Minister ‘thrilled’ with Traineeship progressions despite steady decline in take-up

The skills minister has hailed the success of traineeships after research revealed 75 per cent of learners move on to work or further study within a year of completing their programme.

It will be a boon for the pre-employment programme, which has been plagued by falling learner numbers and a lack of investment that has frustrated sector bodies.

The policy, which was only launched in 2013, appears to have fallen off the political radar, evidenced by FE Week failing to find any reference to traineeships in any of Anne Milton’s public speeches since she became skills minister two years ago.

Following today’s research report, Milton said she was “thrilled” to see how traineeships are “supporting young people to start their apprenticeship journey, get their first job or go to further study”.

The government also announced today it will introduce a new traineeships achievement rate measure for the academic year 2019/20, which will help the government monitor the programme’s effectiveness.

This is in addition to providing £20 million through the adult education budget for training providers, to encourage more young people aged 19-24 to start a traineeship.

Milton said the achievement rate measure will provide “greater transparency and help young people make informed decisions about their next steps”.

Traineeships are six-month programmes, which were introduced to provide 16 to 24-year-olds with English and maths tuition, work experience and work preparation training.

Today’s report focuses on the cohort of trainees from 2013/14 and draws on surveys with learners, providers and employers; case studies; and analysis of national administrative data.

It did find a marked divide between 16 to 18 and 19 to 23-year-old trainees, with the younger group less likely to begin employment within 12 months of a traineeship – 19 per cent compared with 53 per cent.

And while traineeships increased the probability of both age groups going on to further learning, evidence suggested traineeships reduced the likelihood of a learner progressing to vocational courses above level 2, compared to if they had not participated in a traineeship.

But employers, including global professional services firm Aon, reported how traineeships have helped them to “recruit people from a range of backgrounds leading to more diverse workforces”.

Adrian Johnson, UK Apprenticeship Lead for Aon, told FE Week that since the inception of its “Step Up traineeship scheme” in 2018, the firm has offered 15 traineeships, with nine trainees going on to permanent positions.

“The recruitment of a more diverse group of professionals is key to the future success of Aon and our market as a whole, and we are proud to support these young people in their career development,” he added.

Mark Dawe, the chief executive of the Association of Employment and Learning Providers, said today’s report will help “reinvigorate” traineeships by encouraging young people to take advantage of the programme.

Traineeships are in need to reinvigoration, having seen their starts numbers fall from 24,100 to 17,700 (26 per cent) between 2015/16, before reforms to the apprenticeship system came into force, and 2017/18.

Dawe said last year the government is “so consumed” by apprenticeships and T-levels, there was a danger that traineeships “don’t get a look-in”.

His colleague, AELP policy officer Ceara Roopchand said in May the ESFA’s Qualification Achievement Rates and the negative publicity around companies offering unpaid work experience to trainees had meant “public support for the programme have dwindled dramatically”, to the hindrance of NEET learners, and those from disadvantaged backgrounds.

An FE Week investigation in 2018 found colleges had delivered fewer than a quarter of traineeships in 2016/17, which was blamed by the Association of Colleges on rigid duration rules.

David Hughes, chief executive of the AoC, today stressed the importance of “stepping stone programmes” like traineeships which allow people to progress to the levels of competence that employers are seeking.

He added that there were many positive outcomes from traineeships, that colleges were helping to deliver.

Edexcel further maths A-level paper replaced amid cheating concerns

An A-level paper due to be sat by thousands of students this Thursday is to be replaced amid concerns over cheating, the exam board Edexcel has said.

An investigation by Pearson, Edexcel’s parent company, has found that a packet containing copies of its further maths A-level paper was opened at a “centre”. Around 7,000 learners were due to sit the paper this week.

Our message to students is not to worry about this and focus on your revision as you normally would

The breach was identified following a probe into the same centre, which has not been named, was launched after sections of the A-level maths paper 3 exam were shared on social media last week.

The investigation revealed that “a packet containing the further maths paper…had been opened by an individual at the centre”. Police are now investigating.

The exam board said that although there was “no current evidence” to suggest that the further maths paper “or any of its questions” have been shared, it is “taking the necessary precautionary steps to safeguard the exam for the students sitting it”.

“We are making arrangements to deliver the papers to all centres shortly before the exam, apart from the centre that is the focus of our investigation, where we are making separate arrangements to ensure these students can complete their exams.

“Centres with entries for this qualification will receive communications from us this morning. If any centres still have questions after receiving this, we encourage them to get in touch with us directly.”

Sharon Hague, Pearson’s senior vice president, said: “We have reached out to all of our centres directly to inform them of this decision.

“We will continue to support and communicate with them through this unusual yet necessary step, that is vital for the safeguarding of confidence in the examination system and to ensure fairness for all learners.

“Our message to students is not to worry about this and focus on your revision as you normally would.”

T-levels: The colleges selected to run courses in 2021

The names of the 64 colleges chosen to deliver T-levels in the second wave of their roll out have been announced.

They’ll deliver the new post-16 technical education qualifications from 2021, in four routes: digital, construction, education and childcare, and health and science.

An initial 50 providers will deliver the first T-levels from 2020.

Unveiling those selected for wave two today, education secretary Damian Hinds said: “Everyone agrees that a radical shake-up of technical and vocational education in this country is long overdue. T-levels are our chance to do that – offering young people high-quality alternatives to our world-class A-levels from September 2020.

“The second wave of post-16 providers we have announced today demonstrates our commitment to making this happen. They will play an important role in ensuring more young people across the country can access these courses and help develop the skilled workforce the country needs for the future.”

An additional £3.75 million boost for the first T-level providers, which includes one-off payments to help them recruit learners from 2020, has also been announced today (click here for full story).

Of the providers in wave two, 14 have never been inspected by Ofsted. The rest are rated ‘good’, with the exception of grade one Burnley College.

The DfE said if a T-level provider’s status changes against any of its published criteria, including holding a grade one or two Ofsted rating, between when it considered their expression of interest and delivery, then the department reserves the right to review their continued participation.

The second wave of T-level providers

College
Digital route
Construction route
Education
and Childcare
route
Health
and Science
route
Ofsted grade
Abingdon and Witney College
X
  
X
X
2
Activate Learning
X
    
X
N/A
Barking & Dagenham College
X
X
    
2
Bath College
X
  
X
X
2
Bedford College
X
X
X
X
2
Bexhill College
X
  
X
X
2
Bolton College
X
X
X
X
2
Buckinghamshire College Group
X
  
X
X
2
Burnley College
      
X
1
Bury College
X
X
X
X
2
Calderdale College
X
    
X
2
Cambridge Regional College
X
  
X
  
2
Cheshire College South and West
X
X
X
X
2
City of Sunderland College
X
X
  
X
N/A
DN College Group
X
X
X
X
N/A
East Norfolk Sixth Form College
X
    
X
N/A
EKC Group
X
X
X
X
N/A
Furness College
X
  
X
X
2
Gloucestershire College
X
X
  
X
2
Halesowen College
    
X
X
2
Harlow College
X
X
X
X
2
Heart of Worcestershire College
X
  
X
  
2
Herefordshire, Ludlow and North Shropshire College
  
X
  
X
N/A
Hopwood Hall College
X
X
X
X
2
Hugh Baird College
X
X
  
X
2
Kendal College
  
X
  
X
2
Lakes College – West Cumbria
X
X
X
X
2
Leeds City College
X
  
X
X
2
Leicester College
X
X
X
X
2
Loughborough College
X
X
X
X
2
LTE Group
X
X
X
X
2
Middlesbrough College
X
X
X
X
2
MidKent College
      
X
2
Milton Keynes College
X
X
X
X
2
Mulberry UTC
      
X
N/A
New City College
    
X
  
N/A
New College Swindon
X
  
X
X
2
Newcastle and Stafford Colleges Group (NSCG)
    
X
  
2
Newham College of Further Education
X
    
X
2
Newham Sixth Form College
  
X
X
  
2
Nottingham College
X
  
X
X
2
Oldham College
X
X
X
X
2
Petroc
X
X
X
X
2
Preston College
  
X
  
X
2
Reigate College
X
    
X
N/A
Richmond Upon Thames College
X
X
X
X
2
Sandwell College
X
X
X
X
N/A
SCC Group
X
    
X
2
Solihull College & University Centre
X
      
N/A
South Devon
X
X
X
X
2
South Essex College
X
X
X
  
N/A
Stanmore College
    
X
X
2
The College of West Anglia
    
X
X
2
The WKCIC Group
X
  
X
X
N/A
The Trafford College Group
X
X
X
X
N/A
United Colleges Group
X
X
    
2
Wakefield College
X
X
X
  
2
Warwickshire College Group
X
      
2
West Midlands UTC
  
X
    
2
West Suffolk College
X
  
X
X
2
Wigan & Leigh College
  
X
X
X
2
Wilberforce College 
      
X
2
Wyke Sixth Form College
X
    
X
2
Yeovil College
X
  
X
X
2

Amidst low take-up predictions DfE to give £30k per T-level and ‘tolerance’ for under-delivery

The first wave of T-level providers are expected to recruit half the amount of students the government predicts, research shared exclusively with FE Week has revealed.

It comes as plans for one-off payments of up to £90,000 for the early providers are unveiled by the Department for Education, as well as confirmation that a “tolerance” will be applied for under-delivery.

The National Foundation for Educational Research conducted interviews with half of the first 50 providers to deliver T-levels in 2020.

We intend to introduce additional one-off payments to providers

All but one said they were planning to recruit between 12 and 20 students in the first year, in “recognition of the challenges in setting up a new programme”.

The Department for Education previously projected the 2020/21 cohort would total 2,500 students, but then revised this down to 2,000.

If all of the 50 providers in wave one recruit 20 students each, then just 1,000 would be studying the new qualifications in that year.

To help the first wave of providers, in part to recruit more students, the DfE said today it would offer them one-off additional payments – as part of a £3.75 million package of financial support.

The plan was revealed in the DfE’s response to its T-levels funding consultation, which confirmed funding rates will range from £4,170 to £5,835 per year, depending on the size of the qualification, despite 62 per cent of respondents opposing the proposal.

In “recognition of the additional costs that are unique to the early T-level providers”, the department said the additional one-off payments will amount to £30,000 per provider for each new T-level introduced in 2020, and of £20,000 per provider introducing the Transition Framework in 2020.

“This is to recognise the costs associated with engaging in co-design of the qualifications and providers’ work with the department on T-level and Transition Framework policy development,” the consultation document added.

Sixteen of the first 50 will offer all three of the first T-levels, which will be taught in education, construction and digital, and will therefore benefit from one-off payments of £90,000.

The funding will be paid in 2019/20 and at the moment is only for the providers delivering in 2020/21.

Considerations are being made to also offer the payments to those set to deliver in 2021/22, but there is “no plan to extend beyond this”.

The consultation continued to say that officials “understand providers are concerned they will not be able to predict recruitment to T-levels far enough in advance to feed accurate student numbers into the allocations process”, and if recruitment “does not reflect the student numbers used for the allocation then this could lead to over or under funding”.

To ensure providers “invest in T-levels with confidence” the department is proposing to operate a “tolerance before making any funding adjustments”.

“We envisage a tolerance for under-delivery during the implementation phase which will be tightened as T-levels become more established,” the document stated.

“We will review actual enrolment against the first data return of the academic year. Any downward adjustment to funding would apply to the number of students outside of the tolerance.”

The full NFER report on T-levels will be published on Thursday.

Click here to see the full list of providers in the second wave of T-levels.

 

Shedding light on Leeds City College’s rebrand and expansion

One of the biggest FE providers in the country is going through a momentous upheaval. Leeds City College Group is juggling a major rebrand while taking on another struggling college, as well as the imminent opening of a £60 million state-of-art campus. Jessica Fino headed to Leeds to find out how the group is handling the change

Two months ago it was announced that Harrogate College was being offloaded by the cash-strapped Hull College Group as part of its recovery plan, following years of financial turmoil.

But eyebrows were initially raised when it was revealed that Harrogate would be joining the Luminate Education Group – a name that isn’t on the UK Register of Learning Providers, the Education and Skills Funding Agency’s allocations data, or Ofsted’s inspection database.

It turns out that Luminate is the new name for one of FEs most established providers: Leeds City College Group.

Luminate was the only name on the shortlist that wasn’t practical

Located in the educational quarter of Leeds, the college’s Printworks Campus is a modern and bright building. As I arrive, I enter a big café with sleek décor and freshly prepared cakes and sandwiches. It definitely does not look like your ordinary cafeteria.

I am greeted by a young barista, who is one of the apprentices working at the café.

Colin Booth is seated at the back of the café waiting for me with a grin on his face. Once we are served with drinks prepared by the apprentice, Booth starts explaining the reasoning behind the group’s new name, saying it was needed to represent a “change of direction”.

Colin Booth, CEO of Luminate Education Group

“When we were called Leeds City College Group everybody assumed that LCC ran the other organisations, but we are all part of the same family.”

The group comprises LCC, Keighley College, Leeds College of Music and the White Rose Academies Trust. From August this year, Harrogate College will also join.

The new name represents a change in how the group manages itself, rather than being a new group, Booth tells me.

He says coming up with a shortlist of names took a “long time of going out and talking to a lot of people externally, as well as to our students and staff”.

As well as Luminate, ‘Changing Futures Group’ and ‘Forward North’ were two other possible names included in the shortlist.

When it was time to vote, Booth did not know what the board was going to go with, but tells me the results were “quite a surprise”.

I am not convinced the name was his first choice, as he points out that it was “the only name on the shortlist that wasn’t practical”, and he explains that it’s more a stakeholder-focused name, rather than student-focused.

We are absolutely fine if anybody wants to join us

The new branding comes at a time of growth. Once Harrogate joins the group, it will have a total of 30,000 students and over 3,000 staff. The college’s budget for next year will be £94 million while the academy trust’s budget will be £20 million.

It is creating a new group board, plus individual boards for each institution. The main central services and the executive team, located in Park Lane, in an LCC building, will likely move to a brand new head office within the next five years – although this hasn’t been finalised yet.

With all these future plans in sight, is Booth planning on expanding the number of colleges even further?

“We are absolutely fine if anybody wants to join us but we don’t have an aggressive strategy to try and recruit other colleges,” he says.

“Our growth is mainly the fact that individual members of the group are growing. We are focused on providing fantastic-quality education and I believe that the consequence is that colleges tend to grow.”

The addition of Harrogate College will by itself be a challenge, since it “desperately needs to grow very quickly when we take that over”. Hull College Group, which Harrogate is still part of, received the biggest amount in restructuring grants from the ESFA last year to support its “fresh start” arrangement and to help its “significant financial and operational turnaround”.

Booth says: “Actually, a number of people keep asking me, ‘If it’s struggling that much financially to attract students, why do you want to run it?’ As a town of 100,000 people, Harrogate should have an FE college, and it was heading to a position where it could soon not have one any more.

“They had been losing student numbers in the last three years, contracting in size and not making ends meet financially. The biggest challenge will be to reverse that contraction and help them grow again.

We don’t have an aggressive strategy to recruit other colleges

“Our belief was that we can probably make it work. Time will tell if we can, but we believe we can make it work.”

The chief executive adds that Luminate’s main problem now is lack of space, a result of the student numbers growing by 11 per cent last year and likely to grow by a similar number next year.

A new £60 million campus at Quarry Hill has been primarily built to improve the group’s resources, but since it started to be designed and built three years ago, the group has outgrown its additional space. “So on day one, the building will be at the fullest capacity and beyond.”

The construction site of Quarry Hill campus

The college’s schools of Creative Arts and Social Science will be relocated to the new campus, as well as facilities and space for Leeds College of Music, which is based nearby.

The project received £33.4 million funding from the Leeds City Region Enterprise Partnership, delivered by the West Yorkshire Combined Authority.

After wrapping up the interview and finishing off our coffees, I toured Quarry Hill. With one month to completion, more than 100 people were working at the site. Some rooms, including an impressive 200-seat theatre, were very close to completion.

But despite its state-of-art classrooms, recording studios, dance rooms and theatres, the new campus is not just another new modern building.

The group was also keen to include some details to give character to the building, including an artwork on its façade depicting Jack Longbottom and Mary Brady, two residents of the Quarry Hill Flats in the 1930s.

Demolished in 1978, these were the largest and most modern of their kind in Europe, housing around 3,000 people – the same number of students who will be on campus once it opens in a few weeks’ time.

Making T-levels and A-levels the only options of choice – really?

Don’t force young people to choose solely between A and T level, argues Bill Watkin. Instead, let’s understand that T-levels and AGQs co-exist, serving different purposes for different people

The arguments in favour of Applied General Qualifications (AGQs) are well rehearsed. They offer an alternative academic route to higher education, a closer relationship between classroom study and the workplace, and an opportunity for skills acquisition. I have yet to hear a single teacher or student in schools and colleges say that AGQs should be discontinued.

It is one thing to seek to rationalise a complex landscape of thousands of vocational qualifications; it is quite another to consider removing an entire post-16 pathway to clear the way for the introduction of T-Levels.

To do so would be to fail to appreciate that when young people are faced with a choice between T-level and A-level they are not going to choose the former just because AGQs are no longer available.

What will students choose, if not AGQs, if they don’t know at 16 what occupation they want to pursue?; if they don’t want to do a single-subject programme of study, or a 900-hour programme?; if the pathway that interests them isn’t offered in their local college, or if there aren’t enough local employers?

This is not to say we don’t need T-levels. The benefits of a more streamlined suite of qualifications and a less acute skills gap are undeniable, but we should have both T-levels and AGQs.

Let T-levels and AGQs co-exist

For any government to consider doing away with AGQs would show a lack of understanding and awareness of their importance to young people, their employment prospects and the country’s economy. So what needs to happen following the consultation?

• We need reassurance from ministers that AGQs are here for the long term. The switch from the Qualifications and Credit Framework (QCF) to the Regulated Qualifications Framework (RQF) does need to happen but there are time, workload and resource implications.

• Advocates of T-levels need to stop repeating the line that AGQ students are less likely to finish university, since this doesn’t consider factors such as the lower prior attainment and greater socio-economic disadvantage of many AGQ students.

• Set aside the language of gold-standard qualifications. AGQs should not be thought of as second-class. We should recognise their contribution in delivering skills valued by employers.

• Keep AGQs for those who, at 16, haven’t decided on a particular career pathway; AGQs are less occupation-specific, more general, and keep more options open.

• Provide for the 20 per cent of students who currently drop at least one A-level and who currently may take up an AGQ to replace it.

• If the ambition is to reduce the number of level 3 vocational qualifications, let’s start with those that have had no enrolment in the past two years, but let’s distinguish between “no enrolment” and “little enrolment”. For example, there may be only 12 cabinet-makers on a course at Chichester College, but it is still valuable and should be preserved.

• Ensure that students in all communities have an opportunity to study a level 3 vocational course in a subject area that interests and inspires them, regardless of the local employment landscape. Otherwise, we may increase the skills gap, not reduce it. Also prospects of social mobility will suffer.

• Protect AGQs for those students who are suited to level 3 study but who do not pass GCSE English and/or maths. If English and maths level 2 is set as a condition of passing a T-level, many providers will make this a condition of entry and render many ineligible for T-levels, leaving A-levels (or NEET) as the only options.

• Let T-levels and AGQs co-exist, as they serve different purposes for different people. Possible exceptions include extended diplomas (3 A-level equivalent) not being offered alongside an overlapping T-level; and a single institution not offering both qualifications where there is a clear overlap in content.

The FE sector needs to prepare for what parity with HE will actually involve

Further education will need to contend with scrutiny from the Office for Students to access funding prescribed by the Augar review, says Martin Vincent

The Augar Review’s recommendations have the potential to address deep-seated imbalances in post-18 education and put colleges on more equal footing with universities, both in terms of prestige and funding. However, now we’ve had time to digest the report in full, the further education sector must quickly realise what this parity would mean in practice.

Philip Augar has recommended that the Office for Students (OfS) should become the national regulator for non-apprenticeship education provision at levels 4 and above, and establish a working group with the Education and Skills Funding Agency (ESFA) to develop new regulation that covers this extended remit. Whatever the outcome, this means the OfS will be significantly more involved in further education. This will come with a layer of scrutiny that colleges and other vocational training providers are unfamiliar with and, arguably, unprepared for.

The most significant impact of this change will be in relation to funding. How new revenue streams for FE would be structured is only hinted at in Augar’s report. As an overview, it recommends that an additional £3 billion should be made available to FE annually, in addition to a £1 billion capital investment from the government in a newly formed national network of colleges.

Two specific measures it does recommend are free level 2 and 3 qualifications for everyone over the age of 18 and a drop in the tuition fee cap from £9,000 to £7,500, which will impact the growing number of colleges offering validated degree programmes.

We can expect that a system that is more dependent on teaching grants from the OfS will emerge to bridge the funding gap left by a reduction in student contributions. This means FE could be reliant on the OfS and subject to all of the accompanying regulation this brings for the first time – a radical departure for colleges.

The FE sector needs to prepare for a step change

Currently, the most significant regulations the sector must adhere to are the statutory provisions of The Higher and Further Education Act and the financial probity conditions and performance guidelines set by the ESFA. FE funding is not currently dependent on areas such as teaching excellence and student experience.

This would change if the Augar Review’s recommendations are fully enacted. Teaching grants from the OfS are linked to the body’s Teaching Excellence Framework and league tables that certify institutions as gold, silver or bronze depending on performance. The system is designed to increase competition and deliver value for money to students, but if colleges are not up to scratch, the funding could potentially be reduced or cut altogether.

Colleges would also have to officially register with the OfS to be eligible for grants. The Augar Review recommends that colleges are given protected titles to increase their standing at a national level. Achieving this status will inevitably come with conditions. For universities, the status of Registered Provider carries with it responsibilities, rules and standards covering everything from student welfare and education delivery, to engagement with the community. If an institution breaches any of these requirements, the OfS can launch investigations, levy financial penalties and, in extreme cases, remove teaching licences altogether. Colleges can expect a similar framework to be introduced and would be wise to start reviewing the steps that universities have taken to comply. 

Beyond this, colleges that offer validated degree programmes will need to understand how their relationships with universities could change if HE and FE are both subject to OfS regulations. If, for example, a college’s OfS classification drops from gold to bronze, a university that validates degrees for that institution may review the arrangement to protect its reputation.

The Augar review recommendations still need to be transposed into legislation, but it is likely to usher in changes that improve FE’s position. To take advantage, colleges and training providers need to understand and prepare for a corresponding step change in what is required of them in terms of regulation and compliance.

On the job T-level placements: how we can avoid a high-vis failure

If there are not enough willing employers capable of designing and delivering good-quality work placements, T-levels may prove to be an expensive, very public flop, warns Ewart Keep

Everyone knew from the outset that T-level work placements would be a major challenge for the new courses that kick in this September, and delivering them will be a central test of the initial pilots.

It’s why the design of the placements has been evolving since the new qualifications were first announced in 2017. Tweaks already made at the drawing board are reflections of hard reality dawning: the decision to allow a student’s placement to be broken down into chunks rather than delivered as one single continuous block, for example; similarly, the switch to allowing a placement to be spread across different employers rather than hosted by just one.

Despite this, it is far from clear at present that enough places can be provided beyond the pilot phase. If a sufficient volume of employers willing to offer the placements cannot be found, and if there are not enough willing employers capable of designing, supervising and delivering high-quality work placements, then T-levels may prove to be an expensive and very visible failure.

A central problem is the capacity of firms large and small to design high-quality work placements that complement and enhance the learning students do in the classroom. To achieve this would require the firm to have a manager capable of liaising with the college to ensure that the integration of curriculum and learning outcomes is carefully orchestrated across these two learning environments.

They should be supported by skilled in-company trainers who could design work processes and tasks that can support structured learning and reflection and monitor and oversee that learning process.

These requirements would not be too onerous in countries like Germany, where well-established apprenticeship systems are in place that require firms to have significant expertise in melding together on- and off-the-job learning, and appropriately qualified in-company trainers. In England, by contrast, this may be a rather big ask.

When even large employers, such as Jaguar Land Rover, contract out their apprenticeship provision, then the chances that small and medium-sized employers (SMEs) will be able to cope with on-the-job training may be slender.

A pilot project run in 2017-2018 by the Chartered Institute of Personnel and Development for the JP Morgan Foundation to provide SMEs with free human resource management advice to get them ready to take on young apprentices demonstrated the problems. Most of the resources were spent on getting them to become legally compliant because it turned out that many companies were operating in breach of basic employment legislation.

It is far from clear at present that enough places can be provided

A separate pilot project undertaken in 2017-2018 by the Institute of Education’s Centre for Post-14 Education and Work (again funded by JP Morgan) reinforced the scale of the problem: the East London Vocational Education and Training (ELVET) project found that many employers in sectors such as digital and creative struggled to cope with offering work placements. Many workers were self-employed and coalesced around one-off projects, firms lacked expertise on learning design, and there were practical problems with safeguarding and insurance. The further education colleges involved in ELVET had to expend considerable time and effort building employer capacity to manage work placements.

Some in government believe that colleges can do the employers’ job for them and in effect supervise the placement – an unlikely prospect. Those external to the workplace will struggle to deliver good on-the-job learning if there is no on-site expertise.

What is to be done? Building employer workplace training capacity will be key. Getting groups of firms, particularly SMEs, to work together and to build shared capacity is one potential route to success. Another is reviving a national, publicly-funded training of trainers programme which was around in the 1970s and early 1980s and was highly regarded. It would also help with apprenticeship quality.

Bank forced to gift millions to college

Government officials forced a major bank to halve a £40 million unsecured loan after threatening to put a college into insolvency.

In a highly unusual move, Lloyds Banking Group agreed to slash Bradford College’s debt to £20 million in return for halving the write-off costs with the Department for Education.

The details of the last-minute deal, struck at the end of March just before the DfE’s “restructuring facility” closed, are secretive and complex but the college has said it is “grateful” to both the department and bank for being kept afloat as it tries to find a further £3.5 million in savings.

Any future negotiations will take place under the shadow of the administration process

Latest accounts for Bradford College, where more than 130 jobs are currently at risk, shows it had a total of £40 million debt, all of which was due to be repaid within one year after it breached one of its banking covenants.

Knowing this repayment deadline could not be met, negotiations began and FE Week understands the ESFA argued that the unsecured loan had been irresponsible lending on the part of Lloyds and used the threat of insolvency to strike a deal.

Rather than potentially losing the entire £40 million if the college went bust, which is allowed to happen following the launch of the FE insolvency regime in April, Lloyds agreed a financial arrangement with the ESFA’s transaction unit.

This meant the college was given £12.8 million by the ESFA to pass on to the bank and the bank gifted an equal amount of £12.8 million to the college, in what they called “debt forgiveness”.

These payments resulted in the loan halving to £20 million, repayable over 15 years, and also covered the £5.6 million loan break costs.

In addition, the ESFA also wrote off its own £9 million loan with the college and provided £5 million for infrastructure improvements, making a total payment to the college of £26.8 million, excluding the £12.8 million passed on to the bank.

A financial advisor to the college sector told FE Week they understand the gift by the bank to be the first such significant debt write-off for a college.

When covenants have been broken in the past, banks would typically renegotiate quickly and change the loan to very high interest rates – knowing the DfE would have to bail the college out if it ran into further trouble.

A spokesperson for Lloyds said a financial arrangement was offered to put the Bradford College on a “stronger financial footing”.

“In conjunction with the EFSA, we agreed a refinancing to all parties’ satisfaction and which allows the college to move forward with a more confident future,” he added.

“This was a standalone transaction and reflected a very specific set of circumstances for Bradford College.”

The college’s bank loans had been taken out to fund a number of capital projects.

Julian Gravatt, the deputy chief executive of the Association of Colleges, explained that Bradford “missed out on capital funding when that budget was cut in 2009, so they used their own funds and a bank loan to redevelop their campus to meet student needs”.

Asked if he thought the insolvency regime might give more colleges a stronger hand when renegotiating loans in the future, Gravatt added: “Any future negotiations between a college and its bank will take place under the shadow of the statutory education administration process. We’re finding out right now how this works.

“There is a bigger point that government has assumed colleges will borrow when allocating capital but has failed to provide adequate revenue funds. Funding colleges properly would avoid the time, effort and money lost in individual financial interventions.”

Julian Gravatt

Minutes from a January board meeting stated that current staff costs at Bradford College have increased compared to previous years and now sit at £33.5 million, which “is not sustainable”. It is now consulting on cutting 132 jobs.

The college’s income for 2019-20 is predicted to fall by £3.5 million for three reasons: its 16-to-18 budget has dropped by £2.5 million, it has lost £800,000 via adult education budget funding in Manchester due to devolution, and has suffered a £200,000 decline in higher education provision.

The job losses will lead to “significant financial savings and ensure the future sustainability of the college”, the Bradford College spokesperson said.

Bradford College went for more than a year without a permanent boss until March 2019, when former Ofsted grade one Barnsley College principal Chris Webb became its chief executive.

The college’s last permanent boss, Andy Welsh, resigned at the end of the 2017-18 academic year after the college received both a financial notice to improve and an Ofsted grade three in quick succession.

An FE commissioner report, published in March 2018, revealed that the college’s dire financial position had come as a surprise to the governors.