Fast growing apprenticeship firm goes bust after ESFA stops payments

One of England’s fastest growing apprenticeship providers has gone bust, owing nearly £4 million, after the government terminated its skills contracts when hundreds of unemployed apprentices were discovered.

Personal Track Safety Ltd, which trades as PTS Training Academy, went into liquidation on 25 August – a year after the Education and Skills Funding Agency (ESFA) banned new apprenticeship starts and stopped making payments.

The Northampton-based firm, which employed 32 people, considered restructuring to stay afloat but could not find a viable way forward.

Insolvency documents filed on Companies House show its debts include £825,000 to the ESFA, £1.5 million to Lloyds Bank, £500,000 to HMRC and £161,000 to staff.

The company also owes £70,000 to Northampton Town Football Club, which it had a deal with to sponsor the club’s stadium (pictured) and shirts until it ran into financial trouble last year.

Liquidator Gary Pettit told FE Week that PTS Training Academy took legal advice after the ESFA stopped payments but “despite a positive Ofsted inspection earlier this year, ESFA declined to change their stance”.

He added: “It would not be out of place for me to say the director found making the 32 employees redundant particularly difficult.

“My role as liquidator is to maximise realisations for the creditors. To this end, I shall be looking at the known assets to see how best they can be realised while also making other appropriate enquiries, which I am unable to discuss at this present time.”

PTS Training Academy’s owner, Matthew Joyce, did not wish to make a separate comment.

The training provider began recruiting apprentices in May 2018 and within two years had more than 2,500 on their books – worth around £6 million – in sectors such as food, care, rail, management, accounting, engineering, sport and prison services.

Its ESFA contracts were terminated on July 10, 2021, following an investigation that found many of their apprenticeships were ineligible for funding.

Joyce previously told FE Week that the firm grew too rapidly but placed the blame for the unemployed apprentices with an apprenticeship training agency (ATA) with which it partnered.

ATAs launched in 2009 to hire apprentices and then place them with host companies that would pay the agency to cover the salaries and administration costs.

Joyce claimed that, when he partnered with the ATA, the apprentices had signed employer agreements, but later found out the jobs were gone when the Covid-19 pandemic struck.

Joyce said the firm had received around £2 million for the unemployed apprentices, which the ESFA then deducted from future payments.

PTS Training Academy, based in Northampton but with offices in London, Doncaster and Somerset, set up in 2012 and was a subcontractor until 2017.

It was visited by Ofsted in January 2019 and was found to be making “reasonable progress” in all areas of a new provider monitoring report. The provider also received one of the watchdog’s “interim” visits in March 2021 during the Covid-19 pandemic which again found ‘reasonable progress’.

Alex Burghart and Will Quince join DfE ministerial team

Conservative MPs Alex Burghart and Will Quince have been appointed education ministers in Boris Johnson’s reshuffle.

Burghart, the MP for Brentwood and Ongar, was previously a parliamentary private secretary to the prime minister. Quince, the MP for Colchester, was a work and pensions minister.

It is not yet known what roles they will take on, nor whether Baroness Berridge, currently academies minister, will stay on in her role.

Vicky Ford, previously the children’s minister, has been appointed as a Foreign Office minister.

Sources inside Westminster reported earlier that universities minister Michelle Donelan was set to also take on the FE and skills brief after Gillian Keegan was moved to the Department of Health and Social Care.

Shortly after the announcement that he’d been appointed to the government, Burghart published a cryptic tweet saying “@educationgovuk⁩ here we go” with pictures of the Skills White Paper.

If Berridge does stay on, this would leave only the children’s minister post vacant, after it was announced that Robin Walker will be schools minister. However, the DfE may rejig roles and responsibilities, as it has in the past.

Measure college success by social outcomes as well as students’ jobs, report says

New accountability measures for colleges should be extended to cover learners’ social as well as employment outcomes, the Learning and Work Institute (L&W) has recommended. 

A new report commissioned by the Association of Colleges (AoC), Focus on results: How a greater focus on outcomes could contribute to England’s learning and skills systems, is looking to build on the government’s plans to judge providers on outcomes. 

Report author and the institute’s chief executive Stephen Evans said the proposals, outlined in the Skills for Jobs white paper, “need to go further” and they want to “see social outcomes included alongside economic outcomes”. 

Under the Department for Education’s white paper proposals, ringfencing and reporting requirements would be relaxed for providers. They would instead have to plan delivery around local employer need and possibly scale back oversupplied provision. 

Under the L&W’s proposals, colleges could choose social outcomes to measure including students’ mental wellbeing, the number of social contacts or groups they join, or their confidence.  

This will build on the proposals in the white paper, currently being turned into law through the Skills and Post-16 Education Bill, for providers to be held accountable for employment outcomes for their learners.  

“Measuring key economic and social outcomes builds the evidence for increased and sustained investment and the case for greater flexibility in delivery,” the report reads. 

It recommends a total of four outcomes to be measured:  

  1. employment six months after completion;  
  1. median earnings six months after completion;  
  1. progression to further learning six months after completion;  
  1. social outcomes; and meeting employer need. 

For social outcomes, the L&W says learners’ confidence could be measured by assessing how much people believe they can achieve their goals, despite difficulties; social capital could be measured by looking at how many friends a learner makes or social groups they join through their learning. 

These would be measured at a provider and local level for all participants and for priority groups, like the long-term workless and those living in deprived areas. This data would then be compared to a national average. 

The report wants added value measures, such as comparisons with outcomes in areas with a similar economy, to be developed. 

International comparisons  

The L&W has backed up its recommendations with evidence from Australia, Canada, Ireland and the USA. 

  • outcomes
    Stephen Evans

Australia has a National Agreement for Skills and Workforce Development which focuses on outcomes, including aiming to halve the proportion of 20 to 64-year-olds without a level 3, as well as improving skills, opportunities and training opportunities. 

Ireland has a Further Education and Training Strategy which identifies six outcome measures: finding work after a course; progressing to other learning; certification at levels 1-3; learners aged 25-64; key skills qualifications; and new apprenticeship and traineeships.  

Labour market and skills agreements 

The L&W argues for Labour market and skills agreements (LMSAs) between national and local government, identifying priorities for those areas, devolved budgets, types of provision eligible for funding, analysis of target groups, outcome measures, and a strategy for evaluating impact. 

Each college and large provider should then have an outcome agreement which would include funding for three years and detail expectations against the four outcomes. 

AoC chief executive David Hughes said it was “appropriate” for college accountability systems to cover a wider array of outcomes. He voiced support for an outcomes-based funding model before the education select committee in September 2020, saying it would be better than using “bums on seats”. 

Today he said an outcomes-based system, combined with simplified multi-year funding and joined-up policymaking, “would lead to high-quality opportunities for all, stronger communities and better economic growth”. 

He added: “The fundamental pitfall that I hope the government avoids is to look solely at wage outcomes, as if that does anything to measure the impact of colleges.  

“Working with colleges and other stakeholders in developing a new approach is essential to get this right.” 

A DfE spokesperson was “grateful” to the L&W “for their contribution to the discussion on how we create an improved funding and accountability system for further education”.  

They said the DfE’s consultation on FE funding and accountability was ongoing until 7 October and welcomes responses, which the department will “consider carefully, adapting our proposals as needed, and will set out our approach in more detail in due course”. 

Confirmed: Gillian Keegan leaves apprenticeships and skills minister role in reshuffle

Apprenticeships and skills minister Gillian Keegan has left the role in Boris Johnson’s reshuffle.

The MP for Chichester, who was a parliamentary under secretary in the Department for Education, has been promoted to the Department of Health and Social Care as a minister of state.

The DfE is yet to confirm whether she will be replaced, but several sources have said universities minister is expected to take on the FE and skills brief.

Following her promotion, Keegan tweeted: “It has been an incredible privilege to serve as the apprenticeships and skills minister, working to level up opportunities across the country.

“It has been wonderful to work with so many exceptional teachers, colleges, learning providers, businesses and most of all students.”

Keegan was appointed as apprenticeships and skills minister in February 2020, a month before the first Covid-19 lockdown.

She became well known in the sector and parliament for regularly reminding everyone she was herself a former apprentice.

During her tenure she has helped oversee the launch of the FE white paper and skills bill, the initial rollout of T Levels, and skills bootcamps.

Some policy decisions have proved controversial, including backing plans to scrap funding for the majority of BTECs, adult education funding clawback from colleges that did not spend 90 per cent of their allocation during the pandemic, and shrinking the independent provider market in adult education.

Reshuffle: Michelle Donelan taking FE and skills brief – sources

Universities minister Michelle Donelan is set to take on the FE and skills brief in the Department for Education following Boris Johnson’s reshuffle, FE Week understands.

Gillian Keegan, who has been the apprenticeships and skills minister since February 2020, has been promoted to the Department of Health and Social Care as a minister of state.

Multiple sources told FE Week that Donelan has been telling staff she will be responsible for all post-18 education after being confirmed as a DfE minister of state yesterday and promoted to attend cabinet.

The sources claimed that the dedicated skills minister role has been abolished.

The DfE is yet to confirm which briefs ministers will be responsible for.

Toby Perkins, Labour’s shadow FE and skills minister, said: “Skills shortages are holding our economy back. For all his warm words, the prime minister’s decision to scrap the dedicated skills minister shows he isn’t serious about reskilling our workforce for the future.”

This would be the second time that Boris Johnson has axed the skills minister role since becoming prime minister. Gavin Williamson, who was sacked as education secretary yesterday, took on responsibility for the brief when he was first appointed in July 2019.

But following a sector-wide backlash, Johnson appointed Keegan to the role in February 2020.

Donelan, the MP for Chippenham since 2015, was first appointed as universities minister in February 2020 and previously sat on the education select committee.

The DfE is yet to confirm which briefs ministers will be responsible for. The department and Downing Street have been approached for comment.

Nadhim Zahawi: 12 facts about the new education secretary

Downing Street has announced that Nadhim Zahawi is the new education secretary following Boris Johnson’s reshuffle.

Here is what we know about him:

1. Born in 1967, Nadhim Zahawi is 54 years old, five years older than the average starting age of education secretaries, 49. But he’s far from the oldest person to take the job – Keith Joseph was 63.

2. Zahawi is the first non-white education secretary in history.

3. He was born in Iraq, but his family fled Saddam Hussein’s regime, and Zahawi came to the UK when he was nine. He grew up in Sussex.

4. Zahawi was educated initially at the comprehensive Holland Park school before moving to the private Ibstock Place and King’s College schools in London. The vast majority of past education secretaries were also privately educated.

5. An often touchy subject, but as the role involves children so directly it will be mentioned at times: Nadhim Zahawi has three children. The average for other education secretaries is 1.76. The most common number of children is zero.

6. Zahawi studied chemical engineering at University College London, the first education secretary to study that particular subject, though Margaret Thatcher’s degree was in chemistry.

7. He was an aide to Conservative politician Jeffrey Archer in the early 1990s. He co-founded the polling company YouGov in 2000.

8. According to the Guardian, Zahawi spent much of his parliamentary career working as chief strategy officer for Gulf Keystone Petrolium, which paid him up to £30,000 a month for his work. The paper also reported in 2017 that Zahawi had spent more than £25 million on property.

9. Zahawi has some experience in the education sphere. He was an apprenticeships adviser to Downing Street during the Coalition years, and later served as children’s minister.

10. During a profile interview with FE Week in 2016, he said wanted to be an international show jumper when he was growing up, but that he was very happy to be an entrepreneur and then an MP.

11. Zahawi also revealed to FE Week that as he and his wife Lana are keen horse riders, they own a stables at their Warwickshire home.

12. His predecessor, Gavin Williamson, was in role for 785 days. The average is 840. If Zahawi stays in office for the average number of days he will leave on January 3 2024.

Tripling traineeships target missed by half, and 3 other findings from today’s Plan for Jobs progress report

The government has missed its target to triple the number of traineeships by more than half, a new report has revealed.

And the number of new apprenticeships that have been created following the launch of employer cash incentives fell 15,000 short of the government’s 100,000 target.

The Treasury revealed the figures in a progress report about chancellor Rishi Sunak’s Plan for Jobs, which was launched in July 2020 to tackle unemployment post-Covid-19.

Here are the main findings:

Traineeships target missed by half

The Plan for Jobs provided £111 million for up to 36,700 additional traineeships in 2020/21, including paying employers £1,000 for providing work placements for trainees.

This would triple the number of starts on the pre-employment programme after 14,900 were achieved in 2019/20.

But today’s report shows that as of July 2021, “over 17,000 young people” started a traineeship in 2020/21 – 46 per cent of the target and just a 14 per cent increase on the year before.

The figures will come as no surprise to the sector, however, as the government delayed the rollout of a procurement to expand the 19 to 24 traineeship provider base, and has so far failed to launch a market entry exercise for 16 to 18 traineeships.

A further £126 million was announced at the Budget 2021 to continue the expansion of traineeships for the full 2021/22 academic year, with the aim of providing up to 43,000 placements.

Despite the figures in his own report, Sunak tweeted in celebration today claiming that “we’ve tripled the number of traineeships”.

85,000 apprenticeships hired with new incentives

The government is encouraging employers to hire new apprentices in England by giving them £3,000 for every one they recruit before 30 September 2021.

Funding for around 100,000 new starts was set aside in the Plan for Jobs.

So far, “more than 85,000 apprentices have been newly hired under our new incentive payments,” today’s report states.

It added that 75 per cent of these new recruits are below the age of 25.

The Treasury said it will keep this incentive scheme “under review” beyond 30 September 2021 amid calls for it to be extended.

63,000 start a kickstart job

The chancellor’s Plan for Jobs promised a new £2 billion “kickstart” fund to create “hundreds of thousands of high quality” six-month work placements aimed at those aged 16 to 24 who are on Universal Credit and are deemed to be at risk of long-term unemployment.

Funding covers 100 per cent of the relevant national minimum wage by age group for a minimum of 25 hours a week.

For a 24-year-old, grants typically reached £6,500.

Today’s report said that across Great Britain, as of 31 August 2021, “over 63,000 young people have started kickstart jobs and over 2,500 young people are now starting a kickstart job each week”.

65,000 enrol on a SWAP

Sunak’s Plan for Jobs included £17 million to “triple the number of sector-based work academy (SWAP) placements in 2020-21”.

The scheme, run by the Department for Work and Pensions, typically lasts for up to six weeks and includes pre-employment training, a work experience placement, and a “guaranteed” job interview.

Today’s report said that last year, “almost 65,000 job seekers enrolled on a SWAP to help them gain new skills and start a career in a new industry – an average of more than 1,200 per week”.

According to DWP statistics, 330,000 SWAP starts were recorded between August 2011 and November 2017, but the department then stopped publishing the data.

It is therefore hard to pin down precisely the recent popularity of SWAPs, and the DWP previously refused to say how many starts would be required this year to meet the chancellor’s target of “tripling” their number.

The Plan for Jobs progress report said the government is looking to create “80,000 more” SWAP opportunities this year, and “over 30,000 job seekers have been supported since April 2021”.

DfE launches digital service for advertising levy transfers

The Department for Education has today launched a service where apprenticeship levy payers can advertise when they have funding up for grabs by other businesses.

A help page for the Pledge and Transfer Apprenticeship Funds scheme has been created on the gov.uk website and levy payers can advertise transfers, which can be up to 25 per cent of a levy payer’s allowance, from today using their Digital Apprenticeship Service accounts.

Levy payers will be able to specify the type of apprenticeships they wish to fund, such as by location or sector. Employers can apply for funding from 27 September.

Skills minister Gillian Keegan said she is “pleased” to be making it “easier for smaller and medium-sized businesses to offer apprenticeships,” ensuring “every business can benefit from the productivity and skills of apprentices”.

A pilot to test the new system ran last month, with construction company Mace Group pledging £100,000, with promises of £350,000 to £500,000 each year for other businesses to access. Their funds will be advertised later this month.

Other businesses which took part in the pilot included Amazon pledging £50,000, Thurrock Council with £100,000 and property maintenance business HomeServe pledging £40,000.

Mace Group chief executive Mark Reynolds said the pilot had shown “the huge potential to support the recruitment of more apprentices to meet our skills shortages; and I would encourage every business that meets the criteria to take up the option”.

Drop in A-levels diversity, and 4 more EPI findings

Students who take more diverse A-levels earn more money than their peers, a new report has found mid warnings government reforms are narrowing subject choice.

Here’s what you need to know from the Education Policy Institute report, commissioned by Royal Society, into A-level subject choice. 

1.           A-level subject choices ‘narrowest since 2010’

Researchers categorised qualifications over five main subject groups: sciences, maths, languages, humanities and vocational. For each student they then counted the number of qualifications in each of these subject groups, to create a breadth score.

The proportion of students with qualifications spanning three or more of the five main subject groups halved from 38 per cent in 2010, to 17 per cent in 2019.

The fall mainly took place between 2016 and 2019 – with a 14 percentage point drop. In comparison, the proportion of students taking qualifications from only one or two subject groups increased by eight and six percentage points respectively.

Since 2017, the average student now takes A-levels in fewer than two subject groups. Only one in 100 students qualifications from four or more subject groups, compared to 1 in 10 in 2010.

Report author David Robinson said the education sixth form and college students receive is “already narrower than in most developed countries, but our research shows that over the last decade, it has continued to become even more restricted in the diversity of subjects taken.”

2.           Gove reforms and funding cuts driving change

EPI says the decline in subject diversity “very closely” follows a drop in the number of qualifications taken – the average number of qualifications fell by 43 per cent between 2016 to 2019, from five to three.

Researchers say this has been driven by Michael Gove’s reforms to decouple AS-levels in 2015 and a reduction in funding since 2010.

Entries for AS-level fell dramatically again this year to 53,300 down 33 per cent from 86,970 in 2020. Since 2017, the number of AS-level entries has fallen by 91 per cent.

EPI said the 16-19 funding formula also plays a role by providing no incentives to offer an AS level alongside their main three A-levels.

This has resulted in the total number of teaching hours decreasing by eight per cent or around 71 hours per student, the report says.

3.           More subjects could mean higher earnings

The research indicated that 26-year-olds who had studied qualifications from at least two subject groups in the 16-19 phase went on to have earnings three or four percent higher than those who studied qualifications from only one group.

After controlling for prior attainment and other characteristics, the difference had a similar impact to the university a student attended, or their socio-economic background, researchers said.

EPI said that while the effect appears small, “we must consider that we are measuring earnings early in an individual’s career”. Data is not yet available for those in their 30s, but EPI wants to measure this when it is to see if the trend continues.

Robinson said there is a “concern” that is the narrowing of provision continues “many students could miss out on the broad range of skills needed to navigate the future labour market”.

4.           Some students hit harder than others

On average, students achieving a grade 4 in GCSE English and maths take qualifications from one subject group, while students achieving grade 7 or above take qualifications from two or more areas.

Both disadvantaged students and students with special education needs are less likely to study a broad range of subjects, the report found.

Also, while students from Chinese and Indian heritage study the broadest range of subjects (2 on average), Black Caribbean and Gypsy or Roma students study the narrowest (1.5).

EPI said this is “concerning” and requires “further attention” from policymakers.

5.           ‘Wholesale review’ of 16-19 funding needed

EPI said the government must undertake a “wholesale review” of 16-19 funding to reverse the fall in provision and breadth.

They have renewed calls for greater funding for young people from low income or disadvantaged backgrounds.

Researchers added: “When the government undertook their reforms of A and AS levels they were keen to preserve the additional breadth offered by AS levels.

“This clearly has not happened. The government must act to ensure that England’s already uniquely narrow 16-19 provision is not squeezed further still.”

DfE have been approached for comment.