A college rocked by an expenses scandal has been saved by a £1.5 million government bailout after its new leaders found it had almost run out of cash just weeks after the former principal left.

The emergency funding was granted to Highbury College this month after its bank refused to supply an additional loan.

It followed a “reprofiling” of the college’s Education and Skills Funding Agency allocations, which meant £800,000 was received quicker than planned, at the beginning of the year when its interim leaders first became aware it could soon go bust.

The bailout should enable the college to “continue to operate for at least a further year”.

The details were revealed in the college’s delayed 2018/19 accounts which were published yesterday following a “thorough independent audit of historical finance practices”.

While Highbury achieved a surplus of £1.6 million last year, this was largely because of a £5.7 million building sale that was completed in August 2018.

The college is predicting a deficit of £1.3 million by the end of 2019/20 and to remain in ‘inadequate’ financial health, but this could worsen as the Covid-19 pandemic has exacerbated their problems and has lost “significant income” from its commercial activities.

The 2018/19 accounts state that the total net impact of the pandemic to date on the college’s cash flow is “estimated to be £124,000 negative”, although the full effects of the virus are still unknown.

Highbury College has gone through a turbulent period in recent years. It axed its sixth form last year owing to financial pressures and made a number of staff redundant, and is still in the midst of a long-running legal battle in Nigeria to recover funds.

The government intervened at the college in September 2019 after an FE Week investigation revealed how its long-standing principal, Stella Mbubaegbu, had spent £150,000 on expenses in four years, which included one-off lavish items such as a £434 pair of designer headphones and a lobster dinner.

The college has been in FE Commissioner intervention since November. A report on commissioner Richard Atkins’ findings has been held up by the Covid-19 pandemic.

Mbubaegbu, who joined in 2001 and officially retired in April 2020, actually left her position as accounting officer in December – a month before new interim principal Penny Wycherley and interim chair Martin Doel discovered Highbury was running out of cash.

The newly published accounts reveal “significant accounting failings over a number of years”, which were discovered by new external auditor’s from Mazars who were appointed in July 2019.

The auditors found, for example, that “no books or records were maintained” for the college’s subsidiary Highbury College Nigeria Limited.

They also gave their opinion on Mbubaegbu’s expenses (click here for full story).

The accounts were signed off on a going concern basis but with “material uncertainty” going forward.

Doel said the college has “already made significant steps to secure the college’s finances”.

“Between the period of time these accounts review and now, the college has become, in many ways, unrecognisable,” he added.

“The introduction of an experienced interim governance and leadership team has not only stabilised the finances and significantly improved staff morale but the college’s success and retention rates look to remain well above national average, meaning our students are able to thrive in a supportive and productive environment.

“On top of the day-to-day challenges of the FE sector, our staff and students have also adapted fantastically to the current Covid-19 pandemic and shown true strength of spirit to think innovatively, overcome hurdles and continue to succeed.”

The college hopes to move its financial health to ‘requires improvement’ by 31 July 2021.

A Highbury College spokesperson said the £1.5 million bailout is repayable and the details of the repayment are currently being finalised.

A spokesperson for the DfE said: “We can confirm that Highbury Portsmouth College requested Emergency Funding in May 2020 due to cash flow issues.

“In line with the arrangements set out in the College Oversight: Support and Intervention all such requests are considered on a case by case basis. Funding has been approved and arrangements for paying these funds are currently being finalised.”

They added that the FE Commissioner’s report publication has been suspended during Covid-19 and that Highbury’s will be released in “due course”.

The skills minister has rejected all plans for PhD-level apprenticeships after concluding that funding them from the levy would not provide “value for money”.

In a letter to the Institute for Apprenticeships and Technical Education published and laid in Parliament today, Gillian Keegan said the level 8 programmes are “not in the spirit of our reformed apprenticeships system”.

Two PhD-level apprenticeships – for a clinical academic professional and nuclear technical specialist – have been in the works for a number of years after being developed by employers.

The clinical professional standard had progressed the furthest, having been officially “approved for development” by the IfATE.

But the institute itself previously questioned whether the programmes would be in the “spirit” of the government’s new apprenticeships system.

The decision to never fund these level 8 programmes comes after the education secretary Gavin Williamson ordered a review of the level 7 senior leader standard that allows apprentices to gain an MBA. The MBA is now set for the chop later this year.

In Keegan’s letter, she said higher and degree level apprenticeships “continue to form an important part of our skills and education system, providing people of all backgrounds with a choice of high-value vocational training alongside traditional academic routes”.   

However, it is “important that levy funds are supporting those that can benefit most from an apprenticeship, such as those starting out in their careers or helping people from disadvantaged backgrounds to get ahead”.

“While we do not yet know the full impact of the Coronavirus, our priority is ensuring that apprentices and employers can continue to access high quality training, both now and in the future,” she continued.  

“I do not believe that using levy funds for level 8 apprenticeships, which could result in a PhD, provides value for money, nor are they in the spirit of our reformed apprenticeships system.  

“Therefore, I am writing to inform you that after careful consideration the department will not fund apprenticeships at level 8. As the powers to take decisions on standards development and approval reside with the institute you will wish to consider whether you continue to invest resources in the development of apprenticeships at this level.”

Keegan said she was aware “aware” that the employers involved have worked “hard developing not only these level 8 apprenticeships, but also a range of apprenticeships at lower levels that have contributed to the success of our reforms”.

“I want to thank them for their continued commitment to this vital programme.”

A spokesperson for the IfATE said: “We accept the decision and will not support the development of level 8 standards at this time.

“We would like to thank the trailblazers for their hard work on the proposals. The institute has been as upfront and informative as possible with them on the funding issue. We requested policy guidance from the DfE and it is appropriate that this has now been issued.”

Joanne Cooper, chair of the clinical academic professional trailblazer group, said the news “is disappointing” but added “we were aware at the outset that funding was not guaranteed and progressed on the basis of developing a national framework which have given us greater clarity and agreement regarding the knowledge, skills and behaviours of clinical academic roles”.

“I am grateful for the support from Skills for Health colleagues and the openness that the IfATE has had along this journey.”

You can read Keegan’s letter in full here.

The controversial expenses racked up by Highbury College’s former principal were “not in line” with value for money rules for managing public cash, an auditing firm has concluded.

In September 2019 and following a year-long freedom of information battle, FE Week revealed that Stella Mbubaegbu had spent £150,000 on the college’s corporate credit card in just four years on items such as first class flights, five star hotels, designer headphones and a boozy lobster dinner.

Then Department for Education minister Lord Agnew, who said he was “deeply concerned” by the spending, intervened immediately by sending in the FE Commissioner Richard Atkins to investigate.

At the time, the college insisted the expenses were “approved and authorised and were then subject to independent audit, as is usual practice”. Mbubaegbu, who became principal of Highbury College in 2001, was then suspended in November and officially retired in April.

While the FE Commissioner’s report findings are held up by the coronavirus pandemic, Highbury College’s new external auditing firm, Mazars LLP, have given their opinion on the expenses after conducting their own investigation.

In the college’s delayed accounts for 2018/19, which were published this week following a “thorough independent audit of historical finance practices”, the auditors said: “During the year, as part of a whistleblowing incident, some instances of potentially inappropriate use of college funds were identified.

“This related to expenditure by a member of the senior management team, some of which arose during the period 1 August 2018 to 31 July 2019.

“In our opinion, the expenditure was not in line with the principles set forth by Parliament of achieving Economy, Efficiency and Effectiveness.”

Asked if the auditors’ opinion would lead to any further action, a spokesperson for Highbury College said: “Matters raised within the report have been reviewed via the appropriate channels. We are unable to comment further.”

And a spokesperson for the DfE said: “We decline to comment. It is a matter for the college, which has conducted its own investigation into the matter.”

Mbubaegbu was replaced by Penny Wycherley as interim principal in December and Martin Doel was later announced as interim chair.

Doel said that the introduction of an “experienced interim governance and leadership team has not only stabilised the finances and significantly improved staff morale but the college’s success and retention rates look to remain well above national average, meaning our students are able to thrive in a supportive and productive environment”.

But since Mbubaegbu’s departure, Highbury has had to secure a government bailout after the new leadership team discovered the college was set to run out of cash (click here for full story).

The NHS is to spend up to £100 million on delivering a tailored level 2 apprenticeship for administrators.

From July 31, all starts on old-style apprenticeships known as frameworks will be switched off to make way for the final transfer onto new employer-led standards.

The Institute for Apprenticeships and Technical Education has repeatedly and controversially rejected requests from more than 100 employers, including from the NHS, for a level 2 business admin standard to be created despite the popularity of its framework equivalent.

FE Week reported in March that some NHS trusts had found that the level 2 customer service practitioner standard could be used instead, which was backed by the Education and Skills Funding Agency. But HEE warned at the time that it could only work for a “limited number of job roles”.

HEE has now launched a tender for a training provider to adapt the level 2 customer service standard and then deliver the “bespoke” programme for NHS apprentices from August 1.

It is aniticipated that NHS employers will spend up to a combined £100 million of their apprenticeship levy funds on the programme over the next four years.

The procurement says: “The level 2 business administration apprenticeship framework has been a vital entry level route into the NHS for many years. With the removal of this framework from 31st July 2020 and no direct replacement apprenticeship standard HEE want to ensure that the NHS can still offer a level 2 programme to attract new talent into the NHS and also offer existing staff the opportunity to move into administration roles.

“HEE are therefore launching a national procurement for a NHS specific level 2 customer service practitioner apprenticeship standard and welcome bids from national and regional providers to deliver a bespoke programme that will cover the wide range of administration and patient facing roles in the NHS from 1st August 2020.”

The tender continues: “HEE, on behalf of NHS (and other public sector) employers nationally are looking for suitably qualified apprenticeship training organisations to adapt the customer service practitioner (level 2) standard to reflect the business and operational needs of health and social care, whilst fulfilling all the requirements of the standard.

“This may be either national providers, or a mix of national and regional (including some NHS main providers), and could be either fully delivered by the training provider, or delivered in partnership with the employers where that capability and wish to do so exists.”

HEE, which is an executive non-departmental public body of the Department of Health, added that it will be willing to work with the successful provider to develop and adapt content, but the majority of that work will be expected to be carried out by the provider.

The latest proposal for a business admin level 2 standard was submitted by employers in February but was rejected outright by the IfATE.

The institute claimed the proposal did not meet the required length or quality of an apprenticeship standard and its chief executive Jennifer Coupland told FE Week’s Annual Apprenticeship Conference the next month that signing off on the standard would “undermine” efforts to create a “well regarded” programme.

During an FE Week webcast last week, she added that she did not regret the decision.

HEE’s tender has a closing date of July 10. Providers can bid for the four-year contract here.

The government should set aside an extra £3.6 billion to upskill the “764,000 people most at risk” post-Covid-19, according to the Association of Colleges.

The call comes just a week after the sector’s other main membership body, the Association of Employment and Learning Providers, demanded a one-off skills package worth £8.6 billion.

In ‘Rebuild: a skills led recovery plan’ published today, the AoC sets out “five key asks”, which includes a £143 million college-based “national tutoring scheme, re-engagement and catch-up programme”, as well as £1 billion in “targeted” employer cash incentives to take on apprentices.

The submission warns of “increased demand” for college places as high unemployment “crowds young people out of the labour market”, and “large numbers of young people needing support to catch up as a result of lost learning in lockdown”.

It also warns of a “large number of apprentice redundancies and a shortage of new places for apprentices”, as well as “large numbers of adults requiring training to help them move from struggling sectors into those that recover more quickly, or even grow”.

FE Week has pulled out the AoC’s five asks that make up their £3.6 billion package:

 

1. £458m to ‘retain’ every young person

The association wants every 16 to 18 year old to have a “confirmed high-quality education or training place”, funded to meet their “needs and the learning they have lost”.

This would include a college-based “national tutoring scheme, re-engagement and catch-up programme” funded through a £375 “premium per enrolment of students who have yet to achieve good grades in English and maths” at a total cost of £143 million.

It would also include a “targeted” one-off £2.4 million grant to support delayed assessments from summer 2020, a one-off £70 million grant fund for social distancing adaptations for colleges, as well as extending high needs funding for final year students by 5 percent.

 

2. A £1.975bn ‘relaunch’ scheme

The AoC says this should include an “up to 12-month pre/re-employment programme to upskill and reskill targeted at key worker and recoverable sectors under a single brand to ensure employer awareness, with clear links to apprenticeship opportunities as they become available and including an interview guarantee through national employer body partners”.

It would also comprise of “investment” in a “range of ‘employability’ wrap around services to complement the pre/re-employment training offer including a funded information, advice and guidance offer”.

Level 2 and 3 traineeship programmes for all 16 to 24-year-olds should be “reformed”, including extending the maximum length to up to 12 months allow the use of “work simulation and realistic environments” where access to work experience is not possible and reduce the minimum requirement of 100 hours.

The AoC also wants the government to introduce “block release apprenticeships” along with employer cash incentives of up to £3,000 per apprentice, to help businesses “retain and take on apprentices with a level of accountability built in”.

 

3. £1.04bn for retraining adults

The AoC calls on government to “enhance” the existing adult education budget together in one budget line with the National Retraining Scheme, the National Skills Fund, and the Shared Prosperity Fund.

If “properly aligned”, colleges would be funded “once to deliver across all of these funds, cutting bureaucracy and making the system more understandable and accessible for colleges, employers and students”. 

The association also wants officials to fully fund adults aged 24 and above to undertake “subsequent level three programmes or units in priority sectors to respond to post furlough unemployment”.

 

4. A single £150m capital budget for colleges

In the March 2020 budget the government announced a £1.5 billion programme to upgrade college estates over the five years from 2021 to 2026.

On top of this, there are five other college-focused capital funding lines: the local growth fund, Institutes of Technology, T-levels, higher education capital, and sixth form college condition funds.

The AoC said if these capital funding lines were brought together they could offer “one clear opportunity for much needed capital investment and reduce the administrative burden on both colleges and the department”.

The association adds the funding is needed now as the shift to online learning has “refocused attention” on technology but colleges have struggled to maintain their IT infrastructure because of pressures on budgets. 

 

5. Simplify the funding rules and rates

Lastly, the AoC calls for a review and implementation of a “range of funding and rule changes to 16 to 18, traineeship, apprenticeship and adult offers”.

Their suggestions include funding 16 to 18 students to repeat a qualification they were enrolled on in 2019/20 and were unable to complete, as well as streamlining the process of making a case for in-year funding to reflect growth in student numbers.

For adults, the association wants government to allow those aged 19 and above to take a second level 3 qualification free of charge, whilst funding “should allow for modular learning at levels 4 to 5 and we ask that the funding restrictions on standalone short courses are lifted”.

And for apprentices, as well as “targeted employer incentives”, there should be “flexibilities in the delivery of off the job training aligned to apprenticeship content but delivered outside employment”. 

The government has confirmed that free digital skills qualifications for adults will finally be launched from August 1 – but no awarding organisation has yet gained approval to offer them.

Adult education budget funding rules for 2020/21 were published today and include a “legal entitlement to full funding” for “essential digital skills qualification, up to and including level 1”.

It means all adults without basic digital skills will be able to enrol on the new qualifications free of charge in two months’ time.

The sector has been waiting for this rollout since it was first announced by the government in October 2016. It became law in April 2017 as part of the Digital Economy Act and puts the subject on a par with English and maths.

New “national standards” for digital skills have since been created, which awarding organisations (AOs) must use to develop their qualifications.

However, each AO must go through a “technical evaluation” process with Ofqual to ensure they are “valid and fit for purpose” before being made available to colleges and training providers to deliver.

The exams regulator published an update yesterday which revealed that none of the nine AOs developing these qualifications have gained Ofqual’s approval so far.

Ascentis and Gateway are the closest to completing the process, scoring 4 on a 5-point scale (5 being sign off), while Pearson has the lowest score of 1 – which means the awarding organisation is “yet to submit materials to Ofqual for technical evaluation”.

A number of the others appear to have had their qualifications knocked back by Ofqual.

Explaining their evaluation process, the regulator’s update said: “Using a combination of subject and assessment experts, we review the materials submitted by each awarding organisation against our rules.

“These materials include the specification and the sample assessments. We consider issues such as their level of demand, coverage of the Department for Education national standards, and the quality of the questions and the associated mark schemes.

“We also review the awarding organisation’s assessment strategy, the key document in which they explain the approach they are proposing to the design and delivery of their qualification.”

FE Week has asked Ofqual whether they are confident that any of the free digital skills qualifications will be ready for use by August.

 

[UPDATE: A day after this article was published Ofqual released an update to its technical evaluations page to say that one AO – Gateway Qualifications – has now completed the process.]

 

The government has announced another 18 schools and colleges handed up to £150,000 each to become “edtech demonstrators”.

They will help other schools and colleges to use technology to support remote learning after the programme was repurposed amid the coronavirus pandemic.

The first 20 “edtech demonstrators” were announced in April and included two colleges – Basingstoke College of Technology and Darlington College. The scheme is part of the government’s £10 million edtech strategy, launched by former education secretary Damian Hinds, to “harness the power of technology in schools and colleges”.

The announcement today includes eight colleges: Derby College Group, Exeter College, Grimsby Institute, Harlow College, The Manchester College, Oldham Sixth Form College, West Suffolk College Group and Wilberforce College.

The remaining 10 are schools.

The programme aims to help education providers who are “using technology effectively” to share their expertise. The providers are awarded between £70,000 and £150,000 in grant funding, with the scheme running until the end of March next year.

Most schools and colleges have to be rated ‘good’ or ‘outstanding’ and “satisfy” the DfE that they have “robust financial controls, including financial reserves”.

The guidance states that “all programme support will now be provided remotely” during the outbreak.

 

The 18 new ‘edtech demonstrators’ 

Dalton St Mary’s Primary School

Denbigh High School with Challney High School for Girls (Chiltern Learning Trust)

DCG (Derby College Group)

Elizabeth Woodville Primary School

Exeter College

Grimsby Institute of Further and Higher Education – part of The TEC Partnership

GST King’s Warrington

Harlow College

Heart of Worcestershire College

The Manchester College (part of LTE Group)

Oldham Sixth Form College

Outwood Grange Academies Trust

Pheasey Park Farm Primary School and Early Years Centre

Reach Academy Feltham

Stephenson Memorial Primary School

West Suffolk College Group and Suffolk Academies Trust including Abbeygate Sixth Form College and One Sixth Form College, Swavesey Village College and the ConnectED Teaching School Alliance led by Barrow Church of England Voluntary Controlled Primary School

Wilberforce College

Wildern School

Ofsted will begin publishing the inspection reports that were held back because of the coronavirus pandemic from next week.

The watchdog had paused publication of all inspection reports because they were “well aware providers have enough to deal with” in responding to Covid-19 changes.

But in an update today, Ofsted said as more schools and colleges are reopening more widely they have decided to publish the paused reports before the summer holidays.

“It is important that learners, parents and carers have access to the most recent inspection information about providers when they make decisions about their future or their children’s future.

“To delay publication any longer would not be in the public interest. We will begin to publish these remaining reports from next week and will contact affected providers beforehand to confirm this.”

Ofsted began releasing some of the pre-Covid-19 inspection reports in May in cases where individual providers requested they be published.

The watchdog said today they have now “published the reports for providers that asked for this”.

The inspectorate previously told FE Week it was sitting on 50 FE and skills reports that had been completed before the Covid-19 outbreak. Since then, 39 have been published at the request of providers.

Ofsted’s pause on inspections still stands. A spokesperson for the inspectorate told this publication last week that “no decision has been made about resuming inspection activity”.