Ian Ross explains why he has asked the education select committee to launch an inquiry into adult education budget funding
It is now two years since the Education and Skills Funding Agency launched its procurement exercise for adult education budget (AEB) funding. While colleges and local authorities receive an annual automatic funding allocation, colleges can bid to procure more through an open process.
The element of procured funding is consequently put under pressure as colleges, who already have AEB funding, have an additional opportunity to bid for more against independent training providers (ITPs) who do not have the luxury of automatic AEB allocations. This creates an element of unfairness: I have always argued that those institutions with automatic AEB allocations should not be permitted to participate in the procured AEB process too.
My second concern is that many colleges underspend their AEB funding year-on-year. In 2016-17 £200 million was unspent. Last week new FE Week analysis revealed that colleges underspent their original procured adult education budget funding allocations by 26 per cent.
“I am not pitting colleges against ITPs”
In January my organisation exhausted our 2018-19 AEB funding for adult classroom provision as our successful courses in Brighton and Hove attracted more learners than forecast. From September 2018 to January this year we effectively spent our allocation, offering a variety of vocational courses with English and maths qualifications. Many of the adult learners we enrolled had few or no qualifications. We have high completion and attainment rates (97 per cent) with 75 per cent progression into work or further learning at a higher level. Of the students who took part in our latest level 2 support work in schools, 60 per cent went on to find jobs straightaway.
I approached 20 colleges in January to enquire about opportunities for sub-contracting and every one said their enrolments and spend was on track. This was no surprise as they always respond along similar lines, yet year after year we witness huge AEB underspends while adult learners miss out on popular courses elsewhere. This is the same story across England. One of the advantages of ITPs is that we do not have rigid start dates, unlike the colleges who tend to only start courses in September, January and April. We can start new courses monthly to meet local learner need.
The third frustration is what happens when we get to the summer; despite colleges saying all year round that their AEB funding is fully committed. Come June many suddenly discover that they have underspends. Many of us are all too aware of offers of AEB funding that has to be spent in the next two months to the end of July. However, if colleges were more efficient and better at monitoring their enrolments and draw-down, ITPs could have been given the opportunity to deliver provision earlier in the year with a bigger impact. I know of one funding broker who is expecting £500,000 of AEB funding to become available during June for the remainder of the academic year.
After grumbling about these issues with other ITPs for the past few years I decided to call on the education select committee to launch an inquiry. I have never engaged with a Commons committee before, so this is new to me. Change is long overdue and I hope my call builds up support and momentum across the sector. This is not about pitting colleges against ITPs, but about creating a more fair and efficient sector to benefit adult learners across the county, especially at a time when AEB funding is so scarce.
The subject causes heated arguments, but surely the newly professionalised world of college governance would benefit from paying those with oversight, says Sue Pember
There is a long history in the UK of the voluntary principle for the governance of public services and charities and, until recently, this has worked well in most instances. The concept of unpaid governors has been one of the defining characteristics of the charitable and college sectors and contributes greatly to public confidence in their governance.
That said, governors are entitled to have their expenses met from college budgets, but the idea of taking this further and paying governors for their attendance at meetings, or giving them an annual salary, divides governors and senior leaders.
Everyone agrees that good people should be supported to attend meetings by claiming for travel and other expenses, such as childcare; but whether college governance is improved if the chair and governors are paid has yet to be evaluated and the subject causes heated debate.
College governing bodies are subject to charity law, and governors are the equivalent of trustees. They should not profit from the office they hold unless authorised by the governing document (Instrument & Articles, Statute or Principal Regulator).
“Governors are being asked to do much more than before”
But there are circumstances when payment is allowed, and the Charity Commission (CC) and the government have produced joint guidance on how boards can apply to the CC for permission. The guidance covers three specific areas where a governor could be paid: expenses and compensation; payment for services or extra work – for example, contributing to area reviews; and payment for professional board leadership.
Although this guidance has been around since 2013, only a handful of colleges have applied. On the positive side, most that have done so have been successful. The main reasons for applying have been to do with the complexity of a merger and/or taking a college from “inadequate” to “good” and needing to attract outstanding people for the role.
In Northern Ireland, colleges have been able to pay their board members for the past eight years and a recent evaluation found that the Department of Education reported a perception of an improvement in the range and calibre of applicants competing for chairs since the implementation of payment. They also reported an increase in applications for governor vacancies from women. Also, clerks thought attendance and engagement was improved.
Over in England? It is interesting that there have not been more colleges applying to introduce payments, but when I have talked to governors, they express concerns about whether this will open the door to external criticism and their motives for being a governor put in doubt. I think this worry is misplaced. NHS trusts and the police commissioners pay their trustees, many local authorities have an attendance allowance for councillors and some cabinet members are paid.
College governors are being asked to do much more than they were before colleges were incorporated in 1993 and are expected to do this without the type of support and reporting the previous funding bodies provided. As the funding agencies have shrunk in size, many of their assurance responsibilities have been transferred to the actual governing body. Some will say that’s the right place for them but, as seen in the past two years, governors struggle to take on that role without being trained and the concept of governance professionalised.
It is important that the proper procedures are put in place. For example, when deciding to apply to pay a governor, the governing body must manage any possible conflict of interest and ensure that this governor takes no part in any meeting or discussion affecting their own payment or potential payment. It must also be satisfied that paying the governor for services would be in the interests of the charity and that the level of payment is reasonable.
Finally, a written agreement, including specifying the exact (or maximum) amount to be paid, should be produced.
The professionalism of governance and the role of governors is changing significantly. If boards of colleges are reporting difficulty in competing with other organisations for governors, they should consider whether payment of chairs and other board members would help alleviate their recruitment problems, and apply.
More and more colleges are appointing directors of governance and are even paying their governors, as they look to professionalise these roles in the shadow of mergers and the insolvency regime. FE Week has taken closer look at how and why this practice has come about.
The importance of governors has never been higher, with colleges facing the challenge of managing an increasingly diverse portfolio of business: from colleges, to independent training providers, to multi-academy trusts.
While colleges continue to merge to create “fewer, larger, more resilient and efficient providers”, as was the plan with the post-16 area reviews which ended in March 2017, they’re also battling against tight budgets; and if poor decisions are made, they could find themselves going insolvent, as has been the case with scandal-hit Hadlow College.
The FE college world is more challenging, with funding cuts and pressures to merge requiring more time of governors
Two of the biggest college chains in the country, NCG and LTE Group, have begun efforts to combat this challenge by paying their governors.
In LTE’s case, seven governors were paid a total of £11,833 in 2017-18; while three “co-optees” – people with specific skills and professions who sit on sub-committees – were paid a total of £3,000.
In NCG’s case, one governor was paid £15,000 to be a director of its subsidiary training provider, The InTraining Group.
A spokesperson said it otherwise “does not reimburse its members of corporation, except as direct recompense for out-of-pocket expenses”.
Another prominent college which has started to pay governors is the East Kent Colleges Group. In an interview with FE Week, the group explains that this decision was made due to the significant higher workload required following its merger (see full interview below).
Another way in which colleges have sought to professionalise governance is by hiring what are known as directors o governance, to supplant the traditional clerk, to work full-time on processing paperwork, recruitment, and advising governors and managers.
FE Commissioner Richard Atkins (pictured), who has spoken in the past about bringing more financial expertise on to college boards, has said hiring professional clerks is “excellent practice”.
A number of colleges, including NCG, Bolton and Sunderland, haveadvertised for heads, assistant heads, or directors of governance over the past year.
NCG hired an executive director of governance, assurance and risk in August 2018 – David Balme – and has advertised for an assistant director.
The group, which runs colleges across the country, justified the move by saying the role has “important oversight of a complex organisation”.
London South East Colleges also employed a group executive director for corporate services, Jennifer Pharo, in 2018.
Speaking to FE Week, she described herself as the “glue” keeping the organisation together.
The ICSA governance institute’s not-for-profit head of policy Louise Thomson, said “it wouldn’t surprise her” if there has been an increase in the practice of paying governors.
“There has been in the charity sector. And the FE college world is more challenging, with funding cuts and pressures to merge requiring more time of governors.”
Thomson added that if a college is facing acute financial or other pressures, its board may believe the chair needs to be more “hands-on” and as such ought to be paid for their efforts.
Boards should consider whether payment of chairs would help alleviate their recruitment problems
She explained that if the board was considering paying governors, there should be a sound business case articulating the benefits to the college, its students and wider stakeholder constituents.
She also warned colleges that may be considering it: “Where a governor is paid and finds themselves in court for their action on the governing body, it is likely that the court will hold them to a higher standard than those not being remunerated.”
However, other colleges may find the prospect of paying governors troublesome as it would violate what Thomson called the “sacrosanct” principle of volunteerism, which many see as one that should be protected at all costs, as well as creating a possible conflict of interest.
Writing on the topic in this edition of FE Week, Dr Sue Pember, the former lead civil servant for FE funding and now director of adult and community learning group Holex, said: “If boards of colleges are reporting difficulty in competing with other organisations for governors, they should consider whether payment of chairs and other board members would help alleviate their recruitment problems and agree to apply to the Charity Commission.”
Indeed, aside from NCG and LTE, the other eight biggest colleges by income that were looked at by FE Week do not pay governors, and almost all of them said they are not considering it.
Yet with an increasing number of colleges looking to pay at least their clerks, it may only be a matter of time before governor remuneration becomes much more widespread.
Director of governance: it’s ‘a nice challenging role’
London South East Colleges’ director of governance Jennifer Pharo has described herself as the “glue” keeping the organisation together, as she sat down with FE Week to discuss her role as a professional clerk.
Pharo was appointed to the role in April 2018 and clerks for all the group’s boards: for the college, the multiacademy trust, and its independent training company, and all the group sub-committees such as finance, audit, curriculum and search, and remuneration. It’s what she calls a “nice, challenging role” with a “unique” portfolio of charities.
Very few colleges are also multiacademy trust sponsors, with Dudley College and Stoke-on-Trent counting among the ranks.
Jennifer Pharo
Of her role, Pharo said: “We needed the glue to keep that together, support governors and to make sure the communication and information flow is working around what is our operating system of governance.”
About one-fifth of her time is devoted to recruiting people to fill 35 governor posts across the three charities.
Other times, she is preparing briefs on a range of items, from the Augar Review of post-18 funding to the Timpson Review on exclusions; and even individualised handbooks for each governor, complete with their terms of reference.
Governors, she says, are “very appreciative” of all she does for them.
So, what should colleges be looking for in a professional clerk?
“I have a legal background. I worked as a legal executive for six or seven years, before I moved into investment banking, but I worked within the legal arena of investment banking for about 15 years, at a large Swiss bank,” Pharo says.
After her banking career, she moved into education, to pursue a dream of becoming a teacher.
She has worked in the FE sector since 2002 and has served as head of planning and performance and director of MIS at Lewisham College, which eventually became Lewisham Southwark College, as well as executive director of college services at LSEC.
“So, I’ve got a really good understanding of the business, about finances and the income – all the challenges that we face as a sector.
“I understand all of the regulatory topics, and I have been involved quite intimately with all the funding agencies, so I understand the funding rules and how both colleges and schools operate.”
In order to avoid conflicts of interest, Pharo has put together an impartiality policy to answer questions as to how she can stay neutral in meetings when she is employed by the college and has to safeguard both the governance and the executive team.
The role that we have is the real conscience of the organisation
“The role that we have is the real conscience of the organisation.” She has plenty on her plate for the next few months, including operating plans for the next year for how the meetings will work and how the information is flowing through them.
There are also the board evaluations, which she is starting in September.
On the recruitment front, the college is endeavouring to bring in greater diversity and also keep up its range of skills.
Recently, a senior Department for Education official approached them about becoming a governor. “He felt we were really, really interesting group,” Pharo said. “He really wants to be part of our governing body. And so that’s really complimentary for us.”
Additional commitment requires remuneration
FE Week spoke to the chair of the EKC Group remuneration committee, Jonathan Clarke, about how the decision to pay its chair came about, as well as the practice’s benefits and its risks.
When the merger between East Kent College and Canterbury College, which created the group, was finalised in 2018, the committee realised there was going to be a significantly higher workload for the chair than there had been before.
“As a result,” Clarke said, “the governing body wanted to ensure we had a chair who not only had the skills, but was remunerated for the additional commitment and time they would need to invest in the governance and strategic guidance of the new group”.
Jonathan Clarke
The time commitment was too much for the then-chair, Beverley Aitken, who announced she would be stepping down shortly before the merger.
Into their shoes stepped Charles Buchanan, the chair of the merger’s transition group.
The board decided to pay him £20,000 per annum for 50 days work a year, though Clarke stressed that he works much more than that in reality.
He said: “The decision to remunerate the chair was taken because of the increased need for the group to have one who had a strong business background and experience of guiding large and diverse organisations.
“The size of the new group means that it’s a highly complex operation, and one which requires exceptional governance and strategic guidance.
“We believe the chair brings that to the board, and adds the professionalism required for the role as it currently is.”
Buchanan, the only remunerated member of the board, is a former chief executive of Lydd/London Ashford Airport and Manston Airport in Kent.
He fits the bill for what the board was looking for in the group’s chair: a strong business background and experience of guiding large, diverse organisations.
His role involves many of the same activities any other chair would be expected to carry out: supporting, but also challenging, college managers and meeting with stakeholders, to name but two of his responsibilities.
However, Clarke says a remunerated chair “brings a professionalism, and a wealth of experience in the world of commerce to the table, enabling the board to examine performance in a much more strategic manner.”
Paying Buchanan also means senior post-holders are able to count on their chair being available when he’s required to give his input in any debate.
Clarke was careful not to recommend it to all colleges, and said there may be some disadvantages, though EKC had not encountered any.
But he said the chair, as a paid officer, was held to a higher standard than the other governors.
The size of the new group means that it’s a highly complex operation
Clarke also said governors had to be mindful of doing their jobs correctly, especially considering some recent “catastrophic” failures of college governance.
One such example is Hadlow College, based a few miles from EKC, which entered insolvency in May, after FE Commissioner Richard Atkins reported its board had failed in its fiduciary duty.
Yet Clarke remains optimistic about EKC Group’s approach: “I don’t feel that is a risk. In fact, quite the opposite – it should ensure that remunerated governors have a vested interested in outperforming others, and working even more diligently to deliver the best possible outcomes for their organisation.”
There was not necessarily a “magic panacea” to recruiting professional governors, he added, but remuneration may be one possible solution.
“I think that FE, as a sector, sometimes needs to embrace new ways of doing things, and should also experiment with innovations.”
So how does a college go about paying its governors?
There are special circumstances under which colleges can remunerate governors for services. According to the Association of Colleges, these include periods when a college is restructuring or reorganising, under orders from the ESFA or FE Commissioner.
There can also be a particular problem with recruitment, or a requirement for a board member to commit a significant amount of time, which would allow for governors to be remunerated.
As every college is a charity, if one wishes to remunerate its governors, it has to apply for permission from the regulator of the charitable sector, the Charities Commission.
As colleges are exempt from the Charities Commission’s oversight, the commission will then consult with the principal regulator of colleges, the Department for Education.
A further education corporation will likely insert the order alongside the instrument of government; while a college set up as a company will insert it into the articles of association.
However, the government says remuneration should not last the maximum duration unless it can be justified, and it cannot be approved retroactively.
A new college can include a power to allow a minority of trustees to receive specified payments or benefits, including remuneration for serving as a trustee.
This does not require approval from the commission, but the wording will, of course, need to comply with charity law.
But where an existing college (which has not been granted permission to pay governors) merges into a new college, the new institution would need to give reasonable assurance that any payment to governors had been paid for by its own funding.
An Ofsted grade two provider has hit out at the government’s “farcical” process for reapplying to the register of apprenticeship training providers, after its bid was rejected on a technicality.
According to the guidelines, providers can be exempt from filling out some parts of the application if they have received a short Ofsted inspection confirming an overall grade of at least “good” over the past three years, and they received the grade for apprenticeships in their most recent full inspection.
One provider specialising in delivering apprenticeships for over 20 years, but which did not wish to be named, was rated “good” overall in its last full inspection in 2014.
However, at this point the education watchdog didn’t give apprenticeships its own grade.
The provider’s most recent report was a short inspection last year, which meant that it maintained its grade two.
During its recent reapplication to RoATP, the provider said it was a grade two apprenticeship provider. But the Department for Education rejected the bid on the basis that, technically, they do not have an apprenticeship grade.
One senior figure at the provider told FE Week: “When is an Ofsted ‘good’ not ‘good’? When it’s an FE & Skills remit. It’s farcical that, as a provider specialising in apprenticeships for over 20 years, with an Ofsted ‘good’, we have to jump through more hoops to get on the register than a provider with a broader remit.
“Our time and money (or should I say the ESFA’s) could have been much better spent actually recruiting and training apprenticeships.”
The provider added it hasn’t been given a date from Bravo (the e-tendering portal) or from the ESFA on how much time it has to resubmit with the extra questions.
The DfE’s rejection email said: “Thank you for your application to the RoATP. Your application has not been taken forward for assessment due to an incorrectly claimed exemption regarding question PR-1:
“Within the last 3 years, have you had an Ofsted inspection and been awarded an ‘apprenticeship’ grade of ‘outstanding’ or ‘good’ and maintained ESFA, SFA or EFA funding since that date?
“Please note, if your last inspection was a short Inspection (where no grade is given for apprenticeships) we looked at your last full Inspection to see if an apprenticeships grade was awarded.”
The email added that this rejected application does not count towards the two applications providers are permitted within a 12-month period limit.
FE Week reported last month that new applicants trying to get on to the register, which finally reopened on December 12 with more “stringent and challenging entry requirements”, had not heard the outcome of the application six months on.
A DfE spokesperson said this week that all providers that applied to be on the register in December, January and February “have been notified of the result”.
“An updated register will be published in due course,” she added. RoATP reopened more than a year after the last application window closed – a time period which left many providers wanting to get on it frustrated.
The new register is expected to bring greater scrutiny, following various FE Week investigations that discovered, for example, one-man bands with no delivery experience being given access to millions of pounds of apprenticeships funding.
While all providers will be asked to apply to the register even if they were already on there, subcontractors delivering less than £100,000 of provision a year have also been told they need to register.
A university technical college stood out this week for the right reasons – it was rated ‘good’ in its first ever inspection.
General FE colleges didn’t reach the same heights, with two large college groups dropping to ‘requires improvement’ while another received a second consecutive ‘inadequate’ report.
UTC Warrington was given a grade two after being commended for its effective governance and teaching since opening in September 2016.
Inspectors said the UTC has developed and improved over its first three years and that a very low number of pupils leave the college without continuing their education or taking up apprenticeships.
They added that leaders know what the college does well and what it still needs to do to improve, and is prepared to address aspects that have not been fully successful.
University of Brighton also received a grade two rating in its first inspection, after “successfully” developing apprenticeships.
The education watchdog said the leaders and managers work well with the local NHS trusts to ensure their staff develop new skills and knowledge, and have taken effective action to recruit experienced and highly qualified staff into leadership and teaching positions.
Another HE provider, University of Bradford, made ‘reasonable progress’ in its first monitoring visit since it started delivering apprenticeships in January last year, after being found to have established a “clear rationale” for the delivery of the apprenticeship programme.
But it was bad news for Hull College, which fell from a grade two to a grade three after Ofsted founds the quality of teaching, learning and assessment is “not yet consistently good” across all types of provision.
Managers of the college, which teaches over 15,000 students, were accused of being too slow to address the programme’s weaknesses, resulting in apprentices making slow progress and not being challenged sufficiently to reach their full potential.
Cornwall College was also rated ‘requires improvement’ this week, down from ‘good’.
Ofsted said leaders’ and managers’ initiatives to improve quality have “yet to show a significant impact”.
Teaching, learning and assessment and students’ achievements are improving, “but are not yet good enough across all programmes and training routes”.
Governors “have not challenged leaders and managers sufficiently to improve the quality of teaching, learning and assessment”.
And Moulton College retained its grade four rating, with Ofsted criticising leaders and governors for failing to improve its performance.
It was also bad news for employer provider Goodman Masson Limited, which was given two ‘insufficient progress’ ratings and one ‘reasonable’. Leaders were accused of overlooking the need for apprentices to complete externally awarded qualifications as part of their apprenticeships.
More successful was Norwich City College of Further and Higher Education, which was found to have made ‘significant progress’ since its merger with Paston Sixth Form College in December 2017. Cambridge Regional College also made ‘significant progress’ in two provisions and ‘reasonable progress’ in another following its merger with Huntingdon Regional College in August 2017.
Lancaster and Morecambe College was found to have made ‘reasonable progress’ across all provisions following a grade three report last April.
Two specialist colleges, Goldwyn Sixth Form College and Brentwood Community College, also received monitoring visits after previously being rated grade three. The former made ‘reasonable progress’ in one provision, ‘insufficient’ in another and ‘significant’ in another, while the latter made ‘reasonable progress’ across all provisions.
Elsewhere, it was an average week for private providers with four – Performance Learning Group Ltd, Steve Willis Training Ltd, North Humberside Motor Trades GTA and PBC Associates Limited – making ‘reasonable progress’ across the board in early monitoring visits.
Enabling Development Opportunities made ‘reasonable progress’ in two areas but ‘insufficient progress’ in one provision since being given grade three rating.
And following its grade four rating last year, DV8 Training (Brighton) Limited was found to have been made good progress after introducing “well-designed” traineeships as a short-term method of fulfilling their commitment to the small number of new students who were expecting to be on a study programme.
Showcase Training made ‘significant progress’ in its first visit. Inspectors said leaders have prioritised the quality of training and maintained the confidence of employers while having a clear strategy and vision for the organisation in the childcare sector.
Lastly, adult learning provider North East Lincolnshire Council made ‘significant progress’ in one provision and reasonable progress in two areas after being given a grade four last year, and employer provider Unipres (UK) Limited made ‘reasonable progress’ across all areas in its early monitoring visit of its apprenticeship provision.
Skills minister Anne Milton wants to launch a new youth pre-employment programme as early as next January.
In an exclusive interview with FE Week, Milton revealed she is already in cross-departmental discussions with ministers about the programme, which would prepare 16- to 25-year-olds for employment, whether that be apprenticeships or another route.
She said: “I don’t think we are meeting the needs of that group of young people who possibly leave school without the minimum qualifications.
“I think you’ve got several departments who are doing work with some of them and I think we need to join all that up and set up a pre-employment programme which would be really good.
I don’t think we are meeting the needs of that group of young people
“One of the issues for me is that if you are 16 or 17, nine months makes up a large percentage of your life, so every month that we don’t do something is a large percentage of that person’s life.”
The Department for Work and Pensions has discussed the initiative with her, as has the Department for Education’s early years’ minister Nadhim Zahawi, as the programme could benefit people coming out of care.
But she has not consulted the Institute for Apprenticeships and Technical Education, as they are “busy and they have other things to do. They’re working with employers designing apprenticeships. I don’t think it should sit with them.”
The programme could even be implemented without the usual review and pilot programme, which the minister said would be “the worst possible thing to do because it would take for ever”.
Milton would instead rely on work that has already been done within the government on similar programmes such as traineeships, and also collect information from job centres, colleges, schools and not-for-profit organisations such as the Prince’s Trust.
Her next step will be to get ministers from various parts of government together to compile an action plan.
“If you ask me the next thing I want to concentrate on it would be that: ministers coming together behind a programme that really works, and jointly putting money in a pot to make it work.”
Without having discussed it with civil servants, Milton said she would like something “on the racks” by January – giving the government only six months to put the programme together from scratch.
For comparison’s sake, from the government’s first mention of a traineeship programme in June 2012, it took until the following May for it to be launched, after originally being scheduled to launch in September 2013.
FE Week’s interview was conducted following the release of a report into traineeships, which revealed that 75 per cent of those who take part move on to work or further study within a year of completing their programme.
The minister said when the report was published that she was “thrilled” to see how traineeships are “supporting young people to start their apprenticeship journey, get their first job or go to further study”.
Nadhim Zahawi
Many of the features of Milton’s new initiative are seemingly already being done through traineeships, which prepare 16- to 24-year-olds for apprenticeships, though she said the new cross-departmental initiative will not be called traineeships as that would be “slightly misleading”.
During the interview, Milton admitted her days as skills minister may be numbered, as whoever is elected the next Conservative leader and prime minister could remove her from the post.
She said: “We are going to have a new prime minister and government, and I would like you to press me or whoever comes into this job” on creating the programme.
Milton started in the role in June 2017, having previously served as deputy chief whip.
Despite being tipped by Fleet Street to replace Jeremy Hunt as health secretary in the cabinet reshuffle of January 2018, Milton stayed at the DfE and recently reached her two-year anniversary in the position.
She was supporting former education secretary Michael Gove in the election, who was knocked out of the race on Thursday. The contest is now between frontrunner and former foreign secretary Boris Johnson and Hunt, the current foreign secretary.
One of the biggest college groups in the country has said it has “no alternative” than to cut staff numbers as it battles to cut its deficit, knowing it will “no longer be ‘bailed out’ by the government”.
The RNN Group, which has around 1,200 staff and nearly 15,000 students, has put 130 jobs at risk, with an initial 40 redundancies planned.
The group was formed following a merger between Rotherham College of Arts and Technology and North Notts College in 2016 and another merger with Dearne Valley College in 2017.
It went from an £868,000 surplus in 2016-17 to a £2.45 million deficit in 2017-18, which it said was “exacerbated by merger activities and costs”, on an income of £45.5 million.
While its cash flow increased from £2.95 million to £4.94 million in 2018, cash and cash equivalents for the year decreased by £5.5 million.
The senior leadership has now outlined a “series of proposed costsaving measures” after experiencing a reduction in income “across all funding streams, and increased employer costs are causing serious problems”.
Jason Austin, who became RNN Group’s chief executive last month, said: “This is an extremely challenging time for the FE sector, and colleges up and down the country are facing difficult decisions in response to year-on-year real terms government funding cuts, increased competition and declining demographics.
“There is no financial support available. Colleges will no longer be ‘bailed out’ by the government. We simply have to reduce the operating deficit.”
The Department for Education has kept many colleges afloat by offering multi-million-pound handouts in recent years.
But these have now stopped following the introduction of the insolvency regime, which allows colleges to go bust for the first time.
Austin continued: “We obviously clearly regret having to put colleagues’ jobs at risk, but we have no alternative.
“We are working closely with colleagues and unions during the consultation period to explore all options open to us to make the savings we need to achieve.”
According to minutes from a meeting that took place in March, the board recently secured a new £1 million bank loan, which the group has since told FE Week would cover a portion of the capital costs for its University Centre Rotherham, which is due to open next month.
FE Week understands the group spent around £12 million constructing the university centre.
The minutes also showed the board approved the disposal of land at its Dinnington Campus. But a spokesperson said the college had not disposed of the campus, and that it was currently investing in new electrical, plumbing and gas workshops which are being fitted over the summer.
“We are continually reviewing our assets in the light of emerging business needs, which includes considering options for both development and disposal at any of our campuses,” she said.
The RNN Group was downgraded from “good” to “requires improvement” by Ofsted last month. Inspectors said senior leaders and governors have presided over a period of “significant decline in the quality of education and training following the two mergers”.
John Connolly, the group’s formal Layoffs loom at RNN Group as DfE cuts off bailouts principal who stepped down with immediate effect last year after concluding he was no longer the “right person” to lead it, received a payment of £150,000 when he left.
According to the group’s accounts, the “emolument” was “in lieu of notice, entitled holiday pay and early access to pension funds”.
Something of a surprise this week from the Department for Education – a press release about traineeships in which the skills minister, Anne Milton, was “thrilled”.
The surprise for me wasn’t the good news – that research found the majority of the first trainees in 2014 progressed into work or further training. The surprise was that the traineeship scheme was being talked about at all.
Without taking the time to check, I don’t recall a DfE press release or minister choosing to talk about traineeships since their introduction at the back end of 2013.
Since then, over 300 providers have been recruiting 16- to 24-year-olds on to the pre-employment scheme at a rate of over 20,000 per year.
After the initial fanfare when launched, many providers either chose not to recruit participants or did so in relatively small numbers.
Many struggled to sell the concept of a six-month unpaid work placement to both young people and employers, leading to inevitable design changes. Most traineeship schemes now last less than 12 weeks.
The programme has also suffered because there has been no dedicated budget. Instead, 16- to 18- year-olds are funded based on their planned hours from existing study programme funds, which has not incentivised growth. And 19- to 24-year-olds are funded from the greatly diminished national adult education budget.
This awkward placement within two very different funding streams has done little to support expansion, with numbers falling in recent years.
It has also meant there is little traineeship-specific provider data available to highlight the successes of the programme. The government publishes little to nothing about the millions spent on traineeships, or which providers are delivering them.
And in the current Ofsted inspection framework they can include a narrative section along with a grade for traineeships. But they typically ignore the provision, arguing that there is an insignificant number of trainees without actually defining a threshold for exclusion. In 2017-18 there were just six providers awarded a traineeship grade (one grade one, four grade twos and one grade three) and in 2018-19 (the nine months from September 2018 to the end of May 2019, just two traineeships judgments (both grade three). And in the new Education Inspection Framework being introduced in September the option to include a traineeship section and grade has been removed.
It was also perhaps surprising that in the last two chief inspector annual reports, traineeships did not feature at all.
So Ofsted has very little to say about traineeships, and in their new slimmed-down inspection reports will say even less.
The renewed interest does seem long overdue – and even seems to be extremely popular with participants. Researchers interviewed 2,153 young people on traineeships and the findings published by the government in 2017 concluded “trainees were very positive about their time on a traineeship. More than nine in ten trainees (92 per cent) said that they would recommend traineeships to other people, and seven in ten trainees (70 per cent) said that they would speak highly of traineeships when speaking to others.”
Traineeships, a preemployment programme for young people, should be much higher profile and more joined up with other government departments, such as the Department for Work and Pensions.
As the skills minister Anne Milton revealed to me, she is now in active talks across government with a view to doing just that.
After two years in office implementing the policies of previous ministers, such as apprenticeship and T-level reforms, she should be supported in taking ownership of a policy to renew focus and investment on supporting unemployed young people into work.
