A top director in the Education and Skills Funding Agency has warned that colleges are “still running out of money”, as officials launch a new early warning system for college finances.

It was announced this morning that college financial returns will be consolidated into a single annual return from January 2020.

Providers have historically submitted their financial returns at least twice a year.

The ESFA claimed this will help college governors, and the agency, “spot signs of declining financial health and ensure preventative action can be taken at an earlier stage”.

But college leaders aren’t convinced.

In reaction to the announcement, Ian Pryce, chief executive of Bedford College, tweeted: “You don’t wait until you hear the football results and learn your team lost 10-0 as a basis for preventing problems and poor performance. You spot things early by developing strong human relationships.

“I find this very disappointing especially if this is what college finance directors think.”

And Chris Todd, principal at Derwentside College, said: “Cash flow is often the issue and an annual return won’t help identify cash flow deterioration quickly enough.”

Responding to Pryce’s concern, the ESFA’s director of provider market oversight, Matthew Atkinson, tweeted: “This is the forecast return we have discussed Ian I think it does address those concerns. It’s a forward look forecast on a monthly basis aimed at cash allowing us to work with colleges sooner not later. Colleges are still running out of money.”

He later deleted the tweet.

Atkinson was first recruited by the ESFA to lead the Transaction Unit, responsible for the £700 million college Restructuring Fund.

His biography on the DfE’s website states: “Prior to joining the ESFA Matthew spent 20 years working with distressed and stressed corporates and their stakeholders. He joined from PwC where he worked in the Deals Team for over 10 years, working in insolvency and restructuring.”

FE Week has asked the ESFA to further explain how moving to a once a year financial returns model will help spot signs of poor financial health earlier.

The agency has also been asked to confirm that Lord Agnew will lead on the new early warning system, considering he was named yesterday as the Department for Education minister responsible for the “further education provider market”.

The move comes just weeks after the ESFA announced that Dame Mary Ney would lead a review into the way the government monitors college finances, and less than a month after the National Audit Office said they were also preparing to launch a value for money review on the management of colleges’ financial sustainability.

The agency labelled today’s announcement as a new “funding model”, which was described by the deputy chief executive of the Association of Colleges as a “major upgrade”.

The ESFA is, however, yet to say how it will be an improvement on the old model.

Colleges will need to submit their finance record for the last time in December with the new “simpler” model coming into force in the new year.

As is the case already, colleges in early intervention or formal intervention; or otherwise in receipt of ESFA loans, will need to submit returns on a more frequent basis.

Julian Gravatt, deputy chief executive at the Association of Colleges said: “Colleges work with a robust set of financial rules developed by ESFA and its predecessors over the last 25 years.

“The new financial model is a major upgrade”

“The new financial model is a major upgrade and we’re pleased at the Association of Colleges that the agency is working closely with college finance directors to put it in place.”

ESFA chief executive Eileen Milner said: “We are committed to ensuring that we balance the risks of protecting public funds, and preventing colleges going into financial decline with a commitment to ask from the sector for things which are reasonable.

“We are recruiting a qualified team to implement the model, which our process of testing with colleagues in the sector, suggests will save colleges a significant amount of time and resources so they can focus their efforts on delivering high quality education.”

Nearly 50 colleges, involving their financial directors, were said to have engaged with user research sessions and contributed to the design and build phase of the new model, with the Association of Colleges and Sixth Form College Association supporting the ESFA on its intent and scope.

Describing the new financial model, the ESFA said: “The new financial model has been developed to replace the longstanding biannual returns of the finance record in December and the financial plan in July, as well as the Cash Flow Against Debt Servicing and the cash flow template.

“The introduction of the new financial model follows on from recent changes to the way colleges submit their financial information with the development of an online submission portal that was first used by colleges in July.”

The Association of Employment and Learning Providers is lobbying government to U-turn on its proposal to introduce yet another data field for logging apprentices’ off-the-job training hours.

Last week the Education and Skills Funding Agency said a mandatory “off-the-Job training – actual hours” data field would added to individual learner records (ILR) from 2020/21, subject to consultation.

It comes after officials announced in May that from the 2019/20 academic year, a new mandatory field in the ILR would be added that requires providers to record “planned” off-the-job hours.

“It is another bureaucratic rule that focuses on administration not quality”

The requirements follow high-profile concern from the National Audit Office and Public Accounts Committee about non-compliance with the unpopular rule going unchallenged.

But providers have reacted angrily.

After FE Week reported the latest announcement on Friday, Jill Whittaker, the managing director of HIT Training, tweeted: “As an employer I am disappointed that the ESFA don’t trust my award winning organisation to give my #apprentices the right amount of training, as a #training #provider I’m irritated that the @ESFAgov see timesheets as a proxy for #quality.”

Tony Holloway, the operations director at Qube Learning, said it is another “bureaucratic rule that focuses on administration not quality”.

“The reason the industry is so split is because across the board rules aren’t suitable,” he added. “Some qualifications require more and some less. Where is the funding for the extra administration burden?”

The AELP is now urging the ESFA to reconsider.

“Data fields for 2020/21 were published this week – and surprise surprise the ESFA now want actual off the job hours,” the association’s chief executive Mark Dawe will tell his members today.

“We warned this would happen when it was optional recording of hours – and here we now are. Total waste of time, probably allows one stat to be provided showing actual hours delivered in apprenticeships and totally misses the point of apprenticeships.

“We will not let this one drop – all it does is introduce bureaucracy and cost for the provider and more importantly the employer – another nail in the employer led coffin.”

The extra data field for 2020/21 would “enable visibility of actual training delivered”, the ESFA said.

It is unclear whether the “actual hours” field would need to be updated by providers every month, or whether the figure would need to be inputted at the end of each apprenticeship programme.

Further details will soon be posted to the feconnect forum and open for comments until 20 September, the ESFA said.

The ESFA previously said the mandatory field for logging planned hours will “help demonstrate compliance with the funding rules”.

In March the National Audit Office said in its apprenticeships progress report that the ESFA, in summer 2018, had just one “red risk” associated with delivery of the programme – that apprentices do not spend at least 20 per cent of their time doing off-the-job training.

The government’s spending watchdog warned that the agency has “limited assurance” in knowing whether the policy is being abided by, as even though audits may identify problems, there is “scope for providers to under-deliver for some time without this being picked up”.

“We will not let this one drop”

“This is an important gap in oversight, because the provider continues to be paid as long as the apprentice remains on the programme,” its report said.

Meg Hillier, the chair of the influential Public Accounts Committee, added that it was “concerning that the ESFA can’t be sure that apprentices are spending enough time on off-the-job training”.

The new mandatory ILR fields have therefore been introduced to mitigate the problem.

Deputy chief executive of the Association of Colleges, Julian Gravatt, said: “We understand the concerns of MPs about monitoring but we’re not convinced that loading more bureaucracy on colleges and training providers is the right reaction.

“The ILR specification is already 50 per cent longer than it was ten years ago and money spent on data collection isn’t available for anything else.”

Yet another minister in the Department for Education has been given some responsibility for further education.

It was announced this afternoon that Lord Agnew, the unpaid minister for the school system, will take on responsibility for the “further education provider market, including quality and improvement”.

He will also lead on EU exit preparation, delivery of the careers strategy, and safeguarding in schools and post-16 providers.

Agnew is the third minister to take on an FE brief in Boris Johnson’s new government, after he failed to appoint a dedicated skills minister in his reshuffle when Anne Milton resigned.

Education secretary Gavin Williamson is taking the lead on FE, while children and families minister Kemi Badenoch is offering support.

Badenoch has, however, now gone on maternity leave and had her responsibilities taken over by Michelle Donelan in the interim.

Donelan will support Williamson in his role as skills lead, including on the delivery of T-levels, apprenticeships and adult education, in “recognition of the important role technical education plays as the country prepares to leave the European Union”.

“I truly believe that a good education is the key to creating a fair society where everyone, no matter where they come from or their circumstances, has opportunities to succeed,” Donelan said today.

“From the earliest years of children’s lives to the point at which they make decisions about their further education or training, I am proud to be joining a department that is focusing its efforts on the most disadvantaged in society.”

Donelan remains as a government whip, taking on the role at the Department for Education on an unpaid basis for the duration of Badenoch’s maternity leave.

She was previously a member of the education select committee between July 2015 and October 2018.

Chris Skidmore has returned as universities minister.

GCSE English in schools should be scrapped and replaced by a new qualification that could be sat at any age between 15 and 19, putting an end to the government’s “wasteful” resits policy, a major commission has recommended.

The Forgotten Third commission, which was launched by the Association of School and College Leaders (ASCL), suggests learners should sit a ‘Passport in English’ instead of GCSE English language, consisting of online assessment, a portfolio of a student’s writing, and a significant spoken English component.

The qualification would have various stages, from “entry level to operational proficiency to expert” for each skill area of reading, writing, and speaking and listening, which would be taken when a learner was ready.

The current system is demoralising and fails far too many young people at a crucial time in their lives

The current comparable outcomes system, whereby the spread of GCSE grades is pegged to what cohorts of similar ability achieved in the past, leads to around a third of learners failing to achieve a ‘standard pass’ – grade 4 – in English language every year, according to the commission.

In line with the Department for Education’s condition of funding rule, all 16 to 19 students who have achieved a grade 3 in English or maths are required to retake the subject until they do pass, while those with a grade 2 or lower have the option of taking the reformed functional skills qualifications instead.

Chief executive of the Association of Colleges David Hughes said the “failure” of such learners is “pointless and avoidable”, and “stage, not age” should determine a student’s ability to gain a qualification.

“The current system is demoralising and fails far too many young people at a crucial time in their lives,” he added.

ASCL are spot on with identifying the problem

Commission chair Roy Blatchford, writing for FE Week, said “The Passport would be a highly respected qualification for a new era which better reflects the full achievements of all students and supports progression to a wide range of pathways.”

ASCL general secretary Geoff Barton said the “groundbreaking proposal” would make the exam system more “humane”, and is “geared towards the language skills needed by employers”.

The commission has suggested, as a means of testing each skill area, an online assessment for reading; an interview with someone from the business world for speaking and listening; and a task involving collating information from articles for the writing test, much like is done in the A-level English language exam.

It concludes that the current GCSE English Language specification is not fit for purpose because it focuses on a restrictive choice of writing tasks with an emphasis on literary analysis, rather than on competency in English.

The commission has also suggested a companion ‘Passport in Maths’ qualification.

There are other options to GCSE English language currently out there: reformed functional skills qualifications in English and maths are now up and running, and are favoured by sector bodies such as the Association of Employment and Learning Providers.

Its chief executive Mark Dawe said: “ASCL are spot on with identifying the problem.

“However, we don’t think that we should be introducing any more possible confusion for employers. 

“Functional skills are a strengthened and well-respected alternative and we would like to work with ASCL to ensure that this is the preferred solution to the concerns raised.”

Asked why the commission doesn’t suggest making better use of functional skills, Blatchford said: “We don’t doubt the merits of the new functional skills qualification, but the point of the report is to design a new qualification which would replace GCSE English Language, be taken by all students and support development over time, and we think this aim is best served by a new type of qualification.”

But this could all be for nought, as the Department for Education has today said the education secretary has promised not to change the national curriculum.

A spokesperson said: “We have dramatically reformed GCSEs over the past five years to ensure young people are leaving school ready for the world of work, while also adapting functional skills qualifications, including English, to better meet students’ needs post-16 and ensure they have a strong grasp of essential skills like reading, writing and maths.”

A Welsh college is to be suspended from recruiting apprentices in England after Ofsted found it making ‘insufficient progress’ in all areas of an early monitoring visit.

Gower College Swansea, which claims to have “award winning apprenticeship delivery” in Wales, moved to deliver the provision across the border in October 2017.

Its apprenticeship offer in England has started small, where 57 levy-funded apprentices are currently trained. Ofsted’s visit focussed solely on this provision, around half of which is delivered by a subcontractor.

The feedback from Ofsted’s new provider monitoring visit was clearly very disappointing

The watchdog found a catalogue of issues, namely that the college does not ensure that its provision complies with the principles and requirements of an apprenticeship programme.

Inspectors found that leaders do not make sure that all apprentices receive their full entitlement of off-the-job training during working hours, and tutors do not place “enough importance” on apprentices developing their English and math skills.

Managers do not involve apprentices’ employers and workplace supervisors in the training and development of their employees, which leads to apprentices not benefitting from enough “carefully planned” on-the-job learning.

“Leaders’ self-assessment of the quality of provision is insufficiently evaluative,” inspectors said.

Tutors were criticised for not taking account apprentices’ starting points. As a result, more confident and competent apprentices “do not make the rapid progress of which they are capable”.

They also do not give “sufficiently detailed” feedback to apprentices which means they do not know what they need to do to achieve higher grades in their end-point assessment.

Safeguarding was also an issue raised by Ofsted.

Leaders and managers “do not ensure that all apprentices receive training in safeguarding and the ‘Prevent’ duty” and as a result, “too many apprentices do not have the information they need in order to keep themselves safe”.

Ofsted did however praise leaders for ensuring that apprentices enrol on the correct programme at the most appropriate level, the large majority of which stay on programme.

“Apprentices take on new responsibilities at work,” inspectors added. “Many apprentices increase in confidence as a result of their training.

“Apprentices benefit from well-qualified tutors who deliver theory and practical training that help apprentices relate what they learn to their job roles.”

Gower College Swansea said Ofsted’s feedback was “clearly very disappointing”.

“Whilst the College has a long standing record for the delivery of high quality apprenticeship provision in Wales, our delivery in England has been kept intentionally small and to date has been limited to six employers, mainly in the south of the country,” a spokesperson explained.

“Although our predicted qualification achievement and retention and rates are very good indeed, it is fully recognised that there are still improvements that we need to make in terms of some of the different expectations required in England.

“We therefore accept Ofsted’s findings and are confident that we can make the necessary improvements to enhance the service we offer to our apprentices and employers in England – building on our award winning apprenticeship delivery in Wales.”

Providers that are found to have made ‘insufficient progress’ in one or more area of an early monitoring visit are suspended from recruiting apprentices in England, under ESFA rules.

Twenty three more new training providers have received temporary bans on recruiting apprentices following early Ofsted inspections that found them making poor progress.

Since October 2018, the watchdog has been carrying out monitoring visits at every directly-funded provider which won its own contract to deliver training after April 2017.

Any that are found to be making ‘insufficient progress’ in at least one area will be suspended from recruiting unless there are “extenuating circumstances”.

The Education and Skills Funding Agency has released an updated version of the register of apprenticeship training providers for September, which shows 56 providers are currently banned from taking on apprentices.

The new additions are: 2 Sisters Food Group, AAA Training Solutions, Amdas Consultancy, Apprentice Assessments, Ashley Hunters, Azilo Training, Biffa Waste Services, Bior Business School, Contracting Services (education and skills), Fresh Training Services, Goodman Masson, Havilah Prospects, Hertfordshire Catering, Home Group, Matrix Solutions International, Medivet Group, Prospect Training (Yorkshire), Rita’s Training Services, SHL Training Solutions, SSG Services, The Academy Hub, Wiser Academy and YMCA George Williams Company.

Inspectors visiting employer provider 2 Sisters Food Group found that “too often, line managers do not release apprentices from the production roles to attend off-the-job training workshops, due to work pressures and the need to meet production targets”. It had 62 apprentices at the time of the inspection.

A provider to 97 apprentices, Amdas Consultancy was found by inspectors to have not gathered information to help them fully understand the reasons why many apprentices are on a break from their training.

Inspectors wrote national waste disposal employer Biffa’s implementation of their sole standard, the level 2 large goods vehicle programme, was “weak”, and Biffa does not ensure apprentices all over the country receive their full entitlement to off-the-job training, with its 21 apprentices.

Fresh Training Services was criticised for not recruiting apprentices, of which it had 25, “with integrity”, because they had not made sure they are employed appropriately to allow them to complete an apprenticeship.

It was found by Ofsted that Prospect Training (Yorkshire) that the information it had collected about its 112 apprentices’ progress was “incomplete and inaccurate”.

Staff at YMCA George Williams College, with its ten apprentices, were found not to have “sufficient knowledge and skills of the requirements of apprenticeships to plan and deliver programmes that meet all apprentices’ needs”.

You can see all of the currently suspended providers below.

Ofsted has started conducting full inspections of new apprenticeship providers that were previously banned from taking on new starts following ‘insufficient’ monitoring reports, and awarded them grades that allow them to start recruiting again.

BNG Training, Construction Gateway, Developing Performance Partnership, Ensis Solutions, Mooreskills, NSL, T.M.S Learning and Skills Support and Vogal Group have been removed from the suspended list.

The full list of 56 providers which have been suspended:

2 SISTERS FOOD GROUP LIMITED

AAA TRAINING SOLUTIONS LIMITED

AGINCARE GROUP LIMITED

AMDAS CONSULTANCY LTD

APPRENTICE ASSESSMENTS LIMITED

ARRIVA LONDON NORTH LIMITED

ASHLEY COMMUNITY & HOUSING LTD

ASHLEY HUNTER LTD

AZILO TRAINING LIMITED

BIFFA WASTE SERVICES LIMITED

BIOR BUSINESS SCHOOL LIMITED

CARE TRAINING SOLUTIONS LTD

CATALYST LEARNING AND DEVELOPMENT LIMITED

CENTRAL AND NORTH WEST LONDON NHS FOUNDATION TRUST

COGENT SKILLS TRAINING LIMITED

CONTRACTING SERVICES (EDUCATION AND SKILLS) LIMITED

E.Q.V. (UK) LIMITED

EMA TRAINING LIMITED

FRESH TRAINING SERVICES (UK) LIMITED

GLOUCESTERSHIRE ENTERPRISE LIMITED

GOODMAN MASSON LIMITED

HAVILAH PROSPECTS LIMITED

HERTFORDSHIRE CATERING LIMITED

HOME GROUP LIMITED

JM RECRUITMENT EDUCATION & TRAINING LTD

JT DEVELOPMENT SOLUTIONS LIMITED

MANATEC LIMITED

MATRIX SOLUTIONS INTERNATIONAL LIMITED

MEARS LEARNING LIMITED

MEDIVET GROUP LIMITED

MERSEY CARE NHS FOUNDATION TRUST

MOOR TRAINING LIMITED

PIPER TRAINING LIMITED

POOLE HOSPITAL NHS FOUNDATION TRUST

PREMIER NURSING AGENCY LIMITED

PROSPECT TRAINING (YORKSHIRE) LIMITED

PROSPECTS TRAINING INTERNATIONAL LIMITED

RIGHT TRACK SOCIAL ENTERPRISE LIMITED

RITA’S TRAINING SERVICES

SCL SECURITY LTD

SECURITAS SECURITY SERVICES (UK) LIMITED

SHL TRAINING SOLUTIONS LTD

SSG SERVICES (EST 2003) LIMITED

THE ACADEMY HUB LTD

THE BUSINESS PORTFOLIO (UK) LIMITED

THE DEVELOPMENT FUND LIMITED

THE EDUCATION AND SKILLS PARTNERSHIP LTD

THE SANDWELL COMMUNITY CARING TRUST

THE TEACHING & LEARNING GROUP LIMITED

TOOK US A LONG TIME LIMITED

TOTAL TRAINING COMPANY (UK) LIMITED

UNIVERSITY HOSPITALS BRISTOL NHS FOUNDATION TRUST

VORTEX TRAINING SOLUTIONS LTD

WDR LIMITED

WISER ACADEMY LIMITED

YMCA GEORGE WILLIAMS COMPANY

Colleges had over £200 million of bank debt paid off by the Treasury during the post-16 area reviews, but civil servants say it is “too early” to determine the programme’s success.

An ‘Area review: end of programme report’ was published by the Department for Education this afternoon to provide a “factual record” of the implementation of the programme, which kicked off in September 2015 and officially ended in March this year.

It noted how, as part of the spending review 2015, the government offered up a £432 million restructuring facility to help with the implementation of recommendations made by the FE Commissioner.

Today’s report stated that between 2016 and 2019, 157 “transition grants” were awarded to colleges, and £201 million (46 per cent) of the restructuring facility was used to pay off commercial debts.

It means that combined college debt has gone from £1.6 billion in 2014-15, to £1.48 billion in 2017-18.

The DfE is no rush to publish which colleges won individual awards, citing grounds of commercial sensitivity associated with the contractual terms of both loans and grants.

Today’s report stated that following this “large investment” in the FE sector, the “expectation is that, going forward, colleges will manage themselves effectively to ensure their sustainability, and support will be available through early engagement with the ESFA or the FE Commissioner”.

It showed the number of general FE colleges in England has shrunk from 241 to 193, while the number of sixth form colleges has reduced from 93 to 54 – which included 23 academy conversions.

Colleges with a financial health rating of ‘inadequate’ has gone down from 37 to 21 as a direct result of the mergers.

Although it is “too early” to determine the long-term financial position of the college sector, early analysis “suggests that area reviews have had a broadly positive impact to date”, today’s report said.

“The area review programme and the financial support it provided delivered a great deal of focussed progress in a relatively short time to re-shape the sector and deal with some of the most difficult financial cases,” it added.

“It will take time for financial efficiencies to be fully realised and for the benefits of stronger leadership to show in improved financial performance and Ofsted grades. Some early inspections have had promising results but we will continue to track and monitor performance.”

The DfE said it intends to publish an evaluation report in 2022, which will focus on the impact of the programme.

A spokesperson said: “The area review programme has helped in supporting colleges to be more financially sustainable, which is crucial if we want to continue to deliver the skilled workforce we need for the future.

“We are really pleased that the area review programme has encouraged collaboration and has made it possible to maintain provision in areas that could have been under threat of losing access to a local FE college.

“We are continuing to build on this through the work of the FE Commissioner and the college oversight regime to support colleges to go from strength to strength. We have also recently pledged a £400 million boost to help colleges and FE providers to continue to deliver high-quality education and training and recruit and retain the brilliant teachers and leader they need.”