold onto Skills Funding Agency cash from 2011/12.

Julian Gravatt, AoC assistant chief executive, told FE Week: “The 2011/12 funding round was particularly difficult because of changes to funding rules and rates made at great speed following the 2010 spending review.

“Some of these decisions were later amended during 2011 and a different approach was taken by government for 2012/13.

“We estimate that, at the end of 2011/12, colleges would have been unable to use about £45m to £60m.

“Colleges keep the funds now, but may have to hand it back in 2013. This will make an already tough budget round in 2013/14 even harder. Loans and new initiatives funded from the skills budget mean core funding allocations are likely to be cut by an average of 10 per cent or more.”

The AoC warning comes after an industry source told FE Week the amount of underdelivery among all providers for the last academic year stood at £630m — nearly 17 per cent of the agency’s £3.8bn allocation fund.

If underperforming colleges and providers are not meeting their targets, then their business should be shifted to good quality providers who can show demand from employers and learners”

The agency had said it “did not recognise” the £630m figure, but also declined to reveal the underdelivery figure it currently had. It has also failed to comment on the AoC’s figure for underdelivery among colleges.

An agency spokesperson said: “Providers have until November to make their final returns against the 2011/12 contracting year and at that point we will have final data on the value of activity delivered by the FE sector in 2011/12.

“We operate in-year performance management for providers. This means we can be assured funding is used for the benefit of learners and employers and those funds are allocated and reallocated in direct response to learner and employer demand.

“Using the latest information from the sector in November we will make any necessary changes to make sure funding continues to support demand now and into 2012/13.”

However, Graham Hoyle, chief executive of the Association of Employment and Learning Providers (AELP), called for new providers to step in where targets were not being met.
“If underperforming colleges and providers are not meeting their targets, then their business should be shifted to good quality providers who can show demand from employers and learners,” he said.

“If the agency’s reconciliation rules are being relaxed too much in favour of underperforming institutions, that would seem to be running against the thrust of recent reforms and would be in danger of turning the agency back into a centralised supply-led planner. And when the FE and skills sector needs to fight to protect its overall budget with a new government spending review on the horizon, it is inexcusable for poor performance to be protected.”

David Hughes, chief executive of the National Institute of Adult Continuing Education (NIACE) and a former director at the Skills Funding Agency, said: “Any underspend represents missed opportunities for thousands of adults to learn and we regret that, but it was clear that the changes in eligibility made it very challenging for many colleges and providers to earn their allocations fully.”

Provider hits back at ‘unfounded claim’

The boss of an Essex-based training provider has said a local college was refusing to pay its apprenticeship bill amid an “unfounded claim” his firm had gone bust.

John Baker, managing director of DB Training, issued a statement on his firm’s website that said no funding had been received from Harlow College for “the past two months”.
It is understood the alleged unpaid amount stands at around £311k.

Mr Baker’s online statement adds: “There have been quite a number of rumours floating around about DB Training, including that the business has folded as well as not being open for apprentices.

“While we are experiencing extremely challenging times, all centres are open and able to accommodate the apprentices that wish to continue to receive training and support for their apprenticeship.

“We believe the claims made by Harlow College have no foundation and we are rigorously contesting the claims.”A spokesperson at the college, which had business, property and IT apprenticeships with DB Training, confirmed there had been a dispute, but declined to say if it owed the firm any money.

 There have been quite a number of rumours floating around about DB Training, including that the business has folded as well as not being open for apprentices.

“Harlow College is extremely aware of its responsibilities in relation to government funding and the importance of transparency and accountability in dealing with those funds,” she said.

“Certain issues have arisen regarding an external training provider that has caused us a degree of concern.

“We are working with all interested parties to establish clarity.”

She added: “Harlow College is fully committed to ensuring the education of students attending the college via this outside agency continues uninterrupted.”

DB Training, which has three main training centres in Rayleigh, Chelmsford and Colchester, plus a satellite centre in Clacton, first swapped contracts with the college in 2008/09. It now also deals with Colchester Institute as a prime contractor and last academic year had a combined income from college and institute contracts of around £3m.

But, said Mr Baker’s online statement: “The income received from Harlow College amounts to more than 90 per cent of our income so this has prevented us from meeting our financial obligations.

“This in turn has had a detrimental financial impact on a number of other companies.”

The statement continues with information for apprentices and learners on training centre opening hours and tutor availability. Nevertheless, the college spokesperson said: “The education and welfare of our students is paramount in everything we do at Harlow College.

“We are fully committed to ensuring the learning process continues unabated for students who attend our college via this third party training provider.

“The future of our students is of the utmost importance to us and we are determined to continue to offer them the skills and training that will equip them to carry on with their chosen vocation.”

She added: “We will ensure all relevant government and education bodies are kept aware of all developments.”

Mr Baker declined to add to his online statement when contacted by FE Week.

Elmfield Training ‘tells 400’ staff their jobs are at risk

A training provider that helped deliver one of the UK’s biggest apprenticeship programmes at Morrisons is shedding a third of its 600-strong workforce, it has been claimed.

Two in every three of Elmfield Training staff were warned on October 4 they could be facing redundancy, according to a worker who wanted to remain anonymous.

Documents that appear to be from the company, leaked to FE Week, list jobs in business support, finance and communications, among others, as “at risk”.

Elmfield Training described the information as “inaccurate”, but failed to say whether any job losses were planned.

However, the documents supplied to FE Week highlighted how 157 of the planned job losses would be from positions on Elmfield’s bumper contract with Morrisons.

It follows a May consultation on redundancies that was reported in FE Week. However, the number of job losses on that occasion was not disclosed. And the anonymous member of Elmfield staff said there was new anger at the firm’s alleged job loss consultation branding it “unfair” on staff. They also said there were fears the cuts could affect learners.

“We’re not being treated with any consideration,” they added. “We’ve been told the consultation is going to last 30 days, but would like it to last 90 days. We think that would be fair to us and fair to our clients.

“It would be nice to have been given 90 days bearing in mind that we’ve put around 100,000 learners through for them. And learners will suffer.”
They said staff would be told whether they had one of the 196 “at risk” posts that would remain on November 4, and those that had not got a position would be given 30 days’ notice.

“Morale is the lowest I’ve ever known it,” they added. “We have gone through this before, but last time everyone was kept in the loop. We feel like we’ve all been left in the lurch. We all need the money, to pay off mortgages and stuff like that.”

A spokesperson for Elmfield, which was allocated £41m by the Skills Funding Agency for the current academic year, described the redundancy figures supplied to FE Week as “inaccurate, selective and misleading”.

“In our considered view, it is singularly unconstructive to focus on second-hand chit chat when the real investigation should be into the challenges confronting training providers and employers who want to help young people make the transition from education into work,” she said. “That’s what is most critical for the employment and skills system at the moment.”

We’ve been told the consultation is going to last 30 days, but would like it to last 90 days. We think that would be fair to us and fair to our clients.”

A spokesperson for Morrisons, which has been delivered around 100,000 apprenticeships by Elmfield since October 2009, said it had “confidence” in the scheme. “Our apprenticeship programmes have been mapped to the national apprenticeship framework,” he said.

“These standards are determined by the Sector Skills Council which in our case is SkillSmart Retail.” He added that Morrisons’ contract with Elmfield was up for review in 2013, when it was “likely to go out to tender”.

The latest alleged shake-up at Elmfield comes around eight months after its boss, Ged Syddall, was grilled by MPs on a business, innovation and skills select committee. He told the committee he had received 95 per cent of a £3 million dividend for their 2009/10 financial year.

“I set this business up from nothing and now we have 750 people,” Mr Syddall told MPs.

“The other thing we have done over the last three years, is 40 per cent of post-tax profits have gone into social impact programmes, which helped thousands of young people back into employment. From every £1 I’ve taken out in the last three or four years, I’ve put £2 back to helping other people who have not been as lucky as me.”

Ofqual indentifies issues with internal assessment of ESOL provision

Assessment malpractice, funding uncertainties, new courses and immigration rules were the hot topics of discussion at a conference on English courses for foreigners.

Ian Dexter, reform officer at Ofqual, kicked off the sold-out event with a presentation on proposals for English for Speakers of Other Languages (ESOL).

He told the audience at London’s Morley College how Ofqual was concerned about internal assessments and how, in 2010/11, it investigated 87 ESOL centres over fears of malpractice.

Mr Dexter further told delegates on Monday, October 8, that Ofqual was proposing a new qualification — provisionally called ESOL for Life in the UK — that would be completely externally-assessed in a bid to address assessment concerns.

He told the Lsect-organised conference that Ofqual had also been in talks with the Home Office about how to ensure the qualification would address immigration requirements.

Mr Dexter said: “The new qualification would allow awarding organisations to demonstrate more clearly how students achieving their qualifications can meet the language requirements needed for UK entry, settlement and citizenship.”

However, one delegate said the proposal was “like using a sledgehammer to crack a nut”, and that the providers of concern should be addressed individually.

Mr Dexter said Ofqual’s 2010/11 investigations, “suggested there was a deeper issue with internal assessment”.

“We should regulate to minimise incentives for malpractice,” he said.

Mr Dexter called on delegates to have their say on the ESOL proposals, by contacting Ofqual by Monday, December 3.

Chris Taylor, ESOL programme manager at NIACE, also spoke at the conference, addressing issues about new UK settlement rules for students.

She told how students who wanted to stay in the UK used to have to pass either the government’s Life in the UK test or achieve an ESOL qualification at levels one, two or three.

But new regulations, said Ms Taylor, meant the ESOL level three qualification is the minimum requirement and it has to be achieved along with the Life in the UK test.

The change meant some providers would have to cater students at three levels of ESOL qualification where they would previously have only accommodated one, she added.

“Will you be able to accommodate new enrolments on top of learners that will stay with you or will some displacement be inevitable? Some providers will be looking at twice as many enrolments as before, and this has huge implications for workforce development, staffing and curriculum planning” said Ms Taylor.

A subsequent discussion on the implications for both providers and students resulted in a stalemate on whether the new immigration rules would have a positive impact on learners’ integration into the UK, or whether they would be unachievable for those with low levels of literacy in their first language.

Additional concerns were raised about how ESOL levels one to three only tested speaking and listening ability. But learners who wanted to stay in the UK would, under the proposals, also need reading and computer literacy to pass the online Life in the UK test.

Others to address the conference included Judy Kirsh, co-chair of the National Association for Teaching English and other Community Languages to Adults, who talked about uncertainties surrounding ESOL teaching qualifications, Jennifer Turner, head of ESOL and literacy at Greenwich Community College, who advised on curriculum planning, and Nick Linford, Lsect managing director and FE Week editord, who looked at possible funding changes for 2013/14 due to published by the Skills Funding Agency in January.

Government figures reveal a ten per cent fall in 16-18 apprenticeships

The government has conceded that under 19 apprenticeships were proving a “major challenge” after official figures showed a 10 per cent fall in the number of starts.

The number of 16 to 18-year-olds who started apprenticeships in the final quarter of the last academic year dropped 5,200 from the previous year to 22,000.

The figures, from the latest statistical first release, also showed how the total number of starts last year was 126,300 — a two per cent decrease on 2010/11.It was the first dip since 2008/09, when there were 99,400 starts.

The government had hoped to hit 133,500 16 to 18 apprenticeship starts for the last financial year and for 2012/13 was aiming at 140,200, with the Education Funding Agency setting aside £833m.

However, the latest figures could still be updated, and across all apprenticeship age groups they showed a 9.9 per cent rise last year to 505,200 starts.

A joint statement from the government and the National Apprenticeship Service (NAS) said: “It is encouraging that despite being rigorous on quality and introducing tougher standards, apprenticeships are growing overall.

“Not surprisingly, raising the level of participation in apprenticeships among 16 to 18-year-olds is a major challenge within a difficult economic climate and the latest figures reflect that.”

FE Minister Matthew Hancock said: “Hitting the half-million mark is a momentous achievement for this government’s apprenticeship programme.

“It shows our passion for skills, and is a ringing endorsement from employers and apprentices alike, who are reaping the benefits of a more highly-skilled workforce.
“This rise comes despite tougher rules to make apprenticeships more rigorous.”

But the falling apprentice figures come just months after the government tried to boost numbers by allowing more businesses to ask for training grants worth £1,500.

The economic conditions are obviously a factor in terms of employers being able to offer places”

Only firms recruiting 16 to 24-year-olds with less than 250 employees could apply the Apprenticeship Grant for Employers, but the change meant employers with less than 1,000 staff could also apply. Up to 40,000 grants are being provided.

Shadow FE Minister Gordon Marsden said: “The statistics highlight the Tory-led government’s failure to achieve enough take-up of quality apprenticeships for young people crying out for these opportunities.

“The fact the number of 16 to 18 apprentices has fallen in comparison to last year also shows their failure to properly engage with businesses or to convince them to participate in taking on apprentices in the current economic climate.

“We would take action by using public procurement and government contracts to boost apprenticeship places. Ministers need to get a grip and urgently boost apprenticeship opportunities for young people, but they have refused to back our plans or acknowledge the findings of the Holt report they commissioned.

“What’s more, the fact that the numbers dropped steeply in the final quarter suggest this decline could be an accelerating trend.”

With the outcome of Doug Richard’s review of apprenticeships due out soon, an Association of Employment and Learning Providers spokesperson also called for a new pre-apprenticeship programme.

“The economic conditions are obviously a factor in terms of employers being able to offer places,” they said.

“Moreover, employers are raising the bar on entry requirements for full apprentices and this is why we feel a comprehensive pre-apprenticeship programme is now needed.”

And Association of Colleges skills policy manager Teresa Frith said: “Many young people are not being given the appropriate advice and guidance about options post-16.”

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Editors comment

To understand the decline in 16 to 18 apprenticeship starts, we need to consider the impact of changes to the definition of an apprenticeship.

The government blames the economic conditions, but there is nothing new there – the truth is much closer to home.

The Coalition passed legislation – drawn up by the Labour Party in power – with the effect of bringing an end to programme-led apprenticeships.

These apprenticeships were popular with thousands of unemployed 16 to 18-year-olds at training providers like Zenos (now Pearson in Practice).

Many programme-led apprenticeships continue to be delivered legitimately, but under the title access to apprenticeships with providers such as the De Vere Academy.

However, crucially, unlike the old programme-led apprenticeships, access to apprenticeships are not counted in government apprenticeship statistics until the learner has got a job.
Hidden away in the latest figures [SFR table 19.1 note 4] we find that 5,400 apprenticeships across all ages were on the access to apprenticeship scheme.

But a staggering 4,300 (80 per cent) remain unemployed. Some learners may yet become employed, but the SFA funding rules say providers should have no more than 10 per cent.

So in truth, the pre-2011/12 figures were inflated as they contained, I estimate, tens of thousands of unemployed learners.

To repeat, today these learners would not be counted as apprenticeships.

So let’s stop blaming the economy, and focus on policies that help as many 16 to 18-year-olds get the education and training they deserve.

Nick Linford, Editor

All is not well in the world of training providers

Training providers feel vulnerable, unrepresented, unsupported, unprotected, exploited and undervalued. That is the inevitable conclusion from the conversations I have had over the last few weeks with a range of providers across the country, says Peter Cobrin, who runs the Apprenticeships England Community Interest Company

This shouldn’t come as a surprise. Over the past year companies have folded, others have got close. The media, ranging from Panorama and  the Daily Telegraph through to FE Week have tried to lift the lid on practices ranging from the possibly illegal through to the ethically questionable.  What concerned me was the apparent absence of a coherent analysis, and clearly Government agrees with me, hence the various reviews and investigations.  The problem is, to adapt the joke about economists, if you laid all the conclusions of these reviews end to end, you still wouldn’t reach a conclusion!

Part of the problem is that these reviews – Holt, the BIS Select Committee and I’ll wager Richards as well – start from a flawed position. This is known as the “something must be done” syndrome.  This is compounded by the confusing and conflicting agendas of the Departments of State covering this sector.  Clearly DfE and DBIS are at odds over key areas that impact on apprenticeships — the information advice and guidance (IAG) services offered to young people, the role and value of vocational learning, embedding employability skills within the curriculum are three examples.  Holt got short shrift for his well-made comments on the crisis in IAG and was understandably angry at this.

Meanwhile, back in the world of front-line apprenticeship training, what words am I hearing? Try vulnerable, unrepresented, unsupported, unprotected, exploited and undervalued.

What words am I hearing? Try vulnerable, unrepresented, unsupported, unprotected, exploited and undervalued.”

Let’s look at each one of these:

Vulnerable: training providers sit at the end of a complex chain of legislation, government agencies and prime contractors — an environment where any change impacts directly, and immediately on its day to day activities and its very survival. Contracts for training delivery are, quoting one provider, “totally one-sided and one would have to be mad to sign one”.  Yet they are regularly and uncomplainingly signed. This was an issue raised by a very surprising source, Elmfield Training’s CEO, Ged Syddall at the Apprenticeships England Conference in Leeds.  He was very critical of the lack of transparency and one-sidedness in the contractual relationship between prime and sub-contractor.

Unrepresented:  repeatedly I was told that training providers lack a voice.  This came as a surprise to me given the role of the AELP and the existence local training provider networks.  The former was regarded, again quoting one provider, a “big boys club” and therefore unwilling or unable to intervene when problems arise, the latter purely a conduit for information “from above”.

Unsupported and unprotected: given the lack of a voice, it is hardly surprising that when things go wrong, there is no “emergency support” for a training provider?  Where is the “999” number that provides 24/7 help?  Every provider I met said that this is clearly a major issue that NAS and the SFA must address.  I had hoped that after a conversation with the SFA’s Geoff Russell at the DBIS Select Committee in May, that this issue was resolved.  I was told that he would ensure that contractual disputes were resolved at local SFA level.  However, one training provider I met with was told by the SFA that “we don’t get involved in domestic disputes” when confronted with non-payment of £300,000 from his prime.  There is clearly is a need for a mechanism for identifying and resolving such a dispute and blaming cutbacks at the SFA is of no use at all  — nor is relying on the informal good offices of, for example, Apprenticeships England, or FE Week’s investigative prowess.

More next week when I look at issues of exploitation and the undervaluing of training providers and make some recommendations.

Principal quits on day of strike

The principal of a Kent College with a £11m budget deficit has quit on the same day as a staff strike.

Bill Fearon resigned from K College on Monday night while around 150 protestors demonstrated outside a governors’ meeting on plans to cut 145 jobs.

The principal, who has been at the college 10 years, said he was “very sorry” to be leaving, but said “financial issues” still needed to be resolved.

It comes around a week after Fe Week revealed the college, which has campuses in Tonbridge, Tunbridge Wells, Folkestone, Dover and Ashford, was the first provider to get a government warning that could lead to the withdrawal of Skills Funding Agency cash.

A college spokesperson said Mr Fearon would leave at the end of term and an interim principal would be appointed to run the college until September.

Mr Fearon said: “I am obviously very sorry to be leaving under the present circumstances, but as the manager with ultimate responsibility for all that the college does and achieves, it is appropriate.

“I have been extremely proud to have been a principal at West Kent and K College, not least due to the commitment and achievements of the staff in the 10 years I have been in post.

“K College has done extremely well in its first two years in many respects, particularly with regard to student performance, and will go from strength to strength while the financial issues are resolved and beyond.

“I will be working ‘full on’ until the end of term with colleagues to ensure the New Year brings a stable position for a successful 2013.”

A week ago the college said its Folkestone campus was likely to be sold.