Latest news from FE Week

Eight fraudsters have been sentenced, including six jailed, for conning colleges out of more than half-a-million-pounds.

The sentences, handed out at Nottingham Crown Court on Tuesday, signalled the end a three-year in investigation, which centred on two companies – Training Options UK Ltd (TOUK) and FE Options Ltd.

It found staff forged documents to falsely claim students from Castle College, which merged with South Nottingham College last year, and North Warwickshire and Hinckley College, completed courses.

Castle College paid £475,391 for 583 students it believed completed a customer services or health and safety course, while North Warwickshire and Hinckley College paid £27,108 for 249 students it believed completed an occupational health and safety course.

However, no students completed either course between February and September in 2007.

Among those jailed were joint company directors Andrew Leathwood (43), of Waterpark Road, Prenton, and Carolanne Ravenscroft (57), of Yowley Road, Ewloe, in Clwyd.

Leathwood, found guilty following a trial of conspiring to defraud the colleges, benefited from the scam by more than £125,000 and was jailed for five years.

Ravenscroft, also found guilty following a trial of the same charge, benefited from the fraud by more than £70,000 and was jailed for three years.

General manager Kieran England (37), of Vermont Road, Crosby, Liverpool, was found guilty after a trial of conspiring to defraud the colleges and of making an article to use in connection with fraud. He received £20,000 above his normal wage from FE Options Ltd between June and October 2007 and was jailed for 33 months.

Administrators Leslie Hayes (44), and his wife Claire Hayes, 38, both of Burnt Oaks Close, Mansfield Woodhouse, pleaded guilty to conspiring to defraud the colleges.

He was sent to prison for three years, while she was jailed for 18 months. The pair were also banned from being a company director for four years.

Former Castle College employee Kay Edwards (45), of Heatherley Drive, Forest Town, Mansfield, admitted conspiring to defraud the college, having received a payment of £21,550 between June 2007 and September 2007 from TOUK. Edwards also admitted an unrelated count of insurance fraud.

She was jailed for 33 months for conspiring to defraud and three months, consecutively, for insurance fraud.

Steven Johnson (39), of Strathmore Drive, Liverpool, and Damion Johnstone (39), of Mossdale Drive, Rainhill, Merseyside, both received suspended sentences.

Johnson pleaded guilty to making an article to use in connection with fraud and was given six months in jail, suspended for one year, and 180 hours community service.

Johnstone, meanwhile, admitted conspiring to defraud Castle College, having received £21,650 above his normal wage from TOUK between December 2007 and February 2008 and £2,000 from Ravenscroft.

He was given 12 months in prison, suspended for one year, given 250 hours of community service and a three month curfew.

A South Nottingham College spokesperson said: “The college welcomes and supports the verdict and sentences handed down to those involved and hopes this serves as a suitable deterrent to others.

“Through the merger we took the opportunity to review our subcontracting procedures and are confident that these are robust enough to prevent any incidents like this taking place in future.”

A Skills Funding Agency spokesperson said: “The Agency is very pleased with the outcome in this case.

“We rigorously investigate any fraudulent activity of which we are made aware and carry out audits across the sector, to ensure that colleges and providers are fulfilling the requirements of their funding agreements and that public funds are being properly used.”

How the investigation unfolded

Nottinghamshire Police began investigating allegations of fraud at Castle College in December 2007.

It found Edwards put Hayes and Leathwood in touch with Castle College after discovering it had money to spend on providing training courses.

Edwards then obtained details of students who had previously completed courses at the college and passed these on to the training providers.

These details were used to fraudulently complete enrolment forms and other paperwork.

The investigation included examining more than 30 bank accounts and hundreds of emails. As part of the inquiry, 562 pages of witness statements were documented, 97 taped interviews were completed and a 6,000 page case file was compiled.

The investigation culminated in warrants being executed at six addresses – two in Nottinghamshire and four in Merseyside – in April 2010, with 64 police officers involved in co-ordinated strikes, including from Merseyside Police.

DC Nick Lowe, from the force’s Fraud Squad, said: “This was an incredibly lengthy and complex investigation into a well-planned and organised fraud. We now move into the next phase of seeking to use the Proceeds of Crime Act to ensure that those sentenced do not benefit further from their criminality.”

Little more than a month ago, thousands of students faced uncertainty after the owners of a distance-learning institution plunged into administration.

Saddled with a pension liability and rapidly reducing income, the Learning and Skills Network (LSN) announced its demise in early November.

It left the administrators, PricewaterhouseCoopers (PwC), with the task of finding buyers for LSN’s five businesses, including the National Extension College (NEC), which supports 20,000 students nationwide on home study courses.

Fast-forward six weeks and the NEC has a new owner in the Open School Trust (OST) – a consortium which includes former employees and trustees who were involved with the NEC prior to its merger with the LSN in 2010.

But the familiarities do not end there, as both share the same founder – Lord Young of Dartington, who set up OST 1989 and the NEC in 1963.

As such, the OST, which has been dormant since 2003 but kept its charity status and is now headed by former NEC director Dr Ros Morpeth, has promised to retain the name and “values and missions of the reborn college”.

Speaking to FE Week, Dr Morpeth said that “for confidentiality reasons” she could not reveal how much the OST paid for the NEC.

However, she said: “Money exchanged hands and there were other organisations bidding. But we made it clear we were only interested in the NEC.”

She added: “The Open School Trust was an educational charity set up by Michael Young, who also set up the NEC.

“What he wanted it to do was provide a curriculum enhancement for children out of school. He had in mind children who were stuck at home or hospital or stayed at home because they were bullied. Also, children whose families are travellers.”

Although it has provided no financial support to the rebirth of the NEC, Dr Morpeth, director of the NEC from 1986 to 2003, said that the OST had been partnered by adult learning champion NIACE to move the college out of administration.

She said: “NIACE’s support has been a significant factor in this success story.

“It is continuing to give generous support in helping us get our systems up and running again. We share, of course, the broad aim of making it easier for people of all ages to return to learning and fit learning into their lives.”

David Hughes, chief executive of NIACE, described the takeover as “great news”.

Mr Hughes added: “The NEC always had a reputation for innovation in distance learning, pioneering approaches the Open University went on to develop so successfully.

“The NEC was also a long-standing member of NIACE and shared our commitment to widening participation for adult learners.

“We’re delighted that Dr Ros Morpeth has been successful in recovering the legacy of one of Lord Young’s inventions by using another – the Open School Trust – and we wish them every success in re-establishing NEC as an independent charity.”

Ian Oakley-Smith, a joint administrator and director at PwC, who are still looking for buyers for the other four parts of LSN, said: “We are pleased a charity with such great lineage has gone to a buyer who both understands its ethos and is able to secure its long term future.

“The sale enables the transfer of 26 members of staff within the NEC, will allow existing students to complete their courses and will preserve future employment opportunities in the area for what we hope will be many years.”

Forty six colleges will receive Enhanced Renewal Grants, the Skills Funding Agency (SFA) has announced.

The additional funding, worth up to £2 million per college, is part of a new two year Capital Programme launched by the Government in September.

Geoff Russell, chief executive of the SFA, said: “The Government’s willingness to make this additional investment is an indication of the crucial role that Further Education colleges can play in providing skills training to regenerate local communities and the economy.

“The standard of bids received was extremely high and we are pleased that some of the most innovative projects have been chosen with the result that more young people, adults and employers will benefit from up-to-date, inspirational learning facilities.”

The grants are part of a £100 million programme announced by skills minister John Hayes as part of the ‘New Challenges, New Chances’ report, published in August.

Nineteen additional applications are unlikely to be funded by the SFA, despite meeting the appropriate quality standards.

The SFA says some, or all of these bids could be accepted though if additional funds are made available.

A press release from the SFA states: “BIS and the Agency are considering possible additional funding options which might allow the projects to be funded.

“These colleges will be advised by the end of January 2012.

All 252 FE colleges were given a £100,000 Renewal Grant as part of the Capital Programme in November.

Colleges received the money provided they could put forward twice the allocated amount for a project considered “appropriate” by the SFA.

The ‘Enhanced Renewal Grant and Renewal Grant Phase 2, Application Guidance and Information Version 5’ states: “Colleges will have to confirm that the works will deliver clear benefits in terms of
improved condition of the college estate, benefits to learners, particularly learners with learning difficulties and disabilities and impact on urban and rural regeneration and that funding from the Agency can be drawn down and spent by 31 March 2012.”

The Enhanced Renewal Grant increases the funding to up to £2 mllion, although colleges will still need to supply twice the allocation to proceed with a project.

Colleges which have received an Enhanced Renewal Grant must complete the project by September 2013, and be operational by the start of the 2013/14 academic year.

The successful colleges include:

Barking and Dagenham College
Bexley College
Blackburn College
Boston College
Calderdale College
Cambridge Regional College
Canterbury College
Carlisle College
Chelmsford College
Chesterfield College
City of Bristol College
College of West Anglia
Cornwall College
Derby College
East Berkshire College
East Riding College
Filton College
Guildford College of Further and Higher Education
Hopwood Hall
Huntingdonshire Regional College
Leeds City College
Newcastle College
Northbrook College Sussex
Norton Radstock College
Norwich City College of F and HE
PETROC
Rotherham College of Arts and Technology
Salford City College
SEEVIC
Shrewsbury College of Arts & Technology
South Leicestershire College
South Staffordshire College
South Tyneside College
Stockport College
Stoke on Trent College
Telford College of Arts and Technology
Thanet College
The Bournemouth and Poole College
The Oldham College
Trafford College
Waltham Forest College
Warwickshire College
West Nottinghamshire College
Weston College
Wigan and Leigh College
Wirral Metropolitan College

The Skills Funding Agency (SFA) will become an Executive Agency following a review of its status.

Skills minister John Hayes, who announced a review of the Agency and its Chief Executive on November 1, said the change is consistent with the government’s commitment to improve transparency and accountability of public services.

By definition, the move means the Agency can deliver government services, but can not set policy. Legal powers rest with the Secretary of State, but they will be delegated to the Agency for day-to-day purposes.

However, it will mean no changes to the Agency’s staff, responsibility or functions.

A statement from the minister read: “The review has concluded that the existing arrangement of a statutory post holder should be replaced with a more traditional Executive Agency model.”

He went on to say it would provide “clarity and focus to the work of the Agency” and ensure “that skills and apprenticeship programmes are delivered within an overarching strategic framework” which is set by government.

The minister said: “The SFA will continue to play a vital role in funding the education and skills training that our country needs to tackle the very real challenges that lie ahead; and the outcome of this review reflects the government’s ongoing commitment to building on the strength of the further education system, whilst ensuring rigorous accountability structures are in place.”

“We will bring forward legislation for this change as and when Parliamentary time allows.”

In response, the Agency said it welcomed the outcome of the review.

A spokesperson said: “The National Apprenticeship Service (NAS) will continue to sit within the SFA, and to lead on the delivery of the apprenticeship programme, with the Agency providing a financial management and contracting service.”

The spokesperson added: “The change in status to an Executive Agency does not imply any change to the functions, responsibilities or staffing structures of the SFA or NAS.

“The SFA and the NAS will work closely with BIS to make the implementation of this policy decision as smooth as possible, and we will continue to work closely together during this period to improve the operational effectiveness of all three organisations.”