The Education and Skills Funding Agency has this afternoon published its annual report and accounts for 2019-20, revealing college loan write-offs, hefty fraud investigation costs and salary boosts for top civil servants.

FE Week has the main findings:

 

1. College keeps £15m in overpayments

During the last financial year, South Thames College received an ESFA capital grant to “facilitate the acquisition of the site for a new school”.

The agency paid the college a total of £15,160,000 in “overpayment”, which has now been waived.

The ESFA’s accounts state: “In certain circumstances over-payments of grants can occur when grant payment profiles for educational bodies are based on expected learner numbers which are not supported by actual numbers or where capital grants are eligible for recovery.

“One example relates to our waiver of the capital grant recovery from South Thames College to facilitate the acquisition of the site for a new school.”

Other waivers of overpayments include £823,000 for Manchester Creative Studio and £609,000 for Wigan UTC.

 

2. Abandoned FE loans costs drop substantially

Across all education streams in 2019-20, the ESFA reported claims waived or abandoned of £25 million for this year compared to £62 million the year before.

The agency said this has reduced due to the completion of the college restructuring programme which implemented recommendations from the area reviews of post-16 colleges.

The only FE sector loan to be waived in 2019-20 was £1,750,000 for Trafford College, which was handed exceptional financial support for its merger with Stockport College. Trafford is also currently working on plans to merge with the troubled Cheadle and Marple Sixth Form College, but this process was delayed earlier in the year owing to Covid-19.

 

3. 115 ‘compliance reviews’ of ITPs…

The ESFA said it “strengthened our oversight and assurance activities”, increasing the amount of resource dedicated to ensuring the “proper” use of public funds and engaging more with the sector.

As part of this, the agency delivered 115 compliance reviews on independent training providers (ITPs) with 21 additional control visits.

 

4. …but fraud continues to be a problem

Fraud hit the agency for £5.6 million in 2019-20, which mainly relates to two unnamed “specific cases” that are not yet in the public domain.

Recovery of the identified losses “remain ongoing”. During the year the ESFA was able to recover £8,119.

At 31 March 2020 the agency had a total of 82 live investigations and allegations to carry forward into 2020-21.

This comprises 19 on-going academy trust cases at “various stages” of the investigation cycle and similarly, 63 live cases relating to colleges and independent training providers.

The ESFA said the formation of new academy trusts and mergers continued to rise in 2019-20 with academies increasing by around 900 in-year.

Whilst there has not been a “significant” rise in the number of academy investigation visits compared to 2018-19, there is a “continuing slightly upward trend aligned to sector growth”.

Additionally, in response to changes in apprenticeships funding “we have seen a rise in the number of allegations this year”.

 

5. 894 providers removed from apprenticeship provider register

Last year the ESFA launched a refreshed and “strengthened” Register of Apprenticeship Training Providers (RoATP) through stronger criteria added to the application process and complete re-registration of providers.

There are now 2,067 providers on the register, and during the process the agency removed 894 providers who did not meet the new criteria.

 

6. Overall underspend mainly because of apprenticeships

The ESFA’s total outturn was £58.57 billion against a budget of £58.83 billion, a 0.4 per cent underspend. This included £58.51 billion expenditure on “grant and other funding, the balance of expenditure was in respect of staff costs and operating expenditure”.

The agency said the variance on resource funding was largely attributable to an underspend on apprenticeships.

As revealed by FE Week earlier this month, the Treasury took back £330 million of unspent apprenticeships funding last year.

 

7. Learning Record Service data breach investigation ongoing

An investigation was launched in January after betting companies were “wrongly provided access” to an education database containing the information of 28 million children.

This was the only “protected personal data related incident” for the ESFA that was judged significant enough to be formally reported to the Information Commissioner’s Office during 2019-20.

The ICO was notified that a learning provider, Trustopia, registered with the Learning Records Service (LRS), had been working with another company to use their access to the database for the purposes of ID verification for “non-educational purposes, in clear breach of their agreement with DfE”.

The personal data comprised of the name, date of birth, gender and postcode of 380,000 individuals registered with the LRS.

The ESFA’s accounts state that the ICO is continuing its investigation and will “contact the Department for Education once the investigation is concluded”.

 

8. Pay rise and bonuses for ESFA’s top officials

Chief executive Eileen Milner saw her salary increase from £140-145,000 to £150-155,000 whilst also bagging a bonus of up to £5,000.

Peter Mucklow, director of further education, saw his wage increase from £95-100,000 to £100-105,000 whilst receiving a bonus of up to £15,000.

The accounts say the pay boosts for both civil servants were made after they took on “additional responsibilities in 2018-19 which were reflected in their salary in 2019-20 and included an element of back pay”.

The only other top ESFA official to receive a pay rise was director of academies Mike Pettifer – from £1150-120,000 to £125-130,000 – after he “took on additional responsibilities from September 2018 which were for the remainder of 2018-19 and for the full year in 2019-20.”

Pettifer was also paid a bonus of up to £10,000.

 

9. £1.4m paid to firms linked to ESFA board members

The accounts show £964,000 was paid to Hays Travel, a company owned by family members of ESFA chair Irena Lucas. She is also the chair at Hays, one of the UK’s largest independent travel agents.

A further £984,000 was paid to the firm in 2018-19.

Meanwhile, another £684,000 was paid to Voyage Care, were ESFA board member Stuart McMinnies is a non-executive director. The firm provides support for people who have complex needs.

Teacher-assessed grades will have to be hauled down by up to 12 percentage points this year so results are not “significantly undermined”.

However the regulator has sought to reassure schools and colleges ahead of this year’s results day, promising that grades will be “slightly better” than last year.

Ofqual revealed today that grades submitted by teachers were around 12 percentage points higher than last year’s actual results at A-level, and 9 percentage points higher at GCSE.

After exams were cancelled this year due to the coronavirus, Ofqual required schools and colleges to submit centre-assessed grades of what results pupils were most likely to achieve, which will then be standardised nationally.

Ofqual said it won’t reveal the full details of its standardisation model until results day as this could lead to some “unfairly finding out their results early or cause unhelpful anxiety if they are incorrectly calculated”.

But, ahead of rising tension about how grades will look this year, the regulator has attempted to reassure schools and colleges, saying “overall, results will be no worse and indeed slightly better”.

They said national results this summer may approach a one per cent increase overall for GCSEs and around two per cent for A levels.

Ofqual said this varies by grade, but this mean that when you aggregate all A-level results there will be a slight overall increase in higher results.

The regulator said this was down to “a number of decisions which work in students’ favour” being taken as part of the standardisation model.

That includes historical data used being based on previous years’ results after any reviews of marking or appeals and allowed students to receive ‘off-tier’ grades in tiered GCSEs.

However, they’ve had to haul down the results submitted by teachers quite substantially as they were, on average, 12 percentage points better than in 2019 at A-level and 9 percentage points higher at GCSE.

But there were greater peaks at some key grades. For instance, 65 per cent of pupils were awarded a grade B at A-level by their teachers under this year’s system, compared to 51.6 per cent in 2019 (an increase of 13.4 percentage points).

Meanwhile, at GCSE, 82.4 per cent of pupils were awarded a grade 4, compared to 72.7 per cent last year (an increase of 9.7 percentage points).

Ofqual said: “Improvement on such a scale in a single year has never occurred and to allow it would significantly undermine the value of these grades for students.”

This means a “substantial number” of students will receive at least one grade that has been adjusted as a result of the standardisation process. As centres have submitted grades that are “higher than would be expected”, this means it’s most likely results will be marked down.

But Ofqual added: “That is not surprising, given that the circumstances meant teachers were not given an opportunity to develop a common approach to grading in advance; and they naturally want to do their best for their students.”

They said the adjustments mean that “universities, colleges and employers can be confident this year’s results carry the same value, and students can compete on a level playing field for opportunities with students from previous and future years”.

Ofqual also said there was around a fifth of a grade difference between centres at GCSE, and a quarter of a grade difference at A-level. The regulator would not reveal further details of which centres submitted more generous grades.

But Ofqual said that overall, from the data it has reviewed, they expect the “majority of grades students receive will be the same as their centre assessment grades, and almost all grades students receive will be the same as the centre assessment grades or within one grade”.

They added: “Results for students will therefore almost always be broadly in line with centres’ and teachers’ expectations, reflecting the skills, professionalism and integrity of those involved.”

The regulator also said the preliminary analysis suggests there will be “generally be no widening of the gaps in attainment between different groups of students. In other words, the concern that identifiable groups of students would lose out from this year’s arrangements have not been borne out.”

But there were small changes. For instance, an initial analysis found the difference in the gap in mean grade between white and black pupils rose by a 25^th of a grade at GCSE this year, compared to last year.

 

The government has U-turned on its decision to exclude 16 to 19 providers from its £1 billion Covid catch-up fund.

A one-off, ring-fenced grant of up to £96 million will be stumped up to provide “small group tutoring” for disadvantaged 16 to 19 students whose studies have been disrupted by the pandemic.

Prime minister Boris Johnson and education secretary Gavin Williamson had sparked outrage last month when they announced the programme for schools and excluded 16 to 19 providers at the last minute.

Organisations such as the Association of Colleges called the move “indefensible” while Toby Perkins, Labour’s shadow apprenticeships and lifelong learning minister, said it was an “unforgivable disgrace”.

The £1 billion fund has two streams: £650 million additional funding for the 2020-21 academic year to help school pupils catch up on education missed as a result of the coronavirus pandemic, and £350 million will pay for the establishment of a National Tutoring Programme.

Announcing the distribution of the catch-up funding to include 16 to 19s, the DfE said today: “As part of the tutoring fund, we will also provide a one-off, ring-fenced grant of up to £96 million for colleges, sixth forms and all 16 to 19 providers, to provide small group tutoring activity for disadvantaged 16 to 19 students whose studies have been disrupted.”

The DfE confirmed to FE Week that the £96 million will be taken from the £350 million National Tutoring Programme, it is not new funding in addition to it.

Further details, including how the £96 million will be shared out, will be published “shortly”.

Skills minister Gillian Keegan said: “I’m absolutely delighted that we have secured an additional £96 million so colleges, sixth forms and all 16 to 19 providers can provide small group tutoring activity for disadvantaged students whose studies have been disrupted due to Covid-19.

“The past few months have been extremely challenging for students, and we are really grateful to the FE sector for their hard work to support students to study online. This funding will make sure those that students who will benefit from additional tutoring support will get the help they need to get ahead.”

AoC deputy chief executive Julian Gravatt said today’s announcement is a “welcome step”.

“We have argued all along that they deserve as much support to overcome the challenges thrown up by Covid-19 as every other age group, including their peers in schools.

“The ringfenced funding for disadvantaged 16 to 19 students will allow colleges to be flexible in their support programmes and enable them to reach those most in need. For example, 70 per cent of students resitting English and maths are from disadvantaged backgrounds and will need tailored and concentrated support to ensure they can succeed next academic year, despite the disruption.

“Today’s announcement is a strong sign that the government recognises the unique role colleges play in getting the country’s young people back up to speed but, in future, it would be better to get these decisions out earlier. Most colleges have already set their budgets for 2020-21.”

The country’s biggest skills and careers event, WorldSkills UK LIVE, has been cancelled for 2020 due to the health and safety concerns caused by the Covid-19 pandemic.

This year’s WorldSkills competition cycle will also not run.

But both events will return in 2021 as the UK begins to prepare its next group of talented young trades people to take to EuroSkills St Petersburg 2022 and WorldSkills Lyon 2023 – competitions which are dubbed the ‘skills Olympics’.

Preparations for EuroSkills Graz, which was scheduled to take place this September but has been postponed until January, and Shanghai 2021 have been ongoing virtually throughout lockdown. Team UK for Graz is expected to be announced either next month or in early September.

WorldSkills UK LIVE, which takes place annually in November at the NEC, Birmingham, hosts the National Finals of the skills competitions and welcomes tens of thousands of young people every year to hear from top employers such as BAE Systems, HS2 and Health Education England.

Neil Bentley-Gockmann, chief executive of WorldSkills UK LIVE, said: “It is with a heavy heart that we have had to cancel LIVE and our competitions  but the ongoing uncertainty, coupled with the practicalities of hosting more than 70,000 people under one roof, led us to taking this difficult decision.

“We will be returning to the NEC in 2021 stronger and more effective than ever.”

Although WorldSkills UK will not be running its national competitions cycle in 2020 the organisation said they will continue to work with all the competitors who registered to “provide them with skills and mindset development”.

This will include access to virtual bootcamps that will provide information and advice regarding well-being and employability, supported by former WorldSkills competitors known as ‘skills champions’, performance coaches and Youth Employment UK.

While cancelling LIVE was a “sad” decision, Bentley-Gockmann said it has presented an opportunity for his organisation to increase its work on digital platforms.

“Through these challenges has come the opportunity to evolve our programmes and create a new online offering for tutorials, masterclasses and assessment to help many more young people get access to our resources so they can continue to think about their career next steps and develop their skills.”

Speaking to FE Week, Bentley-Gockmann explained their digital presence will mostly be enhanced via online seminars focussed on mental health and well-being and employability skills.

“It is about helping competitors with advice and techniques about managing their mental health and wellbeing, goal setting, time management, attention control.

“So that will be online seminars around thinking about your skills and employability skills and what employers are looking for, such as CV writing and interview preparation.”

He added that next year’s LIVE event could also become more virtual to reach more parts of the country.

“We’re thinking about potentially a virtual LIVE as part of our thinking about how we make the event accessible from anywhere in the UK, as well as people coming into it physically from West and East Midlands.

“If you can’t get to a LIVE event, we want to explore how you make it virtual so wherever you are in the country, you can experience what’s going on.”

Using brokers in subcontracting deals will be a “serious breach” of funding rules next year, the government said today as it announced the first steps to clamping down on subcontracting in FE.

Training providers have also been told to publish a “rationale” for subcontracting, their management fee structure and a list of subcontracting partners on their websites by October 31.

The measures were outlined in new subcontracting guidance for 2020/21, published today by the Education and Skills Funding Agency.

Last month, the ESFA released its response to a consultation that was run earlier this year and proposed major changes to subcontracting.

The agency wants to see a “significant reduction” of the practice in FE and will roll out strict measures, such as volume caps, over the next three years.

For academic year 2020/21, the ESFA said today that the use of brokers to source a subcontracting partner is “not permitted and will be treated as a breach of contract/funding agreement”.

“By brokers we mean where a third-party matches, for a fee, a provider with an unused allocation with a provider that can secure enrolments of learners to utilise it,” the agency explained, adding that they have “strengthened our levers to act and will do so where we find cases of provision being subject to brokerage”.

FE Week has reported on multiple cases of brokers cashing in on last minute subcontracting deals in recent years.

In March we revealed on how a learner find firm was attempting to broker a subcontracting deal for 16 to 18-year-old trainees who had already completed their placement at football clubs.

The only other change coming into force next year is a requirement for “all providers to publish a clear educational rationale for their subcontracting position on their website alongside their management fee structure and a list of subcontracting partners”.

The guidance states that directly funded institutions should “set out in their organisation’s strategic aims their reason for subcontracting, which must enhance the quality of their student offer”. The rationale “should be signed off by governors and boards and published on their website”.

The ESFA said they expect this information to be published by 31 October 2020 and it should be “easy to navigate to from the front page of the organisation’s education and training web pages”.

Other reforms will be introduced in 2022 and 2023.

A chief executive has resigned after his college hit serious financial problems that led to a plea for emergency funding and triggered formal FE Commissioner intervention.

Nick Juba (pictured) quit Greater Brighton Metropolitan College (GB Met) “some weeks ago” after five years at the helm.

In an unusual move, Andy Green, who is currently the executive principal at Chichester College Group, will be seconded from August 10 to replace Juba in the interim.

A spokesperson for GB Met said Juba had stepped down for “personal reasons”. But FE Week later discovered that his resignation came in the same month that the college requested a bailout for an undisclosed amount from the Department for Education.

The plea for emergency cash, which has now been granted, led to a notice to improve to be issued in June due to “cash related concerns”, according to the DfE.

The college had received a diagnostic visit from the FE Commissioner in December 2019 following a grade three Ofsted report, but this has now been escalated to formal intervention.

While the college has remained tight-lipped about the cause of its financial problems, their accounts for 2018/19 suggest they could stem from a £21 million redevelopment project for its Pelham Street campus which began in August 2019.

The financial statements state that there “remain some cashflow timing issues to be managed during the project”, which is scheduled to complete in 2021, and their forecasts “show that a short-term borrowing facility will be required”.

The accounts were signed off as a going concern on the basis that a facility could be secured via Barclays, as the bank’s “continuing support has been evidenced over the recent period” after the college breached bank covenants for consecutive years.

FE Week asked the college if a facility has been required from their bank since the accounts were signed off but they did not comment.

A GB Met spokesperson would only say: “We can confirm that the college made a request for emergency funding and was successful in this application.

“This triggered the formal intervention process and we welcome the support of the FE Commissioner and the ESFA and are working closely with them to address the funding issues the college faces.”

Greater Brighton Metropolitan College was formed by the merger of City College Brighton and Northbrook College in 2017. It operates across five campuses in Brighton, Shoreham and Worthing and teaches around 3,500 16 to 18 year olds, 7,500 adult learners, 1,000 undergraduates and 800 apprentices.

Prior to joining the college, Juba was a director of the University of the Arts London. He has also worked at the Qualifications and Curriculum Authority, an agency of the Department for Education, as a senior adviser and for the European Commission as consultant and rapporteur.

GB Met said that Juba’s replacement, Andy Green, has a long history with the college having held a number of teaching, director and vice principal roles at what was then City College between 1996 and 2010.

He joined Chichester College as deputy principal in 2010 and was subsequently appointed executive principal and deputy chief executive, during which time he helped lead the college to achieve two consecutive ‘outstanding’ Ofsted inspections.

Commenting on the change in leaders, Sue Berelowitz, chair of GB Met, said: “First of all I want to take this opportunity to thank Nick for his long service and to acknowledge the significant contribution he has made to the college. I wish him well for the future.

“I am also delighted the Andy has agreed to come and join GB MET. He is an outstanding candidate who will bring a wealth of experience and knowledge to the role. His work at Chichester College Group has long been the envy of many other colleges in the country and I am very much looking forward to working with him.”