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CEO faces ruin after fighting directors’ bonus plan

The sacked boss of an awarding body fears bankruptcy after going “nuclear” over allegations his directors planned to defraud the company.

In late 2024, former CEO of GQA Qualifications, Michael Clayton, accused five directors of scheming to plunder the non-profit company’s assets, which included £9 million in reserves.

The board’s plans, dubbed “project gemini”, involved paying themselves £500,000 “backflush” bonuses based on retrospective performance measures, and transferring some of the company’s assets to a for-profit business under their ownership.

Clayton attempted to suspend the directors and launch an independent investigation, but they seized control of the Sheffield-based firm and fired him.

GQA Qualifications then took the former CEO to the High Court, hiring lawyers who accused him of taking the “nuclear course” by launching an “attempted coup” to unlawfully oust the entire board and hand control to his “close friends and acquaintances”.

In a ruling issued in January, Mr Justice Sheldon said Clayton breached his duties as a director and employee by sharing confidential and legally privileged documents with two men he brought in to help run the company during his investigation.

Clayton also breached his duties by disobeying instructions on how he should declare a sponsorship box at Barnsley football club for tax purposes and “deceptive” editing of an email about the issue, the judge found.

‘Reasonable and proper’

However, Mr Justice Sheldon found the former CEO had “reasonable and proper” grounds to suspend directors Shaun McAllister, James Ratcliffe, Anthony Parsell, Neil Ashley and John Ogilvie, and launch an investigation into their plans.

He added: “It was reasonable for him, based on the correspondence and communications with the other directors, to act swiftly as he believed with good reason that he was about to be removed from GQA in the circumstances.”

Sheldon did not rule on whether the directors’ plans or actions were fraudulent.

Following a post-trial order to pay half of the company’s estimated £1 million in legal costs, Clayton – who received free legal representation due to lack of funds – now fears he will be made bankrupt.

He told FE Week: “It’s affected my mental health and my family. It’s impacted my faith in ethics and morality, because I knew it was wrong to do what they wanted but I have ended up on the wrong end of it.

“I’ve got four children in secondary school and college. It’s impacted them massively as it’s threatening me with personal bankruptcy.”

Profitable non-profit

GQA Qualifications, founded in 2001, offers more than 200 qualifications for the glass manufacturing and installation, nuclear, print and automotive industries, and issues CSCS cards. It had a turnover of £4.1 million in March 2023.

Its non-profit purpose is enshrined in its status as a ‘company limited by guarantee’, meaning it is owned by “members”, has no owner or shareholders, cannot pay dividends, and must reinvest “surplus” income into qualifications delivery.

Company limited by guarantee status is often used by membership bodies, associations or charities – with governing rules set out in a memorandum and articles of association.

But unlike similar organisations such as Make UK, which is owned by other companies through the company limited by guarantee structure, GQA Qualifications’ only members appear to be its directors.

Restructure and bonus battle

Project gemini, which included the directors’ plans to pay themselves bonuses, appears to have stemmed from secretive plots to “acquire” or restructure the company that began in 2023.

A review by newly appointed non-executive director Parsell, an accountant who joined that year, found the non-profit organisation was “highly profitable” but lacked proper controls and had outdated governing rules that were last updated in 2002.

On the advice of KPMG consultants, plans to form a new director-owned for-profit company that would take over some of the business were shelved due to the potential for high tax costs.

But McAllister, who is now CEO, was determined to change the company’s governing rules so £500,000 “backflush bonuses” could be paid.

Parsell opposed the bonuses, saying they amounted to “feathering one’s own nest”, and external pay consultancy 3R advised they raised governance issues.

Fraud fears crystallise

Clayton became convinced the company was in “urgent danger” of fraud by the directors after falling out with company chair Ratcliffe over concerns about project gemini.

Meanwhile, Neil Ashley, a barrister who joined as director to help “unlock” the project in September 2024, escalated concerns about Clayton’s company benefits that resulted in disciplinary action.

McAllister had offered Ashley a financial incentive if project gemini succeeded, emails show.

Clayton met with “confidante” Chris Globe and former solicitor Milton Firman, sharing confidential legal documents.

In November 2024, Clayton told the other directors he had concluded fraud was “being committed or, at the very least, contemplated”, suspended them, and appointed Globe and Firman to help him run the company.

He also shared concerns with Ofqual, the Scottish Qualifications Authority and CSCS, and tried to remove McAllister from the company’s banking mandate with Barclays.

In a showdown on November 7, the directors were barred from entering the GQA Qualifications office, but later convened an urgent board meeting where they disqualified Clayton as director and forfeited his membership. Clayton had refused to attend.

Legal proceedings which led to the judgment were launched later that month.

Clayton also has an unfair dismissal and whistleblowing claim filed at the Employment Tribunal, but this is yet to be heard.

GQA Qualifications, its new CEO McAllister, and other directors, did not respond to requests for comment.

Exam regulator Ofqual told FE Week it followed up on aspects of the case relevant to GQA Qualifications’ conditions of recognition.

‘Serious legal risk’

Commenting on the case, Nirav Patel, a partner at Bates Wells, said that while the judgment made clear Clayton’s actions “exceeded his powers”, it did not say he was wrong to be concerned about governance risks.

He added: “Unfortunately, good motives don’t give you a magic wand to ignore following the proper process.

“Even where the CEO believed the directors were acting improperly, taking confidential material, briefing third parties and attempting to ‘outmanoeuvre’ the board carries serious legal risk.

“The case outcome shows how quickly a governance dispute without following due process can lead to personal financial exposure.”

Patel said safer options for the CEO could have included raising concerns internally, making protected whistleblowing disclosures, applying to the court for relief, or resigning while documenting the reasons.

Companies limited by guarantee should also regularly review their governing rules, he added.

Death sentence for jails’ work-programme expansion

An expansion of employer-led work programmes in prisons has been quietly ditched after a million-pound procurement proved “poor value for taxpayer money”.

The Ministry of Justice (MoJ) launched a £1 million tender two years ago searching for employers to deliver HMP Academies in 17 prisons over a four-year period.

But Freedom of Information data reveals just one academy was set up since the contract was procured.

The MoJ will now abandon the expansion as the procurement process was said to “no longer represent good value for the taxpayer”.

Under the HMP Academy model, employers deliver training in-house to serving prisoners. Participants are guaranteed a job interview for a live vacancy on completion and receive formal qualifications if employers deem it necessary.

Before the attempted expansion into 17 prisons, a handful of HMP Academies existed backed by employers such as Timpson and Halfords.

The only additional HMP Academy to open following the procurement was in HMP Wealstun, near Wetherby in West Yorkshire, where Leeds-based facilities management company SBFM set up a cleaning academy in January 2025.

An SBFM spokesperson told FE Week that 31 offenders participated in the academy with an average attendance rate of 84 per cent, which includes prisoners who dropped out.

The MoJ refused to detail the completion rates at the academy and how many participants were offered a job interview on data protection grounds, but claimed it was a “high proportion”.

SBFM said it “honoured” the commitment to offer job interviews to course completers.

FOI data revealed that five or fewer programme completers progressed into employment within six months of release.

An SBFM spokesperson said the company was “proud to be operating the only established HMP Academy”, adding that it worked “closely with the MoJ and HMP Wealstun to deliver meaningful employment opportunities for participants”.

The MoJ said it would “take forward learnings from the pilot including how we improve future procurement processes for work and education services”.

A spokesperson added: “This government is committed to delivering punishment that cuts crime. That is why every prison provides the education and training needed to reduce reoffending, and we are strengthening partnerships between governors and local employers so more people can find work on release.”

Con-demned

Jon Collins, chief executive of Prisoners’ Education Trust (PET), said it was “deeply disappointing” the MoJ had failed to create more academies.

“The HMP Academies programme was a chance to build on these pockets of success and it’s deeply disappointing that the programme has not been able to deliver on its original aims,” he said.

In March 2023, the MoJ sought private companies to pilot the launch of specialist training centres in open prisons to boost employment prospects when offenders were released.

Twelve suppliers were awarded contracts, including City & Guilds and SBFM. No payments have since been made to the suppliers aside from SBFM, the MoJ said.

The aim was to build on existing employment partnerships with retail and hospitality companies.

Halfords started its first training programme in men’s prison HMP Onley in 2014. It now runs an academy in women’s prison HMP Drake Hall, set up in 2017.

The MoJ does not collect attendance data in legacy academies, such as in HMP Drake Hall, but claimed levels remained “consistently strong”.

At least a dozen of these partnerships exist between prisons and private companies.

Pub chain Greene King has opened four training academies since 2019, supporting over 350 prison leavers into work. Learners enrol in 12-week programmes in barista, catering, front of house and back of house roles, later earning a City & Guilds level 1 hospitality qualification and the chance to interview for relevant positions at Greene King pubs once they are released.

Offenders can also view job vacancies and receive help with applications in employment hubs available in 93 prisons.

Prisons can access help from businesses through employment advisory boards and regional employment councils to support prison leavers.

Collins told FE Week the HMP Academies expansion was an attempt to provide prisoners with skills and qualifications that employers are looking for, but pointed out that core education provision had been cut by 25 per cent in prisons this year.

“It shows how difficult it is to deliver innovative programmes in a prison system that is underfunded, understaffed and overcrowded,” he added.

Don’t scrap industry-prized diploma, pleads BRIT School boss

The head of a school that counts Adele and Olivia Dean among its alumni has warned against cuts to qualifications that allow creative students to “go deep into their art form”.

The government announced in its response to the curriculum and assessment review last year that it would introduce new V Levels. They would be equivalent to one A Level and replace hundreds of existing vocational qualifications.

Most vocational post-16 creative subjects are covered by the level 3 extended diploma, which is delivered in partnership with the University of the Arts London (UAL), and is equivalent to three A Levels.

But these diplomas will be replaced by V Levels and T Levels by 2030.

The Francis review recommended that while most V Levels would be the same size as A Levels, there would some larger V Levels, including for creative subjects.

But the government’s response argued that “having both large V Levels and T Levels will create confusion”.

The BRIT School in Croydon offers several extended diplomas including in performing arts, music, dance, film and visual arts.

Stuart Worden, its principal, said the industry valued large creative and performing arts qualifications.

“The idea that there won’t be a substantial [V Level] doesn’t really bear thinking about,” he told FE Week.

“Employers [in the arts industry] are so happy with the extended diploma, because it’s made people adaptable.

“We have so many stories […] of people taking up jobs straight away with tech companies, with dance companies, with education, theatre companies, because they’ve been given the chance to go deep into their art form.”

T Levels ‘too rigid’ for arts

Adrianne Chapman, the school’s vice-principal, said that while T Levels “work really well in certain spheres” such as hospitality and engineering, they risked being too rigid and fixed towards a specific career path.

“The creative industries in their nature need agile, adaptable, amendable people, [who are] open to change, so some of the rigidity of the occupational standards is a concern.

“A lot of our young people want to be creatives in a broad sense, and they might specialise, but we don’t cut off avenues.

“We have amazing dancers that are now broadcasters, because that’s where the career took them.

“Being quite linear on a narrow path to one particular job poses quite a lot of challenges.”

The BRIT School has been asked to be involved in developing the T Level for performing and the creative arts, with Worden saying it would aim for it to be as close to the existing level 3 diploma as possible.

But he warned that if pupils were not given a chance to study the arts at a deep level, they would have to do so outside of school time if they wanted to get into competitive performing arts schools.

“If you wanted to be an international footballer and you are only allowed to do that for five hours a week, it’s never going to happen.

“The idea that only those that could afford to do additional training outside of the school curriculum would have a chance of getting into high establishments … it’s surely not what any government would want.”

He was unable to say at this stage whether the school would offer V Levels or T Levels after the extended diploma was phased out.

Case-by-case basis

The government said it would look at subjects on a case-by-case basis to decide whether a large qualification was needed. In these cases they would become T Levels rather than V Levels.

But Labour peer Jane Ramsey said the response was “plain silly” during a recent House of Lords debate.

Ramsey, whose daughter attends the BRIT School, said this was “pointlessly destructive of world-beating creative vocational education”.

She urged the government to rethink its response and “back the wonderful provision that already exists”.

A Department for Education spokesperson said: “V Levels are deliberately A Level-sized so students can combine them flexibly, and support progression into higher level learning.

“T Levels will be the only large qualification for students who want a sector-focused choice.

“We will work with the further education sector to make sure that V Levels and T Levels meet the needs of creative industries and the students who want to pursue them.”

Scrapping essays over AI fears ‘never off the table’, says Ofqual boss

Scrapping extended writing coursework because of fears of artificial intelligence cheating is “never off the table,” Ofqual’s boss has warned.

Ian Bauckham is “evaluating” exam boards’ responses to his letter last month, which called for more action to crack down on AI misuse.

Little coursework remains in England’s assessment system after a cull by the Conservatives, but the chief regulator is concerned about extended writing essays that make up 20 per cent of history and English A Levels.

He told FE Week’s sister publication Schools Week there were “various possible courses of action”, adding: “The most obvious one that people talk about is just simply getting rid of non-examined assessment. And it may be that in some cases that is the right thing to do.”

Asked whether this was something Ofqual was considering, he said: “It can never be off the table.

“It’s worth remembering that we are in a reform process for GCSE and A Levels at the moment, and one of the key things we’ll be doing is making sure that where coursework is proposed in the revised qualifications, it can be delivered in such a way that it’s secure and authentic.

“If it can’t be, we have to ask the question, can we allow this to be included?”

But there were other options “if you genuinely believe that the process of researching and completing an assignment is an important part of the learning process”, he said.

This included more “checkpoints” where teachers reviewed the work with pupils and signed it off as authentic.

Pupils might have to increase source referencing and footnotes “so it’s clear you’ve not just asked ChatGPT to write 10,000 words for you”.

Boards’ ‘interesting proposals’

Bauckham is less worried about creative art coursework, where paint and pens are used in front of teachers. But questions remain around digital art.

He said boards have made “some interesting proposals for what they intend to do”. He also requested stronger arrangements to crack down on mobile phones in exam halls.

The four exam boards refused to provide copies of their letters to Schools Week.

The Joint Council for Qualifications, the boards’ members’ body, said it was “constantly monitoring these evolving risks and adapting our policies and processes appropriately”.

It would continue to strengthen its guidance and support for teachers, who “remain well-positioned to ensure students understand and follow the rules”. It would also continue to develop models to detect AI.

Exam boards ‘have business strategies’

Bauckham, appointed interim chief regulator in 2024 and then given the role permanently last year, has taken a strong stance on his relationship with awarding organisations.

For example, after announcing new powers to publicly “rebuke” rule-breaking boards last year, he said awarding organisations “didn’t like it very much, which gave me assurance that it might be effective”.

There is also tension around Ofqual’s proposals to initially limit on-screen exams to two subjects per board.

Colin Hughes, AQA’s chief executive, previously warned this was “unduly restrictive”.

“It means that exam boards like AQA, that have been developing and trialling digital exams for a number of years, will be inhibited in building that all-important base of evidence and experience.”

Bauckham said his job was to “steward” the exams system “to make sure it maintains its place in public esteem”.

“It doesn’t surprise me that some of the exam boards have been clear that they want us to go further in on-screen assessment. Exam boards will have their business strategies, they will see that there are benefits for them for greater on-screen assessment.

“But my job is not to do what exam boards want me to do. My job is to look after the national asset.”

Digital decision looms

Ofqual will publish its final decision on digital exams later this year, but Bauckham said the “public mood on tech in education is evolving”.

“When we first started thinking about on-screen assessment, before the pandemic, there was a more widespread assumption that more education would be on-screen and that would be the public expectation for education.

“But since then, the anxiety about excessive screen use by children and young people and excessive social media use, the damaging effects of doom scrolling … have risen in public consciousness.

“The public is now much more ambivalent about what they think about young people and screens. I think that has an impact on decisions that we’ll take about on-screen assessments.”

Future Ofqual

Reflecting on Ofqual’s role in the sector, Bauckham said the regulator was now “far more aware of the wider implications of the work it does”.

“Ofqual, in its first decade of existence, was a more internally focused technical organisation than perhaps it is now.

“That’s not to say that the technical work is less important, but I think we’ve just got a broader understanding of what qualifications are and what they do.”

It was a “legitimate to ask to what extent we think Ofqual needs to a brand that is very high in public awareness”. For example, Ofsted was a household name.

He referenced the Food Standards Agency. “When you buy your shopping, you’re not thinking about them, but without them, the food you buy wouldn’t be trustworthy.

“So there are ways in which we do want to be in the public’s mind as an organisation that safeguards the quality of qualifications.”

The regulator would be closely involved in curriculum and assessment reforms in the months and years ahead.

While Ofqual did not sign off subject content, Bauckham said it engaged with the DfE through the process – and he would not hold back if he disagreed.

“If the DfE makes proposals for content which I think will have a materially negative impact on the qualifications I will say absolutely, without fear or favour. But I’m pleased to say that the relationship is constructive. The process is working well.”

Movers & Shakers: Edition 529

Exam board fined £270,000 over errors in physics papers

Ofqual has handed out a £270,000 fine to Cambridge OCR due to serious errors in last summer’s physics papers, which meant 40 students received the wrong grades.

A total of 12 errors were found in AS and A Level Physics papers sat by 14,000 students as well as in mark schemes.

Ofqual found OCR had breached their conditions by failing to ensure the content of the paper was fit for purpose, and ordered them to pay the fine.

A spokesperson for the exam board said that they “did not meet the high standards that students and teachers deserve” and have apologised for the error.

Five errors were found before the exam took place, and OCR issued correction notices to centres prior to the assessment.

Another five errors were found after the exam, and OCR took mitigatory action, including by awarding full marks for the affected question.

But two of the errors were found after results day. One of them was a mistake in the AS paper and another was an error in the mark scheme for the A-level paper.

There were 37 students whose grade increased after OCR corrected those errors.

A 2 per cent special consideration uplift – where schools and colleges request adjustments to marks because of errors – was incorrectly given to 82 students in relation to one of the errors.

This resulted in three students achieving one grade higher than they would have otherwise, but OCR decided not to amend these results to prevent any adverse effect on those students.

‘Unacceptable failures’

In its investigation, Ofqual took into account the seriousness and the number of errors, the number of students affected, and the previous fine of £175,000 OCR was given in 2018.

It also considered the fact the OCR took action at minimise the impact of the errors, agreed that it breached Ofqual’s conditions of notice and agreed to pay a £270,000 sum.

A Cambridge OCR spokesperson said: “We accept this judgment and we are very sorry to the students and teachers who were affected by these mistakes. We did not meet the high standards that students and teachers deserve, and that we set for ourselves.

“When these issues came to light, we acted to support students and minimise any impact.

“We undertook a detailed root cause analysis, using the findings to improve our processes. We are determined to learn from this and to improve, and we are continually refining our processes.

“We’re grateful to all the physics teachers, students, subject experts, and Ofqual, for their scrutiny, feedback and insights that have helped improve our approach.”

Amanda Swann, Ofqual’s executive director for delivery, said: “Students deserve quality exam assessment materials.

“After years of hard study, these unacceptable failures caused anxiety for students during their exams. Some were issued incorrect grades.

“We will always act to protect students’ interests and maintain public confidence in our qualifications system.”

OCR also provided an action plan for preventing these errors from happening again, which includes strengthening technical checking across AS and A Level Physics exam papers.

Ofqual said it would take action if OCR does not follow through on its action plan.

£9m keeps complex-needs job finder scheme alive

An employment training scheme that helps students with additional needs find work has been handed £9 million to extend for another year.

The Department for Education this week confirmed the cash injection to fund the supported internships pilot during the 2026-27 financial year. The programme, run by local authorities, offers work placements to 16 to 24-year-olds with complex needs but who have no education, health and care plan.

The cash boost will help councils develop more pathways to reach disengaged young people and increase participant numbers.

Ministers hinted at an extension in their long-awaited reforms to the SEND system, published in February, after finding “positive outcomes” from the four-year £7.5 million project.

The pilot was one strand of the ‘internships work’ project, run by the National Development Team for Inclusion (NDTI) and launched in 2022 to remove barriers to employment for young people with SEND.

Local authorities use the funding to link young people with job coaches, structured support and unpaid six to 12-month work placements to transition them into paid employment, or other positive outcomes such as volunteering or further education.

DfE will now take over administering grants to councils after NDTI’s contract ended on March 31.

Just under half (47 per cent) of the 240 participants found a paid job last year.

The programme is an offshoot from supported internships, which are exclusively for SEND learners with EHCPs.

The NDTI administered grants worth hundreds of thousands of pounds each to 12 councils that initially took part in the first two years of the pilot, extending to 16 this year.

One council placed young people without EHCPs onto existing supported internship programmes, while other local authorities set up gym-based and digital work placements for local learners.

Enrolments more than doubled this year to 573, according to the NDTI. It is not clear how many supported interns the scheme expects to recruit this year with the new £9 million pot.

Richard Kirkup, NDTI’s programme lead for children and young people, said: “It is great to see the government providing further investment to explore ways to expand and develop supported internships.

“This funding will help local authorities to develop new pathways and support many more young people to experience work and start a journey into sustained employment.”

Minister for school standards Georgia Gould told FE Week: “We’re widening access to supported internships for hundreds more students with SEND – providing the opportunity to learn on the job, build relationships and gain the real-world experience needed to get on in life.

“Whether it’s trying their hand in the hospitality or construction industry or working for the NHS, these placements play a key role in transforming the outcomes of kids across the country, boosting their confidence, offering a sense of community and giving them the skills they need for the world of work.”

Simon Ashworth, deputy chief executive and director of policy at Association of Employment and Learning Providers (AELP), said the investment was “positive and timely”.

He added: “These programmes play a vital role in supporting young people into work and further training, and this funding has the potential to reach hundreds more who would otherwise miss out.”

David Holloway, senior policy manager at the Association of Colleges, said: “The proposed reforms to the SEND system mean that this is the right time to open the door to more young people who have SEND but don’t have EHCPs.

“There are too many young people who are not in education, employment or training (NEET) and we hope that a more flexible model of supported internships will be part of the solution.”

Inquiry vote backed as City & Guilds members demand answers

City & Guilds Foundation members have backed an independent inquiry into the sale of its commercial awarding business, after an action group refused to “accept secrecy”.

At the foundation’s annual meeting, members voted in favour of the Save City & Guilds Action Group’s resolution to launch an inquiry into “all aspects” of the sale of the business to PeopleCert last year.

About 100 attendees, including the charity’s advisory council and a wider group of members, heard the statement that outlined “grave concern” about the decision-making of trustees, large post-sale bonuses to senior executives, and transparency.

FE Week understands 67 of the 100 attendees supported the resolution, which would require the inquiry to be overseen by three councillors and be completed within six months.

The meeting, held at Drapers’ Hall in the City of London, over-ran by two hours.

Attendees said many members, including representatives from City & Guilds’ founding livery companies, expressed frustration to trustees about the sale.

Members also approved the appointment of Jessica Leigh-Jones as the charity’s new chair, replacing Ann Limb who stood down in January. Limb was made a baroness in December but has said she would not take her seat in the Lords until “matters relating to my previous voluntary roles are resolved”.

In a separate bi-annual meeting of the charity’s advisory council, the same resolution for an independent inquiry did not pass, with a minority (six) understood to have voted in favour.

The council includes about 50 councillors who are either elected, co-opted from industry or appointed by the City of London’s livery companies – although it is unclear how many attended.

A charity spokesperson said the trustee board now “needs time to reflect” on the resolutions passed during the meeting.

However, the agenda shared before the meeting warned that the board would only implement recommendations if they were “in the best interests” of the charity.

A letter from law firm Bates Wells advising that an inquiry would not be in the charity’s interest was also understood to have been handed out during the debate.

Speaking on behalf of the action group, council member Neil Bates said: “Today’s vote is a decisive victory for members and fellows after a five‑month campaign to get answers that should have been provided from the outset.

“We were told to move on, to accept secrecy, and to trust without transparency. Members have now made clear that this was never acceptable.

“This resolution sends an unambiguous message: the sale of City & Guilds’ operating arm will not be brushed aside or quietly forgotten.

“An independent inquiry must now be established, and it must follow the facts wherever they lead. Trustees are duty‑bound to act on this instruction, not reinterpret it or delay it.”

The Charity Commission has already opened a statutory inquiry into the circumstances surrounding the sale, which will probe trustee decision-making and million-pound post-sale bonuses for executives paid by PeopleCert.

Earlier this week, in an exclusive interview with FE Week, PeopleCert’s owner Byron Nicolaides revealed that his own internal review had been escalated to examine “potential criminal activities” surrounding the deal.

This is understood to include concerns that bidders were not given accurate estimates of the cost of upgrading the awarding body’s legacy IT system, which could be as high as £50 million.

A spokesperson for the City & Guilds Foundation said: “Today we held our bi-annual City and Guilds of London Institute (CGLI) council meeting with members of council and annual meeting with some of our CGLI members.

“Both meetings were an opportunity to reflect and discuss the recent decisions made and present our early thinking on the strategy for CGLI moving forwards.

“Our strategy is deep rooted in our royal charter to advance technical education, and there was a commitment made from the trustee board at both meetings to better work with and engage with them moving forward.

“In addition, a range of resolutions were passed and the trustee board now needs time to reflect on those resolutions and will be meeting in the coming days to discuss them and next steps.”

Colleges face funding squeeze as DfE rations student growth cash again

Colleges and sixth forms in England will once again be forced to absorb the cost of rising student numbers after ministers confirmed they will not fully fund this year’s in-year growth.

The Department for Education said providers taking on additional 16 to 19 learners in 2025-26 will receive only around three-quarters of the funding expected.

This is the same approach the government took last year due to an “unprecedented” number of extra students, with officials citing pressure on budgets as demand continues to grow.

It comes a month after the DfE announced a below-inflation per-student rate rise for the next academic year, with ministers accused of breaking a promise for a real-terms funding increase for 16 to 19-year-olds made in last year’s white paper to ease demographic pressures.

The DfE said today: “There has been another large increase in 16 to 19 funded students this year. This growth is positive for the many young people who have been able to take up opportunities for 16 to 19 education and represents a strong response by the sector.

“However, because of the size and distribution of this growth in student numbers, it does create another year of very high in-year growth. We will fund all students through the lagged student number methodology in future allocations as normal. However, the current growth is significantly above the budget available for in-year payments, and so we cannot fully fund this growth.

“We will provide approximately three-quarters of the funding expected based on arrangements published in August 2025.”

In-year growth provides extra funding to colleges that recruit significantly more students than originally allocated, acting as an exception to lagged funding by offering a partial top-up for additional in-year costs.

The Association of Colleges estimated that colleges are currently teaching around 32,000 unfunded 16 to 19-year-olds due to the demographic bulge.

David Hughes, chief executive of the AoC, said colleges and their students are being “let down once again in today’s announcement by a dysfunctional funding system and a lack of respect which harks back to the dark days of austerity they suffered in the 2010s”.

He told FE Week: “This academic year, colleges recruited 32,000 more 16 to 19-year-old students than they were funded to and did so because they believe in the power of learning to support people in life and in work.

“Today, we learned that the government cannot even find the funding to pay around 50 per cent of the full cost for their courses. Instead, they only have sufficient funding to pay three quarters of their formula, meaning colleges will end up being part-funded at a little over a third of the full cost.”

Hughes added: “The cost of fully funding those 32,000 students would be around £220 million and the DfE formula would probably result in colleges getting half of that, around £110 million.

“But they will now get three quarters of that – around £80 million – meaning they have failed to find £30 million to fully fund their own formula. That suggests these learners and colleges are simply not viewed as high priorities, because no other part of the education system is expected to operate like this.

“At a time when the government is rightly aiming to reduce the numbers of young people not in education, training or employment (NEET), it also makes no sense. College leaders feel that their good will and strong inclusion values have been abused and I worry about what that might mean in future decisions they take when faced with unfunded students.”

Officials acknowledged that the in-year growth decision will be “disappointing” and encouraged colleges that have concerns about the impact of this change to contact their regional officials or the DfE’s customer help centre.

Providers will start to receive growth payments from July.