Latest news from FE Week

DWP revisits unloved 30/70 apprenticeship unit payment split

The payment model for apprenticeship units may change after providers warned the current structure was destabilising delivery.

Speaking at the Association of Employment and Learning Providers’ national conference, Department for Work and Pensions work-based skills director Kate Ridley-Pepper revealed officials were already exploring alternatives to the 30/70 payment split.

It comes months after FE Week reported provider concerns that the apprenticeship unit funding model was stacked against them and deterred some providers.

Currently, providers receive 30 per cent of funding at the start of delivery and the remaining 70 per cent on completion.

It means a provider that delivers 90 per cent of planned hours when a learner drops out risks suffering a huge shortfall.

Ridley-Pepper said early feedback from providers had highlighted the model’s unsuitability for longer units.

“As promised, we are committed to undertaking a period of test and learn to make sure those apprenticeship units give employers what they need and that the design works for providers. That work will be completed in the next few weeks,” she said.

The government had expected “high levels of retention and achievement” and therefore wanted “a payment model that gets the money to providers in a sensible way with as little admin burden as possible, because obviously additional milestones mean extra audit”.

Feedback from providers suggests the model works for shorter units but not longer units, she added.

“Feedback is telling us that this 30/70 payment model has worked well once a programme is up and running, however, it’s not perfect.

“It works for smaller units of up to 60 to 70 hours, where funding is likely to be drawn down over one or two paper cycles, but it won’t work as well for larger units, such as the modular building, which has 140 hours of content.

“So we’re already exploring options to make some changes for those larger units, and we’ll keep you posted.”

Proposals by late summer

Asked when the sector could expect a decision on potential changes, Ridley-Pepper suggested recommendations would reach ministers within weeks.

“It’s very sort of live information. We’ll be giving that to ministers before they finish for the summer, so hopefully that will be relatively soon.”

She declined to speculate on what a revised payment profile might look like, indicating providers would play a key role in shaping any changes.

Positive early feedback

The government launched the first ten apprenticeship units at the end of April as part of its drive to offer employers more flexible training options alongside full apprenticeships. This is the first time that non-apprenticeship training can be funded through the levy.

Ridley-Pepper told delegates that units in artificial intelligence and mechanical fitting had generated encouraging responses from providers.

“The first of these in key industrial strategy priority areas are now well underway, and early feedback from the providers who delivered the first cohorts in AI and in mechanical fitting has been incredibly positive,” she said.

Ridley-Pepper also confirmed more apprenticeship units were coming, and added Skills England would reveal which sectors would get them, and when.

‘Not the end of the road’ for apprenticeship funding restrictions, Smith suggests

Jacqui Smith has refused to rule out further restrictions that shift apprenticeship funding towards young people, warning it is “not the end of the road” for reform following the recent defunding round.

Speaking to FE Week after announcing a review of apprenticeship funding bands, the skills minister re-asserted the government’s determination to “pivot” the system towards younger apprentices, and failed to guarantee that future reforms would not include additional age restrictions or the defunding of standards.

The Department for Work and Pensions has asked Skills England to review funding bands for apprenticeships that support government priorities, with a view to increasing rates where provision for younger people is considered more expensive or risky to deliver.

But ministers have not allocated any new money to pay for potential uplifts, prompting concern that employers and providers could face further cuts elsewhere in the programme.

Smith said any funding band increases would come from within the apprenticeship budget, currently set at £3.3 billion, which has been fully spent in recent years.

“We have already made some decisions that have shifted resources around,” she told FE Week, citing the decision to remove levy funding for level 7 apprenticeships for over-21s and the defunding of 16 apprenticeship standards, including popular management courses, used largely by older employees.

Meanwhile, a long-awaited level 2 administration assistant apprenticeship set to launch in August will only be available to learners aged under 25.

“The overarching objective here is to shift the apprenticeship system back towards younger people,” Smith added.

Starts for under-25s have fallen 40 per cent over the past decade, while more than one million young people are now not in education, employment or training.

No plans ‘at the moment’

Pressed on whether some apprenticeship funding bands in non-priority areas would be decreased to make way for rate uplifts, Smith insisted ministers were “not proposing at the moment to reduce funding levels for any apprenticeships”.

Asked directly whether there would be more defunding exercises similar to the recent removal of 16 apprenticeships, she replied: “Not at this moment, no.”

Smith also denied that further age restrictions were being planned.

But after her FE Week interview and her speech at the Association of Employment and Learning Providers’ (AELP) national conference, Smith signalled that ministers were not finished with reforms.

“I don’t think we can continue in a way where we are coming back every year and saying we’re going to defund some standards,” she said during an audience Q&A.

“But I don’t think this is the end of the road in terms of reforms that we might want to put in place to help that shift to young people.”

The comments come amid fears ministers will need to find further savings within the apprenticeship budget if they want to increase funding rates without securing additional Treasury support.

Alongside a package of cash incentives for employers to hire young apprentices, ministers have also rolled out foundation apprenticeships and apprenticeship units – enabling employers to use their levy funds for non-apprenticeship training for the first time.

And ministers set a precedent by handing £140 million of the apprenticeship budget to mayors to fund an apprentice brokerage pilot, which appears to be the first time apprenticeship levy funds have been used to fund initiatives beyond training and incentives.

Bust budget

The government increased the apprenticeship budget by £180 million between 2025-26 and 2026-27, taking total spending to £3.3 billion.

It followed the first-ever overspend of the apprenticeship budget in 2024-25, which forced the government to inject £345 million and pushed total spending beyond £3 billion in 2025-26.

Smith could not say whether the apprenticeship budget would be increased further in future years.

“It’s hard for me to say what we’ll be able to persuade the Treasury to do,” she said.

However, she argued apprenticeships would remain a priority regardless of who succeeds Keir Starmer as Labour leader.

“Young people in particular, the opportunities offered by apprenticeships, is not an area that this government, under whichever leadership, is going to be de-prioritising.”

Providers expected to ‘pivot’ to youth

Smith said the funding band review was needed because employers and providers had consistently told ministers that younger apprentices cost more to train and present greater delivery risks.

She hopes increased funding rates will incentivise providers to turn their delivery focus to those standards mostly taken by young people.

“One reason for doing this is because employers and training providers tell us that it is more expensive and more risky to train young people, so that needs to be reflected in the funding bands,” she said.

“If we want providers to be willing to lean into that pivot that we’ve been quite clear that we’re making in the system to young people, one of the ways that we can signal that is by increasing those funding bands.”

Co-investment proof announcement

Smith also used her AELP speech to announce that the government will no longer require training providers to prove that they have collected co-investment from employers before completion payments are paid.

Simon Ashworth, AELP deputy CEO and director of policy, said: “Decoupling the link between collecting all the co-investment and releasing the completion payment to providers is welcome news.

“The current situation penalises providers operating on tight margins, so this change should help their cash flow. It will also see a reduction in bureaucracy and administrative burden, alongside an uptick in achievement rates.”

More ITPs will be ‘exceptional’, says Ofsted boss

Ofsted’s top ‘exceptional’ grade is achievable for independent training providers despite only one provider achieving the feat, the inspectorate’s new FE chief has said.

Jonathan Childs, Ofsted’s deputy director for post-16 education and skills, told FE Week he was “sure and confident” that “plenty more providers” would secure the highest judgment as more inspections were completed.

His comments, made during an interview at the Association of Employment and Learning Providers’ national conference, follow concerns from independent training providers that the new grade is virtually impossible to achieve.

Since Ofsted introduced report cards and its five-point grading scale in November, just one of more than 150 published independent provider inspection reports included an ‘exceptional’ judgment.

This was for adult achievement for a relatively lower number of skills bootcamp learners.

More than 120 exceptional grades have been handed to schools since November, from 1,300 school reports.

Childs acknowledged there had been “relatively few” exceptional grades across the post-16 sector, but argued this was because the inspectorate had intentionally set an “extremely high bar”.

“We are eight months in, so we definitely don’t have a representative view yet,” he said. “But the exceptional grade is designed for any provider to be able to reach.

“It is definitely not out of reach for any provider type. It is about you doing the very best job that you could be doing with your learners, that is having a transformational impact on their outcomes and is sustained over time.”

‘Transformational impact’

Under Ofsted’s new framework, providers must first meet the requirements for a ‘strong’ judgment before being considered for exceptional.

Multiple providers, including Kleek last week and Corndel in March, have received ‘strong standards’ across the board and were left frustrated at missing out on exceptional.

Childs said exceptional was intended to identify “the really best sector-leading provision that is out there”.

“Where we see that we want to celebrate and share it so others can learn from it,” he added.

Childs rejected suggestions the grade may be harder for certain provider types to achieve.

Instead, he argued exceptional performance would look different depending on the learners being served.

“Exceptional will look different depending on who your cohort of learners are,” he said. “When I talk about achievement I talk about distance from starting points. It is not just about exam results or whatever.

“Transformational is like that. If you are taking a group of disengaged young people who are not really involved in education, not attending, and you take them to a place where they are attending all the time, they are achieving high levels and exceeding expectations, going on to fantastic outcomes afterwards, that is what exceptional might look like.”

Challenged on whether “transformational impact” was too subjective, Childs said: “We’ve tried to be clear in the toolkit about what we think exceptional looks like, but I accept that there will always be different views as to whether someone has met that level or not. Inspectors are humans; we are an organisation of lots of humans who will go out and make decisions. The toolkit tends to make that a much more consistent process.”

Earlier in his speech, Childs had said Ofsted’s drive for greater consistency did not end at inspection.

“Every inspection is quality assured – both in real time and after the event – to give us confidence that the evidence gathered supports the grades given and the standards in our toolkit,” he explained.

“Where we need to, we will do a further review of the evidence or even return to gather additional evidence, and where necessary we will amend a grade. And before every report card is published, we will review it to make sure it fairly and accurately tells the story of the provider and the quality of their provision.

“These quality assurance processes are there to ensure fairness and consistency. And of course, if a provider remains dissatisfied with their inspection, we have a rigorous complaints procedure that they can follow.”

No ‘urgent improvement’ trigger

Childs also dismissed suggestions that Ofsted uses apprenticeship achievement rates as automatic triggers for poor inspection outcomes.

Four providers have so far received the lowest ‘urgent improvement’ rating for apprenticeship achievement. Their qualification achievement rates ranged from 16 per cent to 39 per cent.

FE Week analysis found one provider scored ‘needs improvement’ for apprenticeship achievement despite a QAR in 2025-26 of 28 per cent.

Asked whether there was a performance threshold that would lead inspectors towards an urgent improvement judgment, Childs said: “Absolutely not.

“We definitely don’t have criteria that says if your achievement rates are at this level or that level, it equates to a certain grade.”

He said inspectors used performance data only as a starting point before examining wider evidence during inspection visits.

“We wouldn’t want to be in a position where you could anticipate, predict or give out inspection grades from a desk-based exercise looking at the data,” he added.

City College Norwich CEO to step down

City College Norwich’s principal Jerry White will step down this summer.

White, who has led the Norfolk college group since 2022, will move to a role supporting colleges to engage with SEND reform at the Association of Colleges (AoC) from September.

In an announcement today, the college said future leadership arrangements will be published “in due course” and that governors “will now begin” recruiting White’s successor.

White said it has been the “greatest honour” of his professional life to serve the college and the Norfolk community, but that the time was right to “pass on the baton”.

“I am confident that the college is in a strong position – financially and academically – and ready for its next chapter under new leadership,” he added.

White’s leaving date has been set for August 31. He joined the college from Norfolk County Council’s adult education service in 2009 and replaced Corrienne Peasgood as principal and CEO in 2022.

The college, which has three campuses, taught about 9,000 students in the 2024-25 academic year and retained its ‘good’ overall Ofsted grade in 2024.

Its accounts for 2024-25 also show a surplus of £615,000 before pension scheme actuarial losses, on an income of about £64 million.

Marcus Bailey, chair of the college group’s board, said: “On behalf of the board and communities we serve, I want to thank Jerry for his dedication and commitment to our young people, adult learners and the wider population of Norfolk.

“He leaves the college ready for its next chapter, and we shall be grateful for his leadership over the past 17 years. We wish him well for his next endeavours.”

Apprenticeship funding band review ordered by skills minister

A review of apprenticeship funding bands has been launched as an “immediate priority” by the government, with Skills England ordered to identify which standards should be first in line for “potential funding uplifts”.

In a letter published today, skills minister Jacqui Smith commissioned the agency to provide urgent advice on which apprenticeship standards may not be funded at a sufficient level.

She said the government is “determined” to boost apprenticeship starts for young people and it is “imperative that our funding rates incentivise this rather than hold it back”.

The move comes after years of complaints from training providers that funding bands have failed to keep pace with inflation and delivery costs.

Smith said employers and providers had flagged that funding rates must be “sufficient” to allow popular apprenticeship standards most used by young people to “grow and flourish”. She highlighted that six of the 20 most-used apprenticeship standards among under 25s have never received a funding uplift since they were introduced.

No new money was announced today to fund band uplifts, stoking concern that further savings will need to be found from within the existing apprenticeships budget, which has been fully spent in recent years.

The government has already defunded level 7 apprenticeships for people aged 22 and above, and will this year defund 16 other apprenticeships, including popular management standards, that are mostly taken by existing and older workers.

In the letter, Smith reiterated Labour’s ambition to deliver 50,000 additional apprenticeship starts for young people by March 2029, reversing almost half of the decade-long decline in participation among 16 to 24 year olds. Apprenticeship starts in that age group have fallen by around 40 per cent over the past decade.

The minister also pointed to other recent reforms designed to boost youth recruitment, including fully funded training costs for non-levy employers taking on 16 to 24 year old apprentices from August and a £2,000 recruitment payment due to launch in October.

Funding bands determine the maximum amount that can be drawn down from the apprenticeship budget for training and assessment. They currently range from £1,500 to £27,000.

Providers have long argued that stagnant bands have made some standards financially unviable, particularly in sectors with rising staffing and equipment costs.

Skills England has been told to prioritise standards that make a “strong contribution to supporting our objectives on young people, with a focus on apprenticeships that deliver, or can deliver, a high proportion of starts for those aged under 25” and those that make a strong contribution to “growth and the priority skills to 2030 identified by Skills England across ten critical sectors, aligned with the government’s industrial strategy and plan for change”.

Smith told Skills England to hand her advice on “which standards” by July and the advice on potential funding rates by October.

What would Andy Burnham in Number 10 mean for FE?

The House of Commons doesn’t sit on Fridays. The corridors of power in the Palace of Westminster are quiet today. But on Monday, MPs will gather for the swearing in of their newest member – the now former mayor of Greater Manchester, Andy Burnham.

Over today and the weekend, though, one question is on everyone’s mind: what happens next?

Will Keir Starmer offer Burnham a job in cabinet? How soon does Burnham officially launch his leadership bid? Will Wes Streeting move first? Will we get the contest Streeting says he is pushing for, or will he settle in return for a big job?

Those are important Westminster questions. For further education, there is another one: What sort of prime minister would Andy Burnham be for FE?

Burnham’s win today ends a nine-year stint as mayor of Greater Manchester. Voters in the north west city region now have to choose a new mayor, triggering another Labour vs Reform UK battle which shouldn’t be overlooked.

During his two-and-a-half terms in the role, Burnham has not shied away from picking fights with Westminster on devolved powers for 16-to-19 education, and spoken out loudly and consistently about equally valued technical and academic education routes.

But the sector should resist the temptation to swoon just because a senior politician can say “technical education” without sounding like he’s only just been briefed on it.

Burnhamism may mean a higher political status for FE, more devolution and a more serious alternative to university narrative. Burnham’s brother, Nick, is principal of Cardinal Newman College, a sixth-form college in Preston. His most famous policy innovation over his two-and-a-half mayoral terms, the Greater Manchester baccalaureate (MBacc), made headlines, but not necessarily headway.

College leaders are looking down the barrel of more squeezes on funding on every budget line. Unfortunately for Burnham, they can’t hire construction lecturers or fund teacher pay rises with rhetoric.

Not a recent convert

Burnham’s record on technical education and apprenticeships didn’t start as mayor.

In his first stab at running for Labour leader in 2010 following the downfall of Gordon Brown, his pitch was what he called “aspirational socialism”. His case was then for all young people to be given the chance to be the best they can be.

There wasn’t a detailed FE pitch. He was better known at the time for his stances on health, social care and his idea for a National Care Service.

But he did, more than his 2010 rivals, talk about young people not pursuing traditional academic education pathways and warned against declining practical and vocational education opportunities for 11 to 16-year-olds.

The clearer FE offer came in 2015, Burnham’s second go at the Labour leadership.

His manifesto promised “true parity between academic and technical education”, a national UCAS-style system for apprenticeships (since tried and dropped), and access to student finance to help people relocate for an apprenticeship. He also proposed, as was fashionable at the time, replacing higher education tuition fees with a graduate tax.

That was a decade ago. A time before “skills for growth” was mainstreamed into the lexicon.

Burnham was an MP for 16 years, was a non-education cabinet minister, and later shadow education secretary under Ed Miliband, fighting against Michael Gove’s cuts to the education maintenance allowance for 16 to 19-year-olds.

His pre-mayoral record on FE was more thematic than substantial: devolve power out of Westminster, labour-market fairness, social mobility and scepticism about markets in public services.

The Greater Manchester experiment

“Saying Westminster’s where it’s at, that’s where everything happens and you’re not really a serious politician unless you’re in Westminster would be the biggest mistake”, Burnham told The Guardian in 2016. Fast forward ten years, he’s heading back to “where it’s at”.

Burnham’s first mayoral manifesto in 2017 promised a “revolution in technical education”.

The language was classic Burnham at the time; confident, unambiguous and designed to suggest that Greater Manchester could succeed where Whitehall had failed.

A “UCAS-style application system for apprenticeships” reappeared as part of a catalogue of commitments for 14+ education and training, which also included expanding adult education and retraining.

His 2017 manifesto also talked about retaining apprenticeship levy cash raised by Greater Manchester businesses to spend locally, and turning it into a wider skills levy. If that sounds familiar, Labour’s 2024 general election made the same commitment but without letting mayors control funding.

By his 2021 re-election run, Burnham’s Greater Manchester Apprenticeships and Careers Service (GMAC) a local alternative to UCAS for young people who didn’t want to go university, was on offer. His manifesto also committed to using the £92 million devolved adult education budget for green and digital courses while prioritising digital literacy and ESOL.

Then came the MBacc proposal – the Greater Manchester baccalaureate.

When it was time to run again in 2024, he was ready to roll out his quasi-qualification, designed to challenge the Govian EBacc with a badge for a more inclusive basket of subject choices at age 14 to 19.

“While the English baccalaureate concentrates on the subjects most valued by universities, the MBacc will focus on those most valued by Greater Manchester employers,” the manifesto said.

So with A Levels, UCAS and university as one route, Burnham’s MBacc, T Levels, GMAC and apprenticeships would form the other “of equal value”.

His plan was that, by 2030, Greater Manchester’s year 11s would be firmly in one of two neat education pathways taking them through to employment, apprenticeships or higher education.

But neat pathways on paper don’t always make for neat delivery.

Burnham on the buses

Burnham has a gift for turning a policy problem into a branded mission across his portfolio, with the notable exception of adult education.

The Bee Network, Live Well, Housing First, the MBacc. This approach gives people something to organise around, but wouldn’t necessarily go down well nationally in a sector reeling with ‘initiativeitis’.

The MBacc is not yet a national model. It’s not even fully embedded in Greater Manchester, and it relies on a chain of organisations locally to behave in a certain way, which is easier to marshal as a mayor than as prime minister.

But Burnham does appear to have understood something that ministers in Westminster often miss in education – participation is about more than curriculum and qualifications.

His 2017 mayoral pledge for free or cheaper public transport for 16 to 18-year-olds was central to his technical education plank. His 2024 manifesto recommitted to maintaining Our Pass – a travel subsidy scheme for 16 to 18-year-olds and care leavers – and promised half-price monthly passes for 18 to 21-year-olds to back up the MBacc.

Meanwhile in Westminster, conversations about public transport subsidies for young sixth formers and apprentices are shut down as unaffordable.

College students need to travel. Apprentices need to get to work and to training. Young people on specialist courses may need to travel even further these days to get to a new technical excellence college.

A prime minister serious about technical education needs to understand that “parity” and “opportunity” mean transport and maintenance, not just new qualifications.

Adults in the room

Burnham was one of the first mayors in England to have full control of a devolved adult education budget back in 2019. Despite that, local sources struggled to pin down a flagship Burnham win on adult education or lifelong learning beyond the common “flexibilities” you see across devolved areas.

Burnham himself said progressing an agenda on adult education was “hard to achieve” because he needed “more control” over employment support from the Department for Work and Pensions, and his budget from Whitehall was being cut.

At an MBacc launch event last year, one education leader told FE Week that Burnham was “too quiet” on adult education, where he has statutory powers and responsibilities, and was instead prioritising “vanity projects” like the MBacc.

But Burnham did secure Greater Manchester as one of the first two “integrated settlement” areas, effectively exempting ringfence restrictions around various adult skills funding pots.

One of the first things Burnham did with those new powers was to drop skills bootcamps.

Prime devolver Burnham

Whitehall bureaucrats famously resist devolving things, not least at the Department for Education.

Last year, skills minister Jacqui Smith admitted to “tensions” with mayors, led by Burnham, over calls for more devolution of education funding.

Burnham has had some wins. Greater Manchester was one of two “trailblazers” announced in 2023 afforded “deeper” devolution powers. But trailblazers in reality only offered minor tweaks and flexibilities compared to the full control of apprenticeships and 16-to-19 education he wanted.

If Burnham goes all the way, the keys to Downing Street come with strings attached. If he is successful in ousting Starmer, he inherits a manifesto and a mandate the country voted for only two years ago.

He didn’t have a defence investment plan to finance while in Greater Manchester. As mayor he could comfortably argue for devolution because he wasn’t the one giving power away.

As PM, Burnham would no longer be the man outside the Treasury blaming the centre for hoarding power to justify lack of progress.

It is one thing to put technical education on a pedestal from afar. It is quite another to do what needs to be done on school accountability, on careers and, crucially, on 16 to 19 and adult education funding.

FE leaders will likely then welcome Burnham’s return with interest, rather than applause.

£3m in bonuses for C&G bosses? It doesn’t add up

Conflicting accounts continue to emerge about whether City & Guilds Foundation trustees knew large bonuses were paid to senior executives after the sale of their awarding business.

Bosses at new owner PeopleCert this week alleged former awarding body chief executive Kirstie Donnelly and chief financial officer Abid Ismail paid themselves bonuses worth almost £3 million without PeopleCert’s or City & Guilds charity trustees’ knowledge.

But Donnelly and Ismail said they “categorically reject” PeopleCert’s allegations and claim to have evidence showing both the charity and PeopleCert were “fully involved” in structuring and approving their payouts.

The pair are accused of independently making the payments on November 3 last year, the first working day after control of the awarding business – City & Guilds Ltd (CGL) – passed to PeopleCert.

City & Guilds Foundation has also repeatedly denied any involvement in discussions about post-sale bonuses.

In a joint statement, legal representatives for Donnelly and Ismail, who were dismissed for gross misconduct in April following an internal investigation, said: “Our clients will present all their evidence to the courts in due course.

“That evidence overwhelmingly demonstrates that all bonus payments referenced in PeopleCert’s statement were approved, documented and implemented as part of the wider transaction process.

“It further shows that both the seller and the buyer, along with their advisers, were fully involved in the structuring and approval of the bonuses paid.”

Charity ‘not involved’?

The former CEO and CFO’s claims contradict the account offered by the charity.

Its account of how much it knew about bonuses linked to the sale has changed since details of the cash first emerged.

When news first hit in December, the charity and PeopleCert issued a joint statement claiming “no payments” were made outside of its existing bonus scheme.

The charity later claimed, on January 3, that trustees were “not involved in any pre or post-deal conversations” about post-sale pay.

However, in response to media reports that trustees did discuss bonuses, and a formal investigation launched by the Charity Commission, the City & Guilds Foundation updated its statement on January 13, admitting that trustees did have “a discussion” about post-sale bonuses in May last year, but scrapped the proposal shortly before the sale was completed in October.

It claimed trustees decided bonuses were no longer necessary “principally because a higher sale price had been agreed”.

But according to former trustees who spoke to The Telegraph, during the May board meeting trustees approved bonuses of four times the CEO and CFO’s gross salary, similar to the amounts they were eventually paid on November 3.

The statement from the charity, which was led at the time by chair Ann Limb – also a friend of Donnelly – claimed that “trustees were not involved in the widely reported bonus payments to CGL executives”, adding that “these post-sale payments are solely a matter for the new CGL owners”.

The claim from Donnelly and Ismail that the charity and PeopleCert were fully involved, and City & Guilds Foundation’s claim that it was “not involved”, cannot both be true.

City & Guilds Foundation declined to comment on the contradictory claims.

Bonus mystery

PeopleCert said it did not learn about the bonuses until December, but refused to explain how its former executives managed to pay themselves and more than 60 other staff members such a large amount of money without authorisation.

The payouts, worth about £5 million in total, were given to Donnelly, Ismail, several other senior executives, as well as 60 more junior members of staff. They also received significant salary increases.

Donnelly and Ismail claim to have already shared their evidence that proves the transactions were approved with “other appropriate agencies”, including the Charity Commission, which launched a formal inquiry in January when news of the bonuses was first leaked to the media by insiders.

However, the pair have declined to share their evidence with FE Week and PeopleCert has not published the full findings of its investigation.

The former CEO and CFO are now understood to be preparing legal action over their dismissal, while PeopleCert has said it will seek to recover the £3 million paid to them.

A PeopleCert spokesperson said: “As stated, the investigation found that bonus payments totalling approximately £5 million were authorised and paid from CGL funds without authorisation, approval from, or knowledge of, City & Guilds London Institute, the CGL Board or PeopleCert.

“The investigation further found that these payments were not brought to the attention of PeopleCert until December 2025, after they had been paid, and that there was no provision, board resolution or other binding document from either City & Guilds London Institute, the CGL Board or PeopleCert that authorised them.

“Concerns came to light through a number of channels, including internal processes and media reporting, following which the matter was investigated.”

PeopleCert’s findings came from an investigation carried out by a committee of non-executive directors, led by Michael Milanovic, chair of PeopleCert subsidiary LanguageCert, with support from legal advisers at Balfour+Manson.

PeopleCert said a subsequent appeal process, led by CGL non-executive director Richard McCarthy CBE, did not uphold appeals against the dismissal decisions.

Donnelly and Ismail claimed that the process leading to their dismissal was “fundamentally flawed and lacked the necessary independence”.

IBIS Capital, which advised City & Guilds Foundation on the sale, declined to comment, citing “confidentiality obligations that prevent us from commenting on any aspect of the matter”.

Extra help for more students on Turing’s final trips

The Turing scheme’s budget will remain unchanged at £78 million for its final year despite more ‘disadvantaged’ students becoming eligible for extra support.

Refreshed guidance for 2026-27 reveals the government has raised the learner household income threshold by £10,000, meaning students from a household with an income of £35,000 or less can receive additional funding.

Persistent under-spenders could also be penalised by the Department for Education.

Named after the mathematician and code-breaker Alan Turing, the DfE-funded scheme replaced Erasmus+ in 2021 as a student placement programme prioritising disadvantaged students for work or study opportunities abroad.

The UK rejoined the EU-funded Erasmus+ scheme in December after months of negotiations by ministers.

The DfE can award education providers extra money to prepare students and apprentices from disadvantaged backgrounds for their “readiness to travel”, such as paying for passports, visa application fees, vaccines, medical certificates and travel insurance.

Bids for providers to access Turing funding for 2026-27 closed in March.

FE providers have consistently sent a high proportion of learners from disadvantaged backgrounds onto Turing placements.

Two-thirds of the 11,352 placements arranged by FE providers this academic year were for disadvantaged students, compared with 52 per cent for university students and 82 per cent for school pupils.

Since the scheme began, 60 per cent of all FE placements have gone to students from deprived backgrounds, compared with 52 per cent in schools and 50 per cent in universities.

Underspends ‘considered’

Limits introduced last year on the maximum funding pot available per FE provider application remain at £205,000 (increasing to £600,000 for consortiums) and daily living cost allowances for students are unchanged.

The 2026-27 guidance informed providers that allocations will consider whether they had persistently underspent their previously allocated funding.

“This may be taken into account when the DfE ranks the applications and affect the likelihood of being awarded Turing scheme funding, or how much the applicant is awarded,” the DfE said.

Any unused funds are recouped by the DfE and cannot be rolled over into the next academic year.

Erasmus+ returns

Colleges will have to seek funding through Erasmus+ for foreign study trips for the 2027-28 academic year.

The UK will pump around £570 million into the programme.

Though £78 million was committed to Turing last year, only £73.6 million was ultimately allocated to schools, FE colleges and universities. The scheme sent 35,249 learners from the UK on trips.

Half of the 318 applications made by colleges and FE providers were successful, resulting in £24.1 million being allocated to the sector.

College staff face zero pay rise warning

College staff risk a real-terms pay cut next year unless ministers provide significant funding, college leaders and unions have warned in a joint letter.

In a rare show of unity, the Association of Colleges (AoC), University and College Union (UCU) and UNISON told education secretary Bridget Phillipson that a zero per cent pay rise recommendation could trigger “further disruption” and “inevitable consequences”.

The letter revealed that employers told unions at the first National Joint Forum meeting for the 2026-27 pay round that, without a “material change” to college funding, “a very low pay award, possibly zero, may be the limit of affordability”.

It came with a warning from union leaders that teachers will not tolerate another disappointing below-inflation or zero pay offer, hinting at future strikes.

The AoC last made a zero per cent pay recommendation in 2015-16, which triggered a national one-day strike by teachers across more than 200 colleges.

The representative body made low pay recommendations of 1 per cent (or £250) between 2016 and 2021. But in 2023-24 it delivered an exceptional 6.5 per cent proposal after the government facilitated additional 16-to-18 funding to all providers.

A 2.5 per cent pay rise was recommended in 2024-25, followed by a 4 per cent proposal last year.

The AoC and unions last joined forces seven years ago to march on parliament to demand fairer college funding.

‘Wholly insufficient’ FE funding

The government pledged “significant investment” in October’s post-16 white paper to respond to a demographic increase in 16 to 19-year-olds.

Ministers were accused in March of breaking their promise of a 16-to-19 real-terms funding increase after the DfE revealed core funding rates would only rise by 0.5 per cent, equating to a real-terms cut.

Consumer price inflation currently stands at 2.8 per cent.

The joint letter slammed the “piecemeal and wholly insufficient” 16-to-19 rate real-terms cut and recent freezes to adult and apprenticeships funding.

“If current funding levels were sufficient, colleges would be able to recruit and retain the staff they need and employers would be in a position to make a meaningful pay recommendation,” the letter said.

“The fact that neither is true demonstrates the scale of the challenge facing the sector.”

The letter added it was “inexcusable” that funding-strapped colleges are forced to turn away learners, particularly following the recent news that the number of young people not in education, employment, or training had surpassed one million.

Colleges of Further Efficiencies

Last week, the AoC met with sector unions to discuss the 2026-27 pay round.

Five trade unions representing FE staff have demanded a 10 per cent, or £3,000, pay rise next year, as well as a mirroring of starting salaries with schoolteachers and binding national pay agreements in FE.

College bosses are free to set their own staff pay, unlike in schools and sixth form colleges which have binding national pay negotiations.

All parties at the meeting agreed colleges were “hamstrung” by funding, and the widening pay gap between FE lecturers and schoolteachers, which is currently estimated at £12,500, was causing impossible recruitment and retention issues.

The AoC’s employment policy committee chair, New City College CEO Gerry McDonald, said his committee “absolutely does not want” to make a very low pay recommendation, or possibly a zero pay award, but it could be their “only option” with the current funding landscape.

“In many colleges, efficiencies will have to be made,” the letter warned.

The UCU and Unison also gave a stark warning of the “inevitable consequences” of a lack of meaningful pay awards.

UCU members at 17 colleges walked out in January over disputes with college employers who refused to meet the AoC’s 4 per cent recommendation, but some union branches settled their rows ahead of the strike.

The joint letter urges the Department for Education to commit to funding colleges so ministers’ priorities for economic growth can be met.

“Despite the injustice of college funding, and therefore pay, the sector is committed to work with you and deliver on your and the nation’s priorities,” it said.

The letter added that FE teachers hear conflicting messages from the government on the importance of a trained workforce to build more homes, grow digital capability and hit net-zero targets, but it “does not match the reality in their pay packets”.

“Until the government backs up its warm words about colleges with investment, the pay gap will only widen,” said AoC chief executive David Hughes.

“It’s quite simple, really: without extra funding, the government will fail to deliver on its own priorities.”

Jo Grady, UCU general secretary, said: “This government continues to highlight the importance of further education but the time has come to put its money where its mouth is and provide proper funding for colleges and fair pay for staff.”

Andrea Egan, general secretary of UNISON, added: “Further education is crucial for delivering the skills needed to help meet ministers’ growth ambitions, yet colleges are hamstrung by a lack of funding.”

The DfE was contacted for comment.