Funding future faces further formulation

Implementation of a new streamlined and simplified funding system for adult skills that had already been delayed until 2013/14 has suffered a further setback, following a rethink on how apprenticeships might be funded.

A newly formed Skills Funding Agency advisory group has been meeting monthly since December, and has said plans to fund apprenticeship provision based on individual frameworks, rather than component learning aim level, requires further testing.

Chris McLean, vice principal of North Hertfordshire College and member of the Funding External Technical Advisory Group told FE Week: “Only two areas related to basic skills and apprenticeship rates have more work to be done and on both counts it’s the work and scrutiny of the group that is asking for extra detailed modelling to be undertaken to satisfy ourselves that the new system will work at the organisation level as well as for the sector as a whole.”

A document published this week by the SFA, entitled ‘A New Streamlined Funding System for Adult Skills’, says “following advice from the Funding External Technical Advisory Group we are reviewing this [apprenticeship funding]. We are continuing to consult and develop our approach to simplify apprenticeships funding and align it to the principles across the rest of the Adult Skills Budget.

“As a result we now expect to be able to publish the principals and rates for funding Apprenticeships no later than May 2012.”

The first version of the funding reform document was published in October 2011 and included a plan for ten apprenticeship framework funding rates within the ‘learning aim rates matrix’ of 30 rates.

This updated version now excludes apprenticeships, and the remaining provision has doubled to 40 rates.

Mick Fletcher, a visiting Research Fellow at the Institute of Education and consultant, says the document shows that the government is struggling to streamline or simplify the funding system for adults.

“Once again simplification proves not to be as easy as the Department thought,” Mr Fletcher said.

“They are still struggling to accommodate basic skills, and can’t yet work out how apprenticeships fit; and they didn’t even try to cover safeguarded learning.

“The reason for the difficulties just might be that it’s not really about simplification at all, but about imposing a centrally determined, price based funding system instead of one that carefully reflects colleges’ costs.”

David Hughes, chief executive of NIACE and until recently the Director of Provider Services at the Skills Funding Agency, said: “We want to work closely with the government and the SFA to try and get a system which has the right sort of incentives for people who it should support and help them not only get into learning, but to succeed as well.

“We want to make sure that any changes do not disadvantage certain types of learners and that those changes recognise the very diverse needs of different learners in different situations.”

The SFA proposals also appear to scrap well trailed plans for Outcome Incentive Payments, and replace them with the piloting of a payment to the provider of half the 20 per cent of achievement funding where eligible unemployed learners prematurely leave their course to get a job.

The document reads: “Job outcome funding will be piloted in 2012/13 using the existing funding models, with 10 per cent job outcome funding where a learner leaves and enters work without achievement of the learning aim.

“This is straightforward in workplace learning, however, in classroom learning the funding will be factored into the year-end reconciliation.”

Plans are also outlined for introducing a funding cap for apprenticeship learners. The report states: “An annual funding cap of £4,400 (applied to the unweighted rate) per learner will be piloted during 2012/13 shadow working.

“The level of an annual funding cap for Apprenticeships is still being considered as part of the work set out above.”

New college classification cautiously welcomed

Colleges will be coming to terms with their new found freedoms after being released from government control.

The Office for National Statistics (ONS), reclassified general further education colleges as part of central government, and sixth form colleges as local government entities, for the purposes of national accounts in October 2010.

But that changed last week when the ONS revealed that colleges would be reclassified to the private sector from April 2012.

It follows the Education Act 2011, which was given Royal Assent in November, through which the Department for Business, Innovation and Skills (BIS), and Department for Education (DfE) removed a range of restrictions and controls on FE and sixth form college corporations.

While the move has been welcomed, some have warned caution. Financial consultant Bob Deed, who works in the FE sector, said: “The ruling is good news; insofar as it means colleges are likely to be spared the additional red tape, which would have been inevitable if they were classified as an arm of central government.”

However, he added: “The de-regulation agenda may have downsides. It is likely banks will ‘re-price’ the risk associated with lending to colleges – that will mean higher borrowing costs on new loans.

“Freedoms do raise the stakes. Colleges will have to think for themselves. When things go wrong, they will not be able to blame anyone else.”

Julian Gravatt, assistant chief executive for the Assocation of Colleges (AoC), said the reclassification could save colleges “tens of millions of pounds” in compliance costs in finance departments. He added: “So we’ve had a near miss at a time when college budgets are being cutback.”

Mr Gravatt also said colleges may not notice many differences, as some of the controls have “never been used” and because the effect of the changes would not be revealed until they are actually used.

One example, Mr Gravatt explains, is the Skills Funding Agency has used its legal power to appoint governors several times in the past decade, but has never formally used its power to ask a governing body to dismiss a principal.

Mr Gravatt said: “Allowing colleges to maintain their own affairs is not only beneficial to the institutions themselves, it also brings more clarity to the way public money is spent.”

Lynne Sedgmore CBE, executive director of the 157 Group, said: “Clearly the voice of colleges and our business communities have been listened to, and responded to, on this critical matter to good effect.”

When announcing the news, skills minister John Hayes said: “I am delighted at this very positive news which we have been working hard to achieve over the last year.”

BIS Committee reveals apprenticeship inquiry itinerary for Sheffield

The itinerary for the Business, Innovation and Skills Committee’s visit to Sheffield next week has been revealed.

As part of their major inquiry into apprenticeships, the cross-party committee will visit Sheffield on Monday, March 5 and Tuesday, March 6.

During the visit, committee members will visit Forgemasters and the University of Sheffield’s Advanced Manufacturing Research Centre (ARMC).

They will also be holding a formal session on March 6 at the ARMC.

The chairman of the Committee, Adrian Bailey MP, said: “Dr Adam Posen of the Bank of England’s Monetary Policy Committee today made clear that he feels the biggest failure in the UK labour market at the moment is in the area of youth unemployment.

“Apprenticeships are a vital tool if we are to address this shortcoming.

“Apprenticeships can help equip young people throughout the UK with the skills necessary to drive forward broad and sustained economic growth, spread across a range of sectors and across the entire country.

“If the Committee’s inquiry is to have the desired effect, we need to look at what is working and where the current structure is falling short, not only for companies running apprenticeship schemes but for apprentices themselves.

“Sheffield is home to a number of significant organisations and employers offering innovative and meaningful apprenticeship schemes.

“This visit will allow the Committee to gain first-hand experience of how these schemes are operating in practice and takes evidence from a wide range of interested parties.”

The news comes ahead of the Committee’s first formal evidence session, which takes place tomorrow from 11am at The Grimond Room, Portcullis House.

Witnesses include Denis Hird, chief executive of JTL Training, Alex Jackman, a senior policy officer for the Forum of Private Business, and Graham Hoyle, the chief executive of the Association of Employment and Learning Providers (AELP).

Subcontractors courted by SFA into direct relationship

Subcontractors with a total allocation of more than £1 million are being offered a direct contract by the Skills Funding Agency (SFA).

Businesses were sent a letter by the SFA in mid-January encouraging them to bid for a contract worth at least £500,000 as part of a one-off funding pilot by the agency.

The letter says successful bidders will receive funding for 16 months to deliver full apprenticeship frameworks aimed at learners of all ages, provided they can begin the delivery from April and enroll a quarter of predicted learners by August.

The SFA says the pilot is designed to “test the appetite” of large subcontractors which have the capacity to move to a direct contractual relationship with the agency.

A spokesperson for the SFA told FE Week: “This is intended as a pilot to inform the potential introduction of a structured long term process to introduce new entrants to the education and training market, providing the Agency with access to additional capacity to deliver high quality learning opportunities to communities and businesses across the country.”

The pilot, which the SFA says will help develop the funding requirements for 2012/13, will test how organisations can be funded directly when it is not possible to reallocate provision from under-performing providers.

The Association of Employment and Learning Providers (AELP) say they are supportive of the pilot and agree that large subcontractors should be offered a direct contract by the SFA.

An AELP spokesperson said: “It is right and welcome that that the SFA should look at ways of encouraging new entrants into direct contracts, providing quality remains the watchword for the process.

“In fact, AELP has pressed for a long time for the agency to offer direct contracts to those relatively large sub-contractors who want them, although we feel that it shouldn’t be a mandatory development.”

The letter says subcontractors were invited to take part in the funding pilot only if they featured on the list of organisations which passed the ACTOR pre-qualification questionnaire and expressed an interest in delivering apprenticeships through the Single Adult Skills Budget (SASB) invitation to tender (ITT) last July.

Deep Blue Sound Limited, which delivers courses in sound engineering, music production and music performance, among others, has a subcontracting allocation of £1.2 million with City College Plymouth, but did not receive the letter.

Nigel Burt, director of Deep Blue Sound, told FE Week: “Were I to receive such a letter I would have to think very carefully about how to react.

“We have a good relationship with partners and I would be cautious about doing anything that threatened that without there being a good deal of security in it for us.

“With the almost whimsical way the education landscape seems to be changed at the moment but policy makers, this obviously wouldn’t help to give me that security.”

He added: “There is little opportunity to plan anything long term as one just doesn’t know what ‘funders’ have in store for us year on year.”

The SFA say they are currently reviewing all of the bids submitted for the pilot.

“We are not able to comment on who has applied until the process is complete,” an SFA spokesperson added.

Funding facing further formulation

The Skills Funding Agency today publish an updated version of A New Streamlined Funding System for Adult Skills.

The document contains a number of significant announcements, changes, clarifications and areas still under development. It states the document “sets out the features and arrangements for testing a new simplified funding system to be implemented in 2013/14. It is published following consultation with the Association of Colleges and the Association of Employment and Learning Providers.”

This week the FE Week newspaper will include a detailed anaylsis of the plans in it’s technical pages. If you do not already subscribe, you can do so here.

Overall timetable of the proposed changes (page 13)

Review into short apprenticeship to conclude by April

Reviews into short duration apprenticeships are due to be finalised by April, the Skills Minister John Hayes has revealed.

A total of 87 providers have so far been reviewed by the Skills Funding Agency and the National Apprenticeship Service (NAS) for running programmes which last six months or less.

However, while 29 have been brought to a “satisfactory conclusion”, the review has so far identified 10 primary contractors and three subcontractors where the Agency and NAS have significant and unresolved concerns.

At least one case has been referred to the Agency’s Special Investigations Unit.

The Agency will significantly tighten the contract and funding guidance from August 2012 to eliminate poor practice.”

The news comes as Mr Hayes today updated parliament on progress to drive up quality, as well as introducing new measures to come into place in the coming months.

Mr Hayes, in a written parliamentary statement, said: “An apprenticeship must involve significant new learning and time spent achieving competence and confidence in the job, which is why I am taking  steps to ensure all apprenticeships are of a sufficient length to allow this learning to be embedded.

“Following my announcement in December, the  National Apprenticeship Service will shortly publish the detail of a new 12 month duration requirement for all 16-18 year olds.

“This will come into effect for all starts from August 2012, although we expect many providers to change their delivery models before then.”

A roundup of the apprenticeship review:

  • 87 training organisations providers, sub-contractors and directly funded employers delivering Apprenticeships of short duration (six months or less) warranted review by the Agency and NAS.
  • 29 cases have been brought to a satisfactory conclusion. These will  continue to be monitored to ensure that issues do not occur and in preparation for the new requirements on duration from August 2012.
  • Where cases have been concluded, providers have changed their delivery models to be fully compliant or ended the delivery of frameworks that don’t meet the requirements.
  • Most providers have revised their programmes to meet the challenge in quality standards that are required.
  • So far, the review has identified 10 primary contractors and 3 subcontractors where the Agency and NAS have significant and unresolved concerns. NAS and the Agency will work with closely with these providers to conclude a full investigation of the specifics of the cases and identify suitable resolutions, including improving, adapting or, if necessary, withdrawing provision.
  • Following major reviews, in the case of 3 sub-contractors, prime contractors have decided to end their contractual relationship.
  • At least one case has been referred to the Agency’s Special Investigations Unit.
  • It is has been made clear to providers that contracts which meet funding requirements technically but fail to meet the more comprehensive quality standards we expect of Apprenticeships are not acceptable. The Agency will significantly tighten the contract and funding guidance from August 2012 to eliminate poor practice.
  • The reviews of the majority of the cases that remain will be finalised by April 2012.

Frank McLoughlin to head Commission on adult vocational learning

Frank McLoughlin CBE, the principal of City and Islington College, will chair an independent Commission on adult education and vocational pedagogy.

The Commission will have the aim of improving adult vocational education; setting out recommendations to ensure adult learners can receive the highest possible standards of teaching and training, and the best learning experience.

It will bring together industry, teacher training colleges, professional associations and leaders and practitioners from the further education sector.

Mr McLoughlin has been Principal of City and Islington College since July 2002. He brings over thirty years of experience to the Commission, having joined the further education sector as a part-time lecturer in 1980.

His appointed was revealed by skills minister John Hayes, who said: “It is great news that Frank McLoughlin has agreed to chair this Commission.

“His wealth of experience in delivering further education and skills in a challenging inner-city environment gives him the right credentials to lead work which will shape the future of teaching and learning for adults in England.”

Mr McLoughlin said: “I am absolutely delighted that the Minister has asked me to Chair this extremely important Commission.

“It presents a once in a generation opportunity to raise the status of adult vocational teaching and learning and promote its nature and heritage in its own terms, sitting firmly alongside the academic model.”

Lynne Sedgmore CBE, executive director of the 157 Group, a body for which Mr McLoughlin is a former chair, said: “This is a timely and crucial commission to develop an enhanced pedagogy for adult vocational education.

“Effective teaching and learning is a vital element in enabling the FE and skills sector to flourish and 157 Group is keen to contribute to the commission’s work in any way it can.”

The Institute for Learning (IfL) has welcomed Mr McLoughlin’s appointment.

IfL’s chief executive, Toni Fazaeli said: “IfL has long been calling for greater prestige for the vocational, and for an independent inquiry into world-class teaching and training in further education and skills.

“IfL’s priority is to engage and draw on evidence from our members, the expert vocational teachers and trainers who can and do make the difference for vocational learners, and their success.

“Our preparatory work, which includes an action research project involving nearly 150 teaching and training professionals across the country, is already well under way.

“It is crucial that young people and adults of all ages should have access to the best possible teaching and learning, to ensure that they have the skills they need for fulfilling working lives and for well-being.”

The final findings and recommendations of the Commission are due to be published in Spring 2013.

New ‘enquiry panel’ to review poor apprenticeship providers

A new ‘enquiry panel’ has been set up to manage poor quality apprenticeship providers.

The panel will report directly to Skills Minister John Hayes, who revealed the news as part of plans to increase the government’s efforts to safeguard and improve the quality and standards of apprenticeships.

The membership of the panel is yet to be announced.

In a statement to the House of Commons, Mr Hayes also today updated parliament on progress to drive up quality, as well as introducing new measures to come into place in the coming months.

They include reviewing frameworks deemed “a cause for concern” and new measures to ensure all adult apprenticeships are of a “sufficient length” to deliver the training that employers need.

He said: “The majority of apprenticeships are the gold standard in vocational training. They boost individuals’ life chances and build the skills that drive growth.

“We must be relentless in our drive to ensure all apprenticeships are as good as the best, to identify and root out any instances of poor quality provision, and to raise the bar on standards.

“I am determined to build on this momentum and go further so that as more people than ever have the opportunity to undertake an apprenticeship, every one of them will receive the high quality training they deserve.”

Latest developments:

  • From August 2012, all apprenticeships for 16-18 year olds will be for a minimum of 12 months
  • NAS and the Skills Funding Agency’s comprehensive review of all short duration programmes has already resulted in significant improvements to many apprenticeships and the withdrawal of inadequate sub-contracted provision
  • New safeguards are being put in place to strengthen monitoring, reporting and subcontracting arrangements, including making public a list of all sub contracted provision over £100,000
  • New contracts will ensure that training providers not only act according to regulations, but also within the spirit of the apprenticeship programme
  • A new ‘enquiry panel’ has been established, reporting directly to the Minister, to manage poor quality providers as soon as they are reported.

Next steps over the coming months:

  • New measures will ensure all adult apprenticeships are of sufficient length to deliver the training employers need
  • NAS will undertake a review into apprenticeship frameworks that have been deemed a cause for concern
  • New guidance on the implementation of quality standards will be published
  • The government will take forward measures to ensure all apprentices are given the opportunity to get Level 2 English and Maths.

Simon Waugh, chief executive of the National Apprenticeship Service, said “sound progress” is being made to ensure that apprenticeships represent “outstanding training and employment” opportunities.

He said: “Historically, growth in apprenticeships has been excellent but hasn’t always been matched by quality.

“The actions we are taking now are to clearly state expected standards, strengthen the processes of monitoring and assuring these standards and address any areas that fall short.

“Raising quality is not a quick fix but about defining a new era that firmly places apprenticeships as first rate vocational programmes offering higher level skills and qualifications in even more industries and sectors, supporting people into employment, boosting the skills of those already in work and bringing benefits to employers that invest in skills.”

Christine Gaskell MBE, member of the board for personnel at Bentley Motors, said although apprenticeships are a long-term investment, they deliver higher skills, loyalty and innovative ideas.

She said: “Good quality apprenticeship schemes are the bedrock on which our business future is built.

“If companies such as Bentley are to remain internationally competitive, we have to attract the best people and give them a training programme that allows them to flourish.”

For more, see next week’s FE Week.

FE colleges to be reclassified by Office for National Statistics

General further education (FE) colleges are to be reclassified as no longer being a part of central government.

The decision by the Office for National Statistics (ONS) means FE colleges will have more freedoms as independent bodies and be affected by significantly less red tape.

Skills Minister John Hayes, announcing the decision today, said: “I am delighted at this very positive news which we have been working hard to achieve over the last year.

“The Government is committed to cutting red tape so that further education colleges have the freedom they need to make their own judgements on how to manage their affairs for the benefit of learners, employers and wider communities.”

The decision follows a review by the ONS of the changes made in the Education Act 2011 by the Department for Business, Innovation and Skills (BIS) and the Department for Education (DfE), which include removing a number of restrictions and controls both for further education and sixth form colleges.

The ONS told the treasury last week that the changes, to be implemented from April 2012, are sufficient enough to warrant a reclassification.

Martin Doel, chief Executive of the Association of Colleges (AoC), said: “We are extremely pleased that the Government has succeeded in getting this decision reversed and has delivered on its promise to afford further education colleges greater autonomy.

“Allowing colleges to maintain their own affairs is not only beneficial to the institutions themselves, it also brings more clarity to the way public money is spent.”

The previous classification by the ONS in October 2010 meant FE colleges were included in government accounting boundaries.

Lynne Sedgmore CBE, executive director of the 157 Group, said: “This decision aligns with the freedoms and flexibilities given by John Hayes and his department and enables colleges to deliver Governmental priorities and initiatives.

“Clearly the voice of colleges and our business communities have been listened to, and responded to, on this critical matter to good effect.”

The National Institute of Adult Continuing Education (NIACE) has welcomed the change and says it will help colleges deliver “more innovative and diverse adult learning”.

Mark Ravenhall, NIACE Director of Policy and Impact, said: “NIACE believes adult learners will benefit from this change, alongside the greater freedoms being introduced for colleges and other providers.

“We welcome the announcement and the challenge made to the sector to deliver more innovative and diverse adult learning that is truly accountable to local communities.

“The decision also proves that just because colleges deliver good public services they don’t have to be part of the public sector.”