Eastleigh is one of over 30 colleges that could lose millions as part of plans to end out-of-area providers subcontracting in London, FE Week can reveal.

The Greater London Authority proposal, approved by Mayor of London Sadiq Khan, will come into effect from 2021-22 – the third year of devolution of the adult education budget.

Currently, the GLA provides around £14 million of AEB grant funding to providers located further than what is considered to be a “reasonable travel-to-learn distances for London learners”.

The GLA will be able to redirect funding to those providers delivering directly to London learners

Officials say the majority of this funding is subcontracted to training providers based in London who are then charged a “substantial” management fee.

“By restricting the number of out-of-London providers it grants to, the GLA will be able to redirect funding, including subcontracting management fees, to those providers delivering directly to London learners with the local knowledge and understanding to ensure it meets the needs of the local community most effectively,” the GLA said.

It comes after the authority introduced the first-ever cap on management fees in subcontracting deals. From August 2019, providers with direct AEB contracts with the GLA are expected to limit the management charge to a maximum of 20 per cent of the funding.

Mark Dawe, the chief executive of the Association of Employment and Learning Providers, said his organisation “strongly supports” a reduction in top slicing and “more direct delivery is also desirable”.

However, he warned this shouldn’t “necessarily preclude national providers from winning contracts if they have a demonstrable presence in the area and show good knowledge of it”.

Mary Vine-Morris, the area director for London at the Association of Colleges, said the GLA’s proposed policy is an “inevitable consequence of adult education budget devolution”.

News of the move comes in the same week that Education and Skills Funding Agency boss Eileen Milner sent a sector-wide letter cracking down on poor subcontracting practice.

It was sent amid high-profile subcontracting scandals, the latest of which involves Brooklands College. FE Week has also previously exposed examples where management fees have risen to as much as 40 per cent.

Mirroring the GLA, Milner’s letter said the government is considering placing “limits on the permitted geographical distance between a directly-funded institution and the location where subcontracted provision is delivered”.

To determine which providers are within reasonable travel-to-learn distances for London learners, the GLA has adopted the ESFA’s definition of London’s “fringe” (see map).

For those providers based outside the fringe – typically more than 30 miles away from central London – the authority said it has notified and invited them to make a business case for why their funding should continue based on the type of provision they offer and the groups of learners they support.

FE Week analysis shows there are 33 colleges based more than 30 miles away from central London which are currently grant funded with the GLA to deliver AEB in the capital.

One of the largest college groups in the country, NCG, has its headquarters based nearly 250 miles away in Newcastle and currently holds a GLA contract worth £10.4 million.

However, two colleges in its group – Lewisham and Southwark – are located in London. A spokesperson for NCG said they have been notified that “we are recognised as a London provider”.

Eastleigh College, which is based 65 miles away from central London, has a contract with the GLA totalling £3.4 million.

It has a history of high-level subcontracting, as highlighted in the latest subcontracting figures published by the government, which are for the 2016-17 academic year.

The college subcontracted to 58 providers in that year and charged a 22 per cent top-slice on average.

Principal Jan Edrich said Eastleigh is now “concerned about the future of the priority area provision (Functional Skills in English, maths and IT) that we have provided Londoners for many years”.

“We are working closely with the GLA to understand how we can support them to achieve their objectives over the next few years,” she added.

Elsewhere, Strode College has a contract with the GLA worth £379,000 this year, and is based 115 miles away from central London. It currently subcontracts all of this funding out to a provider in the capital called Yeti, which is charged a 20 per management fee.

A spokesperson said the college “agrees that the training provider should be based within 30 miles of central London, employing London quality training staff delivering to London residents”.

However, the training providers the college has “partnered with, have clearly stated they prefer to focus on delivering outstanding training to their learners and rely on Strode College to efficiently manage compliance and quality for a value for money management fee”.

The spokesperson added they will not be making a business case to the GLA to continue this relationship.

Derby College, based 112 miles away from central London, has a GLA contract worth £672,000 for this year. A spokesperson said the college is in “early discussions” with the authority on the impact of its grant funding plan.

East Sussex Colleges Group is based more than 50 miles away from central London and has a current GLA contract worth £383,000.

Its executive director for strategic partnerships and engagement, Dan Shelley, said the college “respects devolution decisions and will continue to work with the GLA to deliver provision that meets their identified priorities”.

“To that end ESCG is seeking more information on the business case process so we can continue to deliver our programmes to disadvantaged adults in the capital,” he added.

Gateshead College, based nearly 250 miles away from central London, has a contract with the GLA worth £560,000.

Its deputy principal, Chris Toon, said all of this funding is delivered directly by the college’s own staff who are based at a site near the capital.

“The programmes were not subcontracted to any other organisation and given our extensive experience of directly delivering national skills programmes, we will continue to tender for work where we feel it is appropriate and in line with our expertise,” he added.

A decision on those providers in scope for continued grant funding will be made by the GLA “before the end of 2019”.

The move will free up a chunk of AEB funding, and the GLA has said it will consult on how best to use this as part of its next Skills for Londoners framework consultation, which will launch in February.

Options could include running a separate AEB procurement exercise or funding uplifts for certain learners and qualifications.

A major financial services provider to high-profile employers and over 3,500 apprentices, has made ‘significant progress’ following a previous bad result, while others scored reasonably well in this week’s run of Ofsted reports.

Kaplan Financial, which also has 10 adult learners and 185 advanced learner loan learners, was downgraded to a grade three last year, but has impressed inspectors by making ‘reasonable progress’ in three areas and ‘significant progress’ in improving the management of underperforming subcontractors.

“Leaders and managers have been highly effective in improving the quality of learning that apprentices receive through subcontracting arrangements,” inspectors wrote.

The independent training provider, which has worked with employers including British Airways, Eurostar and Morrisons Supermarkets, has gone about these improvements by cutting the number of organisations it subcontracts with from nine at the last inspection, to two.

Kaplan has also decided to only deliver apprenticeships in the future, so has been incrementally reducing its adult learning provision, while it implemented a “more rigorous” due diligence and associated operating procedure for remaining providers.

This, the report reads, is to ensure “the quality of education and training for these apprentices is of at least the same standard as that provided by Kaplan”.

Independent training provider The Number 4 Group also performed well, scoring two ‘significant progress’ ratings and one ‘reasonable progress’ rating in its Ofsted report.

Four learners were enrolled in construction skills for building site operatives and door supervisor courses at the time of the inspection, and inspectors wrote: “Managers have successfully designed programmes that allow learners to gain the relevant accreditation.”

Particular praise was paid to the senior management team for their “clear vision” of how their provision can help unemployed adults to return to the job market.

The provider works with JobCentre Plus, charities and employers to address regional skills shortages, and it uses government funding “effectively” to overcome learners’ economic and social barriers.

Safeguarding is given a “very high priority” by leaders and managers, and all staff are fully trained in the area.

It wasn’t all good news however, as N&B Training Company, which offers level 2 adult courses and apprenticeships at levels 2 and 3 to 440, dropped from grade two to three this week.

Inspectors found leaders had made slow progress in handling recommendations from the previous inspection report, so too few apprentices benefit from high-quality feedback to improve their work.

Additionally, staff lack confidence in developing learners’ knowledge of the dangers of radicalisation and extremism.

It is also reported the quality of teaching, learning and assessment is not consistently good for all learners, which has been blamed on high staff turnover negatively impacting upon learners’ progress.

One example the watchdog picked out was the business apprentices who are making less than expected progress, while leaders, managers and training coordinators are “unclear” about how many of those apprentices have a substantial amount of work to complete to achieve their apprenticeship.

But the provider was praised for the high timely achievement rates of apprentices in 2017/18 and for the design of programmes meeting employers’ needs “effectively”.

Templegate Training Academy CIC earned two ‘insufficient progress’ and one ‘reasonable progress’ ratings from an early monitoring visit of its provision to 19 adult learners.

The provider’s main curriculum intent was until recently to provide functional skills to ethnic minority learners, but inspectors wrote: “Leaders and managers are not meeting the learning needs of local minority ethnic communities” as per the stated aims and ambitions.

The major functional skills programmes on offer had ceased by the time of the inspection; the provider’s remaining curriculum offer was small and directed at other learner groups.

Templegate’s designated safeguarding lead is unable to provide appropriate support to any at-risk learners, as they had not developed any links with relevant external agencies.

But leaders do demonstrate a good understanding of British values, and learners on the provider’s diploma programmes gain skills and knowledge for their intended careers.

Beats Learning Limited and Digital Marketing Mentor Limited scored three ‘reasonable progress’ ratings in early monitoring visits.

Independent Learning Providers	Inspected	Published	Grade	Previous grade
Beats Learning Limited	11/09/2019	01/10/2019	M	N/A
Digital Marketing Mentor Limited	11/09/2019	03/10/2019	M	N/A
Kaplan Financial Limited	30/09/2019	04/10/2019	M	3
N&B Training Company Limited	23/09/2019	30/09/2019	3	2
Templegate Training Academy CIC	12/09/2019	03/10/2019	M	N/A
The Number 4 Group Limited	04/09/2019	30/09/2019	M	N/A

The government has come under fire for planning to spend £500,000 helping small employers get “onboarded onto the Apprenticeship Service”.

A tender was launched last week by the Department for Education seeking a supplier to help “intermediaries”, such as local enterprise partnerships (LEPs) and membership organisations, ensure non-levy payers engaging in apprenticeships are aware of the transition to the digital system.

“Apprenticeships are a key feature of the government’s educational policy”, the procurement, worth up to £515,000, says, “with specific ambitions to improve quality and ensure all employers offering apprenticeships are onboarded onto the Apprenticeship Service – be they levy-paying or otherwise.

“Intermediaries, including LEPs, have a significant role to play in helping government achieve these goals through using their existing employer networks and understanding of local skills needs.”

The DfE has been inviting non-levy payers to test the Apprenticeship Service – where employers can manage apprenticeship funding and pick standards, frameworks and end-point assessment organisations – since the summer.

Previously only companies which pay the apprenticeship levy, so those with a pay bill of over £3 million, could access the service.

The ESFA original aimed to have all small employers on the digital system by April 2019, but had to delay this for a year.

But the tender has been criticised by Mark Dawe, chief executive of the Association of Employment and Learning Providers, who said: “Why does the government need to do this when there are local networks of providers who would have no difficulty in finding SMEs across the country willing to offer apprenticeship opportunities? They are just sidestepping the obvious solution.”

AELP research in August found three-quarters of training providers could not meet demand from such businesses for apprenticeship provision, showing that engaging small-to-medium enterprises in apprenticeship delivery is not so much of a problem.

Dawe has called for greater funding to be put towards the apprenticeships budget, due to a shortage of funding for SME apprenticeships that he warned could become worse.

The Department for Education defended the tender: “The aim of this initiative is to make sure all avenues are being pursued in the engagement of small businesses in apprenticeship delivery,” a spokesperson said.

“Of course, we are aware of the local networks of providers, but this is an additional option to connect more employers with apprenticeships.”

The ESFA allocated a £500 million funding pot to providers to deliver apprenticeships to small employers between January 2018 and March 2019.

Contracts were then renewed for another year while the digital system is prepared.

As FE Week has reported, last year’s funding pot had been exhausted by February 2019 and providers were having to turn learners away.

Shortly afterwards, the Federation of Small Businesses went public with “serious concerns” over how the budget was being handled, having found 41 per cent of businesses had reported an increase in costs related to recruiting and training apprentices since the system reforms in 2017.

The Institute for Apprenticeships and Technical Education warned the budget could be overspent by £0.5 billion in 2018/19 and £1.5 billion in 2021/22, which FE Week was first to report upon in December 2018.

Applicants to the DfE’s tender, which must be not-for-profit organisations, have until October 11 to bid.

Counter fraud investigator has become the 500th apprenticeship standard approved for delivery by the Institute for Apprenticeships and Technical Education.

The level 4 standard, with a maximum funding band of £15,000, has been approved just eight months after the institute passed the 400 approved standards mark in January.

Education Secretary Gavin Williamson said it was “fantastic news” to have reached this milestone.

“This is a great achievement and means there are now more high-quality apprenticeship opportunities available than ever before,” he added.

The counter fraud programme was developed by the Cabinet Office, HMRC, and the Department for Health and it is hoped it will be used by both central and local government

It may be of use to the Department for Education, as this news comes a day after Education and Skills Funding Agency chief executive Eileen Milner warned providers her agency will act against providers acting fraudulently in subcontracting deals.

The chief executive of the Civil Service John Manzoni said: “This apprenticeship is an important milestone for the government counter fraud profession.

“It represents the first means of direct entry into the profession and as such will be integral to embedding a baseline standard of highly skilled professionals across the counter fraud community.”

We have hit a major milestone as counter fraud investigator becomes our 500th #apprenticeship standard to be approved for delivery. Read more about this on our website https://t.co/vIKtxfmkdk #apprenticeships pic.twitter.com/KTNzjEJiCw

— The Institute (@IFAteched) October 4, 2019

Standards were introduced in March 2016 as replacements for the old apprenticeship frameworks, as part of the government’s sweeping reforms to the system.

The pace at which standards are approved has doubled since the institute instituted its ‘faster and better’ scheme in December 2017.

After employers complained the approvals process was too slow and bureaucratic, the scheme was intended to cut through the red tape and streamline the process.

Of reaching the “impressive landmark” of 500 approved standards, institute chief executive Sir Gerry Berragan said: “We will ensure through our reviews process that all standards remain relevant and in demand by employers.”

The National College for High Speed Rail is ploughing ahead with a new name and broader course offer, following a multi-million pound government bailout.

After consulting earlier this year, the government’s flagship college is changing its name to the National College for Advanced Transport and Infrastructure and intends to offer a wider range of courses at its Birmingham and Doncaster campuses.

Chief executive of the college Clair Mowbray said: “As an employer-led college, it’s key we ensure the skills we equip our learners with meet the demands and the skills shortages of the broader advanced transport and infrastructure sector.”

She quoted figures from the Strategic Transport Apprenticeship Taskforce which estimate 50,000 more people are needed to work in the rail sector; 41,000 to fill roles on the road network; and 180,000 to deliver the Heathrow Expansion project.

“There is huge demand across the sectors and the name change reflects our dedication to delivering and developing our curriculum to meet industry demands,” Mowbray continued.

This name change coincides with delays and costing problems with the HS2 project, which is meant to deliver a high-speed rail link from London to the north and is closely aligned with the college.

Mowbray developed the college while working at the company responsible for the project, HS2 Ltd, which has lent her college £2,906,000 in 2018 and £2,804,000 in 2017.

But completion of the first phase of HS2, between London and Birmingham, will probably be pushed back until 2040, transport secretary Grant Shapps told parliament last month, and the budget for the project could increase by around £20 billion.

NCHSR’s rebrand comes after FE Week reported in May the National College for High Speed Rail needed a £4.55 million bailout from the Department for Education to sign off its 2017-18 accounts, that the provider would not need to pay back.

However, what will need to be paid back – by 2030 – is a working capital loan of £8.3 million in 2017-18 that was necessary “to help with startup costs that have been incurred in establishing the college,” according to a spokesperson.

This is not the only national college to run into difficulty since the scheme was launched with £80 million of taxpayers’ money in 2014.

National College Creative Industries is consulting on dissolving and instead starting a new company, NCCI Ltd, which would franchise classroom provision and its building out to South Essex College and apprenticeship provision to Access Creative College. NCCI’s move came after it made it through 2017-18 as a “going concern” thanks to a £600,000 bailout from the Department for Education.

Despite a target to recruit 1,000 learners a year, it only recruited 167 between May 2018 and May 2019.

Following the bailout, then-skills minister Anne Milton announced NCCI would be going through a structure and prospects appraisal to identify partners.

The DfE launched an evaluation of the national college policy in November, to avoid making mistakes in the rollout of the Institutes of Technology, of which eight more were announced this week by education secretary Gavin Williamson (see page 14).

A college rocked by a £20 million apprenticeship scandal is now being run by a Department for Education consultant after the chair stood down, FE Week can reveal.

Terry Lazenby (pictured right) resigned from Brooklands College this week.

It is a relatively small college that FE Week understands is now trading whilst insolvent, after the government demanded it returns a huge amount of funding.

Terry was passionate and committed to the student experience

Lazenby’s replacement on an interim basis is Andrew Baird (pictured left), one of the DfE’s National Leaders of Governance, who is on their payroll and takes home £300 a day for his services.

Baird, who is also currently the chair of governors at Orbital South Colleges, was parachuted into Hadlow College earlier this year after financial irregularities were exposed.

He stopped being chair of Hadlow when it went into administration in May – making it the first to go through the new college insolvency regime.

Baird will be paid for up to 15 days work between now and the end of the year at Brooklands College, according to the DfE.

The department confirmed they offered Baird to Brooklands as interim chair, and the decision to appoint him was taken by the college’s governing body. They declined to comment on how much influence they had in the resignation of Lazenby, who was chair of the audit committee when the apprenticeship funds were received.

A spokesperson said: “We welcome the college’s appointment of Andrew Baird as chair, who brings a wide range of experience within FE and beyond.” 

A Brooklands College spokesperson said it was “pleased to announce” Baird as the new chair of governors with immediate effect on Wednesday.

“Governors look forward to the opportunity to work with Andrew in taking forward the strategic intentions of the corporation,” she added.

Brooklands College’s future currently hangs in the balance following an Education and Skills Funding Agency investigation into its subcontracting relationship with a training firm called SCL Security Ltd.

Amongst many findings, the agency discovered that apprenticeship funding was being used to pay the wages for the 16 to 18-year-olds, which is strictly against the funding rules.

The ESFA has now demanded it pays up to £20 million back to the government.

ESFA boss Eileen Milner also sent a sector-wide letter today, which promised a crackdown on “complacency and mismanagement” of subcontracting deals, as well as “deliberate and systematic fraud”.

Prior to taking over as chair, Lazenby had been vice chair since 2014, a member of three committees including audit and attended 32 out of 33 board and committee meetings in the past three years, according to the published college accounts.

Audit committee meeting minutes show that Lazenby was fully aware of the scale of subcontracting, noting in a September 2017 meeting it was “a significantly higher proportion of income at Brooklands than many FE colleges”.

The audit committee for Brooklands currently only has three members, following the recent resignation of its chair Jerry Loy, as revealed in minutes from a board meeting for June 2019.

Gail Walker, who worked her way up to principal and chief executive of Brooklands after joining in 2011, resigned in March.

She was replaced on an interim basis by deputy principal Christine Ricketts and vice principal Shereen Sameresinghe, who are splitting the role.

The college’s spokesperson said: “In recognising the previous chair’s achievements the interim principal and interim chief executive expressed their gratitude for Terry’s commitment to the college.

“Terry Lazenby MBE, a former chief engineer at BP, was an accessible and visible member of the governing Board to both staff and students.

“Terry was passionate and committed to the student experience and actively engaged in student life to inspire the next generation of engineers.”

Lazenby said all staff at the college “have the best interests of our students at the heart of everything they do”. He did not respond to a request for comment on the ESFA’s investigation.

The DfE said Baird is the only National Leader of Governance, paid by the department, who is currently acting as interim chair of a college.

The education secretary has said his former college made the “right decision” in pulling out of offering a T-level in digital, as he pledged to convene business leaders in an attempt to address shortages of work placement opportunities.

It was announced this week that Scarborough Sixth Form College, where Gavin Williamson studied, will no longer deliver the digital pathway in 2020. The principal said the decision was made because of a lack of work placement opportunities in the area and a shortage of good-quality teachers.

Senior leaders in FE have long expressed concern that young people, especially in rural areas, will be unable to pass the T-level owing to a lack of local and lengthy placement opportunities. However, in 2017, the government said it would not budge on the mandatory work placements.

This doesn’t close the opportunity to offer it in a year after that

Speaking to FE Week at the Conservative Party conference, Williamson said it was “fantastic” his former college was going ahead with the education and childcare pathway, but said dropping the digital offer was the right call.

“They have to look as to how they deliver the very best quality and the very best choice, and they’ve had to make that decision and it is the right decision because it is about preserving that quality.

“This doesn’t close the opportunity to offer it in a year after that, but it’s getting the whole package right, because every youngster that tales a T-level, we want to get it right first time.”

Williamson said there was a “clear recognition” in government that T-levels must be “exceptionally high quality” and that colleges must be “able to offer the full spectrum of what needs to be in the T-level”.

He acknowledged that skills “aren’t as evenly spread as we would like them to be”, and said government must become a “convening force” between colleges and employers.

“We want to take the opportunity to work really closely, very closely with not just colleges but also employers as to actually how best we unlock some of the opportunities to do the vocational side of it.

“It’s one of the reasons that we’re convening together some of the country’s largest employers to have a conversation about how we work closer with employers to make sure that the opportunities are coming available for colleges right across the country.”

When pressed for further information on the work with employers, the DfE said this referred to employer panels and dialogue with industry.

FE Week also asked the DfE for its advice to families in Scarborough who want to study the digital pathway, but received no response.

The DfE did say this week that the Grimsby Institute of Further & Higher Education, which was already set to offer the education and childcare pathway from next year, will now also deliver the digital pathway.

“We always expected there to be a certain amount of fluctuation of providers, and the pathways they offer, as we progress towards September 2020,” a spokesperson said.

“However, we continue to have an excellent group of high-quality providers offering a variety of pathways across the country.”

T-levels were originally meant to be rolled out from September 2019 but skills minister Anne Milton announced a delay of a year in July 2017.

Williamson’s predecessor, Damian Hinds, then rejected a request from the DfE’s permanent secretary, Jonathan Slater, for another year-long delay rejected in the first ever ministerial direction issued by an education secretary last May.

This week’s changes are not the first to affect the T-levels wave one provider list: Big Creative Training and the London Design and Engineering UTC were removed in February.

It follows a pledge by Williamson in his Conference speech on Monday that England will “aim to overtake Germany in the opportunities we offer to those studying technical routes by 2029”.

Asked how it would work towards the target, the DfE said the introduction of new T-levels would boost access to great technical education across the country.