MPs will investigate whether careers funding is achieving value for money after the government abandoned plans to make the Careers & Enterprise Company pay for itself.

Meg Hillier, chair of the parliamentary Public Accounts Committee, (pictured) told FE Week’s sister paper FE Week that her committee wants to look into the Department for Education’s careers spending, most of which currently goes to the CEC.

FE Week revealed on Friday that ministers will continue to fund the Careers & Enterprise Company, which has to date received more than £95 million, after admitting it will not become self-sufficient.

The organisation had pledged to raise at least half of its funding from alternative sources by 2017-18, but documents obtained by FE Week show plans to generate millions through the sale of its services never came to fruition.

“It’s absolutely vital that we’re clear where taxpayers’ money is being spent and what the procurement process has been,” Hillier said, adding that there was a “big question” over how careers funding was being spent.

“That’s the bit we will look at,” she said.

The education committee has previously criticised the company’s impact and spending, too.

Robert Halfon, the former skills minister who chairs the committee, said the decision to continue funding the Careers & Enterprise Company from the public purse “undermines part of the basis on which it was established”.

He urged ministers to “pause and reflect” on whether the quango is “a vehicle to rely upon for transforming careers education”.

Dr Deirdre Hughes, former chair of the National Careers Council, said: “Given the acute lack of school funding, surely it’s time to rethink and allocate the majority of the money to schools and colleges, working in partnership with Local Enterprise Partnerships, local authorities and the National Careers Service, instead of expensive London-based staff and a plethora of external consultants.”

Announcing the creation of the company in 2014, former education secretary Nicky Morgan said that “in the longer term, the company will sustain itself”.

But CEC’s new sustainability plan shows the company and the government “no longer envisage replacing government funding with alternative sources of income in the way that was originally intended when government set up the CEC”.

This is because the nature of the CEC’s work has “expanded significantly” to deliver the government’s careers strategy, it said.

The original sustainability plan from 2016 predicted the company could raise up to £1 million each from educators and employers for destinations data, and a further £1 million from the commercialisation of its “passport for life” scheme, which is still not up and running.

The company also hoped make £1 million by developing and selling a service which runs psychometric profiling of company workforces, and £4 million in corporate sponsorship.

But the company has “leveraged” just £16.5 million from “other sources” since it was launched, including £6.5 million from LEPs, which are themselves part-publicly funded.

When asked what had happened to the various proposals for revenue generation formed in 2016, a company spokesperson said that plan had been “completely replaced”, given CEC’s new role.

Claudia Harris, the company’s chief executive, said ongoing government support would “ensure continued rapid progress in line with its careers strategy and make sure all young people receive the vital opportunities and inspiration they need”.

A DfE spokesperson said: “Since the launch of our careers strategy in 2017, the remit of the Careers & Enterprise Company has expanded and this government recognises that grant funding is necessary to fulfil their important role.”

The government will reopen the option for sixth-form colleges to academise in the post-area review era – but they could have to fork out the full conversion costs themselves, FE Week understands.

Converting to academy status, and in doing so enjoying the luxury of not paying VAT, has been a possibility for nearly all SFCs since former chancellor George Osborne changed the rules in November 2015.

However, the window of opportunity closed in March when the £726 million restructuring facility – a fund designed to help colleges implement area review changes – ended and reverted to the Treasury.

We are extremely pleased that this opportunity will remain available

SFCs and their representative body the Sixth Form Colleges Association have been campaigning for this “arbitrary” deadline to be extended indefinitely, and FE Week understands their wish is to be granted.

Formal guidance on how to academise now that the area review process and restructuring facility has ended is being worked on and will be issued before the summer when the Department for Education intends to reopen the option.

It is not known, however, whether SFCs will have to pay the full conversion costs themselves, which can range between £40,000 and £90,000. Schools are currently given a £25,000 conversion grant if they academise.

“This is a welcome and sensible development and we expect updated guidance to be published later in the year,” said James Kewin, the deputy chief executive of the SFCA.

“This guidance could bring some consistency to the type of academisation that is permitted and hopefully confirm that the academy conversion grant available to schools will also be available to sixth-form colleges.”

The news has been welcomed by many SFC principals.

“Richard Huish College was unable to academise through the area review process because of the complexities of providing education for international students,” said John Abbott, principal of Richard Huish College.

“Whilst this remains an ongoing issue, the growth of the Huish group, which now includes one secondary and four primary schools, as well as the sixth-form college, means there is a growing logic and desire that the college becomes a 16-to-19 academy in order to formally consolidate the group.

“We are therefore extremely pleased that this opportunity will remain available.”

Jim Grant, principal of Cirencester College, told FE Week his college was unable to convert during the period following area review as “we ran out of time in getting a model agreed before the ESFA deadline”.

“So we are delighted that there will be further opportunities and we look forward to seeing the full details and developing our academisation plans further,” he said.

Becoming an academy means SFCs no longer have to pay VAT – letting them off an average annual bill of £385,000.

The first to convert was Hereford SFC in March 2017. Twenty-one have since followed suit, leaving 59 designated SFCs. Three of these are, however, in the process of converting.

A group of 14 which are Catholic-run have, however, been completely prevented from converting due to their religious character, which would not be maintained under current government rules.

If they converted, they would lose protections in areas of curriculum, acts of worship and governance. The SFCA and Catholic Education Service have been trying to get the government to add a clause to the education bill to rectify this, but the DfE has not obliged.

Mike Hill (pictured above), the principal of Carmel College in Merseyside, a Catholic SFC, told FE Week the situation was “extremely frustrating because the other sixth-form colleges close to us that have academised are surging ahead and we feel we’re being left a little bit out on a limb”.

He pointed out that being an academy would allow him to give his staff the schools pay award – a 3.5 per cent salary rise – which is not available to FE lecturers.

“I have a concern here that in the near future, some of my staff might be saying, ‘10 miles away there’s a sixth-form college that is paying the teachers’ pay rise because they’ve had funding’, but unfortunately here we won’t be able to do that,” he explained.

A DfE spokesperson said the department is “currently considering whether sixth-form colleges may still elect to convert to 16-19 academies” and “further guidance will be issued in due course”.

A training provider with over 2,000 learners has gone into administration, with the loss of 69 jobs.

James Lumb and Howard Smith from KPMG were appointed as administrators to Inspire 2 Independence (i2i) on April 29.

Lumb, a director at KPMG, said the provider, which offered employability and apprenticeship programmes through its 13 sites across the midlands and north of England, faced “significant commercial pressures”.

“The financial challenges facing the learning sector have been well documented as providers battle low margins and intense competition,” he added.

“We are working with prime contract providers to transfer students to appropriate courses.”

Thirty one members of i2i staff have been transferred to prime contractors, according to Lumb.

i2i had debts and bills totalling £3.45 million due in one year at the end of 2017/18, according to its latest set of accounts.

At its last Ofsted inspection in September 2017, it was downgraded from grade two to a grade three.

According to inspectors, too many apprentices did not complete their qualification, and too few completed their programme on time.

i2i ran apprenticeships ranging from level 3 to level 5, and delivered training as a subcontractor for the Department for Work and Pensions.

“Our team is on site to support the affected staff through the redundancy process and make claims to the Redundancy Payments Service,” Lumb said.

The Mayor of London has today revealed the FE projects that will share £57.6 million to spend on improving training facilities and equipment, as part of the second round of the Skills for Londoners Capital Fund.

Seventeen providers, nine of which are colleges, will benefit from funding of between £150,000 and £10 million.

The Greater London Authority said applicants have committed £181 million in match funding from other sources, taking the total value of these projects to £239 million.

Areas to be focused on include construction and digital skills, as well as training those with special educational needs and disabilities.

The Mayor of London, Sadiq Khan, said: “Ensuring Londoners have the skills and training to thrive in our dynamic economy is crucial for the future of our city.

“This funding will create high-quality facilities and training programmes, working in partnership with businesses to establish a pipeline of talent for employers both now and in the future.”

The Skills for Londoners capital fund, which totals £114 million, comes from the £324 million Growth Deal central government gave the London Economic Action Partnership.

One of the beneficiaries in this round was London South East Colleges, which received £10 million for its Future Greenwich and Greenwich Digital Village project.

Principal Sam Parrett said: “This investment is greatly needed since we took on the management of the former Greenwich Community College in Greenwich in 2016.”

She added that the funding will be matched by the college’s own funds, to enable the construction of a new £24 million campus.

Harrow College and Uxbridge College, which merged in August 2017, has been allocated £5,330,520 for its Digital and Skills for Work Academy, with deputy principal Pat Carvalho saying: “This latest funding for our Harrow-on-the-Hill campus will be vital in transforming our learner services, digital, media and English as a second language provision.”

The Mayor of London is due to take control of the city’s £306 million adult education budget in August.

Full list of successful bidders:

Project title	Applicant	SfL Capital Fund contribution	Mayor’s Construction Academy contribution
London Institute of Transport Technology	Queen Mary University of London	£10,000,000	–
Future Greenwich and Greenwich Digital Village	London South East Colleges	£10,000,000	–
The Ardleigh Green Campus Re-development Project	Havering College of Further and Higher Education	£7,500,000	–
Wembley Park	United Colleges Group	£5,836,253	£4,163,747
The Mary Ward Adult Education Centre East	Mary Ward Centre	£5,680,001	–
Digital and Skills for Work Academy	Harrow College and Uxbridge College	£5,330,520	–
Surbiton Adult Learning Centre and Community Hub	Richmond & Hillcroft Adult & Community College	£2,827,865	–
Resourcing – IOT Industrial Digitalisation	Barking & Dagenham College	£1,452,000	–
Construction Skills Centre	HCUC	–	£1,412,633
London South East Colleges MCAS Hub	London South East Colleges	–	£819,720
Big Creative Digital Futures	Big Creative Training Ltd	£800,000	–
Open Learning and Digital Environment	Working Men’s College	£559,000	–
Mayors Construction Academy LB Camden Partnership	United Colleges Group	–	£440,000
Meadowbank – Digital Technology Training Centre	London Borough of Hounslow	£254,100	–
Waltham Forest BECI Centre	Simian Risk Management Limited	–	£213,900
Construct Your Future	The STC Group	–	£150,000
Barts Health Learning Hub	Barts Health NHS Trust	£148,950	–

The government is expected to announce which regulator will inspect the quality of learning for level 6 and 7 apprenticeships without a prescribed HE qualification, such as a degree, in the coming days.

FE Week was first to expose the lack of oversight for thousands of these apprenticeships in November, which are currently not the responsibility of Ofsted, whose remit only extends to level 5, or the Office for Students if the provider offering them is not on its HE register.

Ofsted chief inspector Amanda Spielman expressed her deep concern at the issue during an interview with FE Week in March: “There are places that go completely unscrutinised because they don’t come within OfS arrangements and they don’t come within our space,” she said.

Asked at the time if she would like Ofsted to inspect the unregulated level 6 and 7 provision, she added: “I very much hope people will see the logic in us doing it.”

After months of deliberation between the two regulators and the Department for Education, a decision is understood to have finally been reached and it’ll be announced imminently.

It comes as arguments continue over the affordability of higher level apprenticeships, which appear to be putting a huge strain on the programme’s budget.

In December, the Institute for Apprenticeships and Technical Education estimated that the budget for England could be overspent by £0.5 billion this year, rising to £1.5 billion during 2021-22.

The National Audit Office then suggested the government should think about reducing the level of public funding for certain types of apprenticeships after finding levy-payers are “developing and choosing more expensive standards at higher levels than was expected”, and warning there is “clear risk” that the programme is not financially sustainable.

Following this, the Association of Employment and Learning Providers called for all level 6 and 7 apprenticeships, including those with integrated degrees, to be removed from the scope of levy funding. This was unsurprisingly met with strong opposition from organisations such as the University Vocational Awards Council.

A week later the DfE’s permanent secretary Jonathan Slater admitted during a Public Accounts Committee hearing that “hard choices” would need to be made if the treasury cannot find extra funding for the programme in the upcoming spending review.

And last week, FE Week revealed that plans for PhD-level apprenticeships have been thrown into doubt after the IfATE raised concerns they were not in the “spirit” of the programme.

The government should raise the funding rate for 16 to 19-year-olds by a “significant amount” in the upcoming spending review, the Social Mobility Commission has said, piling yet more pressure on the Treasury.

The commission’s 2018-19 State of the Nation report says funding for the age group has “fallen 12 per cent since 2011-2012 and is now eight per cent lower than for secondary schools”, leading to “cuts to the curriculum and student support services that harm disadvantaged students”.

It has now added its voice to those from across the education sector and political parties that sixth form funding is not sustainable at its current level, and called on the chancellor Philip Hammond to fix the situation in the spending review.

The base rate funding per 16 to 18-year-old student has been stuck at £4,000 per year for the last five years. Campaigns including Raise the Rate, which is led by the Sixth Form Colleges Association, are calling for this to be increased to £4,760.

The Association of Colleges has meanwhile said the rate should be upped to £5,000, which it says is needed to avoid a T-levels crisis.

“Further education provides alternative life chances for all 16 plus age groups,” said Alastair da Costa, a Social Mobility Commission commissioner and chair of the Capital City College Group.

“Consistent budget cuts have made it more difficult to provide opportunities for everyone. But as 75 per cent of disadvantaged 16 to 19 year-olds choose vocational education, the cuts represent a class-based segregation of the school system.”

David Hughes, the chief executive of the Association of Colleges, said: “Treasury and DfE should carefully consider these recommendations because they echo similar calls from many other reports and institutions, including employers groups such as the CBI.

“The case is so strong now, we simply are awaiting the Treasury to acknowledge and respond in the spending review this year.”

Today’s report found that “twice” the number of disadvantaged 16-18-year-olds are in FE colleges compared to school sixth forms and this “segregation” within the education system has risen by 1.2 per cent since 2013.

It said that disadvantaged students “still do worse in improving their scores when they resit level 2 exams compared to their more affluent peers and the gap between disadvantaged and advantaged students is growing”.

The commission said the government should “introduce a Student Premium for disadvantaged students aged 16-19 that models the Pupil Premium in schools, with a goal of targeting funding and focussing on raising attainment for disadvantaged students”.

The commission also found that, driven by funding shortfalls and a £2,500 difference in pay between FE and school teachers, recruiting and retaining teachers in FE colleges is a “major problem”.

“Ninety per cent of colleges report difficulty recruiting and the average college had 16 vacancies at the start of the 17/18 school year, creating volatility for students and impacting on student attainment,” it reported.

Education Secretary Damian Hinds said: “We want to create opportunity for everyone. Employment has risen in every UK region under this government, wages are outstripping inflation, the gap between disadvantaged pupils and their peers has narrowed and the proportion of 16 and 17-year-olds in education or apprenticeships is at its highest ever. 

“We are supporting pupils to thrive at every stage – setting a 10-year ambition to boost children’s early reading and communication skills, transforming technical education and providing coaching for young jobseekers.”

Apprenticeship starts for the period August 2018 to February 2019 are up 10 per cent on the previous year – but 18 per cent down for the same period in 2016/17 – the year before the levy reforms were introduced, figures published this morning show.

Provisional figures for February 2019 show 25,300 starts, up 16 per cent on the 21,800 provisional starts published this time last year but still well down on the final figures for the same month in 2017 before the levy was introduced.

FE Week analysis of progress towards the government’s manifesto commitment of 3 million starts by 2020 shows a 24 per cent and widening gap. An average of nearly 90,000 starts per month are required for the remaining 14 months to achieve the target. In the 46 months since 2015 the average starts has been less than 40,000. See graph above.

Apprenticeships and skills minister Anne Milton said: “It is great news that these figures show we are continuing to see a rise in the number of people starting their apprenticeship journey – an increase of 10% compared to the same point last year. It is also brilliant to see that over four million people have started an apprenticeship since May 2010.”

Mark Daw, the chief executive of the Association of Employment and Learning Providers, said his organisation “still believes that introducing the levy was right but starts being over a third down on pre-levy levels show that the Chancellor was also right to call for a fundamental review of how the funding system is working”.

“As last week’s report by the Federation of Small Businesses illustrated, it’s increasing funding available for SMEs as major providers of level 2 and 3 apprenticeships which is the biggest priority and the government must use the Spending Review to restore the funding for them that was there prior to the levy,” he added.