The cash-strapped Hull College Group is to offload one of its three colleges later this year.
Harrogate College, which currently makes up the group along with Goole and Hull College, will join the Leeds City College Group on August 1, after plans were signed off by the FE Commissioner and ESFA.
The move is part of Hull College Group’s five year “restructuring plan”.
The troubled institution is in a dire financial position, and recieved the biggest amount in restructuring grants – a total of £34,187,000 – from the ESFA last year to support its ‘fresh start’ arrangement and to help its “significant financial and operational turnaround”.
The college said in its 2016/17 accounts, which were published almost 18 months late, that it had overspent £10 million that year.
Its 2017/18 accounts show a surplus in the year of £22 million, which was “in respect of restructuring costs”.
Leeds City College Group is to now be called Luminate Education Group, which currently comprises of Leeds City College, Keighley College, Leeds College of Music and the White Rose Academies Trust.
Michelle Swithenbank, chief executive at Hull College Group, said: “We are handing over a strong local college which is in good health, to Luminate [Leeds City College Group]. We wish Harrogate College every future success.
“We’re focused on growing Hull College and Goole College and continuing to provide the best education and to serve our local communities.”
Colin Booth, current chief executive of Leeds City College and future chief executive of the Luminate Education Group, said: “Welcoming Harrogate College to the group is another step forward and will mean benefits for both students and staff. This news will mean that Luminate Education Group has responsibility for 30,000 students in total, further proving our role in nurturing the skills for the future in Yorkshire, and beyond.”
And Kevin Williams, principal at Harrogate College, added: “The college has benefited from the expertise of Hull College Group over a number of years. There is a great opportunity for us in the Luminate Education Group arising from geographic proximity and the opportunity to share best practice.
“Our recent campus redevelopment, alongside this news, puts us in great shape for the future.”
The summer term has kicked off on a solid footing with two colleges and one university being graded ‘good’ while one dance and drama college was rated ‘outstanding’.
However, the good news was slightly overshadowed by two ‘inadequate’ full inspections and three ‘insufficient’ monitoring visits.
Liverpool Theatre School & College Limited was upgraded to ‘outstanding’ after Ofsted found teachers have extensive industry experience and students’ work ethic is “excellent”.
Inspectors said students receive “extensive, high-quality advice and guidance” from teachers and develop their skills and performance quality to a “very high standard”.
Meanwhile, Furness College secured its ‘good’ rating in its first inspection since its merger with Barrow-in-Furness Sixth Form College, which Ofsted said leaders and managers have managed “effectively”.
Teachers were recognised for using their professional and industrial experience successfully to help learners and apprentices to develop high-level technical skills, who benefit from “high-quality impartial careers advice and guidance” and from a “well-developed and wide-ranging programme”.
Bridgwater Taunton College also received its first inspection after its merger between Bridgwater College and Somerset College of Arts. The college was rated ‘good’ but five out of the seven provisions were rated as ‘outstanding’.
The college was found to have leaders with “determined and ambitious” actions and who managed the merger “extremely well”. Further improvements continue “apace”, the report said.
Coventry University saw its overall grade increase from three to two across the board thanks to senior managers and governors working “very effectively” to address the recommendations from the previous inspection.
The report said there has been a “steady and sustained improvement” in achievement rates for learners and apprentices.
In more negative news, Be A Better You Training Limited, a loans-only provider, was rated ‘inadequate’ after Ofsted found it was using banned subcontracting.
Nottinghamshire Training Network was also hit with the lowest possible rating after receiving six consecutive ‘requires improvement’ ratings since opening its doors.
EMD UK Limited received a grade three in its first-ever inspection after its leaders and managers failed to take “swift enough action” to improve its programmes and failed to ensure that learners benefit from high-quality impartial careers advice and guidance.
The report said staff do not prepare learners sufficiently to work in commercial settings, but recognised a high proportion of them achieve their intended qualifications.
Develop-U fell from ‘good’ to ‘requires improvement’ just two months after a ‘reasonable progress’ monitoring visit. Ofsted said the provider has not yet had time to demonstrate the impact of actions it took following the visit, and that leaders and managers do not evaluate the quality or raise the standard of teaching, learning and assessment well enough.
In its first monitoring visit, Arriva London North Limited was found making ‘insufficient progress’ across the board as its leaders and managers “lack the expertise to provide successful apprenticeship provision” and fail to implement quality assurance processes to identify the strengths and weaknesses of the quality of training.
Cogent Skills Training Limited was also rated ‘insufficient’ in its first visit as leaders and managers do not ensure that they meet all the principles and requirements of an apprenticeship. Ofsted found a small minority of the apprentices did not realise they were enrolled on an apprenticeship. The provider claimed this was just one apprentice.
Elsewhere, The Intraining Group Limited, part of NCG, received a monitoring visit following its grade three inspection last year, where Ofsted found it has made ‘insufficient progress’ across three provisions and ‘reasonable progress’ in one.
Southport College received one ‘significant progress’ and three ‘reasonable’ in its first visit since merging with King George V sixth form college in January, while Strive Training received two ‘significant’ and one ‘reasonable progress’ ratings.
Three providers – Workpays Limited, Just I.T. Training, Adalta Development and The Chartered Institute of Housing – were all found to have made ‘reasonable progress’ across the board in their early monitoring visit reports of their apprenticeship provision.
Lastly, Ofsted rated the apprenticeship provision at The Newcastle Upon Tyne Hospitals NHS Foundation Trust with two ‘reasonable progress’ and one ‘significant progress’.
“The trust recruits apprentices into genuine job vacancies and guarantees apprentices continued employment on completion of their programmes,” Ofsted found.
The government has said it may tender for more Institutes of Technology after FE Week shared concerns that there were none planned in the north west and the east of England.
Just two of the 12 flagship institutes being taken forward after a two-stage tender process are in the north, with the north west being completely shunned.
“So much for the Northern Powerhouse” was how one MP reacted after seeing FE Week analysis showing residents of major cities such as Liverpool and Blackpool would have to travel over 100 miles to attend their nearest IoT.
So much for the Northern Powerhouse
The east of England, in addition, doesn’t have a single IoT opening in the region, following the rejection of one college’s bid. There has been no explanation forthcoming for this.
The IoTs, which will be established via a share of £170 million in capital funding, will specialise in delivering higher level technical training at level 4 and 5 in STEM subjects, including digital, advanced manufacturing and engineering.
In the education secretary Damian Hinds’ words, they will be the “pinnacle of technical training – new collaborations between universities, colleges and business to make sure young people have the skills they need to build a well-paid rewarding, career, while the economy gains the skilled workers it needs to be more productive”.
But when FE Week shared serious concerns over a lack of broad geographical coverage, the DfE quickly realised there was a problem.
“We have always acknowledged that there might be some parts of the country where there were no proposals that met our high quality threshold,” a spokesperson for the department said.
“We will, however, review the extent of geographical ‘cold spots’ to determine whether a future competition should be considered.”
According to the DfE, all institutes must hold an Ofsted ‘good’ or ‘outstanding’ rating at the time the licence and capital funding agreements are signed.
The department said it did receive other applications from providers based in the north at stage one of the competition, but these did not meet the threshold required to progress to stage two.
Henri Murison, the director of the Northern Powerhouse Partnership, was not impressed with the outcome: “By only choosing two locations in the north out of a possible 12, and the north west missing out entirely, the government is failing to address the scale of the skills challenge facing the north.
“The skills gap between the north and south is one of the biggest challenges facing us now and for future generations. We need to see better representation across the whole of the north if the government is serious about rebalancing the economy and making the Northern Powerhouse a reality.”
He told FE Week that with all the Northern Metro Mayors missing out, “any future decisions about how and where next should be made by devolving the decisions and funding to those who understand our interconnected city regions, not another Whitehall-led bidding process”.
Angela Rayner, shadow education secretary and MP for Ashton-under-Lyne, was furious at the government for “neglecting” the north. “With not a single university or college in the whole of the north west involved, one of my constituents would need to travel nearly two hours on public transport to the nearest provider on the government’s list, while Liverpool is over 100 miles away,” she told FE Week.
“All of our communities need investment and have great potential if we support our young people and equip them with the skills they need.”
Angela Rayner
Gordon Marsden, shadow skills minister and MP for Blackpool South, was equally unimpressed: “The failure to give a leg-up to learners and providers in the north west – and the need to support all our colleges, who have had the Cinderella treatment from government on funding, supporting staff and still no decent response to the Love Our Colleges campaign – has now been compounded by the minister’s inexplicable decision to leave us off the map for the new Institutes of Technology programme.”
Stephanie Peacock, Labour MP for Barnsley East, added: “The education secretary said the Institutes of Technology would be the pinnacle of technical training but that pinnacle will be left out of sight for far too many. Barnsley is a near 50-mile drive or a two-hour train ride to York College, the only such institute in the whole of Yorkshire, Humberside and the north east combined.
“So much for the Northern Powerhouse.”
The college in the east of England to have its bid rejected in the final stage of the IoT tender was West Suffolk College, which has been rated ‘good’ by Ofsted since 2016.
The college has not yet received detailed feedback of why it was declined, and principal Dr Nikos Savvas said: “We were very surprised and disappointed to learn that we didn’t make it through to the second stage of the IOT as we believed we had submitted a very strong bid.”
He added that the college is opening a “campus for STEM innovation for the eastern region in September 2019”, which will help fill the gap of an IoT.
The first IoTs are expected to open from September this year.
This week we reveal that an Institute for Apprenticeships sub-committee (that includes four board members) refused to approve the first PhD level 8 apprenticeship.
Instead, they asked the full board to rule whether a PhD level is even “in the spirit of apprenticeship policy”.
Four months on and the board is still in discussions with the DfE about an agreed level 8 policy, despite employers working on plans for a year, and the DfE is “looking carefully at what the priorities of the programme should be from 2020 onwards”.
The IfA hasn’t always given employers what they want, often quoting rules originating from the DfE when rejecting demands.
But there does appear to be far more concern over value for money and a weakening of the employer-ownership mantra, given it was only last May that their chief executive, Sir Gerry Berragan, told the education select committee: “The institute is completely agnostic about the level of apprenticeships” and “from my perspective, this is an employer-led process, and that is who we reflect.”
And at the same sub-committee meeting in December the IfA called for their board to consider if the “increasing number of degree apprenticeships, particularly at level 7, may put pressure on funding for delivery of apprenticeships at the lower levels, while cross-subsiding higher education from the apprenticeship budget”.
Despite this the IfA told FE Week this was not discussed at the following board meeting, so it remains unclear what the board think.
And as for the IfA chief executive, it seems if he does have a view he is not keen to share it, given ahead of our last interview it was a “condition that he wouldn’t answer questions relating to the levy and apprenticeships budget because that’s DfE responsibility”.
The truth is, as eloquently articulated by the DfE permanent secretary, the apprenticeship budget is on track to be overspent and hard choices will need to be made.
Now more than ever before we can be honest and say the employer ownership experiment has proved unaffordable.
The young people that would benefit most from the public funding should be in the driving seat, and the IfA could have an important role in helping define the priorities to make that happen.
Auditors were unable to properly scrutinise the finances of a failed University Technical College because important data was missing, but the government chose not to investigate this issue.
Accounts for the Greater Manchester UTC for 2016-17, finally published last month and over a year late, reveal that auditors gave a rare “disclaimer of opinion” on the state of the UTC’s finances.
This was because auditors couldn’t get their hands on data on income and expenditure, the school’s balance sheet or a statement of cashflow.
The UTC, set up by venture capitalist and Bright Tribe founder Michael Dwan, closed in September 2017, just three years after it opened. It had failed to attract enough pupils to be financially sustainable.
In the accounts, the auditors say they were “unable to obtain all of the information and explanations requested” following the departure of trustees and leaders during the 2016-17 year.
The documents also show the UTC closed with a £526,000 deficit, which had to be paid off by the government.
A “disclaimer of opinion” is one of four types of report issued by external auditors when looking at company accounts. It means a firm’s financial status cannot be determined. Such reports are rare in the academies sector; just three were issued in 2015-16 and 2016-17.
However, despite the rarity of such an audit outcome, and despite the fact the ESFA has previously investigated academy trusts and schools on the basis of internal financial information or concerns about potential financial irregularities, the DfE told FE Week no investigation was carried out in this case.
Lucy Powell, MP for Greater Manchester and a member of the parliamentary education committee, told FE Week: “The failure to supply adequate accounting information to the auditors is really concerning and is a further indictment on the management and oversight of this school.
“It beggars belief that the DfE has failed to undertake an investigation into this situation, which yet again calls into question the oversight and accountability of all these new fledgling schools. Large sums of public money were at stake and the DfE and EFSA need much better systems to account for its expenditure.”
She added a “catalogue of errors from the DfE, the ESFA and the school leadership” had contributed to the UTC’s downfall.
FE Week understands the ESFA must take into account the cost of investigations into academies, and may have chosen not to do so in this case because it was already due to close.
The UTC opened in September 2014, but was already showing signs of struggling less than two years later.
A flurry of directors resigned from the UTC in 2016. Michael Dwan and his brother Andrew left in November, but North Consulting Limited, a company owned by Michael Dwan, remained as the UTC’s company secretary until January 20, 2017.
Michael Dwan also remained as a controlling member of the trust until that date, along with the Bright Tribe Trust and University of Bolton.
A spokesperson for Dwan claimed he had resigned in July 2016, but continued to offer “some support to facilitate the transition”, which was given “at the request of the Department for Education”.
“He did not at any stage have any day-to-day operational responsibilities and was never made aware of any issues with the accounts or a lack of information. He was never approached for any documentation.”
A DfE spokesperson insisted the accounts “were signed off by the trust and the auditors”, but acknowledged the disclaimer of opinion judgment.
“New trustees were appointed in February 2017 to oversee the closure of Greater Manchester Sustainable Engineering UTC. The parent trust is still in place, pending all actions being completed.”
An independent provider that is part of the country’s largest college group has had its first Ofsted monitoring report published since receiving a grade three last year, and it returned stinging criticism.
The Intraining Group Limited, a division of NCG that currently trains nearly 2,500 apprentices, received three ‘insufficient progress’ ratings from the four areas judged. Both the provider and college group refused defend itself when asked for comment.
The focus of the divisional board is predominately on the financial performance
Inspectors found that the “focus” of the divisional board of Intraining “is predominately on the financial performance of the division” and members “do not focus sufficiently on the improvements needed to the quality of training for apprentices”.
“They do not demand information, from leaders and managers, in enough detail about the rate of improvements,” today’s report said.
Governors and leaders were criticised for being “slow to rectify the weaknesses identified at the previous inspection”.
A delay in “making decisions” means that the “lack of progress of too many apprentices remains a significant concern”.
As revealed by FE Week last month, Intraining was hit with a recent Education and Skills Funding Agency mystery audit that found major data manipulation.
It is understood the agency is not only demanding a significant clawback from the NCG division after finding evidence of achievement rate fiddling, but contract termination is also likely.
Today’s Ofsted report highlighted some data issues.
“At the time of the previous inspection and of this monitoring visit, leaders were overseeing a very lengthy transfer of performance data from one system to another,” it said.
“They have not completed this process. This means that they cannot identify the apprentices who are behind in their learning or those who are not developing the skills that they require to do their job well. In addition, leaders cannot ascertain if apprentices receive their entitlement to off-the-job training.”
Ofsted also found that until recently, leaders have not used quality assurance arrangements well enough to evaluate the performance of apprentices, and the “large majority” of apprentices do not achieve their qualification within planned timescales.
Around three quarters of apprentices who receive training from subcontractors remain on their programme beyond the planned date of completion, inspectors said.
They added that leaders have “carefully analysed” the reasons for the underperformance of subcontracted provision and have reduced the number of subcontractors they work with, “based on an analysis of potential risk”.
In terms of teaching and learning, leaders at Intraining have continued to make ‘insufficient progress’.
“During individual reviews with apprentices, tutors do not challenge apprentices to achieve beyond the minimum requirements of the qualification or achieve their qualification on time,” inspectors said.
“They do not use assessment information effectively to track all aspects of apprentices’ progress. Apprentices do not aim for, or gain, the knowledge, skills and behaviours of which they are capable.”
Ofsted found that most apprentices develop and improve their skills and knowledge “through the training that employers provide”, instead of Intraining.
The provider was, however, praised for “very recently” implementing a ‘Great Place to Teach’ initiative which “provides clear guidance for staff on the expected standards for the apprenticeship provision and on the professional values required from tutors”.
Leaders are also changing the staffing structure at Intraining and “developing further the system for data collection”, while the NCG board has “strengthened the governance arrangements at the group board level”.
Both NCG and Intraining declined to comment on the report.
Up to 300 jobs are currently on the line at NCG after it announced plans to close Intraining’s centres across the country, as well as the centres at the college group’s other private provider, Rathbone Training.
The providers currently train 4,500 learners between them, of which two-thirds are apprentices. Some could be forced to find alternative providers if the centres do end up shutting.
An investigation initiated by the Hadlow Group’s board into their former deputy principal has been taken over by the Education and Skills Funding Agency.
A spokesperson for the embattled group said the board is “co-operating with the ESFA” and “working closely with the agency to ensure the outcome is fair, proportionate and holds individuals to account”.
Amid a separate investigation by the FE Commissioner into financial irregularities at the group’s colleges – Hadlow College and West Kent & Ashford College – the principal of both, Paul Hannan, Hadlow’s deputy principal Mark Lumsdon-Taylor, two board chairs and several governors left their roles earlier this year.
It has been alleged Lumsdon-Taylor doctored emails from the ESFA to prove to the agency that he was entitled to claim extra funding, which he said had been agreed when Hadlow College adopted West Kent & Ashford colleges from K College.
The ESFA queried the claims following an audit of West Kent & Ashford College last year, and when it found it had not sent the emails Lumsdon-Taylor had presented them with, the agency demanded a significant sum of funding be returned.
Lumsdon-Taylor left his role on March 1 and received “no financial enhancement to his salary or payment after this date,” according to the group.
He has scheduled a press conference for June, entitled “MARK LUMSDON-TAYLOR talks about then…. now… and the future,” where it is understood he will respond to the FE Commissioner’s report, which is due to be published next month.
In the meantime, the college is evicting him from a flat he has on campus, with a spokesperson saying the college has served notice “regarding the inaction of his tenancy”.
It is understood that Lumsdon-Taylor is currently completing a Master of Science degree in Finance and Accounting at Manchester Metropolitan University, which the college agreed in 2018 to pay for.
The college would not give more exact details on when paying for the course was agreed and whether the decision was made by one of its committees.
A spokesperson said the college “does not expect to be paying any fees for any future years”.
A spokesperson for Mark Lumsdon-Taylor said he could not be reached for comment.
He became one of the leading figures at Hadlow College after starting work there in 2002, overseeing the creation of the Hadlow Group in 2014.
He was both a finalist in the 2018 Institute of Directors director of the year awards, and the winner of the UK financial director of the year (public sector and voluntary) award at the Business Finance Awards in 2014.
The regeneration of Betteshanger Colliery, which Hadlow College acquired in 2013, into Betteshanger Sustainable Parks was described as a “personal” project of his.
However, the college had to spend £1.2 million changing plans for the foundations of a park visitor centre and it lost out on £4 million when the sale of a business park at Betteshanger fell through.
This, combined with a failed application for £20 million from the ESFA transactions unit and the ESFA’s demands for funding to be returned, has left the colleges reliant on government bailouts for survival.
The Federation of Small Businesses has raised “serious concerns” about the apprenticeship budget and claims “over a quarter of apprentice employers say reforms have had a negative impact”.
In a report published today called ‘Fit for the future: making the apprenticeship system work for small business’, the membership body seeks to influence the forthcoming spending review with a series of recommendations.
The FSB said the government should ensure that small businesses are not excluded from the apprenticeship system, putting them in control of non-levy apprenticeship funding through the Apprenticeship Service after their migration to the service, which is expected next year.
It recommended the government should develop a “matching service” to support levy-paying employers to pass on unused funds to non-levy-paying employers and extend the current £1,000 incentive to those businesses with less than 50 employees who take on apprentices aged 19 to 24 from “selected labour market disadvantaged groups”.
The federation found only 40 per cent of eligible SMEs have received the £1000 incentive for hiring 16 to 18-year-olds, while a third said they were not aware of it.
Moreover, the government should “consider the feasibility of an incentive for start-ups who have never taken on an apprentice” and make training-related travel free for all young apprentices working for employers with less than 50 staff to ensure SMEs, “particularly those located in rural areas”.
The recommendations follow a survey by the FSB of 1,665 small businesses that found 42 per cent of SMEs see recruiting an apprentice the biggest challenge when engaging with apprenticeships, followed by management time this involves (29 per cent) and the 20 per cent off-the-job training (24 percent).
It also found 41 per cent of the businesses surveyed reported an increase in costs related to recruiting and training apprentices since the reforms.
Apprenticeships and skills minister Anne Milton said: “Large businesses can now transfer up to 25 per cent of their levy funds to small employers which will be a fantastic opportunity for smaller business. We are very aware of the support smaller business needs and will continue to work with them so they can take advantage of the fantastic opportunity an apprentice brings to their business.
“We want an apprenticeship system that works for all employers – big and small. Our reforms were designed and driven by businesses of all sizes to make sure apprentices learn the skills employers need. Apprenticeships are now longer, higher-quality, with more off-the-job training and provide for a proper assessment at the end.”
But Mike Cherry, FSB National Chairman, said many small firms are turning away from apprenticeships with some of the 2017 reforms being the cause.
“Changes like the explicit requirement for a minimum of 20 per cent off-the-job training, are causing real headaches,” he said.
While recognising the halving of the co-investment requirement to 5 per cent was a “major step forward” to reduce the cost of apprenticeships, there is a “real concern around the funding black hole” that is likely to hit with a significant overspend expected on the apprenticeship programme by 2021.
“Unless urgent action is taken we are in serious danger of making apprenticeships unaffordable for many of our small firms,” Cherry added.
“If apprenticeships become a privilege only for those that can afford them, we will worsen persistent skills shortages and gaps that are damaging growth and productivity.”
The FSB’s findings follow a National Audit Office report that warned the apprenticeship programme is not financially sustainable after the average cost of training an apprentice hit £9,000, approximately double of what the government predicted in 2015.
