DfE paid £1m to settle Hadlow Group’s legal case

The Department for Education forked out £1 million to settle a legal dispute at a college group under investigation and already relying on government bailouts to survive, FE Week can reveal.

The department paid off BAM Construction after West Kent and Ashford College (WKAC) was ordered by the High Court to pay outstanding debts for the construction of a state-of-the-art teaching building in November.

This is the latest revelation about the financial scandal embroiling the Hadlow Group, which runs WKAC, and is now looking for two new board chairs and half a dozen governors after the previous holders quit.

The group has been receiving an unknown amount of exceptional financial support from the Education and Skills Funding Agency, as well as visits from the FE Commissioner.

The commissioner met the agency last Friday to decide what advice to give to the education secretary: bail out the group, or let it become the first college to become insolvent.

BAM Construction was contracted to build the new Elwick Road building for Ashford College in 2015, and finished it in 2017.

Ashford College, part of West Kent and Ashford College, was adopted by Hadlow College in 2014 after K College collapsed. The Hadlow Group was then formed to run Ashford College, Hadlow College and West Kent College in Tonbridge.

WKAC accumulated a debt of £1 million for the Elwick Road construction work, and, according to a BAM spokesperson: “Despite our making a number of attempts to negotiate payment of this debt, the college failed to settle.”

The case was taken to the High Court, which found in favour of BAM and ordered WKAC to pay the £1 million bill, which the DfE covered. 

According to BAM, the college has now paid most of the outstanding debt. 

The High Court case was not the last monetary problem for the £26 million building – which features a recording studio, a hair and beauty salon, and a lecture theatre.

The project received support from Ashford Borough Council, which gave WKAC a £2 million loan in February 2015 to deliver phase one of the development – the £26 million teaching block.

The college loan was converted into a grant in September 2018, meaning it did not need to be paid back when the teaching block was completed.

In July 2016, the council gave the college a further extra £1 million, again on the basis that they would not need to pay it back as long as a further phase of development was completed, a technologies block known as “phase 1a”. 

The technologies block was never completed and it is understood that the council now wants their £1 million back. 

The February council cabinet meeting agenda lists a relevant report and a request from the college for an extension on phase 1a completion until March 2021.

However, after FE Week reported – the day before the meeting – that the FE Commissioner had visited the Hadlow Group, deputy principal Mark Lumsdon-Taylor had resigned and principal Paul Hannan had gone on sick leave, Ashford Borough Council leader Gerry Clarkson pulled the item off the cabinet’s agenda.

At the cabinet meeting, Clarkson said: “Following the recent news that came out only yesterday about changes to the management of the West Kent and Ashford College, and having not received any further detail or an official position from the college at this stage, it is felt prudent to withdraw the cabinet report on the Ashford College campus.”

Asked whether the college can continue with phase 1a without support from the council, a group spokesperson would only say: “We understand and respect Ashford Borough Council’s decision on this and value the close working relationship we have with them.”

The Hadlow Group declined to comment on the court case. 

Asked to confirm if the Department for Education had spent £1 million to settle the college’s legal dispute, a spokesperson said: “The ESFA is working closely with the colleges to maintain stability and to ensure that education for learners is not adversely affected and appropriate steps are taken to manage public money.”

Three-day strike at New College Swindon called off after 2% staff pay rise agreed

Strike action has been called off at New College Swindon after it agreed to a staff pay deal which includes a two per cent raise.

Members of the University and College Union at the college were one of nine other colleges due to walk out for three days starting next Wednesday, in the third wave of such action since November.

However, just hours after today’s strike announcement, the union said a deal with New College Swindon has been struck to prevent the action.

The two per cent raise will be backdated to August and the college will change pay scales so staff can move onto better grades faster.

The UCU said both sides have agreed to set up a working party to monitor the changes and look at other possible improvements to pay progression.

UCU regional official Nick Varney called the announcement “good news,” but warned colleges which did not enter into negotiations on pay and conditions “should expect to reap what they sow”.

“Nobody ever wants to take strike action, but members felt they had been left with no alternative,” she said.

“Colleges who don’t try and hide behind government failings, but instead engage with us on the pay and conditions of their staff will receive a positive hearing.”

The UCU has been campaigning for better pay for FE staff after finding the pay gap between college teachers and school teachers stands at £7,000, and staff have “seen the value of their pay decline by 25 per cent over the last decade”.

Colleges on strike 18, 19 and 20 March Colleges on strike 20, 21 & 22 March
West Thames College Bath College
  Bradford College
  Bridgwater and Taunton College
  City of Wolverhampton College
  Croydon College
  Harlow College
  Petroc
  South Bank College (previously Lambeth College)

The National Education Service: Suggestions on a postcard, please

In its latest NES consultation document, Labour asks for suggestions on how to achieve local democratic accountability – the sector must rise to the challenge, says Ewart Keep

FE Week recently reported on the launch of the Labour party’s latest consultation on local accountability as part of the development process for a National Education Service (NES). Two points about this document are striking.

The first is that it perhaps plays a little fast and loose with history. A stranger arriving from another planet who read the consultation would be forgiven for thinking that prior to 2010 and the arrival of the coalition government, England had possessed a set of reasonably vibrant, successful and powerful local mechanisms for discussing, steering and holding accountable local provision of education.

In reality, as we all know this was not the case. The decline of influence and importance in local decision-making in education commenced with the Thatcher government in the 1980s and continued under administrations of all political persuasions – New Labour included.

Over time, education has been de-localised, nationalised, centralised and then marketised. And because marketisation has followed centralisation, the quasi-markets created are designed and regulated at national, not local, level. The underlying cross-party political consensus for much of the last 35 years or more has been that central government knows best.

This means that delivering local accountability will require a fundamental re-orientation in thinking among policymakers and practitioners who have long been habituated into a centralised, top-down model.

The second and much larger point, concerns the nature of the consultation document. Most consultations advance a set of proposals and then ask for feedback on their feasibility and desirability. Local Accountability in the National Education Service does not conform to this model.

The future is seen as an open policy space waiting to be filled with ideas

It lays out some very general principles (trust-building, two-way/reciprocal accountability) that it wants to see delivered around creating local democratic accountability, and then asks for suggestions as to how this might best be achieved. The future is thus seen as an open policy space waiting to be filled with ideas and potential mechanisms and structures – in terms of funding, performance management, accountability mechanisms, policy development bodies and so on. Both the architecture and operation of localised accountability are apparently up for grabs.

Though this open agenda is an exciting prospect – as nothing has yet been ruled in or out and there is therefore considerable latitude for new and constructive thinking to emerge – it is also a major challenge to those responding to the consultation because it means that they have a lot of thinking to do.

To give just one example: how local is local when we decide the level at which we want accountability for education to operate? Is it combined authority, city region, county, local enterprise partnership (LEP) or district council? Will the answer be the same across the country, or will the levels differ across place depending on past history and current preferences? Will the level be the same for all types of education institution in a given locality – early years providers, primary and junior schools, secondary schools sixth-form colleges, FE colleges (which vary considerably in size and student makeup), universities, independent training providers and so on? How will choices on this issue inter-relate with those on funding, inspection, quality monitoring and improvement, and the relationship(s) between local and national policy?

The deadline for responses is 30 June. This is not long to ponder, and resolve, the set of complex and profound questions asked at the end of the consultation document.

It is to be hoped that colleges (and other providers) will want to act as a catalyst for new thinking in their own communities and localities about potential models for accountability, and that, at national level, AoC, AELP, Holex, trade unions and other bodies will also be active in trying to envision a more decentralised, bottom-up model of accountability, and fresh ways in which collaboration between stakeholders can be generated.

MOVERS AND SHAKERS: EDITION 274

Your weekly guide to who’s new and who’s leaving.

Sean Lyons, Chair of the board of governors, West Nottinghamshire College

Start date: February 2019

Concurrent job: Management consultancy and property development 

Interesting fact: In his previous role as a senior vice-president in the steel industry, Sean commuted between England and Stockholm every week for five years.

Holly Price, Board member, Construction Industry Training Board

Start date: February 2019

Concurrent job: Training and development director, Keltbray and Presidential Officer of the National Federation of Demolition Contractors.

Interesting fact: In 2005, she was Europe’s only female explosives engineer.

Annette Cast, Principal, Southwark College

Start date: March 2019

Previous job: Pro Vice Chancellor and Dean, University of East London

Interesting fact: She once completed a 24-hour squash marathon.

Jackie Grubb, Principal, City College Plymouth

Start date: August 2019

Previous job: Principal, City of Westminster College

Interesting fact: She is a qualified sports therapist.

Revealed: The 10 colleges in third wave of strike action over pay

UPDATE: The strike at New College Swindon has been called off after the union and the college agreed on a pay increase.

 

Staff at ten colleges in England will go on strike over pay later this month, in the third wave of such action by the University and College Union.

The walk-outs will take place between 18 and 22 March following strikes in November and the end of January.

College staff have been voting to take action due to what the UCU calls: “The failure of college bosses to make a decent pay offer to staff or address key issues such as excessive workloads.”

UCU head of further education Andrew Harden said: “Strike action is always a last resort, but unless colleges work with us to prioritise their staff they will face disruption next week.”

The UCU has been campaigning for better staff pay in FE after finding pay gap between teachers in colleges and schools currently stands at £7,000, and staff have “seen the value of their pay decline by 25 per cent over the last decade”.

The 10 colleges on strike:

Colleges on strike 18, 19 and 20 March Colleges on strike 20, 21 & 22 March
West Thames College Bath College
  Bradford College
  Bridgwater and Taunton College
  City of Wolverhampton College
  Croydon College
  Harlow College
  Petroc
  New College Swindon
  South Bank College (previously Lambeth College)

 

Scrap funding rule that stops providers from transferring their unspent levy, says UEL

A university has called for the scrapping of an apprenticeship funding rule that stops them from using unspent levy funds to support local businesses.

The University of East London delivers apprenticeships to large employers, but after missing out on a non-levy allocation they have to turn small employers away.

One solution would be to share their own unspent levy funding with small employers using the transfer funding arrangement, but under current government rules they would not be allowed to deliver the training.

“As a large employer we would like to transfer our unspent levy, but of course being an apprenticeships provider we can’t,” said UEL apprenticeships manager Nigel Hogg (pictured right).

“We are going to be losing our unspent levy in May – we would have loved to use that.”

As a result, Hogg suggested the government should flex the rules to allow training providers to use their levy to support the small and mediumsized enterprises (SME) market. The Department for Education make it clear that “if a training provider transfers funds to you, they cannot deliver the training for that funded apprenticeship” and a spokesperson told FE Week there was no plans to change the rule.

Asked if he would support UEL’s call for change, Adrian Anderson, chief executive at the University Vocational Awards Council, said: “Yes, why not? I would be delighted if the Education and Skills Funding Agency decided that universities could transfer their levy to non-levy payers. It’s something we would encourage and welcome and support.”

However, Anderson said this is “not the bigger issue”, but that “we are in a ridiculous situation where there is no funding for many universities to deliver to SMEs”.

This newspaper understands the extra protection applied to the transfer funding policy was introduced because of concerns over fraud.

Skills minister Anne Milton has previously suggested that “fraud has been an issue” within the current system.

“We have to have rules, and they’re irritating and bureaucratic, but fraud has been an issue,” she said at a fringe event at the Conservative party conference in October.

Anderson believes the rule exists because the ESFA thinks there could be a conflict where providers would be delivering training provision to a company that was in receipt of their levy.

Next month the transfer funding limit is set to increase from 10 to 25 per cent, but, according to a recent report from the Department for Education, only 200 apprenticeship levy transfer arrangements had been made in the beginning of February since the allowance was introduced last April, while a further 20 applications were pending approval.

Hogg told FE Week that he finds many companies “can’t be bothered to actually set [transfers] up”.

“They feel the bureaucracy is a bit too much for them to do and then they have to get someone in to look at their digital accounts, transfer that money to somebody else, and some of them just let the levy go back as a tax.”

The UEL also said it has had to turn small businesses away as it does not have a non-levy apprenticeship allocation.

Sadaf Alvi (pictured left), head of academic and employer partnerships at UEL, said it was “very frustrating” not being able to work with SMEs.

Policy makers might call it an unintended consequence, but I call it a scandal

This week the Treasury confirmed that the apprenticeship fee – known as co-investment – will halve from 10 to 5 per cent from the start of April.

Or to put it another way, the public subsidy for apprenticeships running at an average cost of £9,000 (according to the National Audit Office) will rise from 90 per cent (£8,100) to 95 per cent (£8,550).

I was quick to take to Twitter to deride this attempt at stimulating more demand from small employers as “probably the worst ever FE policy in the 15 years I’ve been in FE”.

It’s so bad because it means the public subsidy for management trainees rises from the same pot that providers tell us is already proving insufficient to fund 16 to 18 year-olds and young adults entering the job market.

Or, again, to put it another way, employers will see their contribution fall from £2,200 to £1,100 for a £22,000 management degree apprenticeship for existing staff when £22,000 of funding in the same pot would have funded seven healthcare support worker apprentices at £3,000 each.

Of course, policy makers might call this an unintended consequence of ‘employer ownership’, but I call it a scandal.

More generally, the co-investment change is bad for apprenticeships because: 

1. Before the reforms were introduced it was assumed employers would contribute 50 per cent to the costs. This fell to a mandatory third when standards were piloted and then 10 per cent from May 2017 and now 5 per cent from April. History has shown the closer the government gets to giving stuff away the lower value the product is perceived to be and the harder it is to put the price up at a later date.

2. If employers are not willing to pay as little as 10 per cent for a product they either don’t value it or their cash flow is so poor their business should not be trusted to survive long enough for the apprentice to complete their course.

3. The ESFA has confirmed to FE Week that despite the change being targeted at small employers, it will also apply to large employers when their levy pot runs out. So providers will be forced to halve their fee to large employers that are already engaged in the programme when they switch to non-levy.

4. The National Audit Office has confirmed what we suspected, that the levy pot is insufficient in the medium to long-term, so increasing the subsidy will add extra pressure and make access to funds for those that need it more, not less likely.

5. There is no time limit on this fee reduction, making it much harder to reverse. Any business will tell you that if you want to stimulate demand you offer a time limited sale.

There are still two weeks left until implementation, so like Brexit, surely more time is needed to determine if this change has been properly thought through and what the sector really wants?

FE Week takes on charity cycle challenge with South and City College Birmingham

FE Week’s editor Nick Linford and publisher Shane Mann will be joining a team from South and City College Birmingham to cycle the 100-mile Velo Birmingham and Midlands and raise funds for the charity Cure Leukaemia.

FE Week editor John Dickens and the principal of South and City College Birmingham Mike Hopkins will be two of the riders joining them in May on the trip from Birmingham to Coventry, then back.

“As a college, we are really pleased that we are involved in this year’s Velo Birmingham and Midlands ride,” said Hopkins.

The college has chosen Cure Leukaemia as their nominated charity this year, as a number of students and staff have been affected by the disease – including one manager, who died of it over a year ago.

Hopkins added: “We are extremely proud to be supporting Cure Leukaemia and helping to raise vital funds to help beat blood cancer.”

The team also includes Dave Heeley, who calls himself “Blind Dave”, the first blind person to complete the seven-marathon challenge in 2008; and they are aiming to raise £50,000 for charity.

To donate to the efforts, visit https://www.justgiving.com/fundraising/lsect-team

The Velo is not the only gruelling cycling challenge being undertaken by a member of the FE community this year.

Chief executive of Askham Bryan College Catherine Dixon is stepping down from her role to try for the Guinness world record as the fastest woman to circumnavigate the world on a tandem bicycle, with her cycling partner Rachael Marsden.

“This is the opportunity of a lifetime,” Dixon said.

“It is incredibly exciting and it will be amazing to set the world record.”

This summer, the pair will have to cycle up to 100 miles a day to cover 18,000 miles across five continents within 320 days, which Dixon acknowledged will be “tough”.

Catherine and Rachael are also using their cycling challenge to support charitable causes: Oxfam and the Motor Neurone Disease Association.

Baker U-turns by telling all UTCs they could survive by joining multi-academy trusts

University Technical Colleges are being pressured to join multi-academy trusts after the programme’s architect Lord Baker U-turned on previous warnings that they will be “watered down” if they do.

FE Week can reveal that Lord Baker and academies minister Lord Agnew wrote to principals and chairs of all UTCs last month urging them to join a MAT.

It marks a dramatic shift from Lord Baker, who said last year he didn’t want UTCs “watered down, and that is the danger if they get into a MAT”.

We believe that membership of a MAT is an important way to help UTCs succeed

Critics have said the U-turn is a “desperate measure” to “salvage” the embattled programme.

UTCs, technical providers that recruit students at age 14, have been besieged by problems since they launched in 2010.

Many have struggled to recruit adequate student numbers and a run of poor Ofsted grades has caused reputational damage.

The letter from Lord Baker and Lord Agnew reads: “In most cases, we believe that membership of a MAT is an important way to help UTCs succeed. This will help to ensure that a UTC has a strong educational offer, as well as aiding recruitment and financial stability.

“Taking a UTC into a MAT will enable the MAT to extend its offer and provide a wider range of choices to their pupils.”

Geoff Barton, general secretary of the Association of School and College Leaders, said the U-turn “smacks of desperate measures in an attempt to salvage a policy which was always bound to struggle” because of the “obvious incoherence” in the 14 to 19 age range.

More than £63 million has been spent on eight UTCs that have closed or announce closure since 2010.

There are currently 50 open UTCs. Twenty are already a part of a multi-academy trust, including all five that rebrokered earlier this academic year.

But there are concerns about whether the UTC brand will survive.

UTC Cambridge rebranded as the Cambridge Academy for Science and Technology when it joined Parkside Federation Academies (now known as Cambridge Academic Partnership) in 2017, because “so many people in our local community didn’t know what UTC Cambridge stood for”.

In May last year, Sir Charles Kao UTC changed its name to the BMAT STEM Academy when it joined the Burnt Mill Academy Trust, based in Harlow in west London. Two other UTCs that joined MATs have already or plan to widen their provision to admit year 7 students.

UTCs that fall into trouble are also being ordered to join MATs.

In March last year, Bolton UTC was told it must join a “strong” multi-academy trust and improve its finances after a government investigation found financial mismanagement and poor governance.

Bolton UTC has not yet joined a MAT. However, accounts for last year, published this month, state: “The current opportunity to rebroker the UTC into a MAT is now a DfE requirement for UTCs and we are in advanced discussions with a potential MAT.”

Taking a UTC into a MAT will enable the MAT to extend its offer

Kevin Courtney, joint general secretary of the National Education Union, said the “pressure now being applied on UTCs to join multi-academy trusts is clear evidence that this is a flawed and failed policy”.

The Department for Education said it was “encouraging and supporting UTCs to join suitable MATs wherever possible, as this is beneficial to both parties”.

Michael Pain, chief executive of Forum Strategy, which represents MATs, said it was “paramount” for any trust considering taking on a UTC to undertake “extensive” due diligence.

He said trusts must be clear about how UTCs fit with their vision, as well as “both the immediate and longer-term implications in terms of resourcing, finance, and future viability”.

To add to the trouble at UTCs, the chief executive of the Baker Dearing Trust, which is behind the programme, announced this week he is stepping down.

Charles Parker will leave the top position in August and be replaced by Simon Connell, the trust’s current development director.