The skills minister has said she is “open to” raising the apprenticeship levy transfer facility above 25 per cent but admitted that “fraud has been an issue” within the current system.

Speaking at a fringe event at the Conservative party conference in Birmingham earlier today, Anne Milton said she had “no particular need” to keep the levy transfer facility at 25 per cent.

“I’m open to it. All that matters to me is that the levy is spent on the purpose for which it was intended,” she said.

“We have to have rules, and they’re irritating and bureaucratic, but fraud has been an issue. Fraud is always an issue in any system you set up.

“So as I say, my only line is that the money is used for the purpose for which it was intended and not spent on other things.”

She also said there had been a “big shift” in the way the apprenticeship levy is seen over the last year and businesses were no longer “complaining” about the system itself.

“They just want the levy to work well for them,” she said. “It’s important, as I always say, that we prevent fraud.”

FE Week understands that there is a concern there may be a rise in fraudulent inducement associated with transfer funding.

Yesterday, the Chancellor Philip Hammond announced the transfer facility would rise from 10 per cent to 25 per cent by April 2019, allowing large levy-paying employers to share more of their annual funds with smaller organisations.

Although some large employers have expressed concern that the new “flexibility” with the levy hailed by Mr Hammond will have little actual impact, Ms Milton said the “hope” was that raising the level allowed to be transferred to 25 per cent would encourage more businesses use the system.

“Few businesses, levy payers, have taken it up,” she admitted. “We hope that increasing it to 25 per cent will increase that, because then it’s a substantial proportion. I think for some employers, they just felt it wasn’t enough to make it worth their while.”

Also on the panel was Robert Halfon, former skills minister and chair of the education select committee, who expressed his own concerns about malpractice within apprenticeship subcontracting: an issue which Ms Milton said was “on my radar”.

“I worry hugely about apprenticeship subcontracting,” he said. “It’s entirely wrong that companies get whacking great management fees.”

The committee’s report on the apprenticeship system is due to be published next week.  Mr Halfon said it will include “recommendations” on subcontracting. 

The principal of a high-profile college in financial crisis has resigned with immediate effect, FE Week can reveal.

Dame Asha Khemka (pictured), who is one of the highest paid FE leaders in the country, stepped down from the top post at West Nottinghamshire College following a “special meeting of the board of governors”.

It was held “in light of the current challenges faced by the college”.

The board thanks Dame Asha for her service and for the difference she has made to the college

WNC received a £2.1 million bailout from the Education and Skills Funding Agency in July – which FE Week last month revealed was requested just 48 hours before it would have run out of cash.

The ESFA then hit it with a financial health notice to improve, which triggers a formal review from the intervention team and the FE Commissioner.

Despite the large cash injection, the WNC today admitted it “can’t rule out having to approach the ESFA for further funding”.

“Following a special meeting of the board of governors and in light of the current challenges faced by the college, the principal and chief executive has announced she has stepped down from her position with immediate effect,” said Nevil Croston, chair of governors at West Nottinghamshire College.

“The board thanks Dame Asha for her service and for the difference she has made to the college and the local community during her tenure.

“We are now working with the ESFA and the FE Commissioner’s office to appoint an interim principal until a national search for a permanent replacement can be implemented.”

He added: “Although we are not the only college to experience financial difficulty at this present time, the board and senior leadership team deeply regrets that the organisation has found itself in this position.

“We have every confidence in our ability to successfully implement our recovery plan and ensure our provision for students and employers remains first-class.

“Although we can’t rule out having to approach the ESFA for further funding, we are committed to correcting the college’s finances in a way that minimises disruption to staff, students and the communities we serve while maintaining an excellent experience for our students.”

Dame Asha received a £262,000 remuneration package in 2016/17. WNC’s website says she has received “many awards and accolades since being in post – including a Damehood in 2014”.

She was also “named ‘Woman of the Year’ at the GG2 Leadership Awards”.

The college has hit financial troubles in the past year.

Earlier this year WNC blamed changes in apprenticeship subcontracting rules, which reduced their income from management fees, for having to cut more than 100 jobs in an effort to make £2.7 million in savings.

Board minutes from April say the college was running low on reserves which were below the £9 million set in its banking covenants. The college has a £15 million loan outstanding with Lloyds Bank, which was negotiated in 2012 to pay for redevelopment and has another 20 years to run.

We can’t rule out having to approach the ESFA for further funding

The minutes also reveal the college’s worryingly low cash days – the number of days an organisation can continue to pay its operating expenses given the amount of cash available.

For colleges these are benchmarked by the FE Commissioner at 25 but they sat at just 11 for WNC, according to the minutes.

The college’s accounts for 2016/17 have yet to be published.

“The college’s strength has always been in providing high-quality education and training that makes a real difference, and the current challenges will not change that,” Mr Croston said today.

“We have already made significant progress in achieving this year’s enrolment targets, and across-the-board we are seeing our students achieve their qualification and move on to their next steps, whether that be further study or employment.

“The focus now is on building on this positive start to the year, working closely with colleagues and their representatives, and with the local community, to ensure our continued success for the future.

“We are very much open for business.”

The Greater London Authority is set to become the first devolved area to launch a tender for its adult education budget later next week.

Contracts worth around £130 million will be up for grabs from October 12, according to a prior information notice published by the GLA last week.

“It is intended that successful providers will enter into individual contracts to deliver a range of education and training services to both in-work and out of work London residents aged 19 or above, to help them gain qualifications, progress into further education and ultimately access and sustain employment,” the notice said.

The contracts will be split into two lots: adult education provision to out-of-work Londoners, which is expected to “constitute approximately 75 per cent of the total procurement value”, and adult education provision for in-work Londoners, which will be worth around 25 per cent of the total.

For each of the two lots, successful providers will be “expected to offer education and training services to equip Londoners with the skills and knowledge they need to gain qualifications, progress into further education” and either access work, or “achieve career progression”.

Providers can bid for one or both lots, with contracts to be awarded in April ahead of delivery beginning August 1 next year.

The GLA is one of seven areas that will gain control of its AEB from 2019/20, through devolution deals.

Its total devolved AEB budget is around £311 million per year, of which only the share available to independent training providers will go out to tender.

The remainder will be awarded in the form of grants to colleges and other institutions that currently receive adult education funding via a grant from the Education and Skills Funding Agency.

They will “receive a similar allocation for London residents to their allocation from the ESFA in 2017-18, based on the ability to spend their allocation in previous years”, according to the GLA’s draft Skills for Londoners Framework, published in July.

Earlier this year, the GLA revealed that it planned to move away from paying providers to deliver qualifications, to paying for wider outcomes such as progression into work.

City Hall won’t “rush” to introduce an outcomes-based funding model, however, and will only do so once “there is confidence that there is sufficient data to allow robust payment models to be developed”, according to the draft framework.

It is expecting providers to collect destinations data “more completely”, and is considering introducing an “outcomes development fund” to provide extra resources for providers to help them develop new data collection systems.

FE Week reported last month that unlimited management fees are set to end under the GLA’s plans for devolution.

It will set a 20 per cent limit on subcontracting fees, according to a briefing document published ahead of a meeting about the AEB.

FE Week revealed earlier this year that the GLA is having to recruit a huge team of new bureaucrats to hand out the budget to London’s training providers from 2019, with most of their wages paid every year by topslicing £3 million from the AEB.

The team is currently 72-strong, but this may need to increase to avoid the risk that the number of contracts and grants to be dished out will be “greater than can be reasonably managed by the current team”, according to briefing documents published last month.

Plans to reform the apprenticeship levy have been criticised by some  large employers, who have voiced concerns that changes to the transfer facility will have “little impact”.

Speaking to delegates at the Conservative party conference in Birmingham earlier today, the Chancellor Philip Hammond hailed the “flexibility” of increasing the annual apprenticeship levy transfer facility from 10 to 25 per cent.

This means large levy-paying employers will be allowed to share more of their annual funds with smaller organisations from April 2019.

Mr Hammond said the government had “heard the concerns about how the apprenticeship levy is working” and will “engage with business on our plans for the long-term operation of the levy” after 2020.

However, employers have hit back at the plans and voiced concerns that changing the amount available to be transferred will have little difference overall.

Mark Corden, head of apprenticeships at Specsavers, said: “It’s not flexibility in who we transfer funds to which is the flexibility that is most sought. Any employer can access apprenticeships in the system, there is a difference in how much they contribute.

“The 10 per cent transfer flexibility is probably only attractive to a small number of the largest public sector levy payers (I’m guessing). Moving to 25 per cent will have little impact across the wider employer base.”

Tony Allen, formerly the Skills Funding Agency’s deputy director of large companies, described the announcement as “just tinkering”.

“From my conversations with employers, even if you made the transfer level 100 per cent, it would not make that much difference.

“Employers are much more concerned about 10 per cent, 20 per cent off-the-job training, and increasingly inherent problems with end point assessment.”

Brian Berry, chief executive of the Federation of Master Builders, said Mr Hammond had “in part” listened to the concerns of business, but said he “needs to go much further”.

“If the Chancellor is serious about ensuring the levy has the desired effect, and increases meaningful training across all sectors, it should go further and make 100 per cent of the vouchers transferable from large to small companies,” he said.

Helen Webb, chief people officer at the Co-Op, said the increase to 25 per cent is a “step in the right direction” but it would better if changes could be brought in “sooner”, including a review of the current arrangements on how funds can be spent from the levy.

She added: “As a business that has around 1,000 apprentices working with us at any one time, we’ve found the controls can be restrictive.

“If the government is serious about making apprenticeships work as a means of equipping our workforce with the skills they need, the remit of what the levy can be spent on needs to be broadened.”

Mark Hawthorne, chair of the Local Government Association’s people and places board, said the announcement was a “positive sign” that the government was listening to concerns from councils about the efficacy of the levy, but said the next step should be to allow local areas to pool levy contributions across local economies.

 Mike Berry, national chair of the Federation of Small Businesses, welcomed Mr Hammond’s announcement which he said has been “a key ask of FSB to stop the decline in the number of people taking up apprenticeships.”

However Labour’s shadow skills minister, Gordon Marsden, criticised the Chancellor’s plans, calling them “too little, too late”.

“It’s not action this day, only a consultation – and will do little to address the shambles of Department for Education ministers missing their target of three million apprenticeships by 2020 or the continuing plummeting start levels for them,” he said.

“Labour by contrast would turbocharge the traineeships programme, essential to get young people onto the apprenticeship ladder and abysmally neglected by this government, and listen to calls for more control over levy funding at local level.”

Angela Rayner, shadow education secretary, wrote on Twitter that the Chancellor had “finally accepted” one of Labour’s proposals in increasing the levy transfer facility, but warned: “With numbers of people starting apprenticeships falling now, a review and no action until after 2020 is just tinkering at the edges.”

 

The government has committed to introducing all new apprenticeship standards in time for August 2020, rather than “by 2020” as previously stated.

Plans to stop funding old apprenticeship frameworks and ensure providers were only delivering new Trailblazer standards were first announced in October 2013, with the frameworks initially planned to end in 2017/18.

However, the government’s ‘2020 vision’ apprenticeship document, released in December 2015, pushed this deadline back and planned instead for “a migration from apprenticeship frameworks to standards over the course of the parliament, with as much of this to take place by 2017/18 as possible.”

Three waves of frameworks have so far been switched off, but earlier this year the Education and Skills Funding Agency announced it would not be closing any further frameworks until 2020.

“By 2020, we expect that employers and providers will have completed the transition, and that all starts will be on standards, so all frameworks will be withdrawn to new starts at that point,” the guidance said.

However, “by 2020” has now morphed into August 2020 at the earliest, after the Treasury released a press release today on changes to apprenticeships.

This included £5 million for the Institute for Apprenticeships to introduce new standards and update existing ones.

“The government will discontinue the old frameworks so that all new apprenticeships will be on the same higher-quality standards by the start of the 2020/21 academic year,” it said.

According to the most recent apprenticeship framework delivery list, published on September 12, 86 frameworks have been withdrawn so far. Two more have withdrawal dates listed – level four public relations (January 1, 2019) and level five care leadership and management (December 31, 2018).

To date, 124 frameworks remain without a withdrawal date.

The Russian Federation reigned supreme at EuroSkills 2018 after their team claimed nine golds, eight silvers, two bronzes and 10 medallions of excellence in Budapest.

Following up in second place was Austria while France finished third (full table below).

Russia, which is hosting next year’s WorldSkills competition in Kazan, took 37 young people to compete in Hungary – the largest team out of any competing nation.

They won top podium spots in mobile robotics, welding, mechanical engineering design CAD, graphic design, visual merchandising, web development, ICT specialists and hotel receptioning.

Austria took 32 competitors and won four golds, 12 silvers, two bronzes and nine medallions of excellence. Their gold medals were achieved in automobile technology, plumbing and heating, painting and decorating, and concrete construction.

France’s 25 competitors won three golds, three silvers, six bronzes and 10 medallions of excellence. They were announced Europe’s best skilled nation in wall and floor tiling, heavy truck maintenance and hairdressing.

EuroSkills 2018 came to a close on Saturday night after three days of brutal competition.

Twenty eight European countries competed in 35 official skills. Over 100,000 spectators were said to have visited the competition, being held at the Hungexpo arena, over its duration.

Flying the flag for Team UK was 22 individuals. WorldSkills UK boss Dr Neil Bentley had given the team a target of a top 10 finish in the overall medal table.

And they achieved just that.

They finished joint ninth with Sweden. Beauty therapist Holly-Mae Cotterell claimed gold, while bronze medals went to mechatronics duo Danny Slater and Jack Dakin, mechanical engineering CAD competitor Ross Megahy, and hairdresser Gavin Jon Kyte.

Team UK also claimed seven medallions of excellence.

“This is a fantastic result for Team UK and the country as a whole,” said Dr Bentley.

“We were gunning for a top ten position and we got it.

“These brilliant young people – training and preparing them to be among the very best across Europe – are the UK’s new generation of high flyers.”

An FE Week souvenir supplement about EuroSkills Budapest will be published this week, in partnership with Pearson.

FE Week is proud media partner of WorldSkills UK and Team UK.

The Chancellor, Philip Hammond, is set to announce that the annual apprenticeship levy transfer facility will rise from 10 to 25 percent.

In a speech at the Conservative Party Conference later this morning, Mr Hammond will also say that he will consult with businesses about further changes to the levy from 2020, following the slow take up and employer criticisms.

As reported in FE Week, large employers used just 10 percent of their levy funds in its first year since launching in May 2017, and monthly starts figures continue to be well below pre-levy levels.

The Conservative Party Manifesto in 2017 committed to “allow large firms to pass levy funds to small firms in their supply chain”, a policy which was introduced in May 2018.

The online Apprenticeship System for levy paying employers when launched allowed for up to 10 percent of annual funds to be shared with up to one employer and has since been expanded to unlimited receiving employers.

FE Week understands that since the policy was introduced six months ago, the take-up has been very low, despite employer groups lobbying heavily for the flexibility.

A spokesperson for the Conservative Party said the increase from 10 to 25 percent available for levy transfer from April 2019 comes alongside a commitment to “expanding the apprenticeships available”, as well as “kick-off the first stage of the Government’s engagement process seeking views on the flexibility and development of the Apprenticeship Levy.”

Mr Hammond will say the changes form part of a “new” £125 million package to support learning and and fuel productivity.

Mr Hammond’s speech will take place during the 10:00 to 12:30 session at the Conference at Birmingham’s NEC. Follow @FEWeek for live updates of the speech.