The first winners from a devolved adult education budget (AEB) competitive procurement process have been told the good news.

The list of 21 providers (see below) which have been awarded AEB contracts by the West Midlands Combined Authority (WMCA) has been sent only to the providers, but has also been seen by FE Week.

WMCA is one of seven combined authorities which is due to take control of the adult education budget for its area from the 2019/20 academic year.

From August, the ESFA will transfer responsibility for the adult education budget for the WMCA area to the authority, which is worth £125.6 million in the 2019/20 academic year.

WMCA put up to £28m of its overall AEB out to competitive tender, with minutes from a meeting of the authority’s board saying this was done in January. The minutes also say the contracts were due to be awarded in April and provision is scheduled to commence in September 2019.

The contracts from this procurement are intended to be awarded for an initial period of one year, with an option to extend for a further two years.

A spokesperson for the West Midlands Combined Authority told FE Week “After confirmation of award on May 27, the next stage will be the on-boarding of providers. There may be further targeted commissioning where we see gaps in the overall market response.”

The tender was split into two lots: one focuses on tackling unemployment among young people and supporting priority groups such as care leavers, the homeless, and long-term unemployed people; another focuses on improving the skills of low-paid, low-skilled workers and increasing apprenticeship take-up.

The 13 separate providers chosen for the lots include Serco, the major public services contractor, which received a grade 3 in an Ofsted inspection of its apprenticeship provision, but redeemed itself by making ‘significant progress’ in two areas of an ensuing monitoring visit.

Advanced Personnel Management Group (UK) Limited, another provider for the workers’ lot, received a grade 3 at its last inspection, with inspectors finding tutors did not use information of most learners’ starting points well enough to identify their prior learning.

Phoenix Training (Midlands) Ltd received a grade 3 as well, and had to withdraw certain adult programmes after its plans to develop longer-courses and apprenticeships failed.

Several providers which have been chosen have not been inspected yet.

In addition to the 21 main providers, WMCA expects to be also supporting 46 subcontractors indirectly.

WMCA’s providers are the first to be revealed for any of the combined authorities that are taking over the adult education budget for their region this August.

The adult education budget mayoral board of the Greater London Authority endorsed a list of organisations to receive contracts in April.

The Liverpool City Region Combined Authority has agreed to award contracts to 19 bidders, subject to due diligence and contracts being signed and returned.

FE Week understands Tees Valley Combined Authority is currently in the final stages of funding awards and is expected to make a decision in the coming months.

The West of England Combined Authority is making decisions on allocations at its next committee meeting on June 14.

The procurement exercise being run Greater Manchester Combined Authority is still live, according to a spokesperson.

The Education and Skills Funding Agency is preparing to invite non-levy employers and providers to test its digital apprenticeship system.

The agency will introduce this change over a “transition period” through an “expressions of interest phase”, with those chosen commencing the trial from summer 2019.

Currently, only big employers with an annual total pay bill of over £3 million who pay the levy can use the online apprenticeship service to access training funds generated through the policy.

It will lead to increased workforce productivity among SMEs

Small employers were originally expected to be added to the service in April 2019, but was delayed for another year to “ensure a more gradual transition”.

After the delay was announced in August 2018 the ESFA extended contracts for providers delivering training for small employers until March 2020, which is how non-levy-payers train up their apprentices.

But as FE Week revealed in February, training providers’ non-levy funding is running dry and some have even had to turn apprentices away. Many fear the same will happen in 2019/20 as their allocations will not be big enough to meet demand.

“Moving non-levy employers onto the apprenticeship service will give small and medium sized businesses a greater choice of quality training providers, and the opportunity to have more control over apprenticeship training decisions for their business,” Eileen Milner (pictured), the chief executive of the ESFA, said today.

“Employers understand the needs of their sector and know better than anyone about how best to use their apprenticeship funding.

“By working with smaller employers, the ESFA will get insight into the skills needs of a wider range of businesses which will help us to remove barriers employers have when recruiting an apprentice.”

Association of Employment and Learning Providers chief executive Mark Dawe said this is a “critical and welcome advance in the reform of apprenticeships”.

“By releasing all employers and providers from the previous contracting system, the government is enabling employers to exercise genuine choice over the apprenticeships that they wish to offer and any registered provider needed to support the training,” he added.

“It will lead to increased workforce productivity among SMEs and make a real difference to social mobility with more apprenticeship opportunities available to young people across the country.”

And Sir Gerry Berragan, chief executive of the Insitute for Apprenticeships, said he also welcomed the move that will “support small and medium sized enterprises towards taking on more apprentices”.

During the transition period, more details of which will be released “shortly”, the ESFA will continue to run contracts with providers who have won provision through procurements for apprenticeship starts with non-levy employers.

“This will give the ESFA time to create the right service functionality to meet employer needs,” the agency said.

Through the apprenticeship service employers can: manage their apprenticeship funding, select a suitable apprenticeship standard and an end-point assessment organisation, as well as advertise an apprenticeship and select a suitable provider to deliver their apprenticeship training.

They can also give real-time feedback on the quality of training provision they receive, have control over the amount of apprenticeship funding paid to their training provider on their behalf, and provide government with apprenticeship “demand data to ensure an valuable apprenticeship market place”.

New applicants trying to get onto the refreshed apprenticeship provider register have been left hanging by the government six months after its launch, and officials can’t say when they’ll be told if they’ve been successful.

The register of apprenticeship training providers finally reopened on December 12 with more “stringent and challenging entry requirements”.

This was more than a year after the last window closed – a time period which left my providers wanting to get on frustrated. Some even exploited a loophole and attempted to buy their way on.

It is our aim to assess applications within 12 weeks

Since the register’s reopening, FE Week understands the Education and Skills Funding Agency has received a higher than anticipated number of new applicants.

This will largely be because the register now requires all subcontractors delivering apprenticeships to be listed on it, including, for the first time, those delivering less than the previous threshold of £100,000 a year.

The ESFA’s “aim” is to assess applications within 12 weeks.

But none have been added to date. At the time of reopening the register in December, 2,571 providers were on it. In an update published this month, it went down to 2,545.

Numerous organisations have got in touch with FE Week to express their frustration at the delay and want to know what the hold-up is.

A Department for Education spokesperson couldn’t shed any light on the situation or say when the new providers will be added.

“As outlined in our guidance it is our aim to assess applications within 12 weeks,” she said.

“However, there may be occasions when this will take longer as we have been working through the applications to ensure we are consistent and robust.

“More details on the next stage of applications will be available in due course.”

All providers currently on the register are being asked to reapply in segmented groups throughout this year – with those that are deemed “high risk” and not delivering training being invited first.

FE Week analysis in December showed that almost a third (580) of providers on the register did not deliver any apprenticeships last year.

Any providers without any delivery within a 12-month period face being removed, under the new strict rules.

The government began inviting reapplications in January. If all of the inactive providers were chosen to be reassessed at the beginning of this year that might go some way to explaining why the ESFA hasn’t got around to sorting the new applications yet.

Key changes to the register include that it will stay open indefinitely – meaning that providers can apply on a rolling basis, rather than having to wait for an application window.

New questions during the application process have been introduced to “test a provider’s ability to deliver” high standards.

There will also be greater scrutiny: companies will have to have traded for 12 months at least in order to be eligible for application and provide a full set of accounts to be on the register.

All providers can make two applications to RoATP within a 12 month period.

The changes come after FE Week has reported extensively on the problems with the original application process, and discovered, for example, one-man bands with no delivery experience being given access to millions of pounds of apprenticeships funding.

Three struggling colleges have been hit with a notice to improve by the government this afternoon, after they were all assessed to have “inadequate” financial health.

Both Hadlow College and West Kent and Ashford College, which together make up the Hadlow Group and have hit the headlines in recent months, received the warnings as they are currently reliant on exceptional financial support to survive.

Hartlepool College received its notice following an ESFA review of their 2017/18 accounts.

Colleges subject to financial notices to improve are put into FE Commissioner intervention and must run most spending decisions past the government.

The commissioner’s team began intervening at Hadlow and WKAC earlier this year following allegations of financial mismanagement.

It has been alleged the group’s former deputy chief executive, Mark Lumson-Taylor, forged emails from the ESFA to justify additional funding from the government.

When the ESFA checked those emails against their own server, they could find no record of them and the agency demanded the money back.

Hadlow Group has embarked on a number of failed business ventures in recent years that had left it in a financially precarious position.

This, combined with a failed application for £20 million from the ESFA transactions unit and the ESFA’s demands for funding to be returned, has left the college group reliant on government bailouts for survival.

Lumsdon-Taylor, several governors and the principal of both colleges Paul Hannan, quit following the FE Commissioner’s intervention.

The notice to WKAC supersedes one issued when it was part of K College in 2012, which came only two years before K College collapsed and Hadlow College adopted its West Kent and Ashford campuses, forming WKAC and the Hadlow Group.

Hartlepool College generated a deficit of £841,000 in 2017/18, has net liabilities of £2.7 million, an operating cash outflow of £230,000, and was subject to an FE Commissioner diagnostic assessment in May 2018.

It has also been borrowing in 2017/18 for the development of a new campus on Stockton Street in Hartlepool.

The college admits its accounts indicate “there may be a deterioration in the college’s unmoderated financial health grade,” but states the college is still a going concern.

This is because its three-year forecasts indicate a return to profitability, sufficient cash to meet its debts, and an ability to meet its covenants.

Despite this though, the notice means Hartlepool had to prepare a draft financial recovery plan by 29 April, following the issuing of the notice on 3 April; must provide the ESFA with monthly management accounts; and allow the ESFA to attend governors’ meetings.

The notice on Hartlepool will be lifted when its financial health grade has improved from ‘inadequate’ to at least ‘satisfactory’.

Among the conditions listed in the notice to WKAC, the college must submit all monthly individualised learner record (ILR) returns for all funding streams, for the remainder of the 2018/19 academic year as well as submit monthly management accounts to the ESFA and invite the agency to its governors’ meetings.

The notice does not specify what conditions must be met before it is lifted.

Nor does the notice for Hadlow College, which must also submit its ILR returns, its monthly management accounts and allow the ESFA to attend governors’ meetings.

The Institute for Apprenticeships will soon start evaluating the impact of its controversial funding band reviews, and promises to “take action” where reductions have made delivering apprentice training unviable.

It comes just weeks after FE Week revealed that major retailer Halfords has been forced into scrapping all of its level 2 apprenticeship provision – a move it blamed on the institute’s decision to slash funding for the level 2 retailer standard by 20 per cent in December.

“I can confirm that we will be starting to evaluate the impact of the funding review in the coming months,” Lucy Rigler, the IfA’s  head of funding, said in a blog today.

The institute wants to ensure that quality apprenticeship training is still viable with a reviewed funding band

“We will assess the impact of any changes to funding bands on numbers of starts as well as additional measures where appropriate.

“This process will take time given the staggered implementation of any funding band changes and we will need time to collect enough data to analyse any trends.”

She insisted that the institute is “open to ongoing discussions with Trailblazers once we have this data”, and it wants to “ensure that quality apprenticeship training and assessment is still viable with a reviewed funding band”.

“And where evidence suggests this is not the case, we will want to act,” Rigler added.

To date, the IfA has been asked by the skills minister Anne Milton to review 61 apprenticeship standards since May last year. She has so far approved recommendations for 41 of these, with the latest 11 announced last week.

Many decisions involved huge funding cuts, including to the popular chartered manager degree apprenticeship by £5,000 despite a high-profile appeal from employers including the likes of retail giants Tesco and Next.

Just last week, FE Week revealed how Scania, a leading manufacturer of heavy trucks and buses, warned that reducing the funding band for the level 3 heavy vehicle service and maintenance technician standard by £3,000, as the IfA is planning to do, threatens its industry’s longterm skills strategy.

The IfA said the evaluation of funding reviews is not based on any particular standard, it is responding to “wider feedback”.

Many disputes have arose because employers and providers believe the institute is secretive about how it does funding band calculations.

In an interview with FE Week in February, the IfA’s chief executive Sir Gerry Berragan promised to become more transparent about how the costs are arrived at, but said he was not willing to share the formula it uses to calculate funding bands as he fears employer groups will “misuse” it to “inflate their costs”.

Rigler said in her blog today the IfA is “fully aware that our work on funding has not always been well-received” and it has now launched its “first wave” of improvements in this area.

“One of the new things we will be doing is ensuring that a funding section is included in intensive workshops our Relationship Managers have with new Trailblazers,” she explained.

“We have also created a clear decision-making flowchart, showing how we prioritise data points used in funding band decisions and the dependencies between them.

“My team has also developed improved funding forms. This is to help Trailblazers supply the right information first time to help us reach the most appropriate funding recommendation. Employers involved can now use the forms to identify standards they think are similar to their own, to help us draw the right comparisons.”

Rigler said the institute will also provide employers with “model forms and answers to frequently asked questions” and has “committed to improving communication with Trailblazers throughout the funding process, to set clear expectations about their input and timescales, and make it clearer how the final funding decision was made”.

She added that the IfA has listened to the feedback from Trailblazer Groups about the initial funding band that they receive when an occupational proposal is approved and it’s “clear that this hasn’t been working as we intended, so it’s right that we take this opportunity to remove this from the funding process altogether”.

Instead, it will share information about the funding bands assigned to apprenticeships that “share the same characteristics as their own, to give an early sense of likely funding bands and help trailblazer groups with their planning”.

Rigler said a second wave of improvements will be announced later in this year “following further review and engagement with stakeholders”.

The Association of Colleges has won a contract with the government to develop a “transitional” course for T-levels, following a secretive and restrictive procurement.

It will now design the offer and support providers with its “phased” implementation running up to first delivery of the new post-16 technical qualifications in 2020 and 2021.

The course, recommended by Lord Sainsbury in his technical education report in July 2016, will be for 16-year-olds to take if they are not ready to start a T-level at level three, but can “realistically achieve it” by age 19.

“The T-level transition framework will help young people, who may not quite be ready, get up to speed with the skills and gain the confidence they need before starting their T-level,” skills minister Anne Milton said today.

“I’m thrilled that we have appointed the Association of Colleges to support the first T-level providers to run a phased implementation of the transition offer in 2020 and 2021.

“The Association of Colleges has a wealth of FE technical expertise and will be well-placed to take this important work forward.”

A tender for an organisation to develop this offer was finally launched in February but only ran for 15 days.

The DfE was then accused of “locking out” small firms, as the procurement was only made available to suppliers in a specific category in its Dynamic Purchasing System (DPS).

The DfE refused to release the tender documents, list who is eligible to apply or even say how much the contract is worth.

The department again today would not reveal how much the contract is worth, saying the information is commercially sensitive.

David Hughes, chief executive of the AoC, said: “We bid for this work, in the normal way, because it is important to our members and because we have lots of expertise and understanding of the issues.

“We were pleased to win and are getting on with delivering the work needed.”

Timescales for developing the transition course will be tight, as there is just over a year to go until the first three T-levels, in education and childcare pathway, design, surveying and planning, and digital production, design and development, are delivered.