The Skills Funding Agency (SFA) has announced the rates for functional skills in the new streamlined funding system for adult learning.

English and maths qualifications will be funded at a base rate of £336, equivalent to 5-12 credits in the government’s new “learning aim rates matrix”. But a 1.3 Programme Weighting Factor will boost the amount for entry level maths to £437.

A spokesperson for the SFA told FE Week that the agency had worked closely with the FE sector to agree the rates, based on current data.

“The agency has made clear that in doing so, further work is needed to explore whether this data is representative of the delivery requirements for functional skills. We will be working with providers over the summer to assess whether we need to revisit this rate when setting the final funding level for 2013/14.”

We would obviously like to see higher rates to enable colleges to provide more maths and English teaching”

The rates were set with the help of the Funding External Technical Advisory Group.

Chris McLean, vice principal of North Hertfordshire College and a member of the advisory group, told FE Week: “I think the sector will be happy with the rates set.  There is one pot of funding, which can be spent only once, and therefore it was imperative that the group developed a balanced system that provides a fair income for the activity delivered.”

However, Julian Gravatt, assistant chief executive of the Association of Colleges, told FE Week that it wasn’t a perfect outcome. “We would obviously like to see higher rates to enable colleges to provide more maths and English teaching, but it’s helpful that these rates are based mainly on existing funding levels – which will minimise disruption and allow teachers to focus on teaching.”

The new simplified funding system for adult skills will be introduced in the 2013/14 academic year, with shadow working available from September.

The original proposal for a simplified funding system had 30 cash totals in the “learning aim rates matrix”, including 10 for apprenticeships.

Revised proposals excluded apprenticeships, but the SFA now says that they will still be funded using the learning aim rates matrix, but boosted by an additional sum yet to be set.

As many of us suspected, simplifying FE funding is proving harder to achieve than BIS thought.”

A spokesperson said that the extra money would reflect the additional activity a provider had to undertake when delivering an apprenticeship.

“Due to detailed work needed to establish and validate the value for such an element, the funding group has recommended that details for this are released  once more work has been completed, and wider consultation has taken place with employer groups.”

The SFA said more details would be published later this summer once the extra funding had been tested and consulted on.

Mick Fletcher, a visiting research fellow at the Institute of Education and consultant, told FE Week: “As many of us suspected, simplifying FE funding is proving harder to achieve than BIS thought.

“Fortunately officials have not been afraid to take advice on some of the detail so the system is becoming more sensible as it becomes more complex.  Part of the difficulty is that instead of starting with the reality of FE and designing a funding system to fit it, the designers have started with a grand design built around the QCF and are struggling to force large parts of FE provision into it: hence the difficulty of accommodating apprenticeships, or basic skills.”

Lead providers charged more than £175 million in management fees to subcontractors in the 2011/12 academic year, an analysis by FE Week suggests.

A Skills Funding Agency (SFA) spreadsheet published on the agency website suggests that contract holders took an average “top-slice” of 23 per cent from subcontractors. It also suggests that subcontractors earned about £581 million, based on original provider allocations worth just over £759 million.

A spokesperson for the SFA told FE Week: “There is an expectation that the funding provided is used for the benefit of the learner and spent on their learning programme or provision.

“The amount of funding retained by a lead provider for programmes and provision delivered in whole, or part, by a subcontractor must represent good value for money and reflect the actual costs incurred by each party in the delivery of that provision.”

The data, gathered from declaration forms submitted by lead providers, shows that Somerset County Council kept, on average, 37 per cent of the funding it gave to subcontractors, amounting to almost £200,000 in the 2011/12 academic year.

In this climate we cannot afford to run apprenticeships for nothing.”

A spokesperson for the council said it had a project and performance management role – checks on the quality of delivery accounted for 15 per cent of the retained funding.

“If a subcontractor cannot complete all the duties they are usually expected to do, the council will take on these duties and keep the appropriate funds,” the spokesperson told FE Week.

“These duties include promotional activity to recruit learners, providing venues, conducting induction sessions, learner and employer reviews, providing additional support for learners, assessment centre functions and responsibilities, key and functional skills delivery, curriculum development and delivery support.”

The spokesperson added that it was a “tailored approach” that reflected the different tasks undertaken by the council and the subcontractor.

However, a subcontractor used by Somerset County Council told FE Week: “This particular provider provides us with very few learners; in the main we source them ourselves and engage in huge and costly marketing opportunities to secure both learners and employers.

“We spend a lot of our time chasing the provider for things not completed, which often results in us doing certain aspects ourselves. (Therefore) a 35 per cent management fee is not giving us value for money.

“In this climate we cannot afford to run apprenticeships for nothing. Providers need to realise that we are a business, a business that is completely learner-focused, but one that needs funds to support local employers and their apprentices in achieving their goals.”

If colleges are greedily taking bigger and bigger slices of the pie then that has to impact on the overall quality of the training.”

One subcontractor told FE Week in June that the management fees of some FE colleges were a “rip off”  a concern since echoed by the Forum of Private Business (FPB).

A spokesperson for the forum told FE Week: “Quite simply FE colleges should not be making huge profits at the expense of subcontractors or businesses, the latter who are parting with money in good faith so that their staff are trained to the best possible standard.

“If colleges are greedily taking bigger and bigger slices of the pie then that has to impact on the overall quality of the training.”

Lead providers who subcontract will need to supply a report at the end of the 2012/13 contractual year which proves their top-slice is “no more than is required to cover the actual costs directly incurred in managing its subcontractors.”

The Association of Employment and Learning Providers (AELP) said it was discussing a number of solutions, including a new code of conduct, with the Association of Colleges (AoC).

“Subcontracting is a legitimate business practice that we would like to see maintained in the skills sector, but at the same time we don’t want to see unjustifiable management fees taking money away from frontline provision,” an AELP spokesperson said.

“There are some meaty issues to address here and that’s why AELP and AoC have got together to look at possible solutions carefully rather than wait for an imposed solution from above which may not work best for the sector.”

Errors have been  found in data and management information reports published by the Education Funding Agency (EFA).

The reports, which give local authorities an overview of the 16 to 19 provision in their area, incorrectly included adult learners in  further education.

A spokesperson for the EFA told FE Week that Qualification Success Rates (QSR)  should only include data for 16 to 18 year-olds. Part of the report has been affected as a result.

“We have subsequently revised our code and are in the process of producing and checking updated reports for all FE colleges, sixth-form colleges and independent private providers,” the EFA spokesperson said.

“We will delete the erroneous reports and upload corrected versions as soon as possible.”

The EFA said the issue was a “coding error” and later emphasised that it had “no concerns” with the data provided by colleges.

“In this instance our quality assurance process was not sufficiently robust and will be revisited for future releases,” the spokesperson said.

“However, there should be no impact of there being a relatively minor error in this report.”

The reports are not in the public domain, but are available both to local authorities and education providers through the information management portal.

The “coding error” was identified by members of the College Management Information Systems (CMIS) network.

One CMIS manager suggested there could be more to the problem than the inclusion of adult learner data.

“I’m not entirely sure where they’re getting the figures from for the learner numbers, Standard Learning Numbers and out-turn funding as they don’t agree with our final claim figures (which came from the Learner Information Suite from our final Individualised Learner Record),” the manager said.

“They’re clearly not including adults because they’re only out by a relatively small number, but it does mean I have no idea what to check it against.”

The inclusions of adult learner data in the EFA reports follow significant errors in other data sets published by government agencies.

The National Success Rate Tables for 2010/11 were removed last month after more than 23 per cent of qualifications were found to be showing an “unknown” level, up from 2 per cent in the earlier QSR.

Meanwhile a breach report published by the UK Statistics Authority found that FE Choices, a website that allows the public to compare the performance of providers, had 2,700 changes to “unique values”.

The Deputy Prime Minister, Nick Clegg, announced today that the goverment will be piloting a new pre-apprenticeship scheme, known as a ‘traineeship’.

In his speech at the CBI Jobs Summit Mr Clegg said: “The teenagers who aren’t ready for an apprenticeship, say. These were the children most let down by the previous system.  Now, as we reform that system, we’re determined that they are not lost in transition.

I know that one idea John Hayes, the Minister for Skills, is looking at is piloting a new ‘traineeship’; a package of training and work experience to get the basic, necessary skills, with a recognised qualification at the end of it, an extra rung on the ladder to get you on your way to an apprenticeship or job. Again, that help will be targeted in the areas most in need.

And more detail will be coming soon.”

Read the speech in full here.

England is failing young people by training them for jobs that don’t exist, while not providing them with the skills for areas where there is work, according to a report from the Local Government Association (LGA).

Hidden Talents argues that there is a mismatch between the jobs that young people are qualifying for and those that are available.

Last year more than 94,000 people completed hair and beauty courses, but only 18,000 new jobs were created in the sector, the LGA’s research suggests – and of those who qualified, more than 60 per cent were aged 16 to18. Meanwhile, more than double the number of people trained to work in hospitality, sport and leisure than jobs advertised in the sector.

In contrast, the report said that fewer than 40,000 people trained to fill about 72,000 new jobs in building and engineering. The environmental industry created about 89,000 jobs last year, but only 27,000 young people were trained to take them. There was also a gap between supply and demand in textile design, accountancy and jobs in the automotive industry.

A nationally driven one-size-fits-all approach doesn’t work.”

The data used in the report captured most achievements up to level 3 (equivalent to A-level), but did not capture non-accredited training on the job or degree-level training (level 4 and above).

The LGA argues that the “skills mismatch” is the result of colleges receiving funding from the government on the basis of studying and passing qualifications, rather than on job outcomes.

David Simmonds, chair of its children and young people board, said it was “indefensible” to encourage colleges to steer students on to low-prospect courses, rather than those that would help them to gain meaningful employment.

“A nationally driven one-size-fits-all approach doesn’t work. We need a shift in training priorities that prizes and rewards those that help students toward meaningful careers. It’s not right that young people trying to secure a good future are being deceived by a system that fails to look at what is best for them, or the taxpayer, and instead focuses on a bums-on-seats approach to education.”

The Department for Business, Innovation and Skills said it had “concerns” about the “robustness” of some of the analysis and believed the conclusions were “unwarranted”, based on the analysis done.

A spokesman said: “The authors do not appear to have taken into account variation between occupations in staff nor in vacancy reporting, which is likely to substantially alter the comparative figures.”‬

The department said it had freed providers from top-down central targets and regulation so that they could better respond to the needs of their communities. The Employer Ownership Pilot was now targeting investment at the skills that employers and the economy needed to grow. ‬

Mark Ravenhall, director of policy and impact at the National Institute of Adult Continuing Education (NIACE), said he agreed with much of the report but that there was “quite a lot more to say”.

He said that he was “a bit annoyed” that there was never a debate about Latin as a subject in private schools and whether there was an oversupply of  classicists.

“No one kicks up a fuss about that,” he said.

“What about the soft skills that you gain in doing hairdressing? What about the literacy and the foundation skills you develop in doing those courses?

“If you get transferable skills from doing a classics degree or PPE at Oxford, why don’t you get transferable skills form doing a hairdressing qualification? If that’s what people want to do, let them do it.”

Mr Ravenhall said the situation was looked at “too much from the employer’s perspective and not enough from the individual’s perspective”.

The Richard Review into apprenticeships officially opened its call for evidence yesterday.

Doug Richard, who was appointed by the government to lead an independent review into apprenticeships, said he didn’t want to critique the current system, but wanted to look to the future. The entrepreneur and star of the TV series Dragon’s Den said that he would not be the “ombudsman” or “trouble shooter” of apprenticeships.

Skills Minister John Hayes said at the opening of the review that Mr Richard needed “to get under the skin” of apprenticeships and bring a “fresh” and “creative” perspective.

You can submit your evidence for the review here.