The Institute for Apprenticeships and Technical Education is updating its ‘affordability measures’ when making funding band recommendations.
Minutes published this week for their approval and funding committee, dated 21 March, say the Digital and Data Science Team “gave an update about work to improve the affordability measures, which will be further developed over the next few months”.
When asked about the plans, a spokesperson for the IfATE told FE Week: “The budget for the apprenticeship programme is finite” and affordability was being considered alongside “evidence submitted by Trailblazer groups, guidance from sector experts on our Route Panels, and evidence we have gathered ourselves about comparative training costs”.
And the Department for Education’s Strategic Guidance to the IfATE, published on 27 March, said: “We expect the Institute to consider the wider affordability of the apprenticeships programme when making funding band 12 recommendations.”
The spokesperson would not be drawn on what the specific measures are or would be, beyond saying they were “analysis of the cost of the apprenticeship programme” and that “the measures are being updated to reflect the fact that there is now a larger amount of information related to the cost of apprenticeship standards, and the shape of the programme”.
It was IfATE that first warned of an apprenticeship levy budget over-spend in a presentation to employers at the end of last year.
IfATE rates reviews have proved controversial so far, with many employer groups opposing reductions that would render the apprenticeships “financially non-viable”.
In the first review launched last May, included 31 of the most popular standards, many of which say a rate reduction.
For example, the level 2 hair professional was cut 22 per cent from £9,000 to £7,000 and the controversial chartered manager degree was cut 19 per cent from £27,000 to £22,000.
The IfATE revealed last December the 30 apprenticeship standards included in its second funding band review, expected to be completed by this summer.
Rate reviews got underway after the institute moved to having 30 funding bands – the maximum rate paid for from the levy – to choose from, up from the previous 15.
According to the IfA’s 2018/19 business plan, the funding band reviews ensure “they support high quality delivery, and maximise value for money for employers and the taxpayer”.
It also said the IfA is “working with DfE to develop the best approach for pricing apprenticeships in the long term.”
When it announced the second review, the institute said “We understand the review might be a concern to employers which is why we are working collaboratively to ensure the review is carried out in an open and fair way, and as quickly as possible.”
The Institutes of Technology tender has fallen behind schedule, with the final 16 providers left waiting to be told if they have been successful.
The Department for Education released the final stage two of the £170 million competition in October last year, and said it expected to announce the outcome in March 2019.
But FE Week contacted a number of the shortlisted colleges, who told this publication they have not heard anything as of yesterday afternoon.
Uxbridge College, York College and Dudley College confirmed they have not been given any indication to whether their proposals have been the successful.
FE Week has also contacted the DfE to find out the reason of yet another delay.
In May last year, this publication reported the competition was falling behind schedule, with providers who applied to open one IoT not knowing if they had been successful.
IoTs, which were first mooted back in 2015, are intended to bring together FE and HE providers along with employers to deliver technical skills training, with a particular focus on levels four and five.
According to application guidance from the DfE, they will offer “higher-level technical skills on a par with more academic routes” and will “achieve the same level of prestige as universities”.
Between 10 and 15 of the institutes are expected to be created.
In December 2017 the Department for Education said: ” We expect the first IoTs will be open in 2019”.
The 16 IoT proposals currently in the final stage are:
The Education and Skills Funding Agency (ESFA) has revealed the colleges with millions in government loans and bailouts.
According to documents released by the ESFA and analysed by FE Week, a total of 34 colleges across the country received £270 million in Exceptional Financial Support and Restructuring Funding loans and grants by July 2018.
This was the first time the ESFA revealed individual values of grants and loans awarded to colleges. The agency explained it had decided to release this information to allow FE colleges to “compare their financial data with national totals and other colleges and organisations”.
When similar figures were released last year, the Department for Education immediately removed any reference from its monthly expenditure list, and said they would remain secret “to ensure the college’s financial position can be managed effectively during the period of support”.
The documents released last Friday revealed Hull College received the biggest amount in restructuring grands – a total of £34,187,000 – to support its ‘fresh start’ arrangement and to help its “significant financial and operational turnaround”.
FE Week had previously reported that the college received a £54 million government bailout in order to balance the books, which was believed to be the highest ever given to an English college.
The college also said in its 2016/17 accounts, which were published almost 18 months late, that it had overspent £10 million.
Meanwhile, Trafford College was awarded a total of £29.11 million in restructuring grants. The college merged with Stockport College in April last year – just a month after Stockport was rated ‘inadequate’ for the third time in five years.
As a result, the grant was provided to enable the merged college to deliver a “significant financial and quality turnaround”.
The government also awarded Chichester College £3 million in loans (EFS and restructuring grants) and £21.37 million in grants.
The ESFA said the college was given restructuring facility funding to facilitate its merger with Central Sussex College, which had also received exceptional financial support funding and a third successive Ofsted rating of ‘requires improvement’ prior to the merger.
The college was last month named one of the institutions that will receive a total of 1.8 million in grants through a strategic improvement fund, designed to support struggling colleges.
Moreover, the agency has revealed that, of its £470m restructuring facility funding allocation, it has spent £290m as of January this year. It said it has received 78 applications for the restructuring facility during the same period. Of these, 58 have been assessed and approved and five remained in the assessment and approval processes.
A Department for Education spokesperson said: “The department publishes college accounts based on data provided by colleges. It is the responsibility of individual colleges to ensure that the data they submit is accurate and to contact us if they believe the data they submitted is inaccurate.”
See the full list of colleges that received loans and grants as of July last year:
College name
ESFA Loans (EFS and restructuring grant)
ESFA restructuring grant
Total ESFA loans and grants
Hull College
£0
£34,187,000
£34,187,000
Trafford College
£0
£29,112,000
£29,112,000
Chichester College
£3,000,000
£21,373,000
£24,373,000
East Kent College
£0
£16,976,000
£16,976,000
Birmingham Metropolitan College
£15,244,000
£0
£15,244,000
St Helens College
£0
£14,100,000
£14,100,000
Telford College of Arts and Technology
£216,000
£13,373,000
£13,589,000
Lambeth College
£13,586,000
£0
£13,586,000
Nottingham College
£13,000,000
£0
£13,000,000
South and City College, Birmingham
£0
£10,800,000
£10,800,000
City of Wolverhampton College
£6,250,000
£3,424,000
£9,674,000
City of Bristol College
£8,949,000
£0
£8,949,000
Sussex Coast College Hastings
£4,397,000
£3,668,000
£8,065,000
North Shropshire College
£5,874,000
£0
£5,874,000
Stoke-on-Trent College
£5,625,000
£0
£5,625,000
South and West Cheshire College
£5,200,000
£0
£5,200,000
London South East Colleges
£4,401,000
£0
£4,401,000
Lowestoft College
£3,450,000
£742,000
£4,192,000
Cornwall College Group
£3,238,000
£697,000
£3,935,000
South Essex College of Further and Higher Education
£3,500,000
£0
£3,500,000
Accrington and Rossendale College
£3,475,000
£0
£3,475,000
Redcar and Cleveland College
£3,251,000
£0
£3,251,000
North Warwickshire & South Leicestershire College
£2,818,000
£0
£2,818,000
Kirklees College
£2,800,000
£0
£2,800,000
Southport College
£0
£2,737,000
£2,737,000
Berkshire College of Agriculture
£0
£2,575,000
£2,575,000
Ruskin College
£2,280,000
£0
£2,280,000
West Nottinghamshire College
£2,100,000
£0
£2,100,000
Weymouth College
£2,019,000
£0
£2,019,000
Epping Forest College
£900,000
£0
£900,000
South Gloucestershire and Stroud College*
£753,000
£0
£753,000
Cadbury Sixth Form College
£300,000
£0
£300,000
Solihull College
£0
£100,000
£100,000
Cleveland College of Art and Design
£53,000
£0
£53,000
Total 2017/18
£116,679,000
£153,864,000
£270,543,000
*South Gloucestershire and Stroud College has said the figure is an “error” either by the ESFA or via data supplied by the college, and claimed that SGSC has not been in receipt of any restructuring loans
Since this article was published a number of colleges have got in touch to say the figures in the government’s data are wrong. If your college has any concerns about the figures please contact the ESFA directly. We’re currently waiting for an explanation from the ESFA.
The Department for Education has today unveiled the colleges and universities in line for a share of £170m in capital funding and a licence to be named an Institute of Technology.
One day after FE Week reported delays in its competition process, due for announcement last month, the department revealed the names of the first successful applicants.
See the list of nine colleges and three universities below.
The government said the institutes will be “unique collaborations” between universities, FE colleges, and employers including Nissan, Siemens and Microsoft.
They will specialise in delivering higher level technical training at level four and five in STEM subjects, including digital, advanced manufacturing and engineering.
According to the DfE, all institutes must hold an Ofsted ‘good’ or ‘outstanding’ rating at the time the licence and capital funding agreements are signed.
However, one of the colleges made it to the final list of 12 despite plummeting two Ofsted grades from its previous ‘outstanding’ in December last year.
When asked about how the grade three college could be a successful applicant, a DfE spokesperson simply said: “Swindon College, like all the other successful applicants, put forward a high-quality proposal and met our requirement to be Ofsted ‘good’ or better when they submitted their application in November 2018.
“We have been clear that all the successful applicants must hold an Ofsted ‘good’ or ‘outstanding’ rating at the time their licence and capital funding agreements are signed. Until that happens they will not formally become an Institute of Technology.”
Pressed again on how Swindon College can qualify as one of the 12 on this the list of Institutes, the spokesperson replied: “We have nothing further to add to this statement.”
And the DfE did not say how much it planned to award each provider from the £170m capital fund, but Dudley College told FE Week it will receive £16.8 million to support its £32.5 million project. Milton Keynes College revealed it expects to receive £28 million and York College will get around £10 million in capital funding.
The four providers that had made it to the second stage but were not included in the final list were North Warwickshire & South Leicestershire College, West Suffolk College, South Essex College of Further & Higher Education and Newcastle College Group.
A NCG spokesperson told FE Week it had decided to withdraw the bid for an IoT to “focus on the development of Newcastle College University Centre”.
But FE Week has previously reported the government had broken its own rules by putting NCG through the final bid despite its three Ofsted rating.
A spokesperson for the department explained at the time that NCG would need to improve its Ofsted rating by November to have a chance of getting approved. Earlier this month, Ofsted published the results of a monitoring visit, which found the college had made ‘reasonable progress’.
Meanwhile, Marion Plant, principal and chief executive of NWSLC said: “We are disappointed that our bid for grant funding to create a dedicated IoT for logistics has not been taken forward by the DfE. In fact, none of the successful projects are focused on the logistics sector, which is a great pity considering the requirements of the industry.”
Angela O’Donoghue, principal and chief executive of South Essex College, also said she was the college was “disappointed not to have been successful” in its IoT bid.
IoTs were first mooted back in 2015 and are intended to bring together FE and HE providers along with employers to deliver technical skills training, with a particular focus on levels four and five.
According to application guidance from the DfE, they will offer “higher-level technical skills on a par with more academic routes” and will “achieve the same level of prestige as universities”.
The DfE said today the pre-award stage will now start, where the details of each Institutes licence agreements and capital funding will be agreed. IoTs will then receive their licence to operate and start to access their capital to develop the buildings and facilities they need.
The first Institutes are expected to open from September 2019.
Education Secretary Damian Hinds said: “These new IoTs will be the pinnacle of technical training – new collaborations between universities, colleges and business to make sure young people have the skills they need to build a well-paid rewarding, career, while the economy gains the skilled workers it needs to be more productive.”
He added they will help employers get “the skilled workforce they need, especially in much sought-after STEM skills and will offer young people a clear path to a great, well paid career”.
But a spokesperson for the Association of Colleges pointed out there are “many more colleges than the successful ones which have suffered from capital spending in colleges being at a 20-year low because of reductions in government grants and commercial lending”.
“The £170m for IoTs is welcome but we probably need another 50 or 60 IoTs in the next decade.”
The 12 providers leading the successful IoT bids are:
The Chartered Institution for Further Education has been left with no employees after its CEO quietly stood down in December.
FE Week had been attempting without success to contact the CIFE for several weeks concerning their 2017-18 annual report and accounts, which remain unpublished.
Speaking to FE Week this morning, Dan Wright said there are no longer any employees and that he has been acting as an adviser on a voluntary basis since his departure. The CIFE will continue under the stewardship of the council members.
The CIFE, which was conceived in 2012 and has so far received £1.5 million in subsidies, received one final payment at the end of January and has since been on its own.
A statement released just before Christmas said that an “increase in membership and remodelling of our infrastructure enables the institution to stand free of government funding”.
“We expect membership to grow as we use our voice independently”, it said at the time.
According to its website, the CIFE currently has 12 members, far fewer than the 80 Wright previously said it would need to be “completely free” of government subsidy.
This was on top of the £1 million it had already received since its conception, as revealed by an FE Week freedom of information request last January.
The institution was the brainchild of the former skills minister John Hayes, and was created to get high-achieving FE providers a royal seal of approval. It took three years for it to be finally granted its royal charter, and it began accepting applications in November 2015.
Colleges and training providers must be rated grade one or two by Ofsted to apply, and also meet the institution’s quality standards.
The annual subscription fee for members who have achieved chartered status is £5,000, but for interested parties there is also a £3,000 non-refundable fee to have an application reviewed in the first place.
List of CIFE council members:
Picture: Happier times in 2016 for the Chartered Institute of FE members at their inaugural admissions ceremony in the House of Lords.
Employers with a payroll of £3 million or more made their first monthly apprenticeship levy payment in April 2017 and if they do not use it by the end of this month they will lose it forever.
But despite many apprenticeship courses still in the design phase, the government will not reconsider taking the funds off employers as part of its “carrot-and-stick” approach, Anne Milton has said.
FE Week was speaking to the skills minister in the week that marks the second year of the levy, a policy that she says has made “phenomenal progress”.
The two-year mark brings with it the first 24-month ‘sunset period’, in which employers will lose all of their first monthly payment if they’ve not spent or transferred it yet.
In March, Keith Smith, the Education and Skills Funding Agency’s director of Apprenticeships, told the public accounts committee that employers are expected to lose around £12 million next month, or 9 per cent of what they paid in April 2017.
One key reason why employers have not spent all of their funds is because the apprenticeship standards they want to use are still in the design and development phase. The NHS, for example, has at least 20 standards still being developed that it plans to use to up-skill its workforce.
Asked whether it is fair that the health service will lose a chunk of its public funding next month, Milton said: “It’s quite a tough thing for employers to suck up but it’s only a month’s worth that they lose, not all of it.
“There is an element of carrot and stick in this.
“Would we’ve got the standards in place if there hadn’t been an imperative to do it because the funds were running out? I have to ask myself that question.
“I think it’s tough but we want the skilled workforce and this is the way we get it, and the money will be recycled into apprenticeships.”
Speaking to FE Week last month, the national programme manager for apprenticeships at Health Education England, Lucy Hunte said the NHS expects to lose “huge amounts” this May when levy payments begin to expire.
But Milton argued if “they’ve got big levy funds then they should transfer them out, there is a lot of bodies, charities that delivery NHS services”.
In January the Confederation of British Industry said employers should be allowed to appeal for more time to spend their apprenticeship levy cash if the standards they want to use are still in development.
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.
Asked if the proposal was something that the government was considering, Milton said no.
“The difficulty is that if we make exceptions, then everyone wants to be an exception.”
She added that the levy transfers that are expected this month from big levy payers “could be significant” and “I know a couple of transfers that will take place that will be in favour of the public sector”.
Considering that employers, like the NHS, have not had the full necessary suite of standards ready to use, some will not have been able to make strong progress on the government’s public sector apprenticeship target.
The target, which came into effect in April 2017, obliges public sector organisations to make sure that new apprentices make up at least 2.3 per cent of their overall workforce numbers on average over the next four years.
The NHS had 13,800 apprenticeship starts in 2017/18, which represented 1.2 per cent of a total headcount of 1,194,614.
Asked if there was any view to rethink the target, Milton said: “No, there is not.”
“I actually think that some delegations should probably have more ambitious targets. If you look at some NHS Trusts I visited during National Apprenticeship Week they are doing a fantastic job.”
Since the levy was launched in April 2017, there have been two notable policy changes: upping the amount employers can transfer to other employers from 10 per cent to 25 per cent, and halving the co-investment to 5 per cent.
Asked if there were any other changes in the pipeline, Milton said: “We are really open minded.
“If we introduce flexibilities we have to be able to police that. Most employers are very responsible and will spend it on the things we allow the flexibilities for but there are always people that will try and stretch the envelope and spend on things we don’ think it should be spent on. So we have to be very careful.”
A university technical college was celebrating this week after it climbed its way up from ‘inadequate’ to ‘good’, while six other providers also secured grade two ratings.
But the week wasn’t without its lows, as one provider dropped to ‘inadequate’, three received ‘insufficient’ ratings in early monitoring reports, and another fell from grade one to three.
Bolton UTC, which was given a grade four in October 2017, was lauded by inspectors this week after its acting principal and senior leadership team oversaw “rapid improvements in every aspect” of the 14 to 19 college, at the same time as developing an “inclusive and supportive community”.
Inspectors found the quality of teaching and learning at the now grade two UTC has improved since their last visit, leading to students, including those with special education needs or disabilities, making good progress.
Elsewhere, St Mary’s College, a Catholic sixth form college in Blackburn, saw its rating improve from ‘requires improvement’ to ‘good’.
Inspectors found that governors, leaders, managers and staff have created an “aspirational culture” and now provide a “high-quality education which supports students to fulfil their potential”.
Ofsted also upped Brighter Futures Merseyside’s grade from three to two this week.
Inspectors reported that tutors at the private provider have “very good subject knowledge” and direct experience of the sectors in which they teach, and learners benefit from “high-quality” resources and sector-specific digital technologies that they will encounter in future employment.
LIPA Sixth Form College was awarded ‘outstanding’ across the board in its first-ever full inspection. The Liverpool-based free school for 16-18 year olds was found to have created a culture in which staff have “very high expectations”, with students aspiring to reach “exceptionally high standards” in their written work and practical skills.
Inspectors also said students benefit from “consistently high-quality teaching from dedicated, inspirational and experienced tutors” and a “well planned” project-based study programme.
The London College of Beauty Therapy also received a grade two, going up from a three. The report said lecturers and assessors plan learning well, and engage learners to that they make good progress and achieve their potential.
It was also a good week to Envisage and Debut Training Academy, which were both given grade twos in their very first full inspection report.
Ofsted found the large majority of learners at Envisage achieve their qualifications and do so within the planned time and pursue higher level study or move into employment or more demanding work roles afterwards.
Learners and apprentices at Debut Training Academy were found to gain good skills that make them employable within the “competitive” beauty industry.
Meanwhile, the Reynolds Group maintained its ‘good’ rating with Ofsted.
However, Moor Training, EMA Training and Vogal Group were found making ‘insufficient progress’ in at least one field judged in their early monitoring visits of their new apprenticeship provision.
Ofsted said Moor Training’s leaders and managers have “insufficient knowledge to develop and provide a fully successful apprenticeship programme”, and do not evaluate the quality of on and off-the-job training accurately because “they do not know how to do so”.
EMA Training was rated ‘insufficient’ across the board after Ofsted found leaders and managers do not monitor the delivery of the programmes “effectively” and “do not understand fully” the quality of apprentices’ experiences or the slow progress they made, according to the visit report.
Vogal Group received one ‘insufficient’ rating as Ofsted found its safeguarding arrangements are “not effective”.
And ProCo NW Limited, a private provider based in Wigan, went from a grade three to a four after inspectors found the quality of provision has “not improved sufficiently”.
The provider’s leadership and management of subcontracted courses, which account for almost half of the provision, are “poor”, and achievements are “too low” for apprentices.
Meanwhile, adult and community learning provider Education and Training Skills Ltd fell from ‘outstanding’ to ‘requires improvement’, after Ofsted found the quality and effectiveness of its provision has “declined progressively”.
Inspectors said the standards of training and support apprentices receive are not consistently high and that too many apprentices are not making the progress they should be making.
Simian Risk Management Ltd, in its first full inspection, was rated ‘requires improvement’ after inspectors found the private provider has been slow to “prioritise” improving the quality of teaching and learning.
Pennine Camphill Community, in the meantime, received two ‘insufficient progress’ and one ‘reasonable’ in a monitoring visit after it was rated grade three in April 2018, and NCG, the country’s largest college group, was found making ‘reasonable progress’ in all areas after being judged ‘requires improvement’ in May last year.
Five private providers – Crown Vocational Training Limited, TRS Training Limited, First Intuition Bristol Limited, Royal British Legion Industries and Developing ‘U’ Ltd – were found to be making ‘reasonable progress’ across the board in early monitoring visits of their new apprenticeship provision, while another, Runway Apprenticeships Limited, was found making ‘significant progress’.
Beacon Education Partnership received one ‘insufficient’ and three ‘reasonable’ progress judgements in a monitoring report that took place after it was rated grade three last year.
And finally, employer provider Select Service Partner UK Ltd maintained its ‘requires improvement’ rating.
Mike Hopkins has more experience than most principals of overseeing college mergers. In January of this year South and City College Birmingham, which he heads, received its second successive grade 2 Ofsted, despite having absorbed two failing colleges in the past seven years. FE Week asked how they managed it
In 2012, before area reviews were even a twinkle in the FE commissioner’s eye (in fact before the role of commissioner was established), South Birmingham College found out that its neighbour, City College Birmingham, was in dire financial straits.
“It wasn’t until they’d exhausted pretty much everything, that they then had a conversation with us,” says Mike Hopkins, then the South Birmingham College principal.
The two colleges shared a campus and had worked closely over the years, so their fates were already intertwined.
We had to absorb everything in terms of the financial impact
“What we couldn’t be in a position for at that time was to have a competitor take over a college that was on our campus,” Hopkins says, leaning back in his chair at the Bournville campus of what is now South and City College Birmingham, a 25,000-learner general FE college spread over eight campuses across the south and centre of the city.
South Birmingham stepped in, taking over City College “with no support from the government. We had to absorb everything in terms of the financial impact,” Hopkins says. The college went from financial good health to taking on millions in debt, some of which is still being paid off.
But it wasn’t just the finances that left it to sink or swim. “To be honest at the point at which we signed all the documents, all the various agencies said, ‘Oh, thank you very much’, and we didn’t hear from them again. We were on speed dial until then, and they just disappeared.”
It took three years of slog to get systems integrated, staff aligned, and the finances back on an even keel. They told tutors to forget about the finance and focus on the students, but behind the scenes the admin team was working frantically to stay afloat. Hopkins describes the period as being like a “swan going across the water, you don’t see the legs going mad”.
The transaction unit was bureaucracy gone mad
By 2015 the college managed a grade 2 across the board in its Ofsted inspection, which said that “leaders have been successful in raising the overall success rates following a decline brought about by the merger three years ago”.
But just as things were starting to feel settled, it was hit with £15 million in austerity cuts to its adult education budget and the area review process began, in which the FE Commissioner was tasked with assessing provision in each part of the country and recommending potential mergers. Birmingham was one of the first to come under scrutiny and Hopkins recalls that “the commissioner came in with a clear view of what he wanted, which was a merger of us, Birmingham Met because it was in trouble, and Bournville College”.
Birmingham Metropolitan College, a 30,000-learner, seven-campus giant with a grade 3 Ofsted rating, had already received £4.5 million in exceptional financial support in the previous 12 months and had its financial management branded “not acceptable” by David Collins, then the FE commissioner.
Bournville, a medium-sized college on the site of the former Rover factory in Longbridge, was also in financial dire straits. “We knew that no college could take on Bournville’s debts,” Hopkins says.
A civil engineering student operates a theodolite at the construction facility at Bordesley Green
He was clear that taking on both, to form the largest college in the country, “wasn’t doable without potentially collapsing everything”. He refused.
But there was a local issue that the college governors and executive felt a responsibility to help with. Bournville College was relocated in 2011 from its University of Birmingham home to a purpose-built campus on the former Rover site as part of the government’s strategy to redevelop the area after Rover MG went into administration in 2005, leaving 6,000 people without jobs.
South and City offered to enter conversations about a deal to take over Bournville – as long the government would cover the debt. But the way Hopkins describes the discussions, as soon as it hinted it would be prepared to consider the merger, the “floodgates” opened.
This was a time when everything was in flux. “The insolvency regime was on the horizon,” he recalls, “so the banks had changed their standpoint completely, the pension fund was jumping around all over the place because of the insolvency regime and were saying, well, colleges are now a massive risk. Then they brought in something called the transaction unit, which was bureaucracy gone mad.”
The transaction unit is a team in the Education, Skills and Funding Agency tasked with allocating funds for mergers arising from the area reviews – from the “restructuring facility” fund of £726 million.
South and City received some financial support from this fund (the amount is confidential), but it was still lumped with a £15 million mortgage and at least £5 million in bank loans with “stupidly high interest rates” and penalty clauses preventing it from paying them off early.
The 2017-18 accounts show bank loans of £26 million, plus £3.6 million owed to the ESFA. The college is currently trying to sell properties to allow it to restructure its debt, Hopkins says, which will take at least ten years to pay off.
“Bluntly, the government got it wrong. We were one of the first two through and it told us it couldn’t get rid of bank debts, so we inherited bank debts. It subsequently got rid of bank debts in other colleges. That would have put us in a far stronger position.
“What we could do with is the transaction unit coming back in reviewing what it did and then addressing it and saying actually, we’ll inject some more to get rid of at least one of the bank loans.”
The restructuring facility fund, however, closed last year with £256 million still left unspent.
In the meantime, the senior team at South and City is keen to push the narrative that students are entirely protected from the impact – and Ofsted awarded its provision another solid grade 2 in January of this year. When pressed, however, Hopkins admits that as well as freezing staff pay, it has had to slash support services such as mentors and mental health workers. “Having those sort of key people to work in community with families and with the students, that’s the bit that’s gone out the window.”
Hopkins’ £180,000 salary for an institution with a turnover of £78 million seems relatively modest when benchmarked against others in the sector. Last year 73 principals were paid more than £150,000 and the highest paid, Matt Hamnett, the former principal of North Hertfordshire College, received £294,000 for a college with a turnover of £30 million.
For someone who’s taken a massive institution through the fire, twice, Hopkins comes over as remarkably stoical – something he attributes to the “excessive amounts of exercise” he does as a racing cyclist. My questions about work-life balance don’t seem to compute. “I live and breathe this,” he insists. “I get a real buzz out of what I do and what we achieve. I love it and I haven’t run out of energy yet, I haven’t stopped enjoying what I do, and I mean even with all the downsides.”
His management style is to be relentlessly present. “A lot of the staff at Bournville think I spend most of my time here. If you ask the people at Digbeth [another of the eight campuses], they’ll say the same thing.”
The key to a successful merger, he insists, is creating an open culture. One of the first things he did at Bournville was to move the senior managers down from their fifth-floor “glass tower” to the first floor and institute an open-door policy, with doors literally propped open unless a meeting is going on. “I accept it might be disruptive, but the other thing is, you’re available to students.”
He runs a “principal’s question time” once a term at seven of the campuses, which has created a culture where the students feel they can chat to him at any time.
A “relentless attention to behaviour” was another crucial part of the Bournville turnaround, he insists, telling how he’s recently witnessed cleaning staff pick up students for wearing a hoodie or dropping litter. The posters on the walls “give them a sort of back-up” – and the catering, security and cleaning staff feel more buy-in now that they are all employed in-house and paid the living wage.
It’s intriguing that Hopkins has agreed to meet me at all, given that he’s uninterested in making a name for himself, refusing invitations to speak at the Association of Colleges conference, for example.
I live and breathe this… I haven’t run out of energy yet
He was “dumbfounded” by how many principals approached him after he wrote a short piece in FE Week earlier this year, giving tips on how to manage a college merger – but says he didn’t have time to engage with the people who asked him for more advice.
“I’ll help colleges regionally, I will help and support, but I’m not going to spend lots of time and effort for things which I have no gain.
“I’m paid to run this college, so spending lots of time ingratiating myself with everybody on the national scene, well, how does that help the college? What benefit do the staff and students have if I’m somewhere else doing things which are not about the college?”
Key dates
August 2012
South Birmingham College merges with City College to become South and City College Birmingham
September 2015
Area reviews process begins, with Birmingham in the first wave
November 2015
South and City College Birmingham gets an Ofsted grade 2
February 2016
ESFA transaction unit created to administer financial support for mergers
August 2017
South and City College Birmingham merges with Bournville College
September 2018
The transaction unit’s restructuring facility closes with £256 million unspent
November 2018
South and City College Birmingham gets an Ofsted grade 2
