Questions surround DfE’s ability to ban poor HE apprenticeship providers

Banning ‘insufficient’ new providers from recruiting apprentices may not be as simple as once thought, as confusion appears to surround the case of a private university.

 BPP University, part of the global BPP Professional Education Group, was warned it was making poor progress in an early monitoring visit report of its apprenticeship provision from Ofsted last week.

The results of the report, which warned that managers were not aware of the “slow progress” made by apprentices, means that BPP University faces being banned from recruiting any new apprentices until a full inspection of its provision can be carried out.

 However, BPP appears on the register of apprenticeship training providers four times. As well as BPP University, it has the approved providers of BPP Holdings, BPP Professional Education and BPP Actuarial Education.

BPP would not comment on whether it would simply be able to switch BPP University’s allocation of apprenticeships to another one of its providers in the case of a ban.

A spokesperson for the Department for Education confirmed that no decision had been made yet on whether BPP University would be barred, but said the other BPP entities are counted separately to BPP University and would not be affected by the outcome of the monitoring visit.

 She said: “We will always take action to protect the interests of apprentices. We are currently assessing Ofsted’s findings and will be contacting BPP University to set out the action we will be taking in due course.”

Another question mark remains over whether any ban would include all of BPP University’s apprenticeship provision. The monitoring inspection only took into account programmes ranging from level two to level five, but the university also offers some courses at levels six and seven.

However, these higher apprenticeships are outside of Ofsted’s remit and are the responsibility of the Office for Students. The OfS is in charge of checking the quality of apprenticeships at levels six and seven, but does this in a risk assessment as part of its annual provider review rather than taking part in monitoring visits.

Some of their apprenticeships, such as the level 7 accountancy and taxation professional standard, which do not have a prescribed degree element, are worryingly completely unmonitored, as revealed by FE Week this week.

A spokesperson for the OfS said the body was “aware of the issue” with monitoring visits and was “actively working with Ofsted and the DfE to address it and ensure all apprenticeships are of high quality”.

Rather than automatically banning any provider who is found to be making ‘insufficient progress’ from also recruiting for levels six and seven, she said it would “depend on the individual provider circumstances”.

 “In the case where a provider was judged to be insufficient by Ofsted and they also offered apprenticeships within our remit, we would work with Ofsted and the DfE to address it,” she said.

“We’re working with the DfE already to develop a process that will ensure consistency and quality of standards of apprenticeships.”

 So far, all 16 apprenticeship providers found to be making ‘insufficient progress’ in at least one area up until October 11 have been barred from recruiting new apprentices until their next full inspection.

The Education and Skills Funding Agencies can overrule the ban, but only if it “identifies an exceptional extenuating circumstance”.

NCG resolves bitter pay dispute with its London colleges

A deal has been struck between the country’s largest college group and union members at its two London colleges to settle a long-running bitter pay dispute.

Staff at the Lewisham and Southwark colleges, who were involved in a controversial long-distance merger with NCG last year, took a total of four days’ strike action in May and September this year.

Their paymasters have now agreed to a pay rise of £350 (pro rata for part-time staff) and have also agreed to change the way they calculate strike pay deductions in the future.

“NCG originally deducted 1/260th of members’ annual salary, but has now agreed to take just 1/365th in future and repay the difference on previous deductions,” the UCU said.

“Both sides said they are committed to reviewing incremental pay progression to improve consistency at all NCG colleges. Employees in Carlisle, Kidderminster and Lancashire currently receive the incremental pay progression, but those in Newcastle or London don’t.”

The settlement comes a month after NCG’s chief executive Joe Docherty resigned and after Lewisham Southwark College decoupled to become two separate colleges again.

Staff at the colleges have been in uproar following “years of real-terms pay cuts”.

The UCU claims that staff have been offered only one pay increase – of just 1 per cent – in five years and, unlike other London colleges, they don’t receive the London weighting allowance.

Chris Payne, interim chief executive of NCG, said: “We’re pleased to have found a solution to this issue and we’re committed to further developing the long term relationship with our trade union partners.”

UCU regional official Iain Owens said: “UCU members at Lewisham and Southwark colleges have accepted the new package on offer and we now want to work with NCG to get them onto the pay progression system enjoyed by NCG employees elsewhere in the country.”

Embattled college boss Dame Asha declines her £130k payout

The high-profile boss of a college in financial crisis resigned from her post without accepting any financial payout, walking away from at least £130,000, FE Week can reveal.

Dame Asha Khemka stepped down as principal of West Nottinghamshire College at the start of October. Her resignation came shortly after FE Week revealed the college had received a £2.1 million emergency government bailout in July, just 48 hours before it would have run out of cash.

One of the highest paid principals in FE, Dame Asha received a £262,000 remuneration package in 2016/17. In 2014 she received a damehood, and was named woman of the year at the GG2 Leadership Awards.

However, West Notts has confirmed that she stepped down with immediate effect and did not receive any payoff, despite the fact her six-month notice period would have entitled her to at least £130,000.

This makes a stark contrast with other disgraced principals, whose large payouts when they finally walked away from their colleges have often earned them infamy.

In June it was revealed that Mike Hopkins, the former principal of Sussex Downs College, had been placed on gardening leave since March following the college’s merger with Sussex Coast College Hastings.

During the five months he remained on gardening leave before the end of the academic year, Mr Hopkins was paid £80,000 by the college, despite the fact Sussex Downs was facing a deficit of £1.9 million and planning a wave of staff redundancies. He also received a final payout for leaving, but it is not known how much this was.

Amarjit Basi resigned as principal of the Cornwall College Group in July 2016 against a backdrop of financial troubles. Despite the college receiving a financial warning notice from the government in April 2016, and preparing for staff redundancies in May, Mr Basi left with a £200,000 payout.

His successor, Raoul Humphreys, resigned from the college last week, but it is not clear if he will also receive such generous remuneration.

Matt Waddup, head of policy and campaigns at the University and College Union, said: “It is important that principals and senior leaders leaving their colleges as a result of their poor management decisions are not financially rewarded for doing so.

 “College funding should be focused where it is needed most – on frontline delivery of students’ education – not on excessive salaries or payoffs for those who have already left the institution.”

 A report from the FE commissioner, published last week, criticised “serious corporate failure” at West Notts College and said it had reached the point of “financial crisis”.

 The intervention report, which had been written back in August, warned that Dame Asha and the college’s board had “overseen a serious business failure which will impact on the whole college” and called for an “urgent review that ensures that those with ultimate responsibilities are held to account”.

 It is understood that Dame Asha’s departure from the college took place shortly after the college board conducted the review as advised.

Dame Asha was approached for comment.

Progress to public sector target slow at government departments

The government has published its progress towards the public sector apprenticeship target for the first time – and FE Week can reveal that starts at seven departments made up less than one per cent of their workforce.

The target, which came into effect last April, obliges public sector organisations – including the civil service – to make sure that new apprentices make up at least 2.3 per cent of their overall workforce numbers on average over the next four years.

Figures published by the Cabinet Office in late September revealed there were 4,459 apprenticeship starts in the civil service for the first year of the target, which made up 1.3 per cent of a workforce totalling 343,160.

But while the data included the number of starts per department, it didn’t show progress by individual departments.

FE Week crunched the numbers, using civil service employment data published by the Office for National Statistics, to show which departments were doing well – and which weren’t.

The Ministry of Justice came out bottom, with just 93 apprentices recruited against an overall workforce of 67,600, or 0.1 per cent.

Nonetheless, a spokesperson said it was “confident” it would meet the target in the future.

The “majority of our workforce” is in the prisons, probation and courts services which “historically” haven’t used apprenticeships “so we have had to build bespoke apprenticeship programmes from scratch”, he said.

Other low-performing departments included the UK Statistics Authority, which had 15 starts out of an overall England-based workforce of 2,170 – or 0.7 per cent.

A spokesperson for the authority, which incorporates the ONS, said that apprenticeships were a “big priority” for it.

The bulk of the authority’s workforce is in Wales, where it is “currently shortlisted for a Welsh government award for its pioneering apprenticeships at the ONS Data Science Campus at Newport” – but these apprenticeships don’t count towards the target, which is England-only.

Apprenticeship starts at both the Treasury and the Cabinet Office also only made up 0.7 per cent of their overall workforce, according to our analysis.

A spokesperson for the Treasury said that apprenticeships in the areas that the majority of its staff work in – policy and economics – have only recently been developed, and it took on its first cohort of policy apprentices last month.

“With those new apprenticeships, we are confident we will be able to reach the target of 2.3 per cent by 2021,” he said.

The Cabinet Office rejected FE Week’s figures, even though they are based on official government data, and said that apprentices made up 0.8 per cent of its workforce – with a significant increase in staff numbers over the reporting period impacting on its progress.

The three other departments to have apprenticeship starts make up less than 1 per cent of their workforce in 2017-18 were the Department for Transport, the Home Office and the Department for Environment, Food and Rural Affairs.

At the opposite end of the spectrum, just two departments exceeded the target: the Department for Business, Energy and Industrial Strategy, and the Department for Exiting the European Union.

DeXEU had 14 starts out of an overall workforce at 550 (2.5 per cent), while BEIS had 285 starts out of a headcount of 11,910 (2.4 per cent).

The Department for Education had 116 starts over the year, which made up 1.9 per cent of its 6,080-strong workforce.

All public-sector organisations in England with 250 or more employees must have reported progress towards the apprenticeship target by September this year.

It’s an average target across the years 2017/18 to 2020/21 to “give flexibility to organisations to manage peaks and troughs in recruitment”, according to DfE guidance.

Government departments are grouped together as one organisation for the purpose of the target.

A government spokesperson said it was “on track to reach our target number by March 2021”.

“Apprentices are core to being a brilliant civil service, helping us to retain and attract the best talent.”

The DfE is expected to publish overall progress towards the target later this month.

 

Governance structures must evolve for a college to survive

Good governance is essential to the effective running of any business, with an ineffective board being the most likely reason for an organisation to fail.

Boards exist to provide leadership, support and scrutiny to a management team. To do this well, a board must be structured in a way that underpins the organisation’s aims and values – while having the experience and ability to sufficiently challenge and advise.

Having been both a CEO of a large organisation and a chair of others, my experiences have enabled me to develop a real understanding of how effective governance influences an organisation’s success.

FE colleges have undoubtedly had to raise their game in all areas in the face of funding cuts and ever-changing policy. When I took up my position of as chair of London South East Colleges last year, it was clear that the existing governance model, which had been in place for many years, did not fully meet the needs of our rapidly expanding organisation.

Following a three-way merger in 2016, this college had transformed from one entity into a multi-campus college. An overarching group was set up, of which the college was part, alongside a multi-academy trust and an apprenticeship company.

Clearly, this was now a very different organisation, continuing to innovate and offer far more than FE alone. A review of governance structure was needed – and undertaken – to ensure that every organisation within our group could be adequately supported and run.

As a result of this work, we have created a new “golden thread” structure, which effectively links our constituent parts. The “thread” joins up strong board level oversight (providing support and capability to challenge) with three independent boards, representing our colleges, schools and apprenticeship companies.

This new structure has strengthened our governance, with local experts sitting on each of our independent boards, creating better local links. Every member has real experience and understanding of the customers they serve – yet with the oversight of other members who can consider the bigger picture and the organisation’s role within the wider community.

Ultimately it’s courage that’s needed to make change

The over-arching board optimises the integration of strategy, management and resourcing within the wider group, eliminating duplication of process but retaining the institutional integrity of each independent board. Each of the three boards delegate upwards within a legal framework that has been agreed.

The model in which we are operating is that of earned autonomy. Ultimately this is an approach that recognises excellence in regulated businesses – when those with efficient management systems in place and a proven track record of compliance are given greater flexibility in delivering outcomes.

This is not model in which the overarching board is composed of trustees with all the power. It is a bespoke set-up, developed specifically to meet our organisation’s current and future challenges. You wouldn’t just apply it to other colleges – but all colleges would benefit from reviewing their governance structure to ensure it fits their longer-term business objectives.

For the many FE colleges undergoing mergers, getting the right governance fit is essential. Indeed, even a college not going through structural change will still be facing a range of regularly changing pressures and dynamic needs.

The flexibility of the government’s regulatory framework is undoubtedly sympathetic to this. It allows colleges to be innovative with their governance and gives them the ability to create bespoke models that are fit for purpose.

Ultimately it’s courage that’s needed to make change. It’s far easier for a board just to carry on as it is, because change will inevitably create a level of uncertainty.

There is a saying, however: “if you do not grasp change by the hand, it will grasp you by the throat”. Put simply, college boards need to be brave.

Innovation is needed for college survival and for innovation to happen, governance structures simply must move with the times. 

Why colleges should be wary of university mergers

Merging with a peer in further education is now the most sensible option for colleges wanting to cut costs, argues Martin Vincent

At the start of November an investigation by The Independent revealed at least three universities in England are in serious financial distress, relying on bridging loans to stay afloat. The news is clear evidence of a sector under pressure. Difficult economic and political conditions, combined with increased competition for students, are negatively impacting institutions that have traditionally been viewed as financially robust. For college leaders, partnerships or mergers with universities have long been a tempting tactic – but the pressure on higher education institutions means this strategy now carries greater legal and financial risk.

Further education has its own, well-documented financial challenges. Labour’s recent analysis of figures from the Institute for Fiscal Studies found spending on further education and skills has dropped by £3.3 billion in real terms since 2010. Merging with education providers has been an effective way for colleges to combat this. While there are several different routes, mergers let colleges pool resources to cut costs and unlock revenue. However, the merging of two education providers requires the sharing of liabilities as well as assets. With the fresh pressure on higher education, colleges are now more likely to strike the right balance of risk and reward by merging with similarly-shaped organisations – namely, other colleges.

Taking a step back, the most common form of collaboration between higher and further education are validation agreements, which let colleges tap into university resources, faculty and facilities to offer degree programmes to students. Manchester College, for example, offers degrees validated by Manchester Metropolitan University and the Universities of Bolton and Salford. Individual arrangements will vary, but ultimately these lucrative collaborations let colleges lean on the offering of more established institutions and generate more revenue through tuition fees.

College-to-college mergers offer a more natural operational fit

However, in the precarious financial position universities are now operating from, validation agreements could increase a college’s legal exposure. With this form of collaboration, students usually have duel registration to give them access to both institution’s facilities. If a university delivering a degree programme on behalf of a college goes under and students affected cannot complete their studies, the college could face a multitude of potentially costly breach of contract claims. So, while course validation undoubtedly gives colleges quick access to revenue, they are far from being a long-term route to financial stability.

By contrast, when a college merges with another, similarly-sized institution that operates in the same locality, both colleges can benefit from estates rationalisation. In practice, this means each institution sells off duplicate, or outdated facilities and combines the best of what’s left into a leaner operation that draws from the same pool of students, uses the same faculty and is generally more financially efficient.

This approach is possible with college-university mergers, too, and has indeed been tried in a number of instances. However, the potential operational synergies that can be achieved just aren’t as beneficial.

Colleges typically offer more vocational courses and need to maintain specialist facilities to deliver them. This is at odds with a university’s set up, which is generally geared to an academic offering and often supported by a portfolio of listed properties that are harder to sell, especially in the case of older institutions. There is also a question of governance. College governors or trustees will usually have little experience within higher education, so taking a leap into the unknown and merging with a university with the stakes higher than ever is short-sighted. The Technical and Further Education Act 2017 extended the Companies Directors Disqualification Act 1986 to further education, meaning college leadership can be found personally liable if their institution enters insolvency due to mismanagement.

Before undertaking a merger, colleges must look carefully at the finances and operations of the institution they intend to partner with. In the current climate, the risks of merging with a university are now too great. Put simply, college-to-college mergers offer a more natural operational fit and deliver synergies that unlock greater revenue for colleges under financial pressure.

DfE: College pension contributions to rise by an extra £142m per year

The government has confirmed colleges will be expected to pay an extra £142 million a year in employer contributions to the teachers’ pension scheme.

The increase comes into force in September 2019, but as this is half way through the financial year the Department for Education has estimated that colleges will have to pay £80 million extra in 2019/20.

This will increase to the full amount of £142 million in 2020/21.     

The latest estimates were revealed by schools minister Nick Gibb in a series of written answers to parliamentary questions asked by shadow education secretary Angela Rayner.

Julian Gravatt, deputy chief executive of the Association of Colleges, said the figure of £142 million amounts to approximately two per cent of college income.

As colleges already spend an average of five per cent of their income (£350 million) on contributions to the teacher pension scheme, this will take costs up to approximately £500 million, or seven per cent of total income, by 2020/21.

As FE Week reported in September, the AoC previously expected that colleges would face paying an extra £140 million as early as 2019/20, a contribution rise of over 40 per cent. At the time, the DfE would not be drawn on a figure.

The Treasury has said the government will “cover the extra costs” for colleges and schools for the “rest of the spending review”, which runs until March 2020.

In an answer to Ms Rayner submitted on October 16, Mr Gibb said the DfE “proposes” to fund schools and colleges for the increased costs relating to the teachers’ pension scheme and would “shortly” run a public consultation to seek views on this and understand the impact of the changes.

FE providers proposed to receive funding include general FE colleges, sixth form colleges, specialist post-16 institutions and adult and community learning providers.

In an answer to Ms Rayner submitted on October 30, Mr Gibb said it was expected that an extra £1.1 billion would be needed in the teachers’ pension scheme for 2019/20. This would take the form of £80 million from FE colleges, £830 million from state funded schools, £110 million from independent schools and £80 million from affected higher education institutes.

In another answer, submitted on November 6, Mr Gibb said the DfE estimates that the cost of increased employer contributions for 2020/21 would be £142 million for FE providers, £191 million for independent schools and £142 million for higher education institutions.

“Funding arrangements for the increased costs will be considered as part of the next spending review,” he added.

The outcome of a valuation of teachers’ pensions was released in August, which the Treasury undertakes every four years, and suggested public sector workers would get improved benefits from 2019.

 

What to do if your college is running into financial problems

Skills minister Anne Milton explains what the government is doing to support colleges in financial difficulty
 
A college is a multi-million pound business and leading a college is a big and important challenge. I’ve been vocal about my belief that further education can change lives, giving people new skills and opening doors to exciting jobs, education and training. 
 
That’s why it is essential that the FE sector is well run and resilient. There are many exceptional governors, clerks and teachers working in FE. Their passion for what they do is clear to me. I want to thank these leaders and teachers for all of their hard work. However I know that some colleges do face challenges and it is vital that their boards are able to take decisive action and provide effective leadership to help improve matters.
 
This column gives me the chance to highlight some of the things all college leaders and boards should be looking out for in the weeks and months ahead.
 
This week we launched the second round of the Strategic College Improvement Fund, a £15m fund which will help those colleges struggling to improve. I’m very pleased that colleges will have the opportunity to apply for this funding. By partnering with top colleges across the country, more people will be able to access high-quality education and training. Those already successful in the first round will be announced shortly. This is great news and will build on the work already underway through the new National Leaders of Governance programme.
 
We also announced a new £8 million professional development programme this week, to help teachers and leaders prepare for the roll-out of new T-levels. Bespoke training will focus on preparing them for this significant change. It will also be an opportunity for teachers to update their subject and industry knowledge so it is relevant to the needs of business.
 
I’d encourage you to tell us early and we can talk about what kind of support might be available
In January, there will be a new insolvency regime in place for FE and sixth-form colleges. This will make sure there is an orderly process in place for managing a college if it hits financial difficulties and becomes insolvent. At the heart of this is our desire to protect learners if something goes wrong.
 
Of course I don’t expect large numbers of colleges to become insolvent. And while I know many of you run your colleges very well, I also know that there are colleges who have run into difficulties and have needed support from government. So if you think you’re heading into financial difficulties, I’d encourage you to tell us early and we can talk about what kind of support might be available.
 
Sometimes even the best of us could use a bit of help and clarity, and this can make a big difference. I’m pleased to say we will be launching practical guidance to help and support governors in their role and to fulfil their responsibilities. It will provide them with helpful examples of good practice to help run their business. The work of the FE commissioner and his team will also continue to help with early diagnostic assessments.
 
One area which needs some good and consistent practice is in the area of executive pay. Colleges are complex businesses but the pay of those at senior management levels should be justifiable. I would urge members of boards to think about how levels of pay will be viewed in your organisation. Does it ultimately represent good value for money for your students?
 
Being a college governor is an important and complex role. I know specific support and training to help carry out your role is crucial and we are about to make a serious investment in leadership and governance training. I believe this will be a very useful resource, whether you are beginning in a governor role or want to develop – good governors are one of the key drivers of good colleges. I will  soon be announcing the details of these prestigious programmes for college chairs, governors and governance professionals.
 
I hope all of these changes demonstrate that we appreciate the significant role colleges play in our education system, as well as the specific challenges they face. Please get involved and use the resources available because we all have an interest in building a strong and successful FE college sector together.

Quality of apprenticeship policy suffers from ‘insufficient progress’

Two years ago FE Week exposed thousands of apprentices on standards without any approved end-point-assessment organisations.

At the time, a former director of the DfE described the situation as “diabolical”.

The chief executive of the ESFA, responsible for recruiting the end-point assessment organisations, was given a ticking off by the education select committee and then sped up processes.

Today, we expose thousands of apprentices on ‘non-degree’ level six and seven standards with no regulator taking responsibility for quality assuring the training.

A former DfE special adviser describes this as falling through the cracks of regulation, which “could be unfair to the students.” and AELP’s Mark Dawe says it’s “appalling”.

Ofsted is not to blame, they have been told to only inspect up to level five.

Nor is the Office for Students, they claim, despite the DfE’s Quality Accountability Statement saying they are responsible for regulating the quality of level six and seven standards.

So no organisation is responsible it seems, and the DfE has no answers, literally.

The Ofsted and OfS approach to their regulatory responsibly could not be starker.

Ofsted is ramping up monitoring visits, for all level two to level five provision at all new providers.

OfS on the other hand, has said they have not sent in the QAA to look at any level six or seven courses.

So the solution seems obvious to me.

The DfE should give the responsibility to one organisation, the only one that actually conducts inspections: Ofsted.

And the ESFA is not completely off the hook, as clarity is needed when it comes to their intervention policy.

As our reporting of the BPP University ‘insufficient progress’ monitoring visit shows, it remains unclear if the ESFA will stop the new level six and seven starts that were out of Ofsted’s scope.

Plus, there is nothing to stop BPP from continuing new starts at one of their three other companies on the register of apprenticeship providers.

Now consider a university with a hand-full of level five apprentices given an Ofsted grade four.

Would the ESFA really boot them off the apprenticeship register if hundreds of their degree apprenticeships had not been part of the inspection?

The complexity and uncertainty begs the question as to whether the Institute for Apprenticeships should step in and bang some heads together.

What is clear is that some leadership is needed to sort the policies out.

What is less clear is where this leadership will come from.