Office for Students board finally has FE representation

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”.

UCU members strike over pay in 13 colleges across England

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.

 

What does the new insolvency regime mean for colleges?

The new FE insolvency regime is designed to improve the sustainability of the FE sector, says Stephanie Mason, who explains what colleges need to know

On 31 January 2019 the further education insolvency regime comes into force, meaning that for the first time it will be possible for colleges to fail and be placed into an insolvency process. The new legislation, which is similar to the measures introduced last year for private registered providers of social housing, will apply aspects of corporate insolvency law to colleges that are statutory corporations. There will also be a new special administration regime known as education administration, with a special objective to protect learner provision for existing students at an insolvent college.

Under the new framework education administrators would first seek to rescue the college as a going concern; but failing this the education administrators would seek to transfer the business to another institution. In the event that this is not possible the education administrator would keep the college operating until students have completed their study, or transfer students to an alternative provider. At the same time the education administrator will also balance the needs and rights of lenders and other creditors and realise assets for their benefit.

This regime was established to provide clarity within the law

This regime was established to provide clarity within the law on what would happen in the unlikely event of a further education or sixth form college becoming insolvent and to provide orderly winding-up provisions similar to those available to companies and other organisations in the UK. Strategically, the intention is to improve the financial resilience and sustainability of the FE sector and eliminate the need for the government to ‘bail out’ uneconomic institutions.

However, what has been less widely addressed is the potential implications for the governors and officers of these organisations which arise as a result of the administration regime; in particular the powers of the education administrator and the statutory obligations they must abide by. This includes a requirement for the administrator to submit a conduct return pursuant to the Company Directors Disqualification Act 1986 (CDDA) to the Secretary of State.

So, for the first time, the conduct of governors at FE colleges for the three years prior to making the administration order could be put under the microscope. The CDDA aims to maintain the integrity of the trading environment; increase compliance and accountability; and ensure governors carry out their duties honestly, responsibly, and with the proper regard for key stakeholders including creditors, customers, employees and students. 

As part of their investigation work the education administrator will consider a range of factors such as trading while insolvent to the detriment of creditors, fraudulent behaviour, poor reporting and non-compliance.

So, if it was found that a governor continued to trade despite knowing (or they ought to have known) that there was no reasonable prospect that the college would avoid insolvency and did nothing to minimise creditor losses then an education administrator could bring wrongful trading actions against those governors. If a successful action is pursued by the education administrators, a court can impose personal liability for debts on the governors – highlighting financial and reputational risk for individual governors, and in some cases disqualification as a director. This means that if a governor is, for example, a director of the company in their non-college life they would no longer be permitted to carry out that director role if disqualified.

College governors must review their governance framework

Within the FE sector, the vast majority of governors will carry out their work diligently and competently and take appropriate professional advice. In particular there is far greater scrutiny and more regulation applied to the FE sector than to many other purely commercial businesses.

But could such a situation arise? As more colleges face financial pressures and look to diversify into areas which carry greater commercial and financial risk, it is more important than ever that governors and officers have up-to-date management accounts, and robust short and long term financial and strategic plans.

Ultimately, there may be scenarios where an FE provider has to continue trading to ensure continuity of service until the end of an academic year, adding further complexity and highlighting a fine line between student welfare and wrongful trading – emphasising the importance of having accurate information to facilitate appropriate decision making.

College governors must review their governance framework; governor and officer liability policies; the FE insolvency governor guidance issued by the government; and ultimately the make-up of the board to ensure they have the right skill set in place to drive forward a profitable, sustainable business plan.  

Allow employers to appeal for more time to spend their apprenticeship levy cash, CBI urges

Employers should be allowed to appeal for more time to spend their apprenticeship levy funds if the standards they want to use are still in development, the Confederation of British Industry has said.

Its new report, ‘Getting apprenticeships right: next steps’, published today, calls on the government to introduce a process for such employers to appeal to the Institute for Apprenticeships on a “case-by-case” basis for the “sunsetting period” to be extended.

It’s one of a number of recommendations put forward by the business organisation to ensure apprenticeships meet employers’ needs into the future, as the government seeks to evolve the system almost two years after the introduction of the levy.

The government should “introduce an appeals system for extending the sunsetting period for those employers with standards which are still in development”, the report said.

Under such a system employers would have the right to request an extension on the 24-month limit for spending their levy funds “as long as the business commits the funds” in their accounts.

John Cope, the CBI’s head of education and skills, said its “motive behind such an appeal system is that we want to get apprenticeship starts up, and we don’t think that employers should be penalised for something they don’t control”.

The appeals system would come into play where a standard is still in development, and is predicted to take longer to get approved than the time left on an employer’s levy funds.

It “would in essence be the employer saying, it’s not my fault, can I get my levy funds held – and so commit them – until the standard is in place? At which point then the apprentice can start”, Mr Cope explained.

He was unable to say how many businesses were likely to be affected, nor how much money was at stake, as he said the report was based on qualitative research rather than a survey of the CBI’s members.

“It is an issue that does come up quite often, and I suspect that it will come up more and more as we get closer to April,” he said – in reference to the date when unspent levy funds will begin to be lost.

The CBI report includes a number of recommendations for both the government, and for the IfA, which formally takes on responsibility for the development of the T-level programme today, and changes its name to the Institute for Apprenticeships and Technical Education.

It urged the government to “allow the institute to set its own success criteria for the technical education system – including progression, wage data and the closing of skills gaps – with a legal reporting responsibility for its findings to ministers” and to “set out how in future traineeships will interact and link to both apprenticeship standards and T-levels”.

The IfATE should also be “given an advisory role on any future changes to the levy rate”.

Recommendations for the institute include carrying out a review of “existing standards, to ensure that there is no duplication or narrow programmes” and to “raise its profile with employers”.

It should also “ensure it has enough frontline capacity” so that it can make the standards process more efficient, and to “provide full transparency over funding decisions, including the financial models used”.

The IfATE’s chief executive, Sir Gerry Berragan, said he welcomed the report “which clearly recognises the integral role the institute has at the heart of technical education reform”.

“We will build on our experience in apprenticeship standards to develop high-quality T-levels that provide the skills our employers need to bolster our economy and allow learners to thrive in their chosen career,” he added.

The Department for Education has been approached for a comment.

The government must spend more on adult skills

Further education colleges must be enabled to continue to provide high quality education and skills training for adults, says Alastair da Costa

Poverty is surprisingly entrenched in the UK, with most of the 10 million people in Britain in low-income or no income households, stuck there. In 2017 the Commission found that just one in six low-paid workers (17 per cent) had managed to permanently escape from low pay in the previous decade.

Without the money or access to resources that wealthier people take for granted, those in low-income or workless households face an uphill struggle to break out of the cycle of poverty. Often with few qualifications, millions of people are trapped in precarious and badly-paid work – as shelf-stackers, waitresses, bar staff, play workers and the like. Many are on zero-hours contracts.

People are losing hope. The Commission’s 2018 Social Mobility Barometer survey found that 47 per cent of 18-65 year olds feel that where you end up in society is mainly determined by your background and who your parents are.

When almost half of the working age population simply do not believe in social mobility, what can be done to improve people’s outlook and their life chances?

Education, education, education

One way is through education – not just for our children, but adults too. Good quality, relevant, affordable adult education and skills training of the kind offered by colleges up and down the country, offers low-paid workers a route into a better job and lifts the unemployed into the world of work. It’s an area that the Social Mobility Commission explores in detail in our report: The adult skills gap: is falling investment in UK adults stalling social mobility? which we launched this week.

Our findings are troubling. Among other things we found:

  • Those from lower socio-economic backgrounds rely on government-funded training, but since 2010, the proportion funded by government has decreased – in 2013/14, it was just 7 per cent of the £44 billion invested in adult skills.
  • Individuals are having to fund more of their own training – often through learner loans.
  • The poorest adults with the lowest qualifications are the least likely to access training – despite being the group who would benefit most.
  • When spending on training and skills, employers prioritise high-qualified workers in senior positions.
  • Lifelong learning – whether it’s to refresh forgotten skills or upskilling to keep up with changes in technology – help improve people’s life chances.

FE’s vital role

The further education sector is central to any efforts to boost adult education, but it has been massively affected by lower government spending in the last decade. The Commission firmly believes that further education colleges must be enabled to continue to provide high quality education and skills training for adults.

In my role as Chair of Capital City College Group, I can see the clear benefits of enabling and encouraging adult training whenever I visit any of the Group’s three colleges. For example, the College of Haringey, Enfield and North East London has pioneered free courses for all adults studying at Entry Level, Level 1 and Level 2. CONEL was the first London college to do this and, not surprisingly, courses are hugely popular with more adults are choosing to study there than ever before. We would also like to develop the idea of a life-long learning credit scheme for our staff, students and alumni whereby courses throughout our Group can be accessed throughout a person’s different life stages. This sort of adult learning credit scheme could clearly have wider application and benefits and I am a keen advocate of the idea.

At the Commission, we’re calling for a number of things, including:

  • Government to spend more on adult skills and prioritise lower-paid people, including more funding for free courses for those who cannot pay themselves;
  • Increased quality of training in terms of earning gains, and improved careers information, advice and guidance;
  • Increased employer spend on lower-skilled, low-paid workers;
  • More investment in research to find out what works.

If the labour market is to work for everyone, those with lower skills and qualifications need to be able to improve their career prospects and realise their ambitions. This is the challenge that confronts us all and which the Commission exists to overcome.

DfE launches £38m T-levels capital fund

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.

College insolvency regime: 7 things we learned from DfE’s new guidance

Two days before the college insolvency regime comes into effect, meaning that colleges will be able to go bust for the first time, the Department for Education has released guidance for governors on the new law and their responsibilities.

FE Week has picked out seven key points:

 

  1. Early identification of financial difficulties is vital – so don’t ‘rely solely’ on ESFA ratings

College governors are being urged to “liaise with their bank and the ESFA” as “soon as signs of financial difficulty emerge”.

“It will be more straightforward to identify appropriate support and intervention if colleges tell the ESFA immediately if they judge that they may be running into difficulties,” the guidance said.

Governors are warned not to “rely solely” on the college’s ESFA financial health rating as “such ratings do not necessarily take into account all aspects of financial management and the cashflow position can vary quickly and should be assessed monthly”.

 

  1. Colleges should have a qualified accountant on their board

College corporations would be “advised” to “recruit a qualified accountant onto their board”, and to also ensure that a finance director of “sufficient seniority” who is “capable of renegotiating covenants and lending facilities and driving through change” is appointed.

Governors without a background in finance “are not expected to become experts” but “they should familiarise themselves with financial planning and accounting guidance” and be prepared to “ask questions” about finance papers, and “undertake training if required”.

During an interview with FE Week in November last year the FE commissioner said it was “staggering” that there were still colleges that didn’t have any financially qualified board members.

 

  1. An independent business review could help ‘head off’ insolvency situation

An independent business review is the first stage in the insolvency process – and could actually “head off” a college going bust “if conducted early enough”.

The IBR involves “assessing the financial and strategic future of the college” to identify a range of options for its future.

It’s usually commissioned “where an undertaking is either exhibiting signs of financial distress, has breached covenants on financing facilities or where there is a material additional financing need caused by operational difficulties”, but does “not automatically result in insolvency proceedings of any kind”.

In the case of the college insolvency regime, it’s most likely to be commissioned by the DfE, a secured creditor, or the college board.

 

  1. Governors have a number of duties under insolvency law – and penalties if they don’t comply

If the outcome of the IBR is that the college is insolvent, the DfE will appoint an education administrator to oversee the insolvency process.

Governors have a “statutory duty to co-operate with an administrator, education administrator or liquidator”, according to today’s guidance.

Actions that governors might be required to do include “make out and submit a statement as to the affairs of the statutory corporation, setting out the particulars of the corporation’s assets, debts and liabilities” and “lay a statement of affairs before creditors”.

Related to this, the FE Bodies (Insolvency) Regulations 2019 lists a number of offences that governors can be guilty of, including “material omissions from statements relating to the college’s affairs”, “falsification of the college’s books” and “false representations”.

In each case the penalty could be a fine or a prison term, or both.

 

  1. Student governors won’t be treated the same as other governors

The legislation around the FE insolvency regime “deliberately” includes “allowances” for student governors.

“Student governors must take their responsibilities as governors and duties as charity trustees seriously, and these still apply,” today’s guidance says.

“However, it was judged that they might be likely to have less knowledge of the college’s financial affairs than other governors of the college and that it would be unfair to put them in a position where they could potentially be fined for not being able to be involved in preparing and submitting statements of affairs about the college.”

Student governors also don’t have the power to appoint an administrator.

But in “circumstances where student members give false statements” in relation to other offences they can be held responsible, as “these matters are within their control”.

 

  1. All governors could be guilty of wrongful trading

Wrongful trading is a civil offence that occurs – in this case – where governors have allowed a college to continue to operate when they knew that insolvency was unavoidable, and they didn’t do everything they could to avoid loss to its creditors.

“Governors must act reasonably and responsibly in the time preceding insolvency to recognise the prospect of insolvency and act on it, making every effort to minimise loss to creditors,” the guidance said.

If a claim of wrongful trading is successful, the court “can order a governor to make such contribution to the FE body’s assets as the court thinks fit”.

 

  1. We still don’t know what the ESFA’s monitoring and intervention arrangements will be

Today’s guidance “does not provide comprehensive guidance on the financial monitoring and intervention arrangements for colleges, which are being redeveloped in the light of the introduction of the insolvency regime”.

More details will be published “later in spring of 2019”.

As previously reported by FE Week, “exceptional financial support will no longer be available from April 2019” but a “range of support will continue to be available” from both the ESFA and the FE commissioner’s team, today’s guidance said.

MPs warned of a ‘postcode lottery’ for post-16 SEND learners

Special educational needs experts have warned of a “postcode lottery” for post-16 learners with high needs, during an education select committee roundtable this morning.

MPs heard from representatives from colleges and charities working with learners with special education needs and disabilities on the issues around post-16 education.

It was part of the committee’s inquiry into the impact of the reforms introduced in the Children and Families Act 2014 which, among other things, extended local authorities’ statutory duty towards those with SEND up until the age of 25.

It seems to be a big tangled mess

Di Roberts, principal of Brockenhurst College and chair of the Association of Colleges’ SEN group, said the reforms had helped “raise the profile of the FE and post-16 providers with local authorities”, as previously “we were the hidden sector and we were doing brilliant work with our young people but I don’t think the local authorities understood”.

But Pat Brennan-Barrett, principal of Northampton College, said she was “deeply concerned” about the “postcode lottery of funding, the devolvement of the budget, the interpretation of the language of the code, and how that is used”.

Her views were echoed by Beatrice Barleon, policy development manager at Mencap, who told MPs that one of the challenges of the reforms was the “implementation across all the different local authorities”.

Ms Roberts gave the example of East Kent College, which took its local authority to judicial review “as they didn’t feel that the authority was funding them correctly, or understanding”.

Through the “perseverance of the principal and the team there” they had agreed a three year funding deal which “gives the college that certainty about being able to invest, to have the staffing necessary”, she said.

That deal was “better than what we have in most places where it’s literally one year to the next,” she said.

She also spoke about the “time, effort and money” that had been wasted on the “bureaucracy” of the system.

“If you’re working with 10s of local authorities they often have different systems, different requirements,” she said.

“If I could take away from my frontline people all the paper work and bureaucracy and put that into frontline delivery that wouldn’t cost any more money and would make the limited resources go further.”

If I could take away from my frontline people all the paper work and bureaucracy and put that into frontline delivery

Other issues highlighted included the “trend to only give education and health care plans to the age of 19” – meaning that colleges were having to use adult funding to provide support to learners with SEND older than 19.

“We do that. We can’t afford to continue doing that. It’s costing us over £300,000 a year,” said Ms Brennan-Barrett.

Ms Roberts said that, although officials working in high needs in the Department for Education were “incredibly supportive”, official guidance from the department said that “the majority of young people with EHC plans should complete their education by 19” – which she described as “totally unrealistic”.

The high-needs budget is devolved to local authorities, and “has to be divided between a five-year-old and a 25-year-old” – which created pressure, according to Ms Brennan-Barrett.

“Under the disability act it is necessary to make reasonable adjustments. We’re not making those reasonable adjustments with the local devolvement,” she said.

Decisions on how the money was spent were made at the local schools forum, at which the college just had one vote among 40 schools “even though we represent more people at 16 to 18,” she said.

After hearing the evidence, education select committee chair Robert Halfon said the picture of post-16 funding for learners with SEND “seems to be a big tangled mess”.

ESFA appoints new chair to management board

Irene Lucas has been named the new chair of the Education and Skills Funding Agency’s management board.

Ms Lucas is currently a non-executive board member of the Department for Education and was previously a director-general of the Department of Communities & Local Government.

She received a CBE in 2008 for services to local government, having served as the chief executive for Sunderland City and South Tyneside Borough councils.

The management board was created in April 2017 and advises the agency’s chief executive on how initiatives are working in practice.

Its interim board, led by Ian Ferguson, was involved in the investigations into the collapse of Learndirect and in 2018, was keeping a close eye on the introduction of T-Levels.

Eileen Milner, ESFA chief executive, said: “It is great to have Irene leading the management board and having all members now appointed.

“The role of the management board is to provide crucial scrutiny, challenge, advice and oversight, to hold us rightly to account as a public body. I look forward to working with Irene and the rest of the board members.”