The Education and Skills Funding Agency will stop any new qualification at level 3 and below receiving approval for funding from September next year.

Officials at the ESFA issued a “moratorium” notice to awarding organisations this week, which will be in place initially for a period of three years.

The move is part of the government’s controversial post-16 level 3 and below review of vocational qualifications, which includes applied generals such as BTECs, tech levels and technical certificates.

Officials claim that many of these qualifications are of “poor quality” and their existence leaves young people and employers “confused”.

A spokesperson for the Department for Education (DfE) said the moratorium will support this review, and will be enforced “so we are not adding to the already confusing and complicated system of over 12,000 qualifications already available at these levels”.

But Graham Hasting-Evans, group managing director at awarding body NOCN, warned of the economic consequences of the decision. “The announcement is not surprising,” he said.

“What I hope we will get very soon is a formal report from the Department for Education, not the ESFA, on the outcome of the [level 3 and below] consultation with the opportunity to comment on any firm DfE proposals, arising from the review.

“In that sense I believe that the blanket announcement of a moratorium, even with the exemptions, is not the best way forward for the UK economy as it could prove to be too restrictive.”

The moratorium will apply to study programme for 16 to 19-year olds, advanced learner loans, the adult education budget and the European Social Fund at level 3 and below.

Exemptions include qualifications that are being reformed, those that have been “designed to respond to a particular economic need” and those which have been approved for 2020 to 2021 but need updating.

The operation of the moratorium will be reviewed annually and will also apply across the Greater London Authority and six mayoral combined authorities, which had their share of the adult education budget devolved to them in August.

James Kewin, deputy chief executive of the Sixth Form Colleges Association, called the government’s level 3 and below review “important” and “high stakes” as it will determine the future of applied general qualifications.

Reacting to the moratorium, Kewin said: “As our consultation response set out, we believe that the newly-reformed applied general qualifications have a vital role to play in the future qualifications landscape, and should sit alongside T-levels and A levels as the ‘qualifications of choice’ for 16 to 19-year-olds.

“Applied general qualifications make an enormous contribution to both social mobility and economic growth and we will continue to make the case for this option to be available to students in the future.”

The ESFA stated that funding approval will not be removed from qualifications that have funding offers unless “they no longer meet approval principles, reach their operational end date during the period of the moratorium, and are no longer available for students to study” or are a “legacy version of a qualification that has been subject to other reform”.

The first part of a two-stage consultation on plans to withdraw funding for qualifications at level 3 and below begun in March and followed the announcement of plans to introduce new “high-quality” T-levels, which will be rolled out from next year.

Then skills minister Anne Milton told FE Week the consultation did not represent a manipulation of the market to ensure T-levels are a success and claimed those providing high quality, necessary qualifications with a clear purpose and good progression “should have nothing to fear”.

However, Ofqual voiced concerns that there was a risk of a potential barrier to student progress if alternative choices to T-levels and A-levels were “unduly restricted”.

In July it was confirmed that more than 160 “duplicate qualifications” at level 3 and below, including 76 BTECs, will have their funding removed from August 2020.

Colleges and independent learning providers are prospering under the new Ofsted inspection framework, with most scoring “good” grades in the initial run of reports.

The first inspection reports conducted under the new framework, which came into effect from 1 September, were released last Friday.

A total of 18 have now been published and almost three quarters (71 per cent) have received a grade two, or “good” ranking.

Four were classified as grade three, or “requires improvement,” and one was rated grade four, or “inadequate”.

The reports are structured quite differently from before, with new questions and a different layout, but one of the most drastic changes has been the reduction in word count.

The report for Woodspeen Training in Huddersfield, the first provider to be inspected under the new framework, features 2,004 words, while its previous report from 2017 contained 5,241 words.

This could be due to Ofsted’s decision to reduce the number of types of provision it inspected under the new framework to make its reports “more coherent and inclusive”.

This meant that, for example, rather than looking at a range of study programmes for those aged 16-19 and those aged 16-24, they would all be grouped under education programmes for young people.

The new framework is intended to focus less on data and more on the quality of education received by learners.

Woodspeen Training, which improved from a grade three to a two, told FE Week in September that inspectors were looking at the “three I’s”: intent, implementation, and impact.

This new model appears to be benefitting general FE colleges: three out of five of their reports from this week returned “good” ratings.

Bedford College was another of the successful providers, with inspectors reporting that more than 10,000 learners enjoy their time and benefit from a “positive and respectful culture”.

This is the first inspection since its merger in 2017 with Tresham College, which received a grade four rating in 2016.

Ofsted also graded Tyne Coast College in South Shields as “good” and wrote that the 5,000 learners enjoy the experience and feel valued by staff.

North Warwickshire and South Leicestershire College also achieved a grade two for its provision to over 5,000 learners.

Inspectors found its senior leaders had developed and successfully implemented a clear strategy, resulting in sustained improvement since the college was formed from a merger of two others in 2016.

The less successful performers were Coventry College and The Sheffield College.

Coventry, which has around 6,000 learners, failed to rise above a grade three after it was found that too few of its learners and apprentices in 2018/19 received clear information about courses, their location and entry criteria.

The Sheffield College, with over 10,000 learners, also received a grade three because too few learners on study programmes and with high needs achieved their qualification.

Two specialist colleges have earned a grade two under the new framework: Lakeside Early Adult Provision on Merseyside, which has ten students and improved on a grade three; and Freeman College in Sheffield, which has 27 students.

Independent providers have also done well since the new inspection framework was introduced – with seven out of nine achieving a grade two in their reports.

Norman Mackie and Associates in Cheshire, like Woodspeen, progressed from a grade three to a grade two this week.

Inspectors reported that its 41 learners “enjoy and participate fully in their learning programmes” and leaders have high expectations for them.

But on the flip side, Mercia Partnership, based in Chorley, Lancashire, is challenging Ofsted after being given the first grade four rating under the new framework. People Solutions Training, which trades as N-gaged and is based in Bristol, scored a grade three overall but received an “inadequate” for apprenticeships.

The provider told FE Week that it would not be challenging the grade.

Employer providers are off to a bad start after Central and North West London NHS Foundation Trust received a grade three in its first inspection.

Kirklees Council Adult and Community Learning scored a grade two. This was a downgrade from its previous grade one.

A former college principal has topped a list of the most influential lesbian, gay, bisexual and transgender role models working in the public sector.

Ann Limb, who is now chair of The Scout Association, was ranked first in the OUTstanding list of 30 LGBT+ public sector executives for 2019.

WorldSkills UK chief executive Dr Neil Bentley-Gockmann OBE was another FE sector leader to be recognised in the awards, which have been running since 2013.

Limb said she hoped that her achievement “can help raise the profile of LGBT+ people and issues across the FE sector”.

At OUTstanding’s awards ceremony on Wednesday, Limb said that as an “almost 67, post-menopausal, gay dwarf, you really never expect to be a role model for anybody. The fact that I seemingly am a role model is joyous and a blessing.”

In front of the awards ceremony’s audience of 170 million people worldwide, Limb said she was “overwhelmed to find myself in this company”.

Afterwards she said: “That is where FE and LGBT+ should be – on the global stage and mainstream.”

Although she has been with her partner Maggie for 33 years, Limb only began to speak openly about being gay in February, after being invited to a parliamentary event during LGBT+ History month.

She is also vice chair of City & Guilds and has previously served as principal of Milton Keynes College and chief executive of the former training giant Learndirect.

She wrote in March: “During a 25-year, successful career in FE, I did nothing overtly in the arena of LGBT+ activities.”

But she now hopes that she can “take some actions to raise the profile of LGBT+ in the sector”.

Bentley-Gockmann, who came 15th on the list, said it was a “real honour to be recognised in this way for the work we are doing at WorldSkills UK”.

He said that with the organisation’s partners in education and industry “we are working hard to boost the profile of LGBT inclusion alongside ensuring more young people, regardless of social background, ethnicity, gender or disability have the opportunity to succeed through our work”.

This includes the first WorldSkills UK Diversity and Inclusion Awards taking place at WorldSkills UK LIVE towards the end of this month.

They are intended to celebrate individuals and organisations championing inclusivity in the FE sector and going above and beyond to support young people from a range of backgrounds.

Bentley-Gockmann said: “Now is the time for more leaders in the skills sector to step up to champion diversity, as role models and allies, so more young people from all walks of life are inspired to take up technical careers and apprenticeships.”

In addition to his work with WorldSkills UK, Bentley-Gockmann has led a roundtable discussion in the House of Commons with education partners to discuss the importance of LGBT+ leadership and role models in colleges; and he has chaired a one-day annual conference on LGBT+ inclusion at work.

His OBE, awarded in the 2019 New Year Honours, was for services to LGBT+ inclusion. He is a former deputy chair of Stonewall, the LGBT + charity.

The co-founders of a disgraced apprenticeship provider currently under police investigation are yet to be interviewed by officers, more than a year after inquiries began.

In October 2018 the government terminated its multi-million pound skills funding contracts with Aspire Achieve Advance, better known as 3aaa, after allegations of fraud. The case was referred to Derbyshire Constabulary.

The apprenticeship giant subsequently went bust with 4,200 learners and 500 staff on its books.

But a spokesperson for the constabulary has confirmed that no contact has been made with anyone who worked at the defunct firm, including the top bosses.

They could not say what work has been done over the past 12 months, even though in March the constabulary said that a “formal criminal investigation” into 3aaa had started.

The High Court placed 3aaa into compulsory liquidation in late October last year.

Anthony Hannon is the official receiver handling the insolvency, but his investigation into the collapse of 3aaa is also ongoing one year later.

A spokesperson said that the Insolvency Service has three years from the date of the company winding-up order to launch enforcement action “if it was to determine doing so was in the public interest in the light of any investigation findings”.

“Enforcement activity is pursued through the courts meaning that applications must be supported by information that meets the evidential standard for those proceedings,” they added.

Sanctions imposed by the official receiver, if he or she uncovers unfit director conduct, include director disqualification of between two and 15 years.

A total of 1,242 company directors were banned last year.

3aaa was co-founded by Peter Marples and Di McEvoy-Robinson in 2008, but the pair stepped down in September 2018.

The company was one of the biggest apprenticeship companies in England, holding £16.5 million in ESFA contracts when it went into administration on October 11 that year.

It received more than £31 million in government funding the year before it collapsed and had the largest allocation for non-levy apprenticeships, standing at nearly £22 million.

Evidence from a whistleblower, obtained by FE Week, showed how the provider inflated achievement rates by more than 20 percentage points, which contributed to a high Ofsted grade and more public funding.

In addition to data manipulation, 3aaa sales documents showed a potential £700,000 ESFA clawback. It is understood that this related to a range of apprenticeship and traineeship funding overclaims made through individualised learner record submissions.

The alleged misuse of grants from an apprenticeship incentive scheme in which 3aaa held on to £1.2 million that was supposed to go to employers is also under investigation.

The defunct company’s latest accounts show that its directors took out huge directors’ loans totalling more than £4 million between them, and that its two owners bought multi-million pound properties at the end of 2015.

Meanwhile, 3aaa spent its public funding on £1.6 million of sports-club sponsorships, an Elton John concert and Tesla supercars, among other luxuries.

Last year was not the first ESFA investigation. In 2016 the auditing firm KPMG was asked to carry out an investigation and found dozens of success rate “overclaims”.

It is understood this resulted in 3aaa paying back a substantial six-figure sum.

After launching its second investigation into 3aaa in June 2018, the DfE called in an independent auditor to investigate the ESFA over its contract management of the former apprenticeships giant.

University technical colleges’ deficits have more than doubled over four years, a damning National Audit Office report has revealed.

The government’s audit watchdog found that total deficits for the embattled 14 to 19 technical providers now constitute nearly a tenth of the total for every academy trust, after rising from £3.5 million in 2014/15 to £7.7 million in 2017/18.

The Department for Education has spent what was described by one union as an “eye-watering bill for the taxpayer” of £792 million on the UTC programme between 2010/11, when they were first set up, and 2018/19.

Despite the huge cash injection, the scheme has been hit with a catalogue of issues which FE Week has exposed over the years and which the NAO’s report lists, including unviable student numbers, multiple closures and poor Ofsted results.

Chair of the Public Accounts Committee Meg Hillier said the report “provides further evidence as to why the Department for Education is my top department of concern”.

Most of the £792 million was capital grants, but there was also £28 million to improve UTCs financial positions and £8.8 million to cover their deficits.

In too many cases, University Technical Colleges have proved to be expensive failures

The DfE has also spent £4.5 million on helping UTCs “improve” and £9 million on closing UTCs, which included the costs of writing off debts and staff redundancies.

University and College Union general secretary Jo Grady said too often UTCs have proved to be “expensive failures” that took funds away from the further education sector at a time when it most needed support.

Assistant general secretary of the National Education Union Nansi Ellis found it “shocking” that such a “staggering amount of money” has been spent on the “flawed model” of UTCs. 

The NAO has also found the 48 open UTCs were operating at 45 per cent of capacity at the end of January 2019, which it says has implications for their financial viability.

It reported that the Education and Skills Funding Agency has “significant concerns” about the finances of a quarter of the remaining UTCs (13 out of 48).

UTCs have attempted to remedy their recruitment and financial problems by applying to take on pupils from year 7, rather than from the age of 14 as they were originally intended to.

This month it was announced two UTCs have been granted permission to open to 11-year-olds from next September, after another UTC and before others are expected to follow suit.

They’ve also been actively encouraged by government to join multi-academy trusts to strengthen their position.

In 2017, the Department for Education embarked on a three-year project to improve UTCs’ finances and provision with two main measures of success: for the proportion of UTCs rated as ‘good’ or ‘outstanding’ by Ofsted to be the same as for free schools generally; and for the proportion of UTCs on the ESFA’s national concerns list to be the same as for academies generally.

However, the NAO has found UTCs are struggling to meet both counts: as of August 2019, as a proportion of schools inspected, Ofsted had rated 52 per cent of UTCs as good or outstanding, compared with 84 per cent of free schools.

This report records the price of everything and the value of nothing

And as of July 2019, 26 per cent of UTCs were on the ESFA’s list, compared with one per cent of academy trusts.

Responding to the NAO report, Lord Baker said it “records the price of everything and the value of nothing”.

“UTCs should be judged by the success of their students becoming apprentices, studying STEM subjects at a university and getting a job as a technician or an engineer. For that we have the best destination data of any schools in the country.”

The NAO did find a higher proportion of students from UTCs go into sustained apprenticeships after GCSEs and A-levels or their equivalents, compared with the national average.

He added that the DfE has encouraged the Baker Dearing Trust to make applications for new UTCs and they are working with local employers and universities for the next round in November.

A Department for Education spokesperson said: “We have been clear that the department is committed to ensuring people have access to high-quality technical education across the country.

“UTCs are helping to deliver on that, with 21 per cent of pupils progressing into apprenticeships after completing their post 16 education, more than double the national average. 

“As this report recognises, we have taken significant action to support and raise the profile of UTCs to make sure they continue to play a role in our diverse education system and provide the skills that employers need.” 

Small employers are likely to be capped on the number of apprentices they can employ, as part of the government’s plan to enable all providers to access funding for non-levy payers from January.

Keith Smith, the director of apprenticeships at the Education and Skills Funding Agency, announced today that every firm on the register of apprenticeship training providers will be able to engage with the programmes with small businesses on the digital apprenticeship system from the New Year.

It will more than double the number of providers with direct access to funding for non-levy payers, including most universities.

But recognising the strain on the apprenticeship budget, as first reported by FE Week and followed up by the National Audit Office, there will be restrictions on the number of starts for the employers.

“We’ll think about funding 15,000 or so starts initially through the online service,” Smith told the Association of Employment and Learning Providers conference.

“Over the next few days we’ll give you specific information about that scale of activity and how we’ll manage that on a month by month basis.

“From a provider’s point of view there will be no stop on cap. What we are thinking about is, purely for testing reasons, putting a cap on the number of apprentices per employer. We think that is a sensible way to try and control and test. What we want to see is how the service will operate to scale.

“There will probably be restrictions in relation to the number of transactions per employer rather than the number of providers.”

Smith added that the move to the apprenticeship service will provide “certainty” that funding is “going to be there going forward”.

“We will introduce something called ‘reserve my funding’, which will enable an SME with a provider to access and reserve apprenticeship opportunities into the system and bank that investment to know that their reservation is there, although it will only be held for a period of time,” he explained.

Speaking to FE Week after his speech, Smith said the ESFA will continue to look at the caps going forward, but confirmed there will be no more tendering for non-levy contracts for providers.

Small employers were meant to move onto the apprenticeship system in April 2019 but the agency delayed this by a year to ensure the roll out is successful. At this point it extended non-levy contracts for training providers until March 2020.

Smith said today that providers with current non-levy contracts will have them extended in April 2020, but there is no fixed deadline for when these will end.

“We’re going to now embark on a dual running and transition system,” he told AELP delegates.

“We’ll move from a contract led system to a service led system. There will not be a switch off and on.

“Contracts are currently the primary route for funding small business apprenticeships. Over time we’ll be switching to those being the secondary route and the digital system to the primary route and eventually we’ll switch off those contracts altogether.”

He continued: “If you have a non-levy contract you can continue to train on that contract, but you can also engage new opportunities from the online service. In essence there will be a dual running of the two services concurrently running in parallel.

“We’re not going to put a fixed time frame to how long that transition period works, but what we can give you assurance on is those non-levy contracts will continue to operate for as long as we think you’ll need them before we fully switch them off.

“We are looking at extensions on those contracts, we think that is a very safe and sensible thing to do, but it shouldn’t be confused with some sort of delay of not moving onto the new online service.

“As we go through next year we will start to think how we’ll scale down those contracts and scale up the online service.”