The motion: This House believes the devolution of the £1.5bn adult education budget will prove to be a successful policy

More than 150 FE sector leaders came to the Houses of Parliament on Monday, January 28, for the third FE Week-Pearson Great Debate.

The previous two debates were on apprenticeship reforms (July) and T-levels (September).

About £600 million of the AEB will be devolved to six combined authorities and the Greater London Authority from September; the debate focused on whether the policy will be successful or not.

It was hosted by Gordon Marsden, the shadow skills minister, and facilitated by Shane Mann, managing director of FE Week’s publisher Lsect.

Speaking for the motion was Dr Susan Pember OBE, of the adult learning provider membership body Holex and a former lead director for FE in the Department for Education. Nick Linford, the editor of FE Week, argued against it.

The panel also included Cindy Rampersaud, senior vice-president for BTEC and apprenticeships at Pearson, and Mr Marsden.

Audience members asked questions and offered their experiences of the AEB and the likely effects of devolution.

At the start of the event, most believed the devolution of the AEB would not be successful.

This result did not change and the motion was voted down.

---

For the motion

“We have to make devolution work,” Dr Pember said.

“The system we have now is not serving the nation as it should. We need to do something and we need to do it now.”

One in five working adults had low literacy, there was a national skills shortage, creeping concern about automation and an over-reliance on the state – all evidence of an adult education and skills “stall”.

Over the past ten years the budget for adult education had been cut by 40 per cent and only 1 per cent of the money for post-18 education was spent on community education.

She said the apprenticeship levy was working, but the activity in the sector was being diverted into degree-level courses, while level 2 apprenticeships struggled.

“Large swathes of our population are feeling left behind.”

On the positive side, Dr Pember said, 86 per cent of adult community learning providers were rated grade two or one by Ofsted.

“We do know how to do it if there was more investment, or the funding that is there was provided differently.

“We have a system that is broken and is not getting to the people who need to get on in life.

“We need the new structure to encourage adults back into learning. A structure that is about local planning, local co-ordination and hearing the person’s voice. We need local authority services working with providers and employers. Devolution can do that.

“I have real confidence we are seeing great progress. We are seeing the right structures being put in place and the right plans.”

The Greater London Authority was committed to free courses at level two and below for people on the living wage, as well as the minimum wage. The same offer was available in the West Midlands.

“These plans and structures will give local people a voice on where money needs to be spent and gives us a chance to see the needs of these areas.”

She made reference to the upcoming spending review and her hopes that instead of Whitehall departments and large providers responding to the Treasury, combined authority mayors would say they needed extra funds.

“This policy will be the solution to many issues we have now. It will deliver local, lifelong learning strategies, real partnership and real delivery from assured providers and will work with other councils.

“It should give us clear progression routes and help learners through those routes.

“What I’m looking for is something we don’t do much in this country: reward learners.”

In other countries, she said, local government ran ceremonies to reward people who had done something differently.

“We will have high-level promotion and lobbying like we have never had before.”

Dr Pember said it was necessary to look at what was going wrong: participation was falling and local need was not recognised by the national system.

Only a handful of providers worked across county borders.

“You have to think what this does for your area. Learners with low skills will not need to travel, local providers know what they want and combined authorities are bending over backwards to find out what is needed. That sounds good for the future.

“Having mayors champion skills as part of a bigger infrastructure seems a much better vision for the future.

“I’m open to change and change is now needed.”

Mr Marsden said there were clear opportunities in new structures of devolution, but the changes had to work for the next 20 years.

There had to be more horizontal, not simply vertical, co-operation. Infrastructure projects should be tied up with local delivery, wherever possible.

Ms Rampersaud did not think it was a matter of “one-size-fits-all” and there was a place for local initiatives.

---

Against the motion

“I don’t think it will be better than what we have now,” Nick Linford said in response to Dr Pember.

He raised the postcode lottery – currently the learner only needed to live in England to access courses, but, once devolved, the budget could only be spent in the combined authority area, which could mean checking whether a person lived on the right end of a street.

Second, he argued devolution would actually mean more centralisation, as instead of providers deciding what courses to run, combined authorities could decide what courses were right for their area.

He raised the example of the Greater London Authority, responsible for 8 million people, which would make decisions for the whole of London.

This had been tried with local learning and skills councils, but abandoned as it could not be agreed what sectors were a priority for the capital.

“I have real issue with the idea this is localism, particularly in London, as the best decisions are made on the ground at the colleges and providers.

“To take it away from them is the opposite of being more localised.”

He also raised costs: Sadiq Khan, the mayor of London, could not get an administration budget, with the Department for Education instead suggesting he use the unspent AEB to hire administrators to dish out the funding.

The duplication of administration was “horrendous,” Mr Linford said. The top-slice of the budget used to fund local administration in London would be more than £3 million as it was still unclear who would audit providers.

Fourth, he asked whether FE funding would be better or less protected if it sat with a combined authority.

If more votes could be won by using the AEB for something else, as it was not known if it was ring fenced after 2020, combined authorities might decide other forms of infrastructure were more important.

“It does worry me that as the DfE budget gets smaller by devolving, initially £600 million out of £1.5 billion, the DfE will care less.

“The bigger the budget, the more weight you have in a department over how that budget is used and it will have less protection.”

Conflicts of interest also needed to be considered: combined authorities, made up of local authorities, were intended to be more transparent, but there were suggestions of favouritism in certain parts of the country. Local authorities would also be bidding for training contracts.

“It can be summed up as a decision that was made at some stage (devolution is not specific to education, it is a thread of policy), but the decision did not have to be made to put the funding into the hands of the combined authorities.

“It would have been easier to give them influence over the local strategy without the responsibility for tendering, contract managing, audit, compliance, financial assurance, funding rules, data returns, data compliance – all the things we spend a couple of hundred million pounds a year on in Westminster to do on behalf of all of us in England are now going to be duplicated.

“There may be some better decisions locally. I’m quite excited by what they are doing in London to move towards outcome-based measures. Some areas will make better decisions than the decisions made in buildings in Westminster.

“But that should be for all of us, not in silos. I think the policy will be less successful than it is now as we are going to spend a lot of money creating a lot of silos, reinventing a lot of wheels and in about five years’ time, when I’m proved right, we’ll be saying ‘why did we do that?’”

---

WEA says it faces core budget cut of 28 per cent next year due to devolution

WEA boss Ruth Spellman spoke at the FE Week-Pearson debate on Monday about the problems posed to the 105-year-old institution by devolving the adult education budget.

“I am hoping the WEA can survive this government, but we are looking at a cut of 28 per cent in our core funding next year,” the chief executive of the Workers’ Educational Association said.

This refers to an estimate of how much the WEA will lose when the Education and Skills Funding Agency devolves the AEB to the Greater Manchester Combined Authority and the Greater London Authority.

“That does not make any sense because we have 2,000 locations in the most disadvantaged postal codes across the country,” Ms Spellman added.

“We need a mix of both the national and local providers. If there is a national initiative to basic digital skills, how on earth are we going to do that through a plethora of different organisations?

“Entitlement needs to be a national offer through a mix of national and local providers.

“We are a national organisation that is incredibly local.”

The founder of the Big Issue, Lord Bird, told parliament last April that the WEA will lose about £7 million because of devolution.

The WEA is rated “good” by Ofsted, has a £19.1 million AEB contract, and teaches around 50,000 disadvantaged learners every year.

Ms Spellman continued: “This is about funding the right solutions for the right problem and having a big enough involvement so all adults can get access to education at whatever age.

“There are some great things about devolution and I am absolutely convinced we will survive, because we are so valued and common sense, but it will be despite the structures, not because of them.

“I put my faith in that, rather than a blind adherence to devolution.

“We do need a national education and skills strategy, and we need continuing access to learning all the way through working life and we do need to design a system that delivers that.

“I do not think we should rearrange the furniture when we do not know what system we are to trying to support.”

---

Post-devolution audits still unresolved

One issue raised during Monday’s FE Week-Pearson debate was the “horrendous” replication of administration that would come with devolving the adult education budget, including audits.

With just seven months to go until devolution kicks in, the issue of audits is still being battled.

The Greater London Authority, led by mayor Sadiq Khan, has been lobbying the ESFA for more cash to cover the costs for over a year.

If the extra funding isn’t offered, the GLA fears it will have to top-slice even more than the £3 million from its annual £311 million budget that it has set aside for administration costs – although it cannot put a figure on this yet.

For the 2019/20 academic year, the authority said it will cover the audit costs by using part of its £1,272,282 implementation budget from the Department for Education.

But it is still working out how it will pay for them from 2020/21 onwards.

Board minutes from a GLA meeting in January note that the authority and ESFA are “each responsible for auditing the adult education providers that they fund”, but are “considering how the two organisations can work together to achieve cost efficiencies in relation to audit and reduce the administrative burden for the providers we have in common”.

The minutes add that the “current offer from the ESFA” for a joint approach to audit, received in December 2018, “does not fully meet our requirements as determined by GLA auditors”.

As a result, “further discussions with ESFA to finalise the approach to audit are ongoing, with an in-principle agreement expected to be in place by March 2019”.

Audits are one area where the prediction of “horrendous” replication looks set to prove true, and not just in the GLA.

The Greater Manchester Combined Authority told FE Week it will take responsibility for all audit, financial health checks and due diligence processes for its contractors under a devolved AEB, but will work with Whitehall on auditing providers getting funding from both ESFA and GMCA.

Liverpool City Region Combined Authority is also collaborating with the ESFA on joint working arrangements for audit and assurance, fraud and investigations and financial health ahead of devolution.

Cambridgeshire and Peterborough and the Tees Valley combined authorities both said they will be carrying out financial due diligence and performance monitoring, including audit, for the funding they are responsible for.

A DfE spokesperson confirmed it was working with the various combined authorities “to review options in relation to audit arrangements post devolution”.

A flagship university technical college had to be bailed out by the government with a £650,000 loan, after being stung by funding rate cuts and delays to its apprenticeship programme.

FE Week reported last week that the JCB Academy – the first UTC to open, in 2010 – was one of six 14 to 19 technical institutions to receive ESFA bailouts last year, totalling £1 million.

Jim Wade, the institution’s principal, has now told this newspaper that the problems arose after it was forced to decide between running its apprenticeship programme on a third of the funding it had budgeted for – or not run a programme at all.

“We were in a difficult place, really, because the choice we had in August was do you turn around to 90 apprentices the week before they’re due to start their apprenticeship and say, sorry guys, ladies, we’ve got no programme for you?” he said.

A subsequent £720,000 funding shortfall led to the ESFA having to step in. 

According to the UTC’s 2017/18 accounts, it received £650,000 from the agency, which was used to cover a £542,000 net cash outflow, part of an overall deficit of almost £1.6 million.

Its sponsor, JCB chair Lord Bamford, also agreed to up his contributions by an extra £250,000 a year for the next four years to cover the funding deficit.

The deficit “principally arose due to the costs of expanding the apprentice training programme and a lower level of apprentice funding per head than was originally forecast”, the accounts said.

Mr Wade said that the UTC, which delivers training for apprentices of all ages alongside its school activities, had previously been offering the level 2 engineering technical support framework.

Because of a funding cut in April 2017, it decided to switch to the new level 2 engineering operative standard – even though the standard was still awaiting approval.

He claimed the funding for the framework was cut by 56 per cent, from £8,853 to £4,000, but FE Week has been unable to verify this; its current funding band is £5,000.

Mr Wade said the UTC had 90 learners signed up for the start of 2017/18, and had budgeted £12,000 for each one, on the basis of information he’d been given by the trailblazer group developing the standard.

But when it wasn’t approved in time, the school was then forced to register all the learners on the framework instead – which resulted in an £8,000 shortfall per learner.

The loss of income amounted to £720,000, which was a “problem”, Mr Wade said.

“We don’t aim to make a profit, so our aim with our budget is to more or less break even or create a small surplus,” he said. 

The UTC has since redeveloped its apprenticeship programme, which covers the costs of delivery, and now has 376 apprentices registered on a range of standards.

These include the level 3 engineering fitter, which has a £21,000 funding cap, and the level 3 engineering technician, which attracts up to £27,000.

Mr Wade said he was “confident” it would be able to repay the money, and wouldn’t need any further bailouts.

The JCB Academy, currently rated “good” by Ofsted and with 575 pupils out of a capacity of 728 in 2017/18, is one of the more successful UTCs.

Many others of the 14 to 19 technical institutions – the brainchild of former education secretary Lord Kenneth Baker – have been plagued by problems since they were founded. 

Eight have so far shut their doors, with a ninth earmarked for closure at the end of the year.

The majority have struggled financially after failing to recruit enough pupils, while quality is also an issue.

Around 60 per cent – or 21 out of 34 – of those that are open and have been inspected by Ofsted have been rated less than “good”.

The government’s apprenticeships agency is not willing to share the formula it uses to calculate funding bands for apprenticeship standards as it fears employer groups will “misuse” it to “inflate their costs”.

Sir Gerry Berragan, the Institute for Apprenticeships and Technical Education’s chief executive, acknowledged that it is a “common refrain that we are very secretive about how we do funding band calculations” during an interview with FE Week this week.

He said he wanted to tackle this by becoming more transparent about how the costs are arrived at by the institute as they often differ hugely to what trailblazer groups suggest.

The calculus is where we will probably be less willing to be open

“What trailblazer groups sometimes say is that they do not understand why the IfATE made that funding decision and I think we need to be much better at explaining why decisions were made in the way they were and that might include interaction with the route panels,” Sir Gerry said.

But the “calculus” is “where we will probably be less willing to be open”.

“That is an area where the more open we are, the more danger there is that people will misuse that information to try to inflate their costs,” Sir Gerry said.

“We have to strike a balance between being straightforward and balanced, which we want to be, and not being so open that, frankly, it opens us up the system to being gamed.”

The IfATE’s lack of transparency around funding band decisions has been an issue for many in the FE sector ever since the institute launched, and has led to various appeals and subsequent delays to standards getting up and running.

FE Week reported in August that the institute refused to publicly reveal the recommendations from its controversial first funding band review of 31 apprenticeship standards – although it did share them with the employer groups involved.

The review was launched in May and led to numerous standards being hit with rate cuts of up to £5,000.

The trailblazer group behind three popular management apprenticeship standards in the review was backed by more than 150 employers – including retail giant Tesco – in its fight to overturn plans to slash their funding bands.

The chartered manager, operational manager and team leader standards all faced cuts of between £500 and £5,000, and the employer group appealed on the grounds that the process behind the decisions wasn’t “fair and transparent”.

I think we need to be much better at explaining why decisions were made in the way they were

The group ultimately lost the appeal.

Meanwhile, the trailblazer group creating three FE teaching standards, which have been in development since 2015, accused IfATE of exceeding its powers last year after claiming their proposed funding bands were just half what they would cost to deliver.

The group claimed that the recommended funding bands were not “based on evidence and on a formal, transparent process”.

The group successfully appealed the decision and two of the funding bands were increased, but it severely delayed the rollout of the standards, which will finally be ready for delivery from next week.

As revealed by FE Week last week, the number of appeals against the IfA skyrocketed by 425 per cent last year as a result of the funding band review.

According to minutes from a November meeting of the IfA’s approval and funding committee, there were just eight appeals from trailblazer groups in 2017 and 42 in January 2018.

Out of all of the 2018 appeals: 21 were rejected, 13 were upheld, 13 were considered not in scope and three are pending a decision.

The institute is likely to be hit with more appeals this year after launching the second wave of its funding band reviews in December – of which 30 apprenticeship standards are involved.

FE finally has representation on the board of the new regulatory body for higher education, after Leicester College’s principal was appointed as a non-executive director.

Verity Hancock (pictured) joins the Office for Students’ board on a fixed term appointment for five years from tomorrow until Janaury 31, 2024, according to a Department for Education announcement this morning.

The role has an expected time commitment of 20 days per annum and remuneration of £9,180 per annum – all of which will be paid to Leicester College.

Please note that all remuneration for this role will be paid to Leicester College.

It comes after cross-party and sector outrage at the original selection process at the OfS, which launched in April last year, when not a single FE person was appointed to the board despite the large number of people studying HE at further education providers.

During a heated Commons education select committee hearing in April, Tottenham MP David Lammy, said it would be a “mistake” for FE not to be represented in “such an important body, which is regulator, funder and has important levers in relation to the provider”.

Education select committee chair, Robert Halfon, added: “Further education and apprenticeships play a vital role in access to HE for the most disadvantaged and are crucial to building the skills base and productivity of our country, but they are so often excluded from bodies of this kind.”

During the debate, then HE minister Sam Gyimah, OfS chair Michael Barber, and director general for HE and FE at the Department for Education said they backed FE representation.

As well as being the principal at Leicester College, Ms Hancock is also chair of the members of the Learning Without Limits multi-academy trust, and a board member at the Skills and Education Group in Nottingham. She was previously a national director at the Skills Funding Agency.

FE Week profiled Ms Verity back in 2013. You can read her story here.

Kathryn King, a full-time PhD doctoral research student at the University of Oxford, Magdalen College, was also announced as a new non-executive board member of the OfS today.

She was previously chief legal Ombudsman for England and Wales.

The DfE said the OfS appointments “are made by the secretary of state for education following a competition run in accordance with the governance code for public appointments”.

Strikes went ahead at 13 colleges but were suspended at three others this week in an ongoing dispute over pay.

Members of the University and College Union from across England walked out for two days from Tuesday, but action was called off at Hugh Baird College in Liverpool, New College Swindon and Coventry College after management agreed to reopen staff pay talks.

“Staff have been out in force this week on picket lines across England, in freezing conditions, standing up for their jobs and fighting for fair pay,” said UCU head of policy Matt Waddup.

“Colleges must stop shirking their responsibility to their staff. If they want to avoid further disruption then they need to come back to the negotiating table with serious deals.

“We hope this latest wave of action will focus the minds of those in charge at the colleges that are refusing to put their staff first.”

Staff are demanding a five per cent pay increase, and are angry over the Association of Colleges’ offer in July of just a one per cent rise plus a “substantial pay package” over two years, dependent on government funding.

According to the UCU, FE teachers are paid £7,000 less than their contemporaries in schools. 

The fight for better pay was backed by several MPs this week, including Feltham and Heston’s Seema Malhotra and Brentford and Isleworth MP Ruth Cadbury, both of whom have visited the West Thames College picket line.

“Cuts to further education funding are having a devastating impact on colleges, staff and students,” said Ms Malhotra.

“I fully support the efforts of UCU members at West Thames College in their fight for fair pay.”

Ms Cadbury said the government’s “heartless austerity programme” was behind the fall in staff wages.

After staff at her local college voted to strike, Oxford West and Abingdon MP Layla Moran said: “It is outrageous hardworking staff at Abingdon and Witney College have been left feeling they have no option but to strike in response to pay cuts.

“This government has decimated college funding, leaving staff pay trailing way behind their counterparts in schools.”

Strike action at Hugh Baird was suspended at the last minute, after governors requested more time to ratify a “landmark” pay deal.

Their staff are asking for a salary rise of between three and six per cent over the next two years, as well as an extra five days’ annual leave for 2018/19.

Governors promised to meet on 8 February to approve the deal, and if both the union and college are happy following this then the dispute will be resolved.

UCU regional official for Hugh Baird College Martyn Moss said: “We are pleased that today’s talks have left us in a position where we can suspend this week’s strikes. 

“We hope to continue the negotiations in good faith and also take scheduled action in March off the table.” 

Staff at Coventry College also suspended strikes after their leadership team agreed to further talks with the UCU.

Action was also called off at New College Swindon following a “breakthrough” in pay talks.

A three-day strike at the college is still planned 20 March and will take place if “sufficient progress cannot be made in resolving the outstanding issues”, the UCU said.

 

The Department for Education has released a guide to the £38 million capital fund for providers to use in wave one of T-levels.

The cash is being offered to help build new classrooms, refurbish buildings and upgrade equipment next year in readiness to deliver the new technical qualifications from September 2020.

The fund is split into two parts: the specialist equipment allocation (SEA) and the competitive buildings and facilities improvement grant (BFIG).

The 52 providers in wave one will receive the SEA, but will have to apply for a BFIG by April 17.

However, the BFIG will not be available to independent training providers, which has led its industry group to accuse the Department for Education of bias towards colleges.

The chief executive of the Association of Employment and Learning Providers Mark Dawe said: “The bias towards colleges has been implicit for a long time and now the DfE has made it explicit.

“It’s just more money being thrown to colleges when it’s the ITPs that are delivering what employers want.

“There have been multiple offers from ITPs to engage their business networks, especially to meet the major challenge of finding appropriate industry placements, but the DfE has been ignoring or rejecting the offers.

“We wish them luck with T-levels, because we think the DfE are taking the same old path ignoring those that can make a difference, and it will be added to the list of  failed technical policies.”

Just two providers out of the 52 set to deliver the first three T-levels is an ITP.

The capital fund guide reveals that providers will need to match the cash.

“You are expected to provide a minimum funding contribution equivalent to 50 per cent of the project value from own or third party resources,” it says.

“That is, for every £1 from us, you should invest an additional £1.”

The guidance recognises that all providers “may not be able to do this”, but the DfE will ask “for evidence in your application to show you have exhausted all avenues of securing additional funding”.

“Once we have this information we will determine any award following an affordability assessment,” it adds.

Skills minster Anne Milton said: “T-levels are a once in a generation opportunity to transform technical education in this country.

“It will be vital that they have access to the latest, high quality equipment and state-of the art facilities during their studies.

“The T-level Capital Fund will help those further education providers at the forefront of delivering these important reforms to be ready to teach T-levels from September 2020.”

The first T-level courses will cover in education, construction and digital.