FE Commissioner: ‘I never intended to force college mergers – but bigger groups have thrived’

Forcing colleges to merge has “never” been the intention of FE Commissioner Shelagh Legrave – but most have “thrived” after forming a bigger group, she has said in her final annual report.

The FE Commissioner’s (FEC) yearly roundup for 2024-25, the last before Ellen Thinnesen takes over in January, delves into the extent of her team’s increasingly “active” support for the college sector during her tenure.

Sector-wide concerns raised by Legrave include the “scale and pace” of Department for Education qualifications reform, adult education funding and “sobering” reminders of governance failures amid recruitment challenges.

Balancing the books has been the main challenge faced by the six colleges that entered intervention last year, with five doing so due to their financial health.

Ten colleges have merged since Legrave took office in October 2021, some after entering intervention and others “voluntarily” seeking financial resilience in a larger college group.

Reflecting on her four-year term, former Chichester College Group chief executive Legrave said: “It has never been my intention to force mergers on colleges, but sometimes this is the right solution.

“It is also becoming much more difficult to survive as a general further education college if turnover is less than £20 million.”

Most college groups have “thrived” following mergers, while their leaders have remained “thoughtful” about ensuring colleges remain “for local communities,” she added.

‘Proud’ of intervention curbing

The total number of colleges in intervention fell from 23 to eight between October 2021 and October 2025, one of the commissioner’s key objectives.

Time in intervention has also reportedly reduced to 84 weeks against a target of 272 weeks, although this year is the first that the annual report has published this metric.

Four colleges left intervention in the last year, with three moving into post intervention monitoring and support. Legrave said she is “proud” of these figures.

‘Sobering’ reminders of bad governance

Without naming the most prominent governance failure in recent years – the multi-million-pound payments to Weston College’s ex-principal Sir Paul Phillips – Legrave emphasised the importance of expert governors making decisions “rooted in public values”.

Legrave’s last orders: build cash, challenge leaders and don’t ignore teaching
Read FE Week’s exit interview with the FEC

Good governance is a “crucial element” in successful colleges but recruitment remains “challenging” in “some locations especially for finance/audit, FE curriculum/quality and those who have the expertise to chair committees”, she said.

Since June 2025, 23 colleges have asked the government’s FE Governor Recruitment Service for help and there is demand for “nearly 50 governor roles”.

The commissioner added: “Sector findings this year are a sobering reminder of where it can go wrong if public values are not underpinning the actions of governors and senior executives.

“Chairs and governors should be focused on continuous improvement. I am encouraged by good examples of boards using external appraisers to assess the performance of chairs or have a senior independent governor, drawing on practice from the private sector.”

Active support

College feedback on the commissioner’s work appears positive, with the latest survey suggesting that 82 per cent have accessed some form of active support and 92 per cent providing positive feedback about it.

Active support, which also offered to 61 local authority FE providers, includes preparing for Ofsted inspections, structural reviews, financial health checks, curriculum efficiency and financial sustainability support (CEFSS), and leadership and governance advice.

“Since its introduction in 2021, ‘active support’ offered through the FEC team has gone from strength to strength and now enjoys very strong, voluntary take-up across the FE sector,” the report said.

During the 2024-25 academic year, 36 FE colleges engaged with CEFSS, with half asking for more in-depth follow up support.

The commissioner’s team carried out financial health checks on four FE colleges and 15 local authorities.

They also started four structure and prospects appraisals (SPAs) and completed two, reviewing whether “a change” such as a merger is needed to “maintain financial sustainability”.

Leaders’ wellbeing

Mental health and wellbeing supervision for FE leaders, offered by UK charity Education Support, has also showed “clear benefits”, the report said.

Since its introduction began in 2023 195 FE leaders have accessed the support, with 68 starting since the start of 2025.

The support includes six fully funded one-to-one online sessions with a “qualified supervisor”, offering leaders a confidential space to “reflect, process challenges, and develop strategies” for managing leadership pressures.

Most leaders who participated reported being “better able to manage stress and anxiety”.

Qualification reforms ‘concerning but exciting’

A “central theme” in discussions with FE college leaders has been the “rapid evolution” of qualifications at levels 2 and 3.

Legrave said the FEC team has had to develop a portfolio of active support strategies to address “concerns” raised about the “pace and scale” of reforms.

She added: “The focus on simplifying skills provision at levels 2 and 3 has had wide-reaching effects, particularly as demand grows for level 1 and 2 places and for more personalised learner support.

“Some institutions and learners have undoubtedly felt the impact more acutely than others, underscoring the need for tailored, responsive support mechanisms.”

However, the commissioner also called the reforms “one of the most exciting opportunities for technical skills provision in recent memory”.

Adult ed and apprenticeship challenges

Legrave said that while government investment in 16 to 18 further education has been “very much welcome”, it is “much more challenging for colleges to deliver adult education”. 

She believes the recent machinery of government change of switching adult education from the Department for Education to the Department for Work and Pensions has “signalled the importance of adult skills in getting more people into work to strengthen the UK economy”. But she also recognised “at the same time, colleges continue to face challenges in recruiting staff in technical areas”. 

Two other key aims for Legrave were to grow colleges’ share of apprenticeships and expand skills bootcamp provision.

Apprenticeship market share has “remained flat”, though achievement rates have risen sharply, while the number of colleges offering skills bootcamps has increased from 52 to 81, her report revealed.

The NEET crisis won’t be solved by fashionable theories

The high rate of young people not in education, employment or training (NEET) is a challenge which needs solving quickly. Everyone understands the risk of long-term “scarring”. But if progress is to be made, we need clear thinking, unencumbered by ideology or policy fads.

The government’s measures addressing the problem are disjointed. A number of small, experimental projects were commissioned some months ago, including £45 million invested in youth guarantee trailblazers, alongside smaller initiatives with the Careers and Enterprise Company and the third sector.

More recently, the government has scaled up its response by announcing a £725 million apprenticeship budget uplift, a proportion of which enables mayoral authorities to broker placements for NEETs. A further £820 million will provide a package of youth employment measures, including intensive support from job coaches, work experience placements and subsidised jobs for those in “high-need” areas on Universal Credit for 18 months.

Yet all this does not add up to a national strategy. Coverage is geographically uneven. No single agency “owns” the challenge. There is a multiplicity of approaches, but no underlying narrative to explain rising numbers since 2021, why inactivity has become so widespread, why mental health features so prominently, or why young men are disproportionately represented.

The government has implicitly recognised this by establishing an independent review, chaired by Alan Milburn. Writing for FE Week, Lee Elliot Major welcomed the appointment, describing Milburn as the “ideal man” because of his social background. He argued that “three powerful orthodoxies” had derailed solutions: the dominance of deficit approaches rather than “equity” ones; rising mental health issues; and the problem of silos in government.

The latter third of these is a genuine problem. The term “NEET” dates back to the late 1990s, when it was introduced by the Social Exclusion Unit. The lack of joined-up interventions led to initiatives such as Connexions and the New Deal for Young People. Connexions has long since gone, and with it any single body with oversight of the whole problem. Responsibility for monitoring 16-18 NEETs sits with local authorities, while the Department for Work and Pensions is responsible for 19-24 year-olds. Arguably, neither has the capacity to address the overall challenge. This needs fixing.

Major’s other two “powerful orthodoxies”, and his analysis of them, are a distraction. The claim that deficit thinking dominates policy, and should be replaced by an “equity approach”, rests on the idea that policymakers and educators wrongly treat disengagement as a problem of the individual rather than the system. At times, this perspective can be useful. But there is nothing new about it. The term “NEET” replaced “status zero” because the earlier language was considered too negative.

Equity-based thinking is already widespread and well established. The suggestion that deficit thinking is the system’s default position is a caricature.  The problem is it may have a weak track record of delivering improvement. As a framework, it often generates more heat than light.

NEETs are not a homogenous group. Experiences vary widely by family background, gender, ethnicity and geography. Understanding the recent rise means disentangling both system-level factors and individual incentives and choices. It is complex, and slogans do not help.

What is missing from the debate is high-quality research into young people’s own perceptions and experiences. This is why our commission, which has argued for a stronger focus on NEETs for some time, is commissioning new qualitative research into the lived experience of disengaged young people. Starting in Blackpool, which has an established NEET reduction partnership, we are seeking two additional areas to include.

The other distraction is Major’s account of a mental health “emergency”, which he suggests is inevitable because the traditional life model of “work hard in education, get a stable job, buy a home” has broken down. There is evidence of declining confidence in this model, but relating primarily to graduates rather than NEETs.

This argument seems wide of the mark in explaining rising NEET numbers. Inactivity is a defining feature of the current problem, and mental health strongly associated with it. But the causes more likely include the effects of social media, over-diagnosis of mental health conditions and a benefits system that too often lacks clarity of purpose and undermines individual development rather than supporting it. I share Major’s optimism about Milburn’s appointment, but disagree that his suitability rests on his upbringing or background. We should judge people by what they do, not where they come from. What stands out is his leadership of the Pathways to Work Commission in Barnsley, which successfully combined health, employment and welfare policy to address inactivity. Similar approaches are urgently needed if we are to tackle the NEETs problem effectively.

UK to rejoin Erasmus in 2027

Ministers have agreed terms with the EU to rejoin the Erasmus+ study abroad scheme from 2027.

The UK will contribute around £570 million to the EU-funded Erasmus+ programme from the 2027-28 academic year – a 30 per cent discount compared to the EU-UK’s standard trade agreement, according to the Cabinet Office.

Future participation will have to be negotiated as part of the EU’s long-term budget and be “based on a fair and balanced contribution”. 

The new deal is likely to mark the end of the UK’s own £100 million-a-year Turing scheme, which was created after Brexit as a replacement student exchange programme for Erasmus and placed more emphasis on sending learners from disadvantaged backgrounds abroad.

Details on the Turing Scheme beyond this academic year will be “shared in due course”, the Cabinet Office told FE Week. 

Ministers began negotiating to rejoin Erasmus+ earlier this and estimate that the scheme could see over 100,000 UK FE learners and apprentices, university students and young people travel across Europe for study and work placements in its first year.

EU Relations Minister Nick Thomas-Symonds said: “This is about more than just travel: it’s about future skills, academic success, and giving the next generation access to the best possible opportunities.

“Today’s agreements prove that our new partnership with the EU is working. We have focused on the public’s priorities and secured a deal that puts opportunity first.”

‘Opening doors’

The government will appoint a UK national agency to administer the Erasmus+ programme and will issue guidance ahead of the 2027 funding call.

It will also work with education providers to maximise take up, particularly among disadvantaged groups.

Skills minister Jacqui Smith said: “Erasmus+ will open doors for thousands of students and staff right across the country in universities, schools, colleges and adult education.

“This is about breaking down barriers to opportunity, giving learners the chance to build skills, confidence and international experience that employers value.”

David Hughes, chief executive of the Association of Colleges, said: “It’s brilliant news that the UK is rejoining Erasmus+. For both staff and students of all ages, the opportunity to travel and spend meaningful time abroad is so important.

“For students, it widens their perspective on the world, opening their eyes to different cultures and different ways of life, and for staff, the opportunity to learn from other countries on how they deliver technical education and skills is invaluable.”

More funding more trips

The government has spent around £100 million per year on the Turing scheme since it launched the global placement programme in 2021. But funding was cut fby nearly one third for the 2025-26 academic year to £73.6 million.

The UK did not make individual contributions to the Erasmus+ scheme when it was part of the EU. Instead, it paid into the overall EU budget, which was used to fund the study abroad programme.

Indicative estimates made post-Brexit claimed the UK paid more into funding Erasmus+ than it was receiving. 

It contributed an approximate £200 million a year into Erasmus+, increasing each year from 2015 to £296 million by 2019. The UK received £123.76 million in Erasmus+ funding in 2019.

Participant statistics show the Erasmus+ student exchange programme benefitted more students coming to stay in the UK – just 18,305 of 54,619 participants were UK citizens going overseas.

In contrast, Turing’s £105.4 million pot for 2024-25 funded 44,797 UK-based students abroad, including £29.6 million for English FE colleges.

Revealed: First 93 apprenticeships chosen for assessment reform

Skills England has published the first batch of apprenticeships that will be revised through the government’s controversial new assessment approach.

Ten sectors spanning 93 standards have been selected, with the most (28) in engineering and manufacturing followed by health and science (26).

New guidance on how to change apprenticeship assessment plans following the 2025 “apprenticeship assessment principles” has also been released today.

The reforms involve ditching the end-point assessment model introduced in 2017, introducing “sampling” of knowledge and skills, a stronger role for mandatory qualifications in some standards and removing independent assessment of behaviours.

A previous FE Week investigation uncovered discontent from the first five pilots of reformed assessment plans, and alarm that Skills England was “bulldozing” through changes without properly consulting and listening to employers and sector experts.

Skills England plans to plough through assessment reform for the 700-strong suite of apprenticeships in England during 2026, with a target end date of August 1 for getting all apprenticeships started on the process.

Here is the full list of the first 93 standards to go through the process:

Skills England has also revealed that it will convene a taskforce for the construction sector to discuss specific concerns about the reforms – and released a list of 40 standards that will be prioritised for assessment reforms once the issues are fixed.

The agency said: “The construction sector has given us a clear message during the assessment reforms pilot about the need to review the content of apprenticeships, and to implement policy in ways that take account of evolving industry requirements. This has shown us that more work is needed to make sure we can deliver positive change for employers and learners.

“To tackle that, we are bringing together a task force including representatives of industry, regulators and others. This will help us to make sure important construction industry requirements and changes within the sector, such as the Building Safety Act, are fully reflected in the underlying occupational standards, and the task force will also help determine any further solutions that support the successful implementation of improvements to assessment in construction and the built environment.”

This expert group will also support Skills England to set a timetable for assessment changes that “work for the construction sector”.

The agency added: “As a result, we are not expecting to commence any immediate work to apply apprenticeship assessment reforms to the construction apprenticeships at this stage. However, we are publishing this list now, to give an indication of which apprenticeship assessments will be prioritised for reform, once the task force’s work is complete.”

Milburn’s panel of experts named for rising NEETs review

A panel tasked with investigating the causes of almost a million young people being out of work or education has been named as chair Alan Milburn launched a call for evidence today.

Former Labour health secretary Milburn has been asked to author a report that will seek to understand the drivers of young people who are not in education, employment or training, particularly those claiming health and disability benefits.

Among his panel of experts is Lisa O’Loughlin, principal and CEO of East Lancashire Learning Group, crossbench peer and social policy expert Dame Louise Casey, and Sir Charlie Mayfield, former chair of John Lewis and chair of the Keep Britain Working review.

A call for evidence from anyone with “lived experience, knowledge and expertise,” launched today, will run until January 30 next year.

The government says the “groundbreaking” investigation by Milburn and a group of 11 health, business and policy experts, will make policy recommendations aimed at “maximising opportunities” for young people.

The number of young people aged 16 to 24 who are NEET in England is currently estimated at 950,000, or about 1 in 8, with a rise of more than 200,000 since 2022.

About 60 per cent of those NEET young people are economically inactive, meaning they are not looking and able to start work, and they are twice as likely to have a health condition as their wider population group.

The call for evidence said there are “varied perspectives” on the driving causes of these trends, with “debated” factors including labour market changes, social and technological developments, poverty, and “shifts within the benefits system”.

It added: “Addressing this challenge requires a fresh approach. It is essential to consider not only education, skills, and training, but also the roles of employers, the healthcare system, and the benefits system.

“By examining each of these areas, we can better understand the current situation and identify new ways to help young people secure quality employment opportunities. 

Key questions the panel wants insight into include what the barriers and most effective solutions are to increasing the number of young people participating in employment, education and training.

Lisa O’Loughlin, principal and CEO of East Lancashire Learning Group

Work and pensions secretary Pat McFadden announced the review in November, two months after he replaced Liz Kendall and took over the adult skills brief.

He was appointed following the government’s U-turn on its controversial welfare reforms, that including blocking under-22-year-olds from accessing health and disability top ups to their Universal Credit claims.

The report will include a ‘discovery’ phase, which diagnoses the trends and causes, and a ‘solution’ phase, which will “identify potential areas for reform”.

An interim report outlining the discovery phase findings is due to be shared with McFadden by Spring 2026, with a “full and final” report due by Summer that year.

The Keep Britain Working review, published in November, looked at rising economic inactivity from ill health in adults, and recommended that employers, employees and the health service take a “shared responsibility” for workplace health and inclusion.

Other panel members include experts on health, disability rights, policy, and mayor of West Yorkshire Tracy Brabin.

McFadden said: “Too many young people are being denied the opportunity to reach their full potential, and it is a crisis we cannot ignore.

“This government has invested a further £1.5 billion to create thousands of work, training and apprenticeships opportunities, but to turn the tide on the longer-term trend we need to understand why so many young people have been left behind.

“That’s why I’ve asked Alan Milburn to help us build a system that supports them not just to find a job, but to build a better future – because when young people succeed, Britain succeeds.”

Here’s the full list of panel members:

  • Gavin Kelly – Chief Executive of the Nuffield Foundation and previous Chair of the Resolution Foundation.
  • Rachel Perkins – Clinical psychologist with over 30 years’ NHS experience and former Mind Champion of the Year
  • Ruth Owen OBE – CEO of Leonard Cheshire and disability rights advocate
  • Shuab Gamote – Co-author of ‘Inside the Mind of a 16-Year-Old’ and educational equality advocate
  • Sir Charlie Mayfield – Former Chairman of John Lewis Partnership and Chair of Keep Britain Working review
  • Tracy Brabin – Mayor of West Yorkshire
  • Andy Haldane – President-Elect of the British Chambers of Commerce and former Chief Economist at the Bank of England
  • Ravi Gurumurthy – Group Chief Executive Officer at Nesta
  • Lisa O’Loughlin – Principal and CEO of East Lancashire Learning Group
  • Dr Jennifer Dixon – Chief Executive of the Health Foundation Dame Louise Casey DBE – Social welfare sector expert.

Criminal probe into ‘unlawful’ sale of City College Peterborough campus

Cambridgeshire police have launched a criminal probe into alleged misconduct in a public office after a local council “unlawfully” sold a college adult education campus for £1 despite being valued at £4.6 million.

Peterborough City Council is set to discuss a damning report in a cabinet meeting today that revealed concerns over a 2020 sale of the John Mansfield Centre (JMC) to the City College Peterborough’s charity offshoot.

Police confirmed that three people arrested in May on suspicion of misconduct in a public office remain under investigation.

Statutory officers at the council raised alarms over the “unlawful” sale and associated financial transactions of the JMC, occupied by City College Peterborough, and sold to City College Peterborough Foundation (CCPF).

The report found the council had illegally paid the charity nearly £800,000 in rent as no evidence of a written lease being found.

Over £1 million in illegal transactions are being investigated.

It also found the decision to sell the freehold of the campus building was made outside of “delegated powers” and was made using powers that applied to leases not freehold.

“It was, therefore, unlawful,” the report said.

An investigation surrounding the sale of the JMC was requested in 2022 by Matt Gladstone, when he took up the chief executive position at the council.

The concluding report has been passed onto the police and now forms part of an ongoing criminal investigation.

Cambridgeshire Police confirmed a live investigation is ongoing.

A police spokesperson said: “On Wednesday May 21 three people were arrested on suspicion of misconduct in a public office. 

“A woman in her 60s from Cambridgeshire, a man in his 70s from Bedfordshire and a man in his 80s from Cambridgeshire. They remain under investigation.”

Tasha Dalton, current principal at City College Peterborough, said: “We are aware of the publication of the report which relates to a historical matter.

“Our priority is to ensure the college learners, supported people and staff are as least affected as possible.”

What happened?

John Mansfield Centre offers adult education courses to learners enrolled at City College Peterborough.

The college, which is owned by the council, registered City College Peterborough Foundation as a charity in 2013.

The council decided to transfer the JMC to the foundation in September 2019. At the time, the book value of the campus was £4.6 million.

By January 2020, it transferred part of the freehold land, which contained the JMC, to the foundation for £1.

Local authorities have the power to dispose of land for “less than the best consideration that can reasonably be obtained” but require secretary of state approval if the value is £2 million or above.

Statutory officers deemed the transfer “fundamentally flawed” for three reasons:

  1. The officer who made the decision was not “explicitly” authorised and was acting outside of delegated powers
  2. The delegated powers related to leases, tenancies, wayleaves and easements, not freehold sales
  3. The £1 sale was “not at best consideration reasonable obtainable” and would have needed minister approval

The council’s report said no consent was sought from the secretary of state and the form stating the council’s intent to sell the JMC incorrectly stated that the foundation was set up “specifically” for the transfer and management of the campus.

After the sale, the council (through the college) paid monthly rent to the foundation to the amount of £17,010 until February 2021, when it was “mutually agreed” that rent increased to £29,010 per month.

In total, the council paid £790,000 in rent, but the report said no evidence was found of a written lease agreement.

“There is a set process for dealing with leases between charities and their tenants and it would appear that this has not been followed. The lack of written lease also creates a significant degree of uncertainty as to the terms of the council’s occupation and as to any liability which may have accrued,” the report said.

Other unauthorised spending was found including £150,000 linked to maintenance costs and £142,000 in maintenance and capital costs.

The council is seeking legal advice whether the sale can be reversed or its ownership of the JMC can be recovered.

Councillor Mohammed Jamil, cabinet member for finance and corporate governance, said: “The publication of this report is proof that where unlawful acts are identified as having taken place, the council’s statutory officers will not shy away from their duty to report that wrongdoing, and we fully support that approach.” 

He added: “Our monitoring officer and section 151 officer consider that the council acted unlawfully in relation to the sale of the John Mansfield Centre in 2020 and associated financial transactions. Therefore, it is right and proper that this is brought to light, and steps are taken to ensure as far as possible that similar unlawful actions do not happen again.

“As part of our improvement journey since 2022, we committed to rapid and far-reaching improvements in relation to governance and financial management. Many of the steps we have taken in recent years have led to more robust processes and policies in relation to decision making, however the recommendations which will go before cabinet this week seek to bolster this further.”

Some City & Guilds jobs to ship to Greece as new bosses chase savings

The new private owner of awarding giant City & Guilds is planning to cut its workforce bill by relocating some jobs to Greece where personnel costs are “up to 50 per cent lower”.

According to a presentation to investors, PeopleCert, the Greek-owned company that FE Week revealed had bought City & Guilds in October, hopes to cut £19 million from its permanent and short-term staff costs in the next 24 months.

The report said around £13 million of the savings will be made from “personnel cost synergies”, with “optimisation” to be driven through “natural employee churn”.

Around 19 per cent, or 247, of City & Guilds’ 1,300 employees are understood to leave the company each year – meaning that within the next two years about 494 roles within will be vacated.

One third of the vacant roles will be made “redundant” due to “overlapping functions”, another third will be relocated to Greece where costs are “up to 50 per cent lower,” and the remaining third rehired in the UK, the presentation suggested.

A spokesperson for City & Guilds said: “Our long-term goal is to create opportunities through strategic investment in technology and innovation that scale our impact. Whilst some jobs may change through natural attrition, others will be created through strategic expansion, enabling greater efficiency and effectiveness for our learners and customers in an increasingly digital and AI enabled world. 

“PeopleCert has committed to significant investment in our infrastructure, enabling us to strengthen our offers, while ensuring we deliver the quality and experience our customers and learners deserve.”

Plans are also afoot to save £6 million per year at City & Guilds by cutting the cost of its 1,800 industry “associates”, which it describes as assessors working through short-term contracts.

The company believes it can “significantly increase” its associates’ productivity through technology, renegotiating their rates “by 10 per cent” to align with the wider group of companies, and increasing the number of assessments they oversee from “1.4 a day to close to 4 a day”.

The City & Guilds spokesperson added: “Our work at City & Guilds continues as does our commitment to skilled, experienced associates who remain a cornerstone of how we deliver quality assessments and training. 

“Existing contracts remain in place. As part of PeopleCert, we will be investing in technology and processes designed to make working with us easier, while maintaining the professional standards and support our associates and learners expect.  These improvements are focused on reducing administrative burden, improving access to resources, and enabling more efficient scheduling and communication.”

The sale

Creating a City & Guilds fit for the fourth industrial revolution
City & Guilds’ leaders explain the reasons behind the sale

City & Guilds, founded in 1878, ended almost 150 years of charitable ownership this year to “secure its future”, leaders said.

The decision came amid ongoing reforms to technical education qualifications, apprenticeship assessment and higher-level training, disrupting market conditions for the awarding sector.

City & Guilds is the second largest qualification awarding organisation in England by number of certificates issued and the largest provider of apprenticeship end-point assessments, according to Ofqual.

The awarding body was acquired by PeopleCert in October this year, joining a group of training and assessment businesses including ESOL awarding body LanguageCert and a project and portfolio management company AXELOS.

Through the sale, the awarding body’s former owner, charity City & Guilds of London Institute, received an undisclosed sum that includes up to £200 million in “gross assets under management” and up to five years’ rent-free office space, allowing it to grow to become an “innovative social investor and change maker”.

City & Guilds said the sale was worked on with support from relevant regulators and the Charity Commission.

When the sale was announced, staff were told there would be “no job losses” as a result of their transfer, but that “changes could happen later” for legitimate business reasons.

The PeopleCert presentation, first reported by The Guardian and seen by FE Week, says the Greek-owned company sees the purchase of City & Guilds as a “clear opportunity” to turn the awarding body into a “best-in-class, lean corporate structure”.

It more than doubled the Greek group’s annual revenue from £115 million to £277 million.

The presentation sets out a range of “synergy” efficiencies between the awarding body and its new owner, including slashing personnel costs from 69 to 54 per cent – closer to the wider group’s 26 per cent cost base.

It also reassures investors that its “fully scalable technology platform” can rapidly adapt to new business models and that 60 per cent of City & Guilds’ revenue is “underpinned by stable government funding schemes” including 16-19, adult education and the apprenticeship levy.

PeopleCert said it wants to capitalise on a “unique market opportunity” as non-profit competitors in the awarding sector “consider divestment in response to technological disruption and AI”.

The presentation suggests the wider group want to leverage the City & Guilds for future acquisitions, ultimately moving towards a “first-of-its-kind” Global University of Applied Skills – a project the group is yet to discuss publicly.

Ofqual fines Pearson £2m for GCSE resit and other exam rule breaches

Exam board Pearson has been fined £2 million by Ofqual for “serious” rule breaches which affected tens of thousands of students taking language qualifications – including GCSE resitters.

The fines are for breaches affecting three different qualifications between 2019 and 2023, including its GCSE English language 2.0 and A Level Chinese.

Pearson, which has now been fined seven times by exams regulator Ofqual, has accepted responsibility and apologised to students affected.

The exam board has agreed to a £750,000 fine for “fail[ing] to identify and effectively manage a risk of inconsistent grading standards” between its GCSE English language qualification and a new GCSE English language 2.0 qualification. 

This is despite Ofqual highlighting the risk in 2022 and 2023.

The 2.0 language exam was introduced by Pearson in 2022. It was aimed at post-16 students who had not achieved grade 4 “standard pass”, including those taking resits. It had 23,165 student entries in 2023.

When standards were realigned with GCSE English language in summer 2024, students “received correct but unexpectedly lower results”, said Ofqual, which “undermined public confidence” and led to complaints.

Pearson previously defended its decision to “significantly” hike up the grade boundary for the GCSE English 2.0 resit exam after “shocked” college leaders complained of lower-than-expected pass rates and threatened legal action.

‘Multiple issues’ with Chinese A Level

Pearson has also received a £505,000 fine for “multiple issues” related to the Edexcel A Level in Chinese. This included spoken exams in Mandarin and Cantonese.

Ofqual reviewed assessments from 2019, 2022 and 2023, and found “multiple issues with how questions were set, and responses marked, that were inconsistent with requirements”.

Pearson failed to resolve these issues even after teachers and others raised concerns, said Ofqual.

Around 12,000 students were affected, particularly non-native Chinese speakers who were “disproportionately disadvantaged by the assessments being inappropriately demanding for them”.

Pearson has also been fined £750,000 for an English language test that enable international students to meet university entrance requirements. An online version, which has now been discontinued, reportedly made it possible for other people to sit the test on students’ behalf.

‘We take responsibility’ – Pearson

Pearson has issued an apology.

“We take responsibility for the issues that affected GCE A Level Chinese, GCSE English Language 2.0, and our legacy PTE Academic Online Test at different times between 2019 and 2023,” said a spokesperson.  

They accepted Pearson’s actions “did not meet regulatory requirements”. 

“For each of these cases, we addressed the issues, conducted a comprehensive review of our processes, and have implemented robust improvements.

“We apologise to all those affected. We have learned from these incidents and continue to invest in our systems, processes, and training to ensure our qualifications are delivered to the highest possible standard.” 

Ofqual said its enforcement panel took mitigating factors into account when deciding on the penalties. This concluding included Pearson accepting the breaches and entering into settlement agreements

Amanda Swann, Ofqual’s executive director for delivery, said the fines “reflect the serious nature of Pearson’s failures as well as our commitment to protecting students’ interests and maintaining public confidence in our qualifications system”.

“Students must be able to trust that their results, and those of their peers taking the same qualifications, accurately reflect their performance, in line with appropriate standards. Students’ work must also be their own.

“This action is necessary to deter Pearson and other awarding organisations from similar failings in future.” 

Pearson has now been fined seven times by Ofqual. The highest penalty issued was in 2022, when Pearson was fined £1.2 million for failures with reviews of marking arrangements between 2016 and 2019. 

‘I’ll have a look’ at college VAT issue, says PM

Sir Keir Starmer has pledged to “have a look” at the long-running VAT “anomaly” affecting further education colleges.

The prime minister said today he would speak to the Treasury about the issue, which FE leaders warn is draining hundreds of millions of pounds from college budgets and undermining the government’s skills ambitions.

The intervention follows a recent education select committee report calling on the Department for Education to make the case for FE colleges and standalone sixth form colleges to be exempt from paying VAT on expenditure.

Despite being reclassified as public sector bodies in 2022, colleges teaching 16 to 18 year olds are unable to reclaim VAT on most purchases linked to education and training. Schools and academies educating the same age group, however, can. 

The government last week rejected the recommendation, arguing that FE colleges are classed as “eligible bodies” for VAT. This means they do not charge VAT on education services but also cannot reclaim VAT on their spending, a position the government said is shared by “many public bodies”.

‘No justification’

Raising the issue during the prime minister’s appearance at a liaison committee session this afternoon, education select committee chair Helen Hayes said her inquiry into FE and skills found VAT was a major factor holding the sector back.

She told Starmer that, “unlike other post-16 providers, FE colleges and standalone sixth form colleges are unable to claim VAT back on their expenditure”.

“This is a tax position for which there is no justification,” Hayes said, adding that the committee’s evidence showed the VAT issue was preventing colleges from delivering against the government’s mission.

She asked whether the prime minister would speak to the Treasury about what she described as an “anomaly”.

Starmer replied: “I [will] certainly have a look at it and talk to the Treasury about it.

“I’m very keen to do what we can to further, further education. I think it’s part of the system that needs more work, more resource, more capability and more weight behind it.”

Millions flowing back to Treasury

The Large College Group, an informal partnership of England’s seven largest colleges, reported last month that £379 million in recently pledged college capital funding is expected to flow back to the Treasury through irrecoverable VAT.

The Association of Colleges estimates college VAT bills cost the sector around £200-£250 million each year.

In its response to the select committee, the government said any tax changes must be considered “in the context of the broader public finances”.