The Greater London Authority is one step closer to capping management fees when it takes control of the adult education budget next year, but the government is still yet to make a decision for the rest of the country.

In a draft rulebook for providers in London, published last month ahead of devolution of the adult education budget in September, the GLA confirmed that it is likely to introduce a 20 per cent cap on top-slices charged by prime providers to manage subcontractors.

“We will consider a retention of up to 20 per cent of funding to manage delivery subcontractors as a maximum cap and would not expect providers to retain more than this,” the draft rulebook reads.

“In exceptional cases, we will consider higher retention amounts and then only if there is a compelling rationale. This will be assessed on a case-by-case basis.”

It comes after FE Week revealed that London mayor Sadiq Khan first thought of introducing a cap on the controversial management fees in September.

Under the current system, the Education and Skills Funding Agency administers the AEB for the whole country, with no cap on top-slices.

But FE Week has reported extensively on examples where the management fees have risen to as much as 40 per cent.

The government was told that it needs to get a grip on the “outrageous and unjustifiable” subcontracting market which has become a “moneymaker” for training providers as a result of these high fees, by a panel of FE experts during an education select committee hearing in March last year.

The ESFA was meant to publish its first ever policy for top-slicing in subcontracting in August, but it kicked this decision into the long grass as it needed to conduct further investigations.

The agency was then supposed to provide an update on the guidance last month, but this has not been forthcoming.

An ESFA spokesperson told FE Week this week that its decision on management fees would be revealed in “due course”.

The Association of Employment and Learning Providers, which developed best-practice guidance on subcontracting including a 20 per cent cap on top-slicing with HOLEX and training provider group Collab last year, has welcomed the GLA’s lead on the approach and urged the government to hurry up.

“It’s great the GLA has set an important and much-needed precedent in adopting sector best practice and we’re encouraged that other combined authorities are now considering the same percentage as either a hard cap or good practice,” AELP chief executive Mark Dawe said.

“With funding so tight, the government should be backing up its own words on maximising the amount that reaches frontline delivery as soon as possible and this is why it’s so disappointing that it has missed its deadline for publishing new expectations in respect of apprenticeships.”

In early 2018, the GLA revealed that it planned to move away from paying providers to deliver qualifications, to paying for wider outcomes such as progression into work.

But the move to an outcomes-based funding system will not happen straight away and has not been included in the GLA’s new draft funding rules.

It will only be introduced once “there is confidence that there is sufficient data to allow robust payment models to be developed”.

FE Week also revealed earlier this year that the GLA is having to recruit a huge team of new bureaucrats to hand out the budget to London’s training providers from 2019, with most of their wages paid every year by top-slicing £3 million from the AEB.

Under the devolved system, seven combined authorities will take control of £600 million of the AEB to administer within their area.

The devolution of the budget is a hot topic at the moment, with FE Week organising a debate in parliament for Monday hosted by the shadow skills minister Gordon Marsden, where FE Week editor Nick Linford and Dr Susan Pember OBE of Holex will argue against and in favour of the policy, respectively.

Three FE teaching apprenticeship standards will be ready for delivery from next week following a successful funding-band appeal against the Institute for Apprenticeships, FE Week understands.

The trailblazer group developing the standards had accused the IfA of exceeding its powers after claiming the proposed funding bands were just half what they would cost to deliver.

But after four years of development and a long-running battle, an agreement has finally been reached which will see two of the three funding rates increase.

Ian Pryce, principal of trailblazer group member Bedford College, said: “We are planning to deliver from September and we are pleased our appeal was listened to and we are content with the outcome.”

Originally, the IfA set the funding bands for the learning mentor, assessor coach and learning and skills teacher apprenticeship standards at between £5,000 and £9,000.

But these were binned after the trailblazer group successfully appealed against the process by which the bands were set.

FE Week understands the funding bands will now increase by £1,000 to £7,000 for the level four assessor coach standard, by £1,000 to £10,000 for the level five learning and skills teacher standard and will stay at £5,000 for the level three learning mentor apprenticeship standard.

The trailblazer leads for the three FE teaching apprenticeships were unable to comment about the outcome at the time FE Week went to press.

A spokesperson for the institute said: “The appeal that the Trailblazer group had previously submitted has been dealt with by the Institute.

“However, the final funding band recommendations are with the minister for final approval. No announcement on the funding band levels will be made until she has reached her decision.”

The trailblazer group appealed on the grounds the IfA had: failed to comply with agreed procedure; failed to take account of relevant information; made a decision based on a mistake of fact; and exceeded its powers. The group’s appeal was turned down on three out of four of these points, but “the appeal panel considered it was persuaded by some of your arguments” in the first point.

These related to the “transition of the process from the Education and Skills Funding Agency to the institute” and the “request from the trailblazer group regarding their attendance at route panel”.

In July, the trailblazer group won their appeal and the three standards were sent back to the IfA’s route panel for new funding bands, which should have been put in place in September.

But the trailblazer group told FE Week in October that the panel had deferred its decision.

However, the three standards are expected to be marked “ready for delivery” next week.

The IfA has been reviewing the funding bands for 60 standards since May last year, at the request of the Department for Education.

It led to a considerable amount of controversy among the trailblazer groups for those apprenticeships, as some were faced with cuts to their funding band of up to £5,000.

Many sought a review of the IfA’s decision which led to a huge increase of 425 per cent in appeals at the institute last year.

According to the minutes from a November meeting of the IfA’s approval and funding committee, there were 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.

Several trailblazer groups did not appeal due to the process being limited to complaints about procedure and impropriety.

A spokesperson for the National Hairdressers Federation, a trailblazer group which did not appeal, said: “It was shocking to find out the funding band would be reduced.

“We received little explanation as to the decision, no hard evidence and no route for appeal.

“Several steering-group members wrote to ministers, strongly urging the decision to be reconsidered and outlining the detrimental effects on the hairdressing sector. Responses referred them back to the IfA.”

Six university technical colleges received bailouts from the government totalling almost £1 million last year, with the ESFA’s funding chief warning she doesn’t want to create a “culture of dependency”.

The funding is given in “exceptional cases … where additional funding is absolutely necessary to stabilise the school’s finances and ensure minimal disruption to pupils’ education”.

Figures obtained by the Local Schools Network show two of the UTCs which received the grants – Sir Charles Kao UTC and Heathrow Aviation Engineering UTC – have since closed and reopened with a new sponsor under the fresh start process, becoming BMAT STEM Academy and Heathrow UTC.

They received £255,000 and £20,000 respectively. UTC@harbourside, which received £300,000, is set to close in August.

Eileen Milner, chief executive of the ESFA, told the Education Show conference on Thursday she did not have “a book of blank cheques to hand out” to struggling providers.

In response to a question from FE Week’s sister-paper FE Week on the grants, Ms Milner said it was “inevitable that we have a recourse to this”.

“We wouldn’t want a dependency culture, where people feel that we are going to be able to get this cheque, because the bar for getting access to this money is high.”

Three UTCs which remained open also received the grants last year. Wigan UTC was given £169,000 by the Department for Education, while the JCB Academy received £150,000.

Cambridge UTC, which ditched the UTC brand and renamed itself as Cambridge Academy for Science and Technology when it joined the multi-academy trust Parkside Federation Academies in 2017, received £101,000.

FE Week understands UTCs that remain open may be expected to pay back some of the money.

Phil Reynolds, senior manager at Kreston Reeves accountants, said the money was likely to be emergency grants “arisen from investigations or rebrokerage or strong negotiation”.

“It’s a shame that so much money is having to be used by the DfE to make sure children still receive an education where there have been issues with schools.”

The most recent government figures show that six UTCs have closed down entirely, while seven others have been rebrokered under the fresh start process, which involves finding a new sponsor and having their previous Ofsted grades wiped.

In November, FE Week reported that almost two thirds of UTCs overestimated their student numbers in 2017/18 and will have to repay funding to the government.

An investigation by this paper in October found that the DfE had handed over more than £2.3 million in the past five years to UTCs, studio schools and post-16 free schools that never even opened.

Julia Harnden, funding specialist at the Association of School and College Leaders, said the grants were given to support providers in “challenging circumstances”.

“The intention is to safeguard the future of the schools involved and provide stability for their pupils, which is laudable.

“But we also need to be sure public money is being used well and if schools are later closing down that is clearly a concern. It also highlights the need to ensure that new schools are sustainable at the outset and that pupils and staff don’t end up with the anxiety and disruption caused by a school closing.”

A spokesperson for the DfE said deficit funding will be provided to trusts “in exceptional circumstances to protect the education of children”.

The Baker Dearing Trust, which represents UTCs, was contacted for comment.

Pressure is mounting on the government to resolve an FE loans scandal that left hundreds of students with huge debts but no qualifications, as one former learner warns he’ll take the matter to court.

FE Week has been campaigning since 2017 to have the advanced learning loan debt written off for blameless former learners whose training providers folded unexpectedly and who have been unable to finish their courses – often leaving them owing thousands of pounds.

The campaign secured a partial win in its early stages after the Department for Education and Student Loans Company agreed to defer repayments firstly until April 2018, and then again until April 2019.

I will let a judge decide what the law states

But as the reprieve draws to a close the government has told FE Week it is still yet to decide whether it will write off the debt, or begin forcing those affected to start repaying the loans which have been accruing hundreds of pounds more in interest.

The SLC, who the debt is with, would not provider a separate comment.

Shadow skills minister Gordon Marsden has been lobbying to write the loans off through parliament and believes it is a “disgrace” that, two years on from the scandal, a solution has not been found.

“If this were in the private sector it would be a classic case of mis-selling,” he said. “The DfE should find a solution now and not continue prevaricating.”

Mr Marsden promised to submit further parliamentary questions to keep the pressure on the department.

Loans learners have been unable to finish courses after three firms, John Frank Training, Edudo Ltd and Focus Training & Development Ltd, went bust in late 2016 and early 2017.

FE Week reported last February that just 129 of the 344 students affected had been transferred to other providers.

This means that the rest still have loans debt, some of which have topped £8,000, but no prospect of completing their qualifications.

Asim Shaheen (pictured), 51, was among the ex-learners at John Frank Training. The chef still had an outstanding debt of £8,000, plus interest, when the firm collapsed.

The ESFA offered to send him to South Cheshire College to complete his training at the time, but this wasn’t viable because it is over 20 miles from where he lives.

He told FE Week this week that the student loans company is “still after us, they are saying I’m liable for it” but he will “argue that in court”.

“The leaders and administers need to sort out who is actually liable for this,” he said.

“They sent the whole lot of the money before I even finished the course directly to a provider.

“I haven’t got any qualification to show for it so the product that I loaned for doesn’t exist.

“I will let a judge decide what the law states when you are taking money or loaning it.”

Mr Shaheen offered this message to government: “Hold the people who have defrauded you responsible. Do not come to the normal working-day people who are not responsible for this situation.”

“Students have been left in the lurch,” he continued. “The government needs to go back to the roundtable and say ‘hang on, is this a viable thing that we are doing for our public?’.”

Lukasz Pacuk, a 34-year-old former carpentry learner with Edudo, said he has had no contact from the DfE or SLC since the provider’s collapse but still has a large loan of nearly £5,000.

“It is unfair for the government to make us repay the loan with interest,” he told FE Week.

“It has caused me a lot of stress and depression. A very sad, bad situation. There’s still the pressure that I have to pay a large sum of the loan.”

A DfE spokesperson said: “We have already committed to offering a practical solution for every learner with an Advanced Learner Loan whose training providers have ceased trading, including deferring loan repayments while alternatives are considered.

“We are considering how we can further help learners that may be affected by the closure of training providers.”

Apprenticeship starts are up 15 per cent for the first quarter of 2018/19 compared with the same period in 2017/18.

There were 132,000 starts from August to October 2018, a rise of 17,700 or 15 per cent on the 2017/18 figure of 114,300, according to figures published by the Department for Education this morning. 

But starts are still down from where they were for the same period in 2016/17, before the levy was introduced.

First reported starts for the first quarter of that year were 155,700, so the current year’s figures are 15 per cent – or 23,700 – below those figures. 

According to the commentary published alongside today’s figures: “Apprenticeship starts in the first quarter of the 2018/19 academic year have increased in comparison to figures reported at this time in 2017/18, but are below equivalent figures reported at this time in 2016/17 and 2015/16”.

Skills minister Anne Milton said she was “thrilled” to see the latest statistics. 

“Since we overhauled the apprenticeship system in 2017 more and more employers including leading firms like Royal Mail, Ernst and Young and Channel 4 are recognising the huge benefits apprentices are bringing to their workplaces,” she said.

“Apprenticeships offer people, of all ages and backgrounds, a high quality route to skilled employment with the option to train at every level. You get paid while you train and can start a great career in a huge range of professions like accountancy, nursing, teaching and law.

“I want as many people as possible to know about the amazing apprenticeship opportunities out there. Our new campaign, ‘Fire It Up’ is playing a vital role in this, helping to challenge outdated perceptions around apprenticeships and raising awareness of the huge variety of apprenticeship options available.”

The number of people taking out advanced learner loans in the first quarter of the academic year has fallen for the third year in a row – with stats for 2018/19 down 19 per cent on 2015/16.

Meanwhile, the overall number of learners starting a loan during 2017/18 fell by 13 per cent compared to 2016/17 – 83,900 dropping to 72,800, according to new figures published by the Student Loans Company today.

It comes despite the Student Loans Company lowering the eligibility age for a loan from 24 to 19 two years ago.

The number of people taking out an FE loan between August and October has fallen steadily ever since 2015/16, when 25,900 loans were taken out.

This number dropped by 10 per cent for the same period in 2016/17 to 23,200, and by a further two per cent in 2017/18 to 22,700.

From August to October 2018/19 just 21,100 people took out an FE loan, which represents and 8 per cent fall for the same period in 2017/18 and a 19 per cent drop on 2015/16.

Shadow skills minister Gordon Marsden said: “These stark figures show the Government’s loans system continues to fail. Year on year half the allocated money goes back to the treasury unused.

“We have consistently said, since their introduction, and I reiterated this only this week in Parliament, that expanding loans and scrapping grants was always going to have a negative impact on the take-up of vital adult courses.

“And as today’s awful statistics show, successive Tory-led governments have completely failed to understand the needs and concerns of mature learners and others who’s circumstances are likely to be very different to traditional entrants at 18.

“Government needs to rethink their policy now. Post-Brexit it’s crucial for people to retrain and reskill.”

The advanced learner loans policy hasn’t been a huge success since it was introduced in 2013.

At the end of 2017, FE Week revealed that a massive 58 per cent of FE loans funding – amounting to almost £1 billion – had not been spent since the policy was introduced.

The shocking figure, which was discovered after a Freedom of Information request, was confirmed by the Students Loans Company, which confirmed that just £652 million in loan-funded provision had actually been delivered since 2013, against a massive £1.56 billion in allocations.

FE loans, originally known as 24+ loans, were introduced in 2013/14 for learners studying courses at levels three or four and aged 24 and older.

Loan eligibility was expanded in 2016/17 to include 19- to 23-year-olds, and courses at levels five and six.

The Education and Skills Funding Agency had previously recognised they had a problem overseeing loans funded provision, particularly where much of it is subcontracted.

In August 2016 the agency banned new subcontracting contracts for advanced learner loans, with a complete ban coming into force last month.

In addition, growth requests for advanced learner loans were paused in September last year, while in November the ESFA introduced caps for how much loan money can be allocated to a provider.

The combination of all these points is likely to be the reason for the fall in the number of people taking out the loans.

 

The Greater Manchester Combined Authority has revealed the providers that have made it through to the final round of its adult education budget tender.

Ahead of its takeover of the AEB for its region in 2019/20, the authority is undertaking a two-stage process for procurement.

The first stage was completed in December where providers submitted a “supplier assessment questionnaire”. From this, 36 bidders met the GMCA’s minimum scoring criteria and have made it through to stage two.

They will now be invited to tender for a slice of Manchester’s AEB funding, with the results expected to be revealed in April.

Although Greater Manchester’s devolved annual adult education budget will be over £90 million, only £20 million of it will be tendered for.

Like the last national AEB procurement, colleges and local authorities will be let off the hook as the rest of the budget will be grant funded to them.

A letter from the GMCA to one unsuccessful provider in stage one of the tender, seen by FE Week, points out that those who did not make it through to stage two still have the “opportunity” to be a part of the winning “organisations supply chains for their upcoming tender”.

Five other combined authority areas, plus London, will have the AEB devolved to them in September.

The 36 providers to make it through to the final stage of GMCA’s tender are:

• Access to Music
• Aspire Education Academy
• Babington Group Ltd
• Back 2 Work Complete Training
• Best Practice Training & Development Ltd
• Blue Apple Training Ltd
• Busy Bees Training Academy
• Gateshead College
• Gloucestershire College
• Groundwork
• HCT Group
• HIT Training Ltd
• Interserve Learning & Employment
• Jarvis Training Management Ltd
• LD Training Services Ltd
• LMR Recruitment
• Mantra Learning Ltd
• MAXIMUS People Services Limited
• Novus
• Pathway First Limited
• PeoplePlus Group Ltd
• Proper Job
• Rathbone
• Rochdale Training
• Seetec Business Technology Centre Limited
• Standguide Limited
• System Group Limited
• The Education and Skills Partnership Ltd
• The Growth Company Limited
• The Training Brokers Limited
• TMP Studios CIC
• Total People Ltd
• UK Curriculum and Accreditation Body (UKCAB)
• Warrington & Vale College
• White Rose School of Beauty and Complementary Therapies
• Workers Educational Association