A cash-strapped college has received a financial health notice to improve from the government after requesting exceptional financial support to the tune of £2.1 million.

West Nottinghamshire College will now be referred to the FE Commissioner for an independent assessment to test the college’s “capability and capacity to make the required changes and improvements”.

A spokesperson for the college confirmed the amount it requested from the Education and Skills Funding Agency.

FE Week reported earlier this year that West Nottinghamshire College had blamed changes to subcontracting rules for the fact it was having to cut more than 100 jobs in an effort to make £2.7 million in savings.

The notice, sent to West Nottinghamshire College’s chair of governors Nevil Croston on July 24 and published today, said the college board “will be expected to engage positively and responsively in the intervention process including attendance at regular case conferences to report on progress to financial recovery”.

The college was told to provide the ESFA with a two year financial forecast and weekly cash flow by August 17, and consult with the agency before “any asset disposal or inter-company financial transfer”.

West Nottinghamshire College is still yet to publish its most recent accounts online, despite the January deadline for doing so. The notice said the college must now share its management accounts with the DfE and any other relevant financial and cash flow information. 

If the college “fails to take the necessary actions (in whole or part) within the timescales to be agreed, or if evidence of progress is not appropriate or not available”, the ESFA will “take further action”.

Dame Asha Khemka (pictured), principal and chief executive of West Nottinghamshire College, said the college had asked for “a short-term loan” from the ESFA, which was provided in July. 

She added that, although close to 100 members of staff were made redundant or accepted voluntary redundancy before the summer, the “full impact of savings” from this will not be realised until 2018/19.

“The college’s plan for financial recovery, which led to the restructure, was also based on us meeting student enrolment targets in 2018/19. Early indications are that we are well on track to do so,” she said. 

“Despite the challenges the college has faced, I am confident we will continue to serve our local communities as a vibrant institution that provides high-quality education and training to local people and employers.” 

West Notts was the largest college provider of apprenticeships in 2016/17, and had contracts to deliver apprenticeships and traineeships worth £19.8 million last year. However, the overwhelming majority of this was subcontracted.

New rules for contracting and subcontracting, which came into force in May 2017, mean lead contractors can no longer subcontract entire apprenticeship programmes but must “directly deliver” at least some of each programme.

West Nottinghamshire College subcontracted 82.4 per cent of its apprenticeship provision in 2015/16, which earned it £3.2 million in top-slicing fees from provision worth £15.5 million.

 

Further education has been the victim of the sharpest cuts in the education sector over the last 25 years, according to a new report.

The Institute of Fiscal Studies’ inaugural report on education spending in England said 16-18 education “has been the biggest loser” from changes to funding, with spending per student falling by eight per cent in real terms since 2010-11.

In 1990-91, spending per learner in FE was 50 per cent higher than spending per student in secondary schools, but it is now around eight per cent lower.

School sixth forms are also struggling against low funding, with funding per learner lower than at any point since at least 2002-03 after budget cuts of 21 per cent per learner since 2010-11.

Tim Gardam, chief executive of the Nuffield Foundation, which funded the report, described the fall in FE spending as “clear and worrying”.

The report said there had been a “dramatic shift” towards apprenticeships and a movement away from classroom-based learning within level two and level three qualifications, with apprenticeship spending for learners aged 19+ now representing 36 per cent of the total education funding, as opposed to 13 per cent in 2010. The overall number of 19+ learners has “fallen substantially”, from 4.7 million in 2004 to 2.2 million in 2016.

Although the government has committed extra funds for the introduction of T-levels – amounting to about £115 million in 2019-20 and growing to £445 million by 2021-22 – the report warned that “the new money for T-levels and the proposed cuts to the rest of the FE college budget offset each other almost exactly”, meaning that spend per learner is unlikely to increase.

The IFS also warned that the focus on developing “specific occupational skills” in both apprenticeships and T-levels could leave learners “more vulnerable to negative economic shocks” than if they had more general skills, and noted “significant concerns as to whether high quality T-levels will be ready from day one”.

The report also found that, although the number of adult learners in further education or apprenticeships has fallen by 29 per cent since 2010-11, funding for adult education has been cut by a far higher amount, with a drop of 45 per cent since 2009-10.

Sally Hunt, general secretary for the University and College Union, said the “severe cuts” to further education were “completely unsustainable”.

“If the government really wants to ensure that everyone can access the skills they need to get on in life, it must urgently invest in further education institutions and their staff.”

Geoff Barton, general secretary of the Association of School and College Leaders, said there is “no rhyme or reason for the extremely low level of funding for 16-18-year-olds”.

“It is a crucial phase of education in which young people take qualifications which are vital to their life chances and they deserve better from a government which constantly talks about social mobility.”

A spokesperson for the DfE said: “Whilst we accept that there are pressures across the system we have protected base rate funding for 16 to 19 year olds until 2020, and are putting more money into our schools than ever before.

“We understand the pressures in further education, which is our wide ranging review of post-18 education and funding is looking at how the system can work better for everyone, ensuring value for money for students and taxpayers.”

 

 

The education secretary is touring Germany and Holland this week to learn more about their famous vocational education systems to aid him in the development of T-levels and apprenticeships.

Damian Hinds’ “fact finding mission” begins today and will start by visiting small businesses to discover the secrets to their apprenticeships system, according to an opinion piece he wrote for The Times.

He’ll then travel over to neighbours the Netherlands to visit some of their “top-performing” technical colleges.

“I’m in Germany this week to learn more about how they educate their young people to have the practical skills they need to support a highly productive economy,” the education secretary tweeted this morning.

His tour comes at a critical time for vocational education in England, with the launch of the Department for Education’s new technical qualifications, T-levels, just around the corner and apprenticeship numbers struggling to grow following the introduction of the levy.

Mr Hinds is likely to learn about Germany’s well-known ‘dual-system’ model, which represents two learning locations — the school and the workplace.

Firms recruit the best-qualified candidates for apprenticeships at 16 or 17; the less well-qualified normally do a full-time preparatory course at a vocational college or wait to re-apply for an apprenticeship.

Around a fifth do a specific technical A-level type qualification then take an apprenticeship before continuing to a degree at a technical university.

All employers, whether apprentice employers or not, contribute to the cost of local chambers of commerce through a compulsory levy that pays for the provision. The upside is they benefit from other services through this levy.

Almost all large German firms offer apprenticeships.

“We know Germany’s highly skilled workforce is a primary driver for their economic growth,” Mr Hinds wrote today.

“Technical and vocational training in Germany is high calibre, combining classroom instruction and on-the-job training.

“Critically, it is not perceived as being less prestigious than university, with nearly half of young Germans taking this route, often through apprenticeships.”

In the Netherlands, Mr Hinds wrote today that they “link education and work at a young age, meaning 12-year-olds are considering possible career options when they choose their subjects; with vocational options proving the most popular”.

The country also has one of the lowest youth unemployment rates in the EU, behind only Germany and Austria.

FE Week will be speaking with the education secretary later this week to discuss what he’s learnt on his travels.

Controversial management fees in subcontracting are set to be capped for the first time, FE Week can reveal.

The Greater London Authority has set out plans to introduce a 20 per cent limit on top slices for adult skills provision when devolution kicks in next year.

It follows sector-wide concerns that in many cases cash meant for learning has been diverted as prime providers levy what are widely seen as excessive management fees to cover administrative costs.

The Department for Education’s decision about introducing a cap was kicked into the long grass in August – delaying any verdict until at least the end of 2018 despite calls for a quick outcome.

We are not convinced that establishing a ‘norm’ on subcontractor fees would be helpful

But while ministers continue to mull over their decision, London mayor Sadiq Khan (pictured) has made up his mind and is currently changing the GLA’s funding rules.

A briefing document published ahead of a GLA meeting about the adult education budget this month states two “key proposed changes in our approach, compared with that of ESFA” regarding “conditions of funding”.

The main change includes a “requirement for providers to seek approval for any in-year changes to subcontracting and a proposed cap of 20 per cent on subcontracting fees”.

The briefing document also provides an interim analysis report of the consultation responses gathered through the GLA’s ‘Skills for Londoners Framework’.

“There was majority support for a 20 per cent cap on subcontractor management fees, providing higher or varied fees could be negotiated where required,” it said.

A GLA spokesperson told FE Week the cap will apply to all funding, both procured contracts and grant awards.

The news of the limit is likely to send alarm bells ringing at London providers that charge higher than 20 per cent top-slices as it will make a heavy dent in their income.

Using ESFA subcontracting data for 2016/17, FE Week identified eight colleges that entered arrangements where they charged more than 20 per cent fees.

At Capital City College, for example, it had subcontracting deals totalling £1,159,424 last year and top-sliced £486,280, or 42 per cent.

If the GLA’s 20 per cent cap had been introduced last year the college would have lost £254,391.

The college group said its member, the College of Haringey, Enfield and North East London, would be most affected by the limit.

“The college negotiates its management fees with sub-contractors based on the extent of services it provides,” said CONEL’s interim principal Kurt Hintz.

“Any caps, although well intended, will interfere with this process and make sub-contracting less flexible and potentially disadvantage or exclude especially unique or small providers from accessing the support they need from a large ‘prime’ contractor.”

New City College, which had top-slices of up to 34 per cent in 2016/17 for AEB deals, told FE Week it did not support the proposed cap as it believes it is “motivated by the wrong reasons”.

“Some smaller providers need substantial support to build their capacity and this justifies a higher subcontracting fee,” a spokesperson said.

Richmond upon Thames College had management fees reaching 31 per cent last year.

Its principal, Robin Ghurbhurun, said that while a 20 per cent cap is “not unreasonable” and it poses no problem for the college “as we have planned to move” to the amount, there should be the “flexibility to locally negotiate a higher per cent rate if additional services are provided”.

Given the college responses, it came as no surprise that the Association of Colleges wasn’t supportive of the plan.

“We are not convinced that establishing a ‘norm’ on subcontractor fees would be helpful,” said Mary Vine-Morris, the AoC’s area director for London.

“Subcontracting receives misleading attention. It can be an enabling mechanism that allows smaller organisations and niche providers to contribute to the delivery of a comprehensive package of learner support.”

Several FE sector representative groups, with the notable exception of the AoC, published best practice guidance in March stating that management fees in subcontracting should not be more than 20 per cent.

Mark Dawe, boss of the AELP – which led on the guidance – welcomed the GLA’s cap.

“This means more taxpayers’ money reaches frontline delivery for the benefit of London’s businesses and adult learners,” he told FE Week.

“There is no reason why the 20 per cent cap shouldn’t be adopted as a maximum nationally and in many cases it should be substantially less.

“We very much welcome the lead that the GLA has taken on this.”

The Association of Colleges has this morning published its proposed new senior staff pay code for colleges.

FE Week revealed last night that refreshed remuneration guidance was being developed as top level pay across the education sector continues to be heavily scrutinised.

A consultation for the new code, which encompasses “three core principles: fairness, independence and transparency”, has now been launched.

FE Week has pulled out the main proposals.

 

1. Seniors mustn’t get a pay rise unless all staff do

Tension within some colleges between lecturers and their bosses have intensified over recent years as leaders enjoy bumper wage increases while pay for lower-level staff has reportedly failed to keep up with inflation.

The AoC wants to put a stop to this.

“Senior post holder remuneration should be determined in the context of each college’s approach to rewarding all its staff, and in particular, consideration should be given annually to the rate of increase of the average remuneration of all other staff,” it recommends.

 

2. The top boss cannot be involved in deciding pay

No individual should be involved in determining their own remuneration, according to the AoC.

Principals are often members of their pay committees to act as an observer without voting rights.

But the association’s new code says the chief executive/principal must “not be a member of the remuneration committee” in any circumstance.

“Remuneration committees must be independent, competent and should not be chaired by the chair of the governing body,” it adds.

 

3. Colleges should publish principal salaries publicly and separately to all senior staff

Although the AoC says each college should provide justification for senior post holders remuneration to its governing body, it wants the remuneration of the chief executive/principal to be “separately justified, published and related to the remuneration of all staff within the organisation”.

Colleges should publish a “readily accessible annual statement, based on an annual report to its governing body” for senior pay.

This should include: a list of senior post holders within the remit of remuneration committee; its policy on the remuneration for post holders within the remit of Remuneration Committee; its choice of comparator college(s)/organisation(s); its policy on income derived from external activities; the pay multiple of the principal and the median earnings of the institution’s whole workforce, illustrating how that multiple has changed over time and, if it is significantly above average, an explanation of why; and an explanation of any significant changes.

 

4. Keep bonus and severance payments ‘fair and reasonable’

“Awards made in respect of annual bonus arrangements linked to the achievement of specific annual objectives should not be consolidated,” the AoC recommends.

“Any severance payments must be reasonable and justifiable.”

 

5. Seniors must justify income they receive from outside organisations

The AoC recommends that there should be a “clear and justifiable rationale for the retention of any income generated by an individual from external bodies in a personal capacity”.

This would apply to any college seniors who are members of the Institute for Apprenticeships board, for example, who are paid £15,000 a year.

One of the original founders of the Association of Employment and Learning Providers has died after a short illness.

Frank McMahon was the vice chair and treasurer of AELP from its creation in 2002 until April 2018, and helped develop its membership to over 900 providers in that time. 

Martin Dunford, chair of AELP, said Mr McMahon was “very committed” to the association’s cause.

“It is worth remembering that the association’s establishment was not an easy endeavour and we were greeted with scepticism and opposition in some quarters. Frank was one of those who were determined to make it succeed,” he said.

“Frank was a very good vice chair, colleague and confidant to me, who served AELP diligently over many years. As well as keeping a close eye on AELP’s balance sheet, he was not afraid to make constructive challenges in the formulation of our national policy inputs.

“He will be sorely missed.”

Mr McMahon was also the owner and managing director of YH Training Services, which has over 1,200 learners across Yorkshire and Humberside. Mr McMahon committed YH to training unemployed adults to help them achieve their career aspirations.

The company won the Yorkshire and Humber Apprenticeship Employer of the Year and NHS Training Provider for the Yorkshire Humber Region in 2011. 

On August 17, YH congratulated Mr McMahon on Twitter for making it through to be a finalist at Yorkshire Coast Radio’s Toast of the Coast awards in the ‘best boss’ category. He died on September 5.

Mr McMahon was also a member of the government’s bureaucracy review group from 2003 to 2009, which led to a reduction of the data collected from providers. 

In Yorkshire, he set up and chaired a local learning provider network, Providers in Partnership, between 2005 and 2010, and was regional chair of the Yorkshire and Humber Training Providers Network. 

A resident of Scarborough, Mr McMahon invested a lot of time in regional voluntary commitments and was asked to judge the National
Apprenticeship Awards on numerous occasions. 

A spokesperson for the AELP said the association extends its “deepest condolences” to Mr McMahon’s wife, Chris, and his family. 

Mark Dawe, chief executive of AELP, wrote in the association’s newsletter: “Last week we heard the very sad news about the death of Frank McMahon, who will be greatly missed by many, especially in the ITP world, given the incredible contribution to education and
training he made through his life.

 “He also gave me an amazing lesson on apprenticeships for fishermen in Whitby – if ever a national policy undermined a quite special and high quality programme, I think this might be the best example. 

“But that was Frank – passionate about every employer, every apprentice, every young person he worked with.”

The Department for Education is still denying it conducted a formal review of studio schools – despite FE Week discovering an attempt to cover-up internal emails which openly discussed the existence and timescale of the review.

It was revealed last year that the former academies minister Lord Nash had met with the Studio Schools Trust to “review the concept of studio schools”, according to official minutes. 

However David Nicoll, then chair of the SST which supports and promotes studio schools, claimed that a review was “definitely not on the agenda of any meeting I attended”. 

Under the freedom of information act, FE Week requested all written correspondence between ministers and employees at the Department for Education and the SST from September 1, 2016, to March 6, 2018. Many of the emails between Mr Nicoll and officials were released but were heavily redacted.

However, FE Week has seen full copies of the documents and discovered that many of the blacked out sentences mentioned a “review” of studio schools.

The small, vocationally-focused 14- to-19 studio schools have struggled to survive due to poor Ofsted ratings and low pupil numbers, with 26 closing or planning to close since the scheme was introduced in 2010 – despite millions of pounds of government investment.

One previously redacted message showed that, on February 16, 2017, Mr Nicoll asked the DfE if he could postpone a meeting with Lord Nash “since it seems that the review will not have been completed in time”. Four days later Mr Nicoll said he would be “back in touch as soon as we know what is happening with the review timing”.

On March 10, Mr Nicoll emailed: “I thought it was time to ask again if there was any progress and/or timetable you could share regarding the studio school review. I appreciate that this may seem impatient, but I am fending off enquiries on a daily basis at the
moment”. 

Three days later he received a response from a government official saying “we are making progress and hope to be in a position to make a decision shortly”.

All mentions of a review were redacted in the government’s official FOI response. The DfE stated the sentences were withheld under FOI rules because ministers and officials “need the freedom to make decisions based on the best advice available, including
correspondence from outside bodies, without fear of this advice being disclosed”. 

When asked about the legitimacy of the DfE’s redaction response, Maurice Frankel, director of the UK Campaign for Freedom of Information, said: “They are trying to conceal that 18 months ago there was a review, or some other word they prefer, and they are trying to keep it from the public.” 

Asked about the review in the light of the redacted emails, a spokesperson for the DfE said: “There has been no formal review of studio schools and we have never set out the expectation that there is one.” 

The spokesperson added that while studio schools “can be popular, we know that there have been challenges which is why we will continue to look into their performance”. 

The DfE would not give any further details about what the “monitoring” of the programme consisted of.  Mr Nicoll could not be reached for comment.