Scrap funding rule that stops providers from transferring their unspent levy, says UEL

A university has called for the scrapping of an apprenticeship funding rule that stops them from using unspent levy funds to support local businesses.

The University of East London delivers apprenticeships to large employers, but after missing out on a non-levy allocation they have to turn small employers away.

One solution would be to share their own unspent levy funding with small employers using the transfer funding arrangement, but under current government rules they would not be allowed to deliver the training.

“As a large employer we would like to transfer our unspent levy, but of course being an apprenticeships provider we can’t,” said UEL apprenticeships manager Nigel Hogg (pictured right).

“We are going to be losing our unspent levy in May – we would have loved to use that.”

As a result, Hogg suggested the government should flex the rules to allow training providers to use their levy to support the small and mediumsized enterprises (SME) market. The Department for Education make it clear that “if a training provider transfers funds to you, they cannot deliver the training for that funded apprenticeship” and a spokesperson told FE Week there was no plans to change the rule.

Asked if he would support UEL’s call for change, Adrian Anderson, chief executive at the University Vocational Awards Council, said: “Yes, why not? I would be delighted if the Education and Skills Funding Agency decided that universities could transfer their levy to non-levy payers. It’s something we would encourage and welcome and support.”

However, Anderson said this is “not the bigger issue”, but that “we are in a ridiculous situation where there is no funding for many universities to deliver to SMEs”.

This newspaper understands the extra protection applied to the transfer funding policy was introduced because of concerns over fraud.

Skills minister Anne Milton has previously suggested that “fraud has been an issue” within the current system.

“We have to have rules, and they’re irritating and bureaucratic, but fraud has been an issue,” she said at a fringe event at the Conservative party conference in October.

Anderson believes the rule exists because the ESFA thinks there could be a conflict where providers would be delivering training provision to a company that was in receipt of their levy.

Next month the transfer funding limit is set to increase from 10 to 25 per cent, but, according to a recent report from the Department for Education, only 200 apprenticeship levy transfer arrangements had been made in the beginning of February since the allowance was introduced last April, while a further 20 applications were pending approval.

Hogg told FE Week that he finds many companies “can’t be bothered to actually set [transfers] up”.

“They feel the bureaucracy is a bit too much for them to do and then they have to get someone in to look at their digital accounts, transfer that money to somebody else, and some of them just let the levy go back as a tax.”

The UEL also said it has had to turn small businesses away as it does not have a non-levy apprenticeship allocation.

Sadaf Alvi (pictured left), head of academic and employer partnerships at UEL, said it was “very frustrating” not being able to work with SMEs.

Policy makers might call it an unintended consequence, but I call it a scandal

This week the Treasury confirmed that the apprenticeship fee – known as co-investment – will halve from 10 to 5 per cent from the start of April.

Or to put it another way, the public subsidy for apprenticeships running at an average cost of £9,000 (according to the National Audit Office) will rise from 90 per cent (£8,100) to 95 per cent (£8,550).

I was quick to take to Twitter to deride this attempt at stimulating more demand from small employers as “probably the worst ever FE policy in the 15 years I’ve been in FE”.

It’s so bad because it means the public subsidy for management trainees rises from the same pot that providers tell us is already proving insufficient to fund 16 to 18 year-olds and young adults entering the job market.

Or, again, to put it another way, employers will see their contribution fall from £2,200 to £1,100 for a £22,000 management degree apprenticeship for existing staff when £22,000 of funding in the same pot would have funded seven healthcare support worker apprentices at £3,000 each.

Of course, policy makers might call this an unintended consequence of ‘employer ownership’, but I call it a scandal.

More generally, the co-investment change is bad for apprenticeships because: 

1. Before the reforms were introduced it was assumed employers would contribute 50 per cent to the costs. This fell to a mandatory third when standards were piloted and then 10 per cent from May 2017 and now 5 per cent from April. History has shown the closer the government gets to giving stuff away the lower value the product is perceived to be and the harder it is to put the price up at a later date.

2. If employers are not willing to pay as little as 10 per cent for a product they either don’t value it or their cash flow is so poor their business should not be trusted to survive long enough for the apprentice to complete their course.

3. The ESFA has confirmed to FE Week that despite the change being targeted at small employers, it will also apply to large employers when their levy pot runs out. So providers will be forced to halve their fee to large employers that are already engaged in the programme when they switch to non-levy.

4. The National Audit Office has confirmed what we suspected, that the levy pot is insufficient in the medium to long-term, so increasing the subsidy will add extra pressure and make access to funds for those that need it more, not less likely.

5. There is no time limit on this fee reduction, making it much harder to reverse. Any business will tell you that if you want to stimulate demand you offer a time limited sale.

There are still two weeks left until implementation, so like Brexit, surely more time is needed to determine if this change has been properly thought through and what the sector really wants?

FE Week takes on charity cycle challenge with South and City College Birmingham

FE Week’s editor Nick Linford and publisher Shane Mann will be joining a team from South and City College Birmingham to cycle the 100-mile Velo Birmingham and Midlands and raise funds for the charity Cure Leukaemia.

FE Week editor John Dickens and the principal of South and City College Birmingham Mike Hopkins will be two of the riders joining them in May on the trip from Birmingham to Coventry, then back.

“As a college, we are really pleased that we are involved in this year’s Velo Birmingham and Midlands ride,” said Hopkins.

The college has chosen Cure Leukaemia as their nominated charity this year, as a number of students and staff have been affected by the disease – including one manager, who died of it over a year ago.

Hopkins added: “We are extremely proud to be supporting Cure Leukaemia and helping to raise vital funds to help beat blood cancer.”

The team also includes Dave Heeley, who calls himself “Blind Dave”, the first blind person to complete the seven-marathon challenge in 2008; and they are aiming to raise £50,000 for charity.

To donate to the efforts, visit https://www.justgiving.com/fundraising/lsect-team

The Velo is not the only gruelling cycling challenge being undertaken by a member of the FE community this year.

Chief executive of Askham Bryan College Catherine Dixon is stepping down from her role to try for the Guinness world record as the fastest woman to circumnavigate the world on a tandem bicycle, with her cycling partner Rachael Marsden.

“This is the opportunity of a lifetime,” Dixon said.

“It is incredibly exciting and it will be amazing to set the world record.”

This summer, the pair will have to cycle up to 100 miles a day to cover 18,000 miles across five continents within 320 days, which Dixon acknowledged will be “tough”.

Catherine and Rachael are also using their cycling challenge to support charitable causes: Oxfam and the Motor Neurone Disease Association.

Baker U-turns by telling all UTCs they could survive by joining multi-academy trusts

University Technical Colleges are being pressured to join multi-academy trusts after the programme’s architect Lord Baker U-turned on previous warnings that they will be “watered down” if they do.

FE Week can reveal that Lord Baker and academies minister Lord Agnew wrote to principals and chairs of all UTCs last month urging them to join a MAT.

It marks a dramatic shift from Lord Baker, who said last year he didn’t want UTCs “watered down, and that is the danger if they get into a MAT”.

We believe that membership of a MAT is an important way to help UTCs succeed

Critics have said the U-turn is a “desperate measure” to “salvage” the embattled programme.

UTCs, technical providers that recruit students at age 14, have been besieged by problems since they launched in 2010.

Many have struggled to recruit adequate student numbers and a run of poor Ofsted grades has caused reputational damage.

The letter from Lord Baker and Lord Agnew reads: “In most cases, we believe that membership of a MAT is an important way to help UTCs succeed. This will help to ensure that a UTC has a strong educational offer, as well as aiding recruitment and financial stability.

“Taking a UTC into a MAT will enable the MAT to extend its offer and provide a wider range of choices to their pupils.”

Geoff Barton, general secretary of the Association of School and College Leaders, said the U-turn “smacks of desperate measures in an attempt to salvage a policy which was always bound to struggle” because of the “obvious incoherence” in the 14 to 19 age range.

More than £63 million has been spent on eight UTCs that have closed or announce closure since 2010.

There are currently 50 open UTCs. Twenty are already a part of a multi-academy trust, including all five that rebrokered earlier this academic year.

But there are concerns about whether the UTC brand will survive.

UTC Cambridge rebranded as the Cambridge Academy for Science and Technology when it joined Parkside Federation Academies (now known as Cambridge Academic Partnership) in 2017, because “so many people in our local community didn’t know what UTC Cambridge stood for”.

In May last year, Sir Charles Kao UTC changed its name to the BMAT STEM Academy when it joined the Burnt Mill Academy Trust, based in Harlow in west London. Two other UTCs that joined MATs have already or plan to widen their provision to admit year 7 students.

UTCs that fall into trouble are also being ordered to join MATs.

In March last year, Bolton UTC was told it must join a “strong” multi-academy trust and improve its finances after a government investigation found financial mismanagement and poor governance.

Bolton UTC has not yet joined a MAT. However, accounts for last year, published this month, state: “The current opportunity to rebroker the UTC into a MAT is now a DfE requirement for UTCs and we are in advanced discussions with a potential MAT.”

Taking a UTC into a MAT will enable the MAT to extend its offer

Kevin Courtney, joint general secretary of the National Education Union, said the “pressure now being applied on UTCs to join multi-academy trusts is clear evidence that this is a flawed and failed policy”.

The Department for Education said it was “encouraging and supporting UTCs to join suitable MATs wherever possible, as this is beneficial to both parties”.

Michael Pain, chief executive of Forum Strategy, which represents MATs, said it was “paramount” for any trust considering taking on a UTC to undertake “extensive” due diligence.

He said trusts must be clear about how UTCs fit with their vision, as well as “both the immediate and longer-term implications in terms of resourcing, finance, and future viability”.

To add to the trouble at UTCs, the chief executive of the Baker Dearing Trust, which is behind the programme, announced this week he is stepping down.

Charles Parker will leave the top position in August and be replaced by Simon Connell, the trust’s current development director.

Ofsted slams civil service apprentices scheme for inappropriate management courses

A provider that trains civil servants has been slammed by Ofsted for putting science graduates on apprenticeships that are a rebadge of its old commercial management courses – with no thought for if they need the training.

The Business Portfolio (UK) Limited (TBP), which teaches 32 apprentices employed at the government-owned National Nuclear Laboratory (NNL), received “insufficient progress” ratings across the board in its first monitoring visit after winning a funding contract in 2017.

“Directors do not use the apprenticeship funding appropriately,” inspectors said.

Directors do not use the apprenticeship funding appropriately

NNL acknowledged to inspectors that the apprenticeship on offer is “broadly aligned to courses that TBP previously delivered commercially and that can now be funded through the apprenticeship levy”.

And apprentices “rightly” acknowledge the learning is not at a high enough level for their job role.

It comes a week after the National Audit Office warned that levy-paying employers are replacing graduate training schemes with apprenticeships.

“There are risks that the programme is subsidising training that would have happened without government funding,” it said.

In December, Ofsted chief inspector Amanda Spielman also raised concerns about graduate scheme rebadging, with levy funds being spent on higher level apprenticeships at the expense of young people on lower levels.

TBP has been the NNL’s training provider since 2017, with one person assigned to deliver the apprenticeship training for the laboratory, which is governed by the Department for Business, Energy and Industrial Strategy.

All apprentices are working towards a level 5 leadership and management programme.

Inspectors found TBP does not take account of prior learning, which is a breach of Education and Skills Funding Agency (ESFA) rules.

“Directors’ curriculum planning is poor,” Ofsted explained. “They give insufficient attention to apprentices’ previous training and career aspirations when designing the curriculum.

“Directors ensure that apprentices develop substantial new vocational knowledge, skills and behaviours.

“All apprentices study the same topics despite their previously acquired knowledge and skills.”

As a result, “too many” apprentices make “slow progress, despite their high achievements at university”.

The ESFA warned providers on Monday they could be audited to ensure apprenticeship courses take into account a learner’s prior learning, and reiterated that funding “may be recovered” if a provider is found not doing this.

Asked if the Department for Education was considering terminating TBP’s funding contract, a spokesperson said: “We will always take action to protect apprentices if a training provider is not fit for purpose.

“We are currently assessing Ofsted’s findings and will be in contact with the provider to set out the action we will be taking in due course.”

An NNL spokesperson said: “We are aware of the Ofsted report and are reading it carefully.

“Our aim is always to work with suppliers of the highest quality, and we will be discussing our future relationship with the Business Portfolio (UK) Limited in the near future.”

It would not be the first time an apprenticeship provider that trains government employees has lost its funding contract following a negative Ofsted monitoring visit.

All apprentices study the same topics despite their previously acquired knowledge and skills

Last November, Premier People Solutions Limited, which delivered apprenticeships to the Department for Work and Pensions, HM Revenue and Customs, and the UK Visas and Immigration service, had its funding terminated after inspectors warned its recruitment procedures were “not safe enough” and too many apprentices were prevented from receiving off-the-job training.

This was also an issue at TBP, where inspectors found its directors do not ensure apprentices receive their full entitlement to “frequent and high-quality” off-the-job training.

Ofsted also reported that directors do not have a clearly defined strategy to develop apprentices’ English, maths and ICT skills because they assumed, as the apprentices are all graduates, no further training was needed.

On top of this, TBP only has one designated safeguarding officer, a company director, but apprentices are unaware of this.

A small company, TBP only registers two people in its 2017/18 accounts and assets of under £22,000.

A spokesperson for the provider said: “We note the report from the Ofsted monitoring visit published this week and will work with all our partners, including the ESFA, to determine the way forward to ensure we deliver quality programmes for all apprentices.”

Boss of charity behind the UTC programme to step down

The chief executive of the organisation that is behind the troubled university technical colleges programme is stepping down.

Charles Parker, who has headed up the Baker Dearing Trust since 2012, will leave the top position in August.

He’ll be replaced by Simon Connell, the trust’s current development director.

The trust was set up by former education secretary Lord Baker in 2010 to promote and support UTCs – technical providers that recruit students at age 14.

Parker has been a key figure in driving forward the programme, which has grown rapidly but struggled to produce good results.

Many of the 14 to 19 technical providers have found it difficult to recruit adequate student numbers and a run of poor Ofsted grades has caused reputational damage.

Lord Baker, chair of the Baker Dearing Trust, said: “Charles was the central figure in establishing the network of University Technical Colleges.

“When he started not one had opened, now there are 50. This considerable achievement could not have happened without his persistence and professional management in building up a team.”

Parker will remain as an advisor to the senior leadership team on employer engagement, fundraising, and policy matters.

Lord Baker continued: “I am very grateful for all he has done – we worked well together and won against the odds. I am delighted that Simon has agreed to become chief executive.

“This provides the charity with continuity and a clear focus as the University Technical College programme is further embedded in the English school system.”

Connell has been the trust’s development director since 2016, after working as chief operating officer for Educate School Services Ltd, which he founded, and following a career in financial services.

Revealed: Apprenticeship employer fees to be halved from April 1 – no joke

The 10-per-cent fee that small businesses must pay when they take on apprentices will be halved from April 1, the chancellor has finally revealed.

In his Budget speech in October, Philip Hammond announced that the contribution non-levy paying companies pay towards apprenticeship training would fall to 5 per cent.

But since then no start date has been forthcoming leaving the sector and skills minister Anne Milton frustrated, and concerns have grown that small businesses may be putting off taking on apprentices until the change is made.

Today, during his Spring statement, four months after the announcement, the chancellor said: “To help small businesses take on more apprentices I can announce that I am bringing forward the £700 million package of reforms I announced at the budget to the start of the new financial year in April.”

The Treasury later confirmed: “From April 1st employers will see the co-investment rate they pay cut by a half from 10 per cent to 5 per cent, at the same time as levy-paying employers are able to share more levy funds across their supply chains, with the maximum amount rising from 10 per cent to 25 per cent.”

The Department for Education told FE Week that the 5 per cent contribution will also apply to levy-paying employers when their levy pot is empty.

The government predicts that cutting the co-investment in half will cost the Treasury an extra £70 million a year by 2022.

Mark Dawe, chief executive of the Association of Employment and Learning Providers said: “Our evidence was that employers were holding back on apprenticeship starts since the autumn budget announcement which might explain the overall falls happening again, so we welcome the fact that this measure is being introduced.”

He added: “Given the overall fall in numbers, there is a case for the low-end levy payers benefiting from the cut.”

 

Damning Ofsted visit finds provider not knowing who its apprentices are

A training provider has been heavily criticised for not knowing accurately enough who their apprentices are, in an Ofsted monitoring report which rated it ‘insufficient’ across the board.

Poole Hospital NHS Foundation Trust was today accused of failing to understand what constitutes a “high quality apprenticeship programme”.

Ofsted found that managers are “unable to provide accurate information on the numbers of apprentices who remain on the programme or their progress”.

Managers are unable to provide accurate information on apprentices who remain on programme

Inspectors also said that a few apprentices don’t even know what apprenticeship they are on and do not know when they are due to complete their programmes. As a result, “too many apprentices” have passed their planned end date due to lack of manager’s intervention.

The trust is the eighth provider out of 156 to be rated ‘insufficient’ across the board since Ofsted started monitoring new apprenticeship providers in August 2018.

Under rules from the Education and Skills Funding Agency, any provider with an ‘insufficient’ rating will be banned from taking on any new apprentices until the grade improves to at least ‘requires improvement’.

Poole Hospital NHS Foundation Trust started delivering apprenticeships in October 2017, after delivering healthcare diplomas for over a decade.

At the time of the Ofsted visit in February, there were 70 apprentices enrolled on a mix of framework and standards-based apprenticeship programmes. They are all working towards qualifications at level 2 and level 3 in healthcare support and adult care worker.

According to the regulator, leaders and managers at Poole Hospital Trust have failed to “gain a clear understanding of the additional requirements of an apprenticeship training programme”, and have not paid enough attention to the quality of teaching, learning and assessment and safeguarding of apprentices.

“As a result, the trust does not have the appropriate resources and processes in place to ensure that the programme is delivered successfully and safely,” the report found.

Managers at the trust were accused of having insufficient oversight of apprentices’ attendance for off-the-job training, despite liaising effectively with ward managers to plan the off-the-job training during times of high pressure in the hospital while ensuring that patient care is not compromised.

Inspectors also found leaders have failed to implement appropriate governance arrangements for the apprenticeship programme, and managers and leaders do not have sufficient oversight of the quality of training.

In addition, leaders do not plan and manage the programme effectively, while managers do not collect, analyse or use data sufficiently well to inform their curriculum planning or to drive improvements.

However, the regulator found the majority of apprentices develop “substantial new practical skills” and make an effective contribution to the trust early in their programmes.

“Apprentices display professionalism and maturity in their roles, and most have aspirations to progress in their career within the healthcare sector,” the report said.

“They enjoy their jobs and have pride in their work and role as a healthcare professional.”

Additionally, they were found to receive “useful on-the-job training” and to gain good practical skills and knowledge while working on the wards with medical staff.

Jon Harding, head of organisational development and education at Poole Hospital NHS Foundation Trust, said: “Poole Hospital is highly regarded for the career development of its staff.

“We note the Ofsted report published this week and will be working with all our partners, including the Education and Skills Funding Agency, to determine the way forward so that we can ensure the quality of the learning experience for all the apprentices on programme.”

Apprenticeship framework certification boss steps down with immediate effect

The managing director of the Federation of Industry Sector Skills and Standards (FISSS) has stepped down with immediate effect, FE Week can reveal.

Mark Froud has left the federation, which represents the 21 sector skills councils across England, after six years at the helm.

In an email seen by FE Week, the FISSS independent chair Dame Julie Mellor said: “Mark Froud will be leaving the Federation at the end of March 2019 and will be on leave until then. 

“The chair and board wish him well in his next endeavour and thank him for his time and undertakings on behalf of the business across the last six years.”

FE Week asked FISSS why Froud was leaving immediately, but it would not provide any further comment.

Mellor added that the board has already started looking for his replacement.

Sector skills councils are employer-led organisations who work with over 550,000 employers to define skills needs and skills standards in their industry, according to FISSS’ website.

FISSS verifies whether apprenticeships have been completed successfully before handing out certificates, but lost responsibility for issuing certificates for completed apprenticeship standards in 2017.

This was due to the Deregulation Act of 2015, which introduced apprenticeship standards and made the business secretary responsible for issuing certificates, a responsibility which could be delegated.

For apprentices on frameworks, providers still need to apply to FISSS for certificates, although the last of these are expected to be handed out in 2021/22.

Froud was previously chief executive of Sussex Enterprise and Lancashire Enterprise, as well as principal policy consultant for the Policy Research Institute.