Barring learners with fewer than three Ds ‘access to student loans’ is ‘retrograde step’

Proposals to deny student loans to learners who achieve fewer than three Ds in their A-levels have been branded a “retrograde step” by school and college leaders.

The Sunday Times reported yesterday that the ongoing independent review of higher education, chaired by former investment banker Philip Augar, will recommend proposals to shake-up the university sector.

That includes barring learners who do not achieve three Ds in their A-levels, or equivalent qualifications, from accessing student loans to fund a university degree.

Instead those learners, estimated to be around 20,000, will be offered loans for cheaper technical or vocational courses in further education colleges.

The review is also expected to recommend that tuition fees are slashed from £9,250 per year to between £6,500 and £7,500.

But Geoff Barton, general secretary of the Association of School and College Leaders (pictured above), said the union would be “very concerned about any move which reduces the opportunity of young people to go to university”.

“Given the importance of improving social mobility, it would be a retrograde step to do anything which would reduce access to university,” he said.

“Students accepted on to courses with lower grades may need appropriate support during their studies but we should not shut the door on them.”

The proposals, leaked to the Sunday Times, come as figures last month showed more than one in three school pupils who applied to university this year had some kind of unconditional offer.

The research seemed to support schools’ fears that these offers – which promote university places to pupils regardless of their A-level results – result in pupils making less effort in their final year.

Today the Office for National Statistics also announced changes on how the government accounts for student loans, with loans that are unlikely to be repaid now to be classed as government spending.

Currently 45 per cent of student loans handed out in England are not expected to be paid back in full, leading to estimations this will increase annual public sector net borrowing by the equivalent of £12 billion pounds.

There has been suggestions this change could also impact the higher education review, with the government now warned against decisions that could result in the return of a cap on student numbers.

Barton added: “It is certainly the case that university might not always be the best option, and there should be a range of high-quality routes available.

“But students should be able to make an informed choice on what route works best for them rather than it being determined by an arbitrary threshold around the eligibility of grades for student loans.”

Ofsted Watch: Three providers rated ‘good’ in first inspections

It’s been a big week for new providers, with five first-time inspection reports published – three of which resulted in a ‘good’ rating.

Elsewhere a college was downgraded from a grade two to three, while seven monitoring visit reports were published.

The Results Consortium Limited, an independent learning provider, got a ‘good’ result this week in a report published December 10 and based on an inspection in late October.

Directors at the provider, which offers loans-funded provision in business administration and adult social care, were praised for “investing significantly in developing technology and digital learning” that enabled “learners to learn around their existing work and home commitments”.

“Most” learners attend lessons “frequently” and “diligently work independently outside of lessons to produce a good standard of written work”.

“Learners improve their confidence and acquire good work-related skills that enable most to progress to, or remain in, employment or learning at a higher level,” the report said.

Barrett Bell Ltd, another independent learning provider, also received a grade two in its first ever inspection, carried out in late October and published December 10.

The provider offers training to become a gas engineer primarily for learners referred by JobCentre Plus, and inspectors noted leaders’ “clear vision and high ambitions” centred “successfully” on “helping unemployed learners achieve their aspirations”.

Learners “achieve well” – thanks to tutors’ “significant industry experience” – and develop their employability skills “exceptionally well”.

“Learners are proud of their achievements and appreciate the positive impact on their lives and the lives of their families,” inspectors found.

The Ridge Employability College, an independent specialist college, was rated ‘good’ in a report published December 10 and based on its first ever inspection, carried out in early November.

Leaders at the college, which offers FE and training for learners aged 16 to 25 with learning difficulties or disabilities, have “successfully established high-quality provision”.

They use high-needs funding “effectively” to “provide an ambitious learning environment” that helps learners “develop good practical skills”.

Learners “benefit from high-quality work experience with local employers” and “develop strong work-related and organisational skills that help them to move on to appropriate jobs”.

The Colchester Institute lost its previous grade two rating in a report, published December 12 and based on an inspection in early November, that rated the college ‘requires improvement’.

The college’s “quality assurance processes and improvement planning” were found to “lack clarity”, while leaders did not “focus on the impact of teachers’ practice on learners’ progress”.

“As a result, essential improvements are not made to teaching, learning and assessment,” the report said.

The college’s apprenticeship provision as rated ‘good’, and most employers “value the technical off-the-job training provided”.

Independent learning provider Dhunay Corporation Ltd was rated ‘requires improvement’ in its first report, published December 12 and based on an inspection in early November.

Governors’ challenge of leaders and managers at the provider, which offers adult learning programmes, traineeships and apprenticeships, was deemed “insufficient”.

“Governors do not receive enough information to give them an accurate oversight of the quality of provision,” the report said.

Staff and assessors were criticised for failing to check apprentices’ and learners’ “prior skills and knowledge in enough detail”, and for consequently not teaching sessions that “build on these skills to challenge all apprentices and learners”.

But adult learners on some pre-employment courses “makes very good progress and achieve their qualifications”.

As previously reported by FE Week, independent provider Beyond 2030 was rated ‘inadequate’ in its first ever inspection this week, which found evidence of copy and paste assignments and raised concerns over safeguarding.

Five apprenticeship early monitoring visit reports were published this week.

Two of these, for Crosby Management Limited and the IT Skills Management Company Limited, found the provider to be making ‘significant progress’ in one theme under review and ‘reasonable progress’ in the remaining two areas.

The three other providers – Capital 4 Training Limited, Ricoh UK Limited, and Birmingham Women’s and Children’s Hospital NHS Foundation Trust – were all found to be making ‘reasonable progress’ in all three themes.

A further two monitoring visits, to providers currently rated ‘requires improvement’, were published this week: Hertford Regional College, and Lakeside Early Adult Provision – LEAP College (Wargrove House Ltd).

GFE colleges Inspected Published Grade Previous grade
Colchester Institute 06/11/2018 12/12/2018 3 2
Hertford Regional College 14/11/2018 12/12/2018 M M

 

Independent learning providers Inspected Published Grade Previous grade
Dhunay Corporation Ltd 06/11/2018 12/12/2018 3 –
Results Consortium Limited 30/10/2018 10/12/2018 2 –
Beyond 2030 30/10/2018 12/12/2018 4 –
Barrett Bell Ltd 23/10/2018 10/12/2018 2 –
The IT Skills Management Company Limited 08/11/2018 14/12/2018 M M
Crosby Management Training Ltd 21/11/2018 11/12/2018 M M
Capital 4 Training Limited 07/11/2018 13/12/2018 M M
Ricoh UK Limited 07/11/2018 12/12/2018 M M

 

Employer provider Inspected Published Grade Previous grade
Birmingham Women’s and Children’s Hospital NHS Foundation Trust 14/11/2018 10/12/2018 M M

 

Other FE Inspected Published Grade Previous grade
Lakeside Early Adult Provision – LEAP College (Wargrove House Ltd) 14/11/2018 12/12/2018 M M
The Ridge Employability College 07/11/2018 10/12/2018 2 –

MOVERS AND SHAKERS: EDITION 265

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

Naomi Clayton, deputy director of research and development, Learning and Work Institute

Start date: January 2019

Previous job: Policy and research manager at Centre for Cities, and deputy director at the What Works Centre for Local Economic Growth

Interesting fact: Naomi spent her summers in between university as a park ranger – it was an eye opening experience!

Joe Dromey, deputy director of research and development, Learning and Work Institute

Start date: January 2019

Previous job: Senior research fellow, Institute for Public Policy Research

Interesting fact: Joe started his career as an employment advisor on a welfare to work programme where he helped over 100 long-term unemployed people into work

Jake Tween, Head of apprenticeships, DSW Apprenticeships

Start date: December 2018 

Previous job: Head of apprenticeships, ILM

Interesting fact: Jake is a keen songwriter and musician and has shared a stage with some household names.

The ESFA may regret rejecting the IfA’s levy budget concerns

As revealed by FE Week, the IfA has warned that there could be a £500m overspend on the £2bn apprenticeship budget this year.

 This, their analysis shows, rises to a £1.5 billion overspend for 2020/21 when the entire £2bn budget would be used paying for apprentices that started in previous years, leaving nothing for new starts.

Readers may find these predictions a surprise, even bizarre, in the context of a fall in starts and employers on average only using a small fraction of their levy pot.

And in an interview with FE Week, the top civil servant responsible for apprentices said he was not forecasting the budget to be exceeded – not this year anyway.

But in truth, the way employers pay monthly for apprenticeships, it is more than possible that a slow start will rapidly grow out of control.

 Consider a levy paying employer starting one £5,000 apprentice per month for 12 months from the start of 2018/19 (total value of £60,000) with the minimum duration for a standard of 13 months (372 days).

 In August, the employer levy spend would be £333 for one start, rising to £666 in September when there are two starts and by the July (once there are 12 starts) the payment for a single month would be £3,667 (more than ten times the cost of August).

And that is before any of the 20 per cent completion payments are paid, in this case worth £1,000 of the £5,000 per apprentice.

So in this example, after a year the monthly cost has risen from £333 to £3,667 and costing a total of £23,333 in 2018/19 with a further £36,667 ‘carry-over’ to be paid in 2019/20 (excluding the cost of any starts in 2019/20).

This exponential growth in both in-year and carry-over monthly payments can quickly get out of control and makes the Institute for Apprenticeships forecast plausible.

And analysis published by FE Week this week suggests the average cost of standards is far greater than the ESFA would have expected.

We’ve taken latest starts data for every standard and compared it to the funding rate band cap when introduced in May 2017. Even taking account of drop-outs, it seems reasonable to suggest average funding is more than £8,000 per apprentice. This peaks in September, when many of the most expensive courses begin – such as the two year £18,000 MBA.

This is likely to be more than double the average framework costs before May 2017 (around £3,000 for 500,000 starts at £1.5bn per year) and far higher than the ESFA was expecting given the budget in England has only risen by £500 million, around a third higher.

The IfA programme of rate reductions will reduce the average cost, typically by around a third.

 So as it stands their £4.2 billion prediction in 2020/21 with no funding for new starts could not only be right but – dare I say it – even conservative.

AoC fears college apprenticeships market share will shrink further

The Association of Colleges has warned that colleges’ share of the apprenticeship market will continue to shrink, after FE Week analysis revealed they have been hit hardest by the move to levy funding.

New statistics from the Department for Education, which included the number of starts per provider for the first time, show that colleges’ share of the market dropped from 31 to 26 per cent from 2016/17 to 2017/18, while their starts plummeted 35 per cent.

Teresa Frith, senior policy manager at the AoC, said that colleges had been particularly badly hit by changes in the apprenticeships market – and warned that the situation was likely to get worse.

“Apprenticeship reforms have shifted funding towards large employers and higher level standards while restricting the money paid for younger apprentices and small companies,” she said.

“This change in the market has made it harder for colleges.”

Referring to FE Week’s exclusive revelation last week that the apprenticeships budget is forecast to be overspent by £500 million this year, she warned that “as the budget becomes more over-committed in 2019, there will be more and more colleges turning small employers and young apprentices down because they can’t afford to offer training for free”.

Ms Frith said it was “right to highlight shifts in the supply side of the apprenticeship market” but urged the DfE to publish information on which employers are spending their levy funds.

“Without this data, we’ll only have a partial picture of what is going on.”

The new data showed that colleges were responsible for 99,220 starts last year, down by 35 per cent – or 52,740 – on the previous year’s total of 151,960.

That’s an 11 percentage-point bigger fall than the sector-wide drop of 24 per cent, revealed in last week’s final year figures.

Some of this fall in starts will have been the result of changes to rules around subcontracting which hit colleges that had previously subcontracted much of their provision.

West Nottinghamshire College, which previously subcontracted the overwhelming majority of its provision, had just 1,440 starts last year – down by a massive 79 per cent on the previous year’s total of 6,830.

The college blamed the rule changes, which meant it could no longer subcontract entire apprenticeship programmes, for having to make £2.7 million savings and cut 100 jobs earlier this year – before it spiralled into a financial crisis that led former principal Dame Asha Khemka to resign.

And Eastleigh College, which previously told FE Week it subcontracted around 80 per cent of its provision, saw its start numbers drop by 75 per cent – from 6,720 in 2016/17 to 1,630 in 2017/18.

While colleges’ share of the market declined last year, “other public funded” providers – which includes universities and employers – saw their share go up from eight per cent to 12 per cent as starts jumped 17 per cent.

They were responsible for 45,540 starts last year – an increase of 17 per cent on the previous year’s figure of 38,910.

Much of this growth was at providers new to the apprenticeship market, including universities delivering degree-level apprenticeships for the first time.

Independent providers’ share of the market remained at 61 per cent over the two years, while starts fell by 24 per cent – the same as the sector average.

They delivered 228,090 starts in 2017/18, down from 300,170 the year before.

That’s a drop of 24 per cent, the same proportion by which starts fell across the board last year, according to final full year figures published last week.

A freedom of information request last year by the Association of Employment and Learning Providers revealed that 74 per cent of all apprenticeship starts in 2015/16 were with independent providers, while colleges were responsible for just 21 per cent.

Last month the skills minister Anne Milton told the Association of Colleges conference that she wanted collaboration between colleges and private providers in delivering apprenticeships.

Her words were a change to what was written in her speech, which urged colleges to be “real competition” for private providers.

MBA apprenticeships defended by their biggest provider

As management degree apprenticeships continue to hit the headlines, with sector leaders voicing growing concern about their rising costs, FE Week spoke to the biggest apprenticeship MBA provider to hear the other side of the story.

 Last year 550 people started an apprenticeship MBA, according to official statistics, and the Cranfield University School of Management in Bedfordshire currently has 388 on the programme, valued at over £7 million.

And the university is preparing expand further from its focus on middle managers and higher, to introduce a new apprenticeship MBA in management and leadership for early career managers. Beginning in March, Cranfield hopes to have a cohort of 120 in its September intake.

Another management degree in logistics and supply chain will begin in February, but is expected to remain small at around 30 learners.

Melvyn Peters, director of education for the School of Management, said he believes higher-level apprenticeships are allowing a greater diversity of learners to access postgraduate courses without the fear of getting into debt.

“The ability to access a high-level postgraduate degree, without cost to yourself, is generating a lot of interest and enabling people to access it for the first time,” he said.

“Learners are more varied. I think it’s breaking down the old boys’ network. I think there was an element of that before. It’s allowing a much greater diversity and I think that has to be a good thing.”

 Ofsted chief Amanda Spielman used her annual report earlier this month to warn graduate schemes are being “rebadged” as apprenticeships and urged the government to give “greater thought” to how levy money is spent, while skills minister Anne Milton has previously warned of a “middle-class grab” on degree apprenticeships.

 But Mr Peters said that the “apprehension” about levy money being spent on high-level apprenticeships was a “misunderstanding”.

“The levy scheme was supposed to upskill across the economy, not just additional vocational apprenticeships,” he added.

 “If there is a reorientation back to lower-level apprenticeships then we’ll basically have a salary tax which is being used to cross subsidise other industries. I can’t see where Barclays or Zurich or companies of that ilk would have that lower-level apprenticeship need. For them it would be pure salary tax.”

Most of Cranfield’s degree apprenticeship programmes cost the maximum allowable under the levy, with the new management and leadership and logistic and supply chain degrees, as well as an existing degree in business and strategic leadership, all coming in at £18,000.

 However, the popular Executive MBA costs £27,000, with employers having to pay the extra out of their own pockets.

 Mr Peters said the non-apprenticeship version of the degrees had also been slimmed down so that the provision and cost is equal on both.

“We’ve been quite careful about how we adapt the programme to deliver. It wasn’t just a cost-cutting exercise, it was value identification.

 “What do these people absolutely have to have? How do we deliver that in a more cost-effective way?

“Without the burden of debt, this is enabling a lot more people to access higher-level qualifications for the first time,” he added. “That has to be a good thing.”

The Cranfield apprenticeships MBA teaching is delivered in “partnership” with Grant Thornton, although not, according to Cranfield, under a subcontracting arrangement.

Bailout cash will still be available under new insolvency regime

Colleges will still be able to access some bailout funding once the insolvency regime comes into effect next year – even though the government has previously said the tap will be switched off.

This was revealed in a letter from Peter Mucklow, FE director at the Education and Skills Funding Agency, published on Wednesday, which detailed post-16 funding arrangements for next year.

It said the agency’s “new approach to intervention, including the arrangements for the insolvency regime, will become operational in April 2019, once the restructuring facility has finally closed and longterm (over 12 months) exceptional financial support is no longer available”.

However, it did not mention either short- or medium-term EFS – indicating they will still be available.

A Department for Education spokesperson said it was “still looking into the details of the exceptional financial support. More information will be available in due course.”

Mr Mucklow’s letter said the incoming insolvency regime was a “significant” change for colleges, and would require “ever more effective monitoring and management of financial resources by colleges and those of us that have a responsibility for the best use of public funds”.

“We would strongly encourage you to audit your internal financial monitoring and management arrangements to satisfy yourselves that you can and will meet this challenge,” he wrote.

He urged colleges to address any financial issues “as early as possible”, as “the risk of deferring or taking an overly optimistic view of resolution now carries a significant risk”.

As part of a request from ministers to be “more proactive in anticipating financial concerns”, colleges “that are evidently deteriorating or at risk financially” should expect challenges from the agency.

The insolvency regime, which will allow colleges to go bust for the first time, was due to have been introduced this year but will now come into force on January 31, the DfE confirmed last month.

It has previously made it clear that once the insolvency regime comes into effect, the exceptional financial support tap will be switched off.

Cash from the restructuring facility, which was intended to support colleges to implement post-area review changes but has increasingly been used to prop up failing colleges, must also be spent by the end of March next year.

A spokesperson told FE Week in June that new arrangements would be put into place which would be “centred round the new insolvency regime”.

In an interview last month, the FE commissioner Richard Atkins (pictured above) said there was likely to be “some money to support colleges that have become insolvent to get back on their feet in some way”, but it was likely to be a “much smaller amount of money” than is available at the moment.

“I don’t think it will be given in the form of handouts to existing governors and management to carry on as you were,” he told FE Week.

Instead, he expected it would be focused on “ensuring that the provision in this area continues” where a college has “either become or is about to become insolvent”.

The costs of EFS are understood to have increased significantly in recent years.

FE Week reported in January that 12 cash-strapped colleges received bailouts totalling more than £11 million in December last year, after the DfE accidentally published the figures.

These included Bradford College, which received two payments each worth £1.5 million in the space of a month, and Stoke on Trent College, which received £500,000 while it awaited the outcome of a £21.9 million application to the restructuring facility.

EFS is cash for colleges that are “encountering financial, or cashflow, difficulties that put the continuation of provision at risk”, and is available as short-, medium- or long-term support.

Both short-term and medium-term re-profiling EFS would be paid back within 12 months, and may result in the college being issued a financial notice to improve.

Longer-term EFS is for cases where “it is clear that full repayment could not be made within 12 months”, and will automatically result in an ‘inadequate’ financial health rating for the college and intervention from the FE commissioner.

IfA consulting on content for five new T-level pathways

The Institute for Apprenticeships is seeking input from providers, awarding organisations and employers on the draft content for five more T-level pathways.

The new consultation is for courses in building services engineering, digital business services, health, healthcare science, and science, which are expected to be taught from September 2021 in wave two of the T-levels rollout.

It was launched today and runs for a month until January 17.

Sir Gerry Berragan, chief executive of the IfA, said: “It is so important that we have a world class technical education teaching offer.

“We know that as a nation we are being held back by a shortage of skills and T-levels will have a key part to play in changing that.”

Addressing employers, he added: “Your involvement as leaders in helping to develop the content is invaluable and I hope you will be able to stay engaged for a long time to come.”

This is the third batch of draft content to have gone out for consultation.

The first batch covered the first three pathways to be introduced for teaching from 2020: design, surveying and planning, in the constructions route; digital production, design and development, in the digital route; and education and childcare.

The second lot covered courses in onsite construction, building services engineering and digital support and services, which are expected to be rolled out from 2021 onwards.

T-levels were first announced in 2016, following the Sainsbury review of technical education.

They’re intended to set a new “gold standard” in training, and be on a par with A-levels.

According to the Department for Education’s response to its T-level consultation, published in May this year, it intends to introduce 13 courses in 2021 and a further nine in 2022 – with full delivery delayed until 2023.

ESFA insists the apprenticeship budget is not under pressure

The top apprenticeship civil servant has sought to reassure the sector after fears were raised of a budget overspend this year, as part of a wide-ranging interview with FE Week.

Keith Smith, director of apprenticeships at the ESFA, said he was “not expecting any pressures” on the £2 billion budget this year, in response to a question about a recent presentation by the Institute for Apprenticeships’ chief operating officer, Robert Nitsch.

The IfA forecast (see below) shows the apprenticeships budget could be overspent by £500 million in 2018/19, rising to a £1.5 billion overspend in 2021/22.

The figures were exclusively reported by FE Week last week, and prompted demands for an “open debate” on how the levy operates, and for the IfA to share the full presentation.

“I think what they were trying to set out was one scenario or a potential, particular illustration of what the budget might do and might happen, depending on some assumptions about demand, take up and those sorts of things,” Mr Smith said.

However, he added that from the agency’s “current point of view we’re working within the context that the apprenticeship levy does and can continue to cover the costs of the programme”.

“For us going forward, very much what we’re trying to do from the budget that we’ve got, that we use that to support all of the high-quality apprenticeships that we want to continue to support.”

Mr Smith said it was “really important to say” that the IfA had “looked at the medium to longer term against various different scenarios and assumptions”.

He said the agency was “working hard to make sure” that “levy-paying employers have confidence to be able to make really high-quality business decisions to invest in their workforce”, to “continue to operate a system for small employers” and “that we can continue to fund as many of those high-quality apprenticeships as we’re able to”.

“And there’s no sense from us in the short term that that potentially is at risk.”

Mr Smith said the agency’s immediate focus was on “delivering on the government’s commitment for three million apprentices” and “creating a more diverse and ethnically diverse apprenticeship programme”.

“We’re completely focused on delivering that for the 2020 commitment,” he said.

Meanwhile, pressure is mounting on the IfA to reveal the full presentation, which was delivered as part of an employer engagement event at Exeter College on November 30.

It has so far refused to share the slides, on the basis that they were produced specifically for the event and “were not intended to be shared beyond this”.

Shadow skills minister Gordon Marsden wrote to the IfA boss Sir Gerry Berragan asking him to publish the presentation, after having told FE Week of his intention to do so.

He said the figures cited from the presentation had “raised some concern across the education sector” as they had “not been previously indicated”.

Publishing the presentation would be “useful”, Mr Marsden wrote, “otherwise it undermines what I imagine was the purpose of the exercise, which was to reassure stakeholders and employers”.

“With an apprenticeship programme still adapting to the introduction of the apprenticeship levy, and fluctuating starts across levels and standards, I believe maximum transparency as to where the apprenticeship budget is being spent is essential for the health of the sector,” he said.

Robert Halfon, chair of the education select committee, has also tabled a parliamentary question about the presentation – although at the time of going to press it had yet to be published on the parliament website.