Would we notice if FE was fully privatised?

The recent decision by the Office of National Statistics to label colleges as being in the private sector doesn’t change things much. Government is no doubt relieved at confirmation that colleges are part of the wealth creating ‘real world’ rather than public sector layabouts, and colleges are relieved not to be dragged back into the rigid constraints of Whitehall accounting, but by itself it has little direct impact on day to day practice.

Suggestions that colleges might take a further step and be fully privatised however are potentially more serious and deserve greater attention.

Some have suggested that the involvement of companies run for profit, perhaps through the involvement of private equity houses might be the next big step in the ‘liberation’ of FE. What might be the costs and benefits?

The first duty of a private company is to its shareholders”

Many of the advantages claimed for privatisation just don’t hold for FE. In the case of public utilities for example it is claimed with some justification that breaking up monopolies and introducing competition sharpened practice and produced a better deal for consumers. Competition however is already pretty fierce in the FE market place and a change of ownership would have little effect. College managers already have to be good to survive.

Another argument, advanced for example in relation to rail or telecommunications is that private ownership brought much needed capital investment that the public purse could not afford. This may be true in other sectors but a lack of capital investment is not top of FE’s problems; much more pressing is the threat to the revenue stream needed to support the capital investment already made. Why would a college want more debt?

Privatisation it is said can transfer risk from the public to the private sector. The theory is elegant but, as the Work Programme is showing, the transfer is hard to effect. If government, as so often, agrees a price that is too generous companies make windfalls; if the price turns out to be tough contractors cry foul or threaten to pull out. Transferring risk means being prepared to let the risk takers fail.

A further reason for privatisation might be to help pay down debt. At first sight selling colleges at a market price sounds rather less daft than giving away schools to cranks and crazies for free. The benefit however would all accrue to the Treasury (apart from the large percentage extracted by the army of consultants needed to set the deals up, and who are probably lobbying feverishly for the change) It is not at all clear what benefit would accrue to the users of FE from such a transfer.
Would there be any downsides of such a move however if colleges are to all intents and purposes already private? There would seem to be two. The first is that while profit should not be a dirty word if it results from making wise investments, taking risks or injecting a new dynamism into an enterprise there seems very little scope for such beneficial actions to take place.

Profit is far more likely to be found, as in many privatisations, from reducing the wages and benefits of the poorest paid and cutting corners on quality. The first duty of a private company is to its shareholders.

The more important concern though is that currently colleges see themselves and are seen as public assets, dedicated (in both senses) to education and training for the long term. A private company simply seeks to maximise shareholder value wherever it can. Because colleges are public assets they enjoy a privileged relationship with government funders, receiving grant in aid.

As private companies this could not continue. All FE would have to be put out to tender with the attendant instability, rigidity, gaming behaviour and threat to quality that the most privatised parts of the system currently exhibit (look for example at prison education) Government would then have to choose between maintaining quality and having light touch regulation since experience shows that in a privatised system it cannot have both.

Mick Fletcher is a Further
Education Consultant

Criticism and restructures as Ofsted grades plummet

Three further education colleges have suffered setbacks after receiving the lowest possible inspection grades.

Reports by education regulator Ofsted, each published on March 30, show ‘inadequate’ reports for Macclesfield College and City of Wolverhampton College. The third to receive the grade, as previously revealed by FE Week, was Lambeth College, also formally published on March 30.

Back in June 2007, Macclesfield College was graded as ‘outstanding’, which made their most recent inspection report a shock for the principal designate Simon Andrews, who takes over at the college on August 1.

Mr Andrews said problems with the 14-19 diploma, which the college has “moved away” from doing, had affected their 16-18 provision, before hitting out at the focus the inspectors during their visit to the college.

He said: “We felt we were similar, but Ofsted came in with a focus which was almost exclusively on 16-18 provision, which is about a third of the college provision.”

He later added: “The report is full of contradictions. They’ve based judgement on a diploma we only ran for two years.”

Improvements at the college will now be formed in an action plan, compiled with the Skills Funding Agency, and a development plan with LSIS. The governing body has had a shake-up, with a new vice-chairman and the chairman will step down next year.

Ofsted will also revisit the college in six months for a monitoring report, before another inspection in 12 months.

Mr Andrews said: “They recognised in the last 16 to 20 months the college has made significant improvements. We are looking forward to Ofsted coming back and showing them that we are not inadequate.”

Meanwhile, Ian Millard, the principal at City of Wolverhampton College, has moved to reassure the college’s students following their ‘inadequate’ grade. Their latest grade is a reduction from a ‘good’ at their previous inspection in February 2008.

Mr Millard said: “I appreciate that students and their parents will, quite rightly, be concerned by the report. However, I would like to reassure them that we are already taking decisive action to address many of the issues raised and are confident we can overcome them.”

He added: “The success rates referred to in the report look at how many students successfully complete their course compared to how many were enrolled at the beginning.

“In these tough economic times we are finding that some of our learners are having to drop out due to financial reasons, which has an impact on our success rates.”

Mr Millard said they will introduce measures to encourage students to stay on, such as additional learning support and grants for those with financial pressures.

Lambeth College, meanwhile, has quashed local news reports that all teachers have been handed redundancy notices in the wake of their ‘inadequate’ report. The college is undertaking a management restructure, which would affect 43 members of staff and salary reductions to a further 24 workers.

If the proposals go through a consultation, staff who earn £41,000 or more will receive a pay cut up to six per cent, whereas staff on the lower end will receive a cut starting at 3.5 per cent. A statement from the college, released to FE Week, reads: “No redundancy notices have been handed to staff and the restructure is of management teams, not tutors.

“None of the colleges other 500 staff (including teachers and business support) are affected by these proposals.

“There is therefore no truth whatsoever that all college staff have been issued with redundancy notices and the college deeply regrets that such an alarming story has been published without the facts being checked directly with the college.

“The purpose of the restructure is to enable the college to focus closely on raising standards and performance within the college.”

John Widdowson, principal, New College Durham

Born into a family of mill workers, machine operators and motor mechanics, John Widdowson jokes that he is the first in his family who hasn’t had to work for a living.

Growing up in Lancashire, he was a studious child, who – much to the despair of his father and grandfather – was absolutely “useless” at working with his hands.

Now principal and chief executive of New College Durham, the young Widdowson had his heart set on a career in law, and after O and A levels at Audenshaw Grammar School (a selective boys’ school in Manchester), went up to Durham University, where he did a law degree, followed by a legal practice course and MBA.

He fell into education by accident, after taking a teaching job at a college to earn some extra cash – and was hooked immediately. He recalls: “It was very odd coming from a post-graduate business school into an environment where I was teaching girls on a secretarial course who had left school at 15 and trying to get them to try and think outside the box.

“Then there was a group of lads who were working for the post office whose job was moving mail bags on and off trains – just realising that after whatever they’d done at school they still couldn’t read or write properly, and having to cope with that while trying to get them to do something else – it was just a big challenge.”

Teaching appealed to his keen sense of social justice and offered pace and challenge, he says. “Young students, particularly those less able, make a lot of demands on people and you have to be intellectually and emotionally right up for it. It’s much more adrenaline-generating being in a classroom…even in a court of law you are never under quite the same pressure.”

Having abandoned his plans for a career in law, Widdowson quickly rose through the ranks, before becoming a principal at just 42, making him one of the youngest college leaders in the country at the time. But he never set out to become a college leader, he says. As he became more experienced, he simply realised that leading a college would offer him the professional challenges he needed.

It didn’t take me long to think that principals of colleges do have a lot of responsibility but also a lot of opportunity to effect change, which you don’t get in many places”

“I know that sounds very pretentious and all the rest of it but it’s one of the few jobs where you can do that and therefore it is a job that is still worth aspiring to,” he says. “It didn’t take me long to think that yes, principals of colleges do have a lot of responsibility but also a lot of opportunity to effect change, which you don’t get in many places.”

What appealed about the job – and what still motivates him now – is the variety. He might be visiting a local school, negotiating sensitive human resources issues or making multi-million pound financial decisions – all in the course of a single day. And because “colleges never close,” there are constant challenges, he says.

“There is always something going on, even in the depths of the summer holidays. You finish one academic year and you have the A-level results coming out in mid-August, GCSEs at the end of August, so the cycle starts again…and you can do all that planning and then something comes up that is more pressing to deal with. You have got to like that sort of dynamic environment; it’s what makes it interesting.”

Widdowson is particularly proud of college’s capital rebuild project (which involved selling one campus and building a new one from the ground up) and the links it has made with local schools. New College Durham now sponsors two local academies – both with complex histories and big capital build projects attached to them.

He is also passionate about the role FE colleges can play in delivering higher education courses and chairs the Mixed Economy Group (a working group of 34 colleges that offer higher education courses in addition to their FE provision) and the widening access and participation committee for the higher education funding body HEFCE.

The biggest challenge facing the sector at the moment is financial uncertainty, he says. The impact of funding cuts – in particular the demise of the EMA – has hit young people where it hurts. “Now you have got to really convince them [young people] of the benefits of getting qualifications and sticking with it.

“We have a large NEET group and we are constantly trying to find different ways to engage them and find different sorts of courses to get them on. And we have to constantly refresh that, because what worked three or four years ago may not work now.”

But if he has learned one thing during his 30 years in further education, it is that, as a leader, certain things are out of your control. What matters is how you respond. “Colleges reflect the real world. You can’t always manage the environment outside the college, and if that’s volatile and things are happening out there…they are not ivory towers. And so as a senior leader in a college you have to lead that response.”

In a college like this you value every level of achievement; whether an academic getting an honour’s degree or it’s a special needs student who learns to live independently”

What continues to inspire him, he says, is seeing students succeed – some of them, against the odds. “You have only got to see our graduation ceremonies and see people who have made a significant change in their lives through education…and if the college wasn’t there that wouldn’t have happened.

“In a college like this you value every level of achievement; whether that is an academic getting an honour’s degree or whether it’s a special needs student who learns to live independently. They are all equally valuable.”

One particular example sticks in his mind. “One of the staff had a very serious, and I mean life threatening, illness. She was in intensive care for weeks and when she came round from this, she discovered that one of the nurses in the ICU was one of the college’s former students who she had actually counselled to go on an access course. And he had gone off and done a nursing qualification and was now a highly qualified intensive care nurse who was helping her to survive this really serious illness. It’s not fate, because I don’t believe in that sort of stuff, but it shows you how things have a habit of paying off.”

Subcontracting and social media

An “urgent review” of sub-contracting has been called for by the Association of Employment and Learning Providers (AELP).

Graham Hoyle, chief executive of the AELP, has written to the skills minister John Hayes recommending a full investigation of current sub-contracting arrangements.

Issue 567 of the AELP Countdown reads: “Recent analysis by the Skills Funding Agency (SFA) of the extent of subcontracting within the FE system has given rise to a series of questions regarding the pros and cons of this delivery mechanism.

AELP has been receiving reports from members of sub-contracting approaches from colleges looking at significant underspends with the final quarter of 2011-12 on the horizon,”

“A more accurate understanding of actual delivery is clearly necessary. “

The call follows instances of undelivered funding from the SFA being advertised openly to sub-contractors through the social networking site LinkedIn.

Neptune Solutions, a brokerage company which helps lead providers team up with sub-contractors, has been offering “immediate” funding to providers on a number of discussion threads on the Apprenticeships England group.

“AELP has been receiving reports from members of sub-contracting approaches from colleges looking at significant underspends with the final quarter of 2011-12 on the horizon,” An AELP spokesperson told FE Week.

“This is one of the reasons why we want the practice reviewed, because it is important that any new sub-contracting arrangements are made with due diligence undertaken.”

Elena Ryabusha, managing director at Qdos Training Ltd, is one of many training providers which have responded to the advertisements on LinkedIn.

Commenting on one of the discussion threads in March, she said: “We are a prime contractor and we have funding spare for March starts.”

The behaviour has raised concerns over much how due diligence is being carried out by prime contractors who enter subcontracting arrangements at short notice.

Scott Upton, vice principal of Sandwell College, told FE Week: “It is a little disappointing that a small minority of members are using the site for ‘blind dating’ for the purposes of setting up sub-contracts with very short lead-ins.

“Offers of funding for starts in the same month leave virtually no time for due diligence between potential partners.”

He added: “This would seem to be flying in the face of the current push for tighter risk management of contracts between providers.

“Hopefully these practices will not proliferate and will be self-policed by the many committed members of the site.”

Mike Cheetham, director of risk management at RSM Tenon, added: “The rise in use of social media to link potential sub-contractors with colleges and other training providers is not unsurprising.

“However, as with any partnership, there is no substitute for a robust due diligence process before entering into the contract, and close monitoring subsequently of the quality of delivery and compliance with the funding rules.

“As auditors, we have seen too many times the financial and reputational damage that can occur from entering into contracts that, with hindsight, really were ‘too good to be true.’”

Geoff Russell, chief executive of the SFA, has defended the behaviour on LinkedIn and said any alternative to an open market system would offer the government less value for money.

“If you look at some of the respondents to the post on LinkedIn, there are quite a few good providers,” Mr Russell told FE Week.

“But clearly, in a market system, there will always be the risk that a small number of participants try to take undue advantage and go for short term profits rather than a reasonable, long term return by delivering quality training.”

Apprenticeship Supplement

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The Apprenticeship Experience

Apprenticeships should be more than just a mandatory set of qualifications, brought together into a formal framework which can delivered as quickly as possible for maximum funding efficiency.

It’s also more than just vocational training, delivered either in a classroom environment or by the employer in the workplace.

Apprenticeships are, ignoring all of the fuss surrounding definitions and on-going debate about brand dilution, an experience.

An apprenticeship is about having a mentor who can not only pass on their skills and knowledge in a timely and structured manner, but also build a genuine rapport with the learner and teach them about the world of work.

It’s about the pride which comes with having a real, sustainable job and the relationship of respect which the learner then builds with his or her employer.

It’s not the sort of provision exposed in the recent Panorama programme ‘The Great Apprentice Scandal’, which heard from disillusioned learners, parents and former employees of training providers.

So whilst some learners will be able to pass all the qualifications in less time than the new minimum durations, that should not be funded as an apprenticeship. There is classroom funding for that, and in the case of many over the age of 25, surely the employer should pay for staff training and development.

This special supplement, produced by FE Week in partnership with Tribal, provides a snapshot of the most recent developments in apprenticeship policy.”

Let’s not waste any more millions on existing employees at large companies like Morrisons, given their own Director of HR told the BIS Select Committee they would have delivered the training anyway.

The minimum durations, which apply for all apprenticeships from August this year, should not have been needed, but the reality is that in an increasingly free market the provider contract needed strethening in favour of the apprentice. It will form an important part of ensuring each learner is given a subtantial experience in a trade or profession.

The government should be applauded for introducing reforms to protect the quality of the apprenticeship experience.

Clearly there are important unanswered questions, and unintended consequences of the minimum durations policy will be inevitable.

How will the sector react  to the new minimum durations?

What will change once the BIS Select Committee submit their final report for their inquiry into apprenticeships?

How will the National Apprenticeship Service (NAS) and Skills Funding Agency (SFA) implement a Quality Action Plan that they are calling a ‘living document’?

This special supplement, produced by FE Week in partnership with Tribal, provides a snapshot of the most recent developments in apprenticeship policy.

Inside you’ll find extensive coverage of the Apprenticeships Quality Conference held last month, including analysis and reaction to the new minimum duration announcement, as well as an exclusive column from Barry Brooks, group strategy director at Tribal.

I’ve also produced a technical feature explaining apprenticeship funding and taken a closer look at the number of apprenticeship starts by age and level.

I hope you enjoy the supplement.

Nick Linford is Managing Editor of  FE Week and Managing Director of Lsect

 

SFA college account data ‘appears incorrect’

College account figures have been removed from the Skill Funding Agency’s website little more than a week after they were published.

The figures, for 2010/11, were published on April 3 but by April 12 had been taken down. A message on the Agency’s website read: “This file has been temporarily removed to verify some of the figures. It will be replaced as soon as possible.”

The Agency, in a statement released to FE Week, said the data was provided by colleges, but one raised inaccuracies.

It read: “It was brought to our attention by a college that a small number of its figures appear to be incorrect on the collated spreadsheet; the spreadsheet has therefore been temporarily removed to verify these figures. As we know that sector rely on this data we wanted to reassure ourselves that the data is correct.”

Prior to the removal of the accounts on April 12, figures published for principals’ salaries in the same documents had also come under scrutiny from the sector.

FE Week used the spreadsheet to publish a list of the ten highest paid principals in 2010/11, but were contacted by a number of colleges to say figures were inaccurate.

A statement from Loughborough College said: “The salary for the principal of Loughborough College for 2010/11 reported as £242k in FE Week, 3rd April 2012, is incorrect.

“This figure (242k) represents the total salary for 2010/11 for the three senior postholders of the college.”

The salary published for the principal of Barnfield College was also said to be inaccurate.

“Pete Birkett is chief executive and principal of the Barnfield Federation, which is made up of more than Barnfield College alone,” a spokesperson said.

“The Federation consists of an existing four academies, three subsidiary companies, the College and five new academies who will be joining the Federation before September.”

The spokesperson added: “The turnover for the Federation is circa £60 million.

“There is a shared contribution towards the salary shown, so the figures quoted should be viewed from a Federal perspective.

“Within the accounts there is a qualifying statement explaining this.”

The correct salary for Mr Birkett is £193,000, with an additional £15,000 in benefits.

Managing Editor of FE Week to give evidence on apprenticeships

The managing editor of FE Week will give evidence at the next session of an inquiry into apprenticeships.

Nick Linford, who is also author of the Hands-on Guide to Post-16 Funding, has been called as a witness for the Business, Innovation and Skills Committee’s fifth evidence session, which takes place on Tuesday.

The session will be held in Committee Room 6, at the Palace of Westminster, from 10.30am, when Martin Doel, chief executive of the Association of Colleges, and Tom Wilson, director at Unionlearn, will give evidence.

They will be followed by Mr Linford, who will then appear at 11.30am.

Anyone can attend the session, or it can be watched live on Parliamentary TV here.

NAS Quality Action Plan revealed

A document detailing how the government will improve the quality of the apprenticeship programme has today been published.

The Quality Action Plan, drawn up by the National Apprenticeship Service (NAS), includes a number of measures to improve the content and delivery of frameworks,  focusing on IT and customer service provision in particular.

Planned actions include an updated Delivery Model Quality Statement, previously published last August, to try and make sure providers understand and incorporate minimum standards.

The document later says the government will publish new guidance on Apprenticeship Training Agencies (ATA).

It states: “Innovative delivery models have increased the number of smaller employers engaged in the Apprenticeship programme, but they have the potential to mask poor practice by training providers and colleges – we will publish our expectations for ATA arrangements, (and any other collaborative and partnership models) to ensure compliance with all elements of our delivery standards.”

Apprenticeships in IT and customer service featured heavily in the Quality Action Plan recommendations.

The document says the NAS will be reviewing the IT User and Customer Service frameworks and publishing their findings to the sector, while the SFA will be carrying out a “thematic review of provision” after the Delivery Model Quality Statement is issued, starting with the IT sector.

In the Quality Action Plan the NAS also admits that the interpretation of the Specification of Apprenticeship Standards for England (SASE) is “inconsistent” across the sector.

“We will work with the Alliance of Sector Skills Councils to review and update the guidance and documentation on developing SASE compliant frameworks,” it states.

The Department for Business, Innovation and Skills (BIS) recently announced a new 12 month minimum duration for all apprenticeships, starting from August this year.

The policy update follows concerns about short duration programmes, some delivered in as little as 12 weeks, by private training providers.

The Quality Action Plan says they will publish a statement following their review of short apprenticeships, which will detail “lessons learned and the action we have taken”.

A NAS spokesperson told FE Week last December: “The review of short provision provided some of the content and direction for our Quality Action Plan.

“During 2012, we will work with the Skills Funding Agency, Sector Skills Councils, and other partners across the sector to implement each of the recommendations in the Quality Action Plan, including those on short duration Apprenticeships.”

The Quality Action Plan also suggests that where any apprentice is in the workplace for less than 30 hours per week, the overall duration of the apprenticeship should be extended appropriately.

The information, which expands on the definitive 30 hours stated on the NAS website, will be issued in “specific guidance” to colleges, training providers and employers.

Other measures include publishing new guidance on when colleges and training providers should be claiming a reduced amount of funding, as well as a review of minimum levels of performance.

The internal document, which includes no dates for implementation, was called for by the skills minister John Hayes following the introduction of statutory standards for apprenticeships.

(The NAS Quality Action Plan can be downloaded here.) 

Zenos brand scrapped by Pearson

Pearson has scrapped the Zenos brand for its ICT apprenticeships.

Zenos, a training provider owned by Pearson, will now operate under the name Pearson in Practice.

A spokesperson for Pearson in Practice told FE Week: “Zenos has been operating as a fully integrated part of Pearson in Practice for a number of months and officially changed its name at the start of April.

“This is part of the long-term strategic integration of the Pearson in Practice subsidiaries and follows Learning World rebranding as Pearson in Practice in September 2011.”

The former Zenos division has been working on a number of new apprenticeship schemes under the Pearson in Practice brand “for some time”, the Pearson in Practice spokesperson added.

The Zenos website now redirects users to the ‘IT Apprenticeships’ section of the Pearson in Practice website, which says: “Formally the Zenos programme, here you can learn all about the UK’s leading ICT Apprenticeship.

“Although the name has changed, the legacy remains and we will continue to deliver training that is high-quality and employer driven.”

The announcement follows criticism of the apprenticeship scheme delivered by Zenos in the Panorama programme “The Great Apprentice Scandal”, broadcast on BBC One last Monday.

The ICT apprenticeships delivered by Zenos are said to be entirely classroom based and cannot guarantee learners a job at the end of it.

“I’ve said that every apprenticeship has to be a job,” skills minister John Hayes MP told the BBC.

“Now I know that’s tough, and there are people who say I’m too relentless about the quality of apprenticeships.

“That’s why I insisted that all apprenticeships should be employed.

“That’s not to say you can’t have good training, good pre-apprenticeship training, and it may be that Zenos is providing that but it’s not an apprenticeship I’m afraid and I’m not going to call it one.”

Mr Hayes later said that Zenos apprenticeships which do not involve an employer “shouldn’t be called an apprenticeship.”