A troubled college’s plans to merge with a major college group have been abandoned at the eleventh hour after “significant financial liabilities” were uncovered.

Oxford-based Ruskin College had been set to join neighbouring Activate Learning at the end of July, but it has been announced it joined the University of West London last Friday instead.

Ruskin’s merger with Activate Learning had been signed off by skills minister Gillian Keegan and announced back in February. Negotiations lasted until the last couple of weeks of July.

Safeguarding group’s finances ‘has to be our priority’

Activate Learning’s chief executive Sally Dicketts told FE Week today the merger was dropped after “our due diligence identified a number of significant additional financial liabilities that would be passed to Activate through the merger, which it would not be appropriate to burden the group with”.

The most significant of these was to do with Ruskin’s pension schemes, which Activate did not have an existing relationship with.

Ruskin offers pensions through the Universities Superannuation Scheme and the University of Oxford Staff Pension Scheme. Whereas Activate uses the Teachers’ Pension Scheme England and Wales, and three separate local government schemes.

Dicketts said they tried to find an affordable solution which would protect her group’s finances with creditors and the Education and Skills Funding Agency, but the agency “were not able to support a solution that could do that, so we have to step back at this point”.

She added this was “disappointing” but explained “it would have been wrong to pursue those at any cost. Safeguarding the longer-term financial stability of the group has to be our priority”.

Although losing Activate had opened Ruskin College up to the risk of insolvency, Dicketts said, UWL will not have triggered the liabilities which her group could not avoid because it too uses the Universities Superannuation Scheme.

The university’s vice chancellor Peter John said they “look forward to reenergising the college so it can continue to deliver its historic mission while ensuring its learners achieve their full potential”.

The merger, a UWL spokesperson said, has been organised in close cooperation with the ESFA.

Merger comes after college’s financial challenges

According to UWL, which has an Ofsted grade of ‘good’ for its adult learning and apprenticeship provision, Ruskin approached them about a merger, following on from their history of “successful” cooperation and after the grade two college has “faced financial challenges”.

Ruskin was handed a financial health notice by the Education and Skills Funding Agency in 2014, which was reissued last November.

It was placed in supervised status after the FE Commissioner reported in July 2020 the college faced an “uncertain future”.

This was due to a “sharp” decline in higher education enrolments, combined with “substantial overclaiming” of adult education and bursary funding thanks to it misapplying funding rules and “poor” record-keeping.

As of July 2020, the report reads, enrolments were just over 50 per cent less than in 2018/19.

The college was also highly geared “relative to turnover”, and had “limited” room to reduce this quickly without selling off property.

Ruskin’s 2018/19 accounts, which were published 311 days late, revealed it had to hand back millions in adult education budget and residential bursary funding to the ESFA.

The college also had to sell off one of its facilities to settle a debt with the Co-operative Bank after it broke a covenant.

Following the commissioner’s report, a structure and prospects appraisal was launched, which led to a merger being pursued.

Aside from its finances, Ruskin also suspended and began investigating its principal Paul Di Felice in May, with former Hadlow College interim principal Graham Morley stepping in to run the college.

The college was originally founded in 1899 and focuses on adult learners with an offer including Access to HE diplomas, English for speakers of other languages courses, and trade union courses accredited by the TUC.

Ruskin College declined to comment on the merger change and the Di Felice investigation.

Applications have opened for a £7 million fund to set up flexible apprenticeships in sectors struggling to meet the 12-month minimum duration for an apprenticeship.

The Department for Education will be welcoming bids to set up a small number of flexi-job apprenticeship agencies to allow learners to work across multiple projects with multiple employers in sectors where jobs are predominantly short-term.

Apprenticeships and skills minister Gillian Keegan said the flexi-job courses will “unleash exciting new opportunities in sectors such as the creative industries and construction where employment is increasingly flexible and project-based”.

The scheme, she says, will also help larger organisations “to grow starts in their supply chains, levelling up chances for people to build the life they want”.

Up to £1 million on offer for apprenticeship agencies

Organisations will be able to bid for between £100,000 and £1 million to set up the new agencies.

Applicants will have to meet a “robust” set of criteria to be successful and must be able to set out how they will meet the needs of their chosen sector or region, ensuring apprentices and employers have a high-quality experience.

The funding will be available in England this year, with the first start on a flexi-job apprenticeship expected in early 2022.

“Good quality” apprenticeship training agencies, which employ apprentices and place them with a host employer so the firms do not have to recruit an apprentice themselves, will be able to “diversify” as new flexi-job apprenticeship agencies.

The £7 million was announced by chancellor of the exchequer Rishi Sunak in his spring budget.

A response to a consultation launched in April on the flexi-job proposals, which featured in prime minister Boris Johnson’s landmark speech on adult education last September as well as the Skills for Jobs white paper, is also being published today.

The consultation revealed  all 111 ATAs would have to apply to a new register of approved flexi-job apprenticeship schemes

Flexi-job apprenticeships could help sectors currently ‘excluded’

Association of Employment and Learning Providers chief policy officer Simon Ashworth said flexi-job apprenticeships “could certainly result in greater participation of apprenticeships in sectors or occupations currently excluded from apprenticeships because existing models are not compatible with the expectation of continuous employment with the same employer over 12 months”.

But he warned providers they will “need to manage any break in learning effectively to make sure that individuals are not out of work for too long and suffer from eroded learning and a disjointed experience,” and said flexi-job providers should have an “enhanced” pastoral support network to assist apprentices.

The Association of Colleges’ senior skills policy manager Teresa Frith said it was “great” to see employers getting involved in the development of flexible apprenticeships.

While she said “this model of delivery will certainly not be simple to set up, it is easy to see the potential benefits for both the apprentices – for example in the range of work experiences they could cover, and for employers who want to support the development of their sectoral workforce, but do not have the ability to support a whole apprenticeship.”

Frith hopes there will be “no opportunity for employers to use this to merely avoid the direct employment of apprentices as has occurred in weaker examples in the past”.

Later this month, TV and film sector representative body ScreenSkills will be launching a pilot where 20 apprentices will undertake multiple placements with Netflix and WarnerMedia over 13 months.

Culture secretary Oliver Dowden, whose department is putting £100,000 into the pilot, said it was “hugely exciting” government was working with the producers to make apprenticeships “more flexible”.

He said this will mean “many more young people from all backgrounds will have the chance to get a start in the UK’s world-class film and TV industry”.

ScreenSkills chief executive Seetha Kumar said the “diverse” group of apprentices will start their induction later this week.

The government is searching for a new Ofqual chair to steer the regulator through “unprecedented challenges” and shape the future of exams during a “period of significant change”.

The successful candidate will be paid £55,120 per year for working two days a week. They will take over from current interim chair Ian Bauckham, an academy trust boss who stands down in December.

Education secretary Gavin Williamson said he wants an “exceptional individual” for the “exciting and high-profile national role”.

This will be a period of significant change for the qualifications system

“This will be a period of significant change for the qualifications system and for Ofqual as an organisation, and the new chair will play a key role in shaping the system for years to come,” Williamson said.

He added the cancellation of exams has created “unprecedented challenges both operationally and in terms of public confidence which will place a premium in the coming years on innovative thinking, efficient delivery and effective public engagement and communications”.

But the advert warns: “Each year there is far more that Ofqual could do than its resources allow.”

The regulator’s budget this year was £23.6 million, a 20 per cent increase on the £19.6 million in 2019-20. Ofqual got £4.8 million additional programme funding this year to cover vocational qualification reform including in apprenticeships and also overseeing the formation of new T-levels.

Strategic thinking and skillful political operator

Essential criteria for the chair role includes “first-rate strategic thinking”, the ability to “skilfully navigate the political landscape” and a “track record of success in board level financial, commercial and people management”.

The successful candidate would also “ideally” have senior leadership experience in the education or training sector.

DfE “particularly encourages” applications from under-represented groups – including those based outside of London and the south east. Applicants who have “achieved success through non-traditional educational routes” are also encouraged.

The initial job will be for up to three years, but this can be extended for “consistently good performance”. The term is capped at 10 years.

‘An unsolvable problem’: Former Ofqual chair opens up about 2020 grading fiasco

The successful candidate will be paid an “honorarium” of £55,120 for working two days a week, although they may “need to work additional hours as necessary for the proper performance of their duties”.

This is 27 per cent more than the £43,400 paid to previous permanent chair Roger Taylor, who resigned after the 2020 grades fiasco.

The appointment panel is led by Julia Kinniburgh, the DfE’s director general for Covid response and schools recovery group.

Other members include Dr Paul Phillips, Weston College principal, Dame Ruby McGregor-Smith, a DfE non-executive director, and Dr Rebecca Surender, pro vice-chancellor at Green Templeton College, Oxford University.

Applications must be submitted by Monday, August 16 with a planned start date of January 1.

Williamson’s policy adviser and former academy trust boss Dr Jo Saxton has been appointed as Ofqual’s new chief regulator.

The government has U-turned on a controversial new funding rule which could have meant apprentices’ learning difficulties could have gone undiagnosed.

In its draft 2021/22 apprenticeship funding rules for main providers, the Education and Skills Funding Agency had proposed banning providers from assessing apprentices for funding for any learning difficulties as a standard part of enrolment.

Yet the agency has now updated the rules to strike out that clause.

ESFA has ‘thoroughly reviewed’ rule

A summary of changes document for the rules explains: “We received significant feedback about the changes we had proposed to the learning support section of the rules and accepted that there were further changes we needed to make.

“We have therefore undertaken a thorough review of this section and have worked closely with provider representatives and other stakeholders.”

The learning support section itself warns it has been “substantially amended,” and now reads: “Before a claim for learning support funding can be made, an assessment must be undertaken to identify whether an apprentice has a learning difficulty or disability that directly impacts their ability to complete the apprenticeship on which they are enrolled.”

The funding entitles providers to £150 a month for a learner with a learning difficulty or disability, to pay for adjustments to complete their apprenticeship.

Until now, many providers ran the assessments as part of their enrolment process to identify barriers to learning; for example, being disorganised.

Sector leaders ‘delighted’ government has listened

Providers were in uproar when the ESFA proposed they “must not put apprentices through a generic needs assessment, where there is no prior assumption of need, to solely result in a need being found and payment requested”.

The Association of Employment and Learning Providers chief executive Jane Hickie told FE Week it was “totally wrong,” and providers warned it could have increased dropout rates as apprentices would not have accessed the support they need.

Ofsted, which has strict rules for providers assessing an apprentice’s proper starting point, said: “It is clearly best for learners if a specific learning difficulty or disability has been diagnosed at the outset.”

Reacting to the ESFA dropping the proposed rule, Chris Quickfall, chief executive of Cognassist which provides learning difficulty assessments to providers, said he was “delighted” the government “has listened to the concerns of multiple parties and safeguarded access to funding for apprentices with hidden learning needs.

“We champion assessment upon enrolment as standard because, unfortunately, too many people reach adulthood without a clear understanding of how they think and learn, including any level of neurodiversity they may have.

“We welcome the change of approach by ESFA and support the greater focus on how funding can best be used to support those with learning needs to ensure everyone can flourish in education and work.”

A Department for Education spokesperson said: “Our priority is to ensure that apprentices with learning difficulties or disabilities get the support they need to complete their apprenticeship and build a successful career.

“We have listened to feedback and revised our rules so they are as clear as possible and will ensure learning support funding reaches those who need it.”

A new rule that would force providers to gain permission before charging subcontracting management fees above 20 per cent was published in “error”, the Education and Skills Funding Agency has claimed.

The ESFA says the policy will now be corrected, just a day after sending it out to the sector.

In a new subcontracting “standard” published yesterday, the agency had said subcontracting top-slices “should only exceed 20 per cent in exceptional circumstances, which, in all cases will require ESFA approval”.

This would be the first time that providers have ever had to seek permission before charging management fees above a threshold.

It was welcomed by the Association of Employment and Learning Providers, which has been lobbying for top-slices to be capped at 20 per cent for five years.

But the ESFA quickly rowed back on the rule and told FE Week it was an “inadvertent drafting error that will be corrected today”.

AELP chief executive Jane Hickie did not buy the ESFA’s claim.

She said: “Does the department think we were born yesterday? The wording was too deliberately crafted for it to be an inadvertent error and someone has obviously kicked up about the requirement since the standard was published.

“If the new rule had stood before today’s U-turn, we would have finally arrived at the correct and sensible solution. Programme budgets should reach learners at the frontline and there has never been any justification for holding back more than 20 per cent of the funding other than in exceptional circumstances.”

The ESFA added that while prior approval will not be required for the charging of management fees above 20 per cent, the agency does “reserve the right” to challenge where fees retained are more than this threshold, as set out in current funding rules.

FE Week has exposed controversially high top-slices over the past decade, finding examples of management fees that reach 40 per cent to cover administrative costs.

Previous analysis by this publication for the 2016/17 academic year, for example, found that top-slices exceeded £100 million, and 28 per cent of prime providers were charging more than 20 per cent.

The ESFA’s refusal to clampdown on excessive fees comes despite mayoral combined authorities doing so after they took control of the adult education budget for their areas in 2018.

First to impose a strict cap was the Greater London Authority, which rules that no top-slice of a subcontracting deal can surpass 20 per cent.

The ESFA did launch a consultation on subcontracting reforms last year, and is taking other steps to crackdown on the practice. The new rules aim to force “significant” reductions to subcontracting e by 2022/23.

Hickie said: “Hopefully under the wider subcontracting reforms, we will also see the end of discredited practices such as year-end tactical subcontracting. However the FE and accountability system consultation raises more questions about where we go next and today’s shabby development hardly fills us with confidence that the right solutions will be adopted.”