There is “clear risk” that the apprenticeship programme is not financially sustainable after the average cost of training an apprentice hit double what the government predicted, the National Audit Office has warned.

The concerning message came in a critical report published today, which said the Department for Education should assess making controversial decisions about reducing the level of public funding for certain types of apprenticeship.

In December, the Institute for Apprenticeships and Technical Education estimated that the apprenticeships budget for England could be overspent by £0.5 billion this year, rising to £1.5 billion during 2021/22.

Spending on the programme could rise to more than £3bn once frameworks are withdrawn

The problem – which comes despite the volume of starts dipping – is the result of higher per-start funding than first predicted, largely driven by the sharp rise in management apprenticeships with high prices, which FE Week was first to warn of in 2016.

Today’s National Audit Office (NAO) report confirms that employers are developing and choosing more expensive apprenticeship standards at higher levels than was expected, which is “absorbing” the public funding.

“The department has calculated that the average cost of training an apprentice on a standard at the end of 2017-18 was around £9,000 – approximately double the cost allowed for when budgets were set in 2015,” it said.

“The department projects that, even if starts remain at current levels, spending on the programme could rise to more than £3 billion once frameworks are withdrawn and all apprenticeships are on standards.”

The NAO said the DfE “recognises” there are ways in which it could seek to control spending if necessary. However, these are “likely to be unpopular and could damage confidence in the programme”.

Options, according to the report, could include: capping the spending of levy‑paying employers; limiting the number of apprenticeships available for non‑levy paying employers; and lowering the funding bands, as the DfE has already started doing through its controversial funding band reviews.

Last month, FE Week revealed that the non-levy funding for providers to train apprentices from small businesses had already started to run dry and some were having to turn apprentices away, but the government has no cash left in the system to ease the situation.

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

Just days later, during an interview with Association of Colleges chief executive David Hughes, skills minister Anne Milton said she would “look at whether it is right” for the government to “continue to fund all apprenticeships”.

Today’s NAO report again warned that levy-paying employers are replacing their professional development programmes – for example, graduate training schemes in accountancy or advanced courses in management – with apprenticeships.

“In such cases, there is a risk that the additional value of the apprenticeship to the economy may not be proportionate to the amount of government funding,” it said.

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

The report concludes: “Given these concerns, the department has some way to go before it can demonstrate that the programme is achieving value for money and that resources are being used to best effect.”

Mark Dawe, chief executive of the Association of Employment and Learning Providers, said his organisation has been warning for two years that higher level apprenticeships offered by the levy payers would “consume the levy to a much greater degree than the government anticipated but no notice was taken”.

He added that the NAO’s overspend figures “confirm why a separate budget is needed for SMEs’ apprenticeships”.

Meg Hillier MP, chair of the influential Public Accounts Committee, said she will hold a hearing on March 25 to quiz the DfE’s permanent secretary, Jonathan Slater, on the apprenticeships programme following the NAO’s report.

Milton said: “The apprenticeship programme gives employers the opportunity to provide new and existing staff with a range of opportunities to gain skills in the workplace and makes sure we have long term investment in apprenticeships.

“The number of people starting training on our new employer designed standards is rising year on year and we will continue to work with employers to help them develop their apprenticeship programmes. Apprenticeships enable people to get a great job and career, and give employers the skilled workforce they need.”

Nearly half of all colleges and schools with sixth forms have had to reduce student mental health and careers support this year due to crippling 16 to 19 government funding cuts.

The concerning finding, revealed in a new funding impact survey of 278 schools and colleges by the Sixth Form Colleges Association, is a substantial increase on what was reported last year and comes despite the government making both areas key political priorities to improve on.

The survey also found that over three quarters of respondents do not believe the amount of funding they will receive next year will be sufficient to provide the support required by disadvantaged students.

We will not be able to provide any more mental health and tutorial support

The SFCA’s research was conducted on behalf of the twelve organisations behind the Raise the Rate campaign, which is calling for the base rate for all 16 to 18 year old students to be increased from to £4,760 in the upcoming spending review, after being stuck at £4,000 for the last five years.

The association said the chancellor’s spending review is “make or break” for sixth form education.

FE Week spoke to two colleges struggling with the financial constraints to find out how they are being impacted on the ground.

Mike Hill, principal of Carmel College in Merseyside, explained that he has been forced to cut the college’s careers department and foundation learning department for students with learning difficulties down from a five-day offer to just four days.

“It has also been really difficult for us to offer permanent contract to staff in the learning support teams because funding is changing not only each year but also within the year, which means we are constantly having to let people go,” he said.

“We now have to wait for students to appear, work out the funding and reappoint people. It has been really, really challenging.”

He added: “We are almost unable to offer any extracurricular support unless students are being funded externally. Offering students anything beyond their subjects has almost come to a halt now in colleges like ours.”

Limor Feingold, director of finance at Brockenhurst College, told FE Week that his college’s funding for disadvantaged students support is set to be been reduced by £180,000, or 40 per cent, next year.

“This means we will not be able to provide any more mental health support and tutorial support than we already do even though our student numbers might be growing,” he said.

Feingold added that the college has been forced to cut wellbeing support services costs and career advice by £80,000 to meet its budget requirements this year.

The SFCA survey said the extent of cuts to student support services has been “more noticeable” overall than in the previous academic year.

It found that the number of schools and colleges that have reduced mental health support has leapt from 32 per cent to 48 per cent, employability skills from 25 per cent to 41 per cent and careers guidance from 28 per cent to 41 per cent.

A previous FE Week investigation found that colleges are increasingly sending students with serious mental health issues to accident and emergency, due to lack of other options as a result of substantial reductions in funding in other years.

Today’s funding impact survey also found that 81 per cent of schools and colleges are teaching students in larger class sizes, 68 per cent moved from a four subject A-level offer as standard to three, and 46 per cent have reduced delivery hours of individual courses.

Bill Watkin, chief executive of the Sixth Form Colleges Association said: “Today’s report makes it absolutely clear that the government must increase the funding rate for sixth form students in this year’s spending review. And this increase must go well beyond meeting the rising costs faced by schools and colleges.

“If we are to keep key subjects on the timetable, offer a wide range of extra-curricular experiences, and provide the essential support activities that our young people need and deserve, the government must raise the rate to at least £4,760 per student, per year.”

The National Audit Office has today published its report into whether the government’s apprenticeships programme is providing value for money.

It is the second report by the NAO into apprenticeships since 2016, but the first since the introduction of the levy.

FE Week has the report’s main new findings:

 

1. ESFA has ‘limited assurance’ the 20% off-the-job-training rule is being complied with

The NAO said the Education and Skills Funding Agency, in summer 2018, had just one “red risk” associated with delivery of the apprenticeship programme – that apprentices do not spend at least 20 per cent of their time doing off-the-job training.

Its report said the ESFA “does not yet have an effective way of identifying where apprentices are routinely receiving less training than they should”.

“The ESFA’s audits may identify problems, but there is scope for providers to under-deliver for some time without this being picked up,” the NAO added.

“This is an important gap in oversight, as training providers are paid as long as apprentices remain on the programme.”

 

2. DfE’s apprentice targets for under-represented groups ‘lack ambition’

The NAO said the Department for Education is “on track” to meet two of its diversity targets: the numbers of starts by black, Asian and minority ethnic (BAME) apprentices and by apprentices with a learning difficulty, disability or health problem.

However, these targets are “not stretching”.

“For example, the target for starts by BAME apprentices (11.9 per cent) is lower than the working‑age BAME population of England (14.9 per cent) and much lower than the proportion of BAME pupils at the end of key stage 4 (20.7 per cent).”

The report added that 19 per cent of working-age adults in the UK reported having a disability in 2016/17, compared with the 11.9 per cent apprentice target on learning difficulties, disabilities and health problems.

 

3. Introduction of standards has increased higher level apprenticeship starts

In 2017/18, 12.8 per cent of starts were at level 4 or above, compared with 5.3 per cent in 2015/16, a trend that “looks set to continue”, the NAO said.

The department “considers that this change will encourage the types of apprenticeship that tend to deliver more value, in terms of long-term wage return to the apprentice”, although the training for these apprenticeships “also tends to absorb more public funding”.

The report added that some levy-paying employers are replacing their professional development programmes with apprenticeships.

“In such cases, there is a risk that the additional value of the apprenticeship to the economy may not be proportionate to the amount of government funding,” the NAO warned.

 

4. Apprenticeship programme lacks productivity measure

The DfE has “improved” its performance measures but is still not transparent in how it demonstrates the impact of the programme on economic productivity, according to the NAO.

It said the department reports a “skills index” for the programme which “takes account of the impact on earnings of successfully completing an apprenticeship, which is an established way of calculating productivity gains”.

However, the department has “not set out how these calculations feed into the index, or what kind of increase in the index would constitute success”.

 

5. A third of apprentices trained by poor providers in 2017/18

Ofsted rated 58 per cent of the established providers that it inspected in 2017/18 as ‘good’ or ‘outstanding’ for their apprenticeship training, compared with 49 per cent in 2016/17, the NAO report said.

These providers were “generally training larger numbers of apprentices”, which means “around two-thirds of the apprentices recorded at the time of inspection were being trained in ‘good’ or ‘outstanding’ providers”.

Ofsted’s monitoring visits to 118 new apprenticeship provider in 2018 found that more than a fifth of them were making ‘insufficient progress’ in at least one of the areas examined.

 

6. Apprenticeship assessment arrangements need fixing

The assessment arrangements are “incomplete” for some standards, which “increases the risk that people with different and possibly inadequate skill levels may pass their apprenticeship”, the NAO said.

Its report reiterated what FE Week has been warning for years, that not all apprenticeship standards have an end-point assessment organisation in place, and many have only one.

“Stakeholders raised concerns with us that, as growing numbers of apprentices finish their apprenticeship under a standard, there may be insufficient capacity to carry out assessments, leading to unnecessary delays or inconsistency,” the NAO said.

 

7. Long-term financial sustainability of the apprenticeship programme is at ‘risk’

The NAO’s biggest warning focused on potential overspend of the apprenticeship programme.

It said there is “clear risk” that the programme will not be financially sustainable after the average cost of training an apprentice hit double what the government predicted.

Click here to read the full story.

 

Concluding the report’s findings, Amyas Morse (pictured), the head of the NAO, said: “Despite making changes to the apprenticeships programme, the department has not enticed employers to use available funds or encouraged enough potential recruits to start an apprenticeship. It has much more to do to meet its ambitions.

“If the department is serious about boosting the country’s productivity, it needs to set out clearly whether its efforts are on track to meet that aim.”

A college surviving on government bailouts faces an uncertain future after being dumped at the eleventh hour by its merger partner.

City College Southampton principal, Sarah Stannard, had already made plans to stand down before Eastleigh College pulled the plug after failing to secure government cash to support the merger.

Despite the situation, Stannard has sought to reassure students, staff and parents that it is “business as usual” and claimed the college has support from officials to continue operations.

The Department for Education said it is “working with City College Southampton to ensure learners aren’t negatively affected”.

City College Southampton, which is rated ‘requires improvement’ by Ofsted, has seen its financial health deteriorate to ‘inadequate’ in recent years.

It was relying on government cash as part of joining Eastleigh College, which is rated ‘good’ by Ofsted and is in a strong financial position, to secure its long-term future after seeing its first merger attempt with Southampton Solent University fall through in 2017, following a recommendation from the Solent Area Review.

The planned merger, which would have seen Jan Edrich, principal of Eastleigh, head up both colleges, was expected to be completed on March 31.

In September 2018 an application to the DfE’s Transaction Unit was made for an unknown amount of funding from the Restructuring Facility – a £726 million pot of cash that is used to support college mergers that closed in September.

But in a statement released by the principals of both Eastleigh and City College Southampton on Friday, it was revealed that the government rejected this bid.

The Department for Education has made clear that there will be no more long-term bailouts available to colleges following the introduction of the insolvency regime on January 31, which will allow colleges to go bust for the first time.

Eastleigh College told FE Week today that without the extra funding to support the planned merger the new college would not be financially sustainable.

City College’s accounts for 2017/18 warned that if this second merger failed, it would “require a standalone application to be approved to ensure it is able to continue operations into 2019/20”.

The accounts also state that the college has £6.1 million of loans outstanding with Santander on terms negotiated in 2009, which has 16 years remaining.

The college’s “forecast” show that one of the loan covenants will be breached, requiring the entire loan to be repaid in a single year. The accounts go on to say: “Santander has verbally stated it will not take any action on the College as it continues to work towards a merger”.

It is not known if Santander will now recall the loan following the collapse of the merger.

The City College Southampton accounts also stated that it has agreed with Santander a £500,000 ongoing overdraft facility, “however this is insufficient to cover the expected cashflow shortfall occurring during January, February and March 2019” and an application for an unknown amount of exceptional financial support from the DfE has been approved “enabling the college to continue in operation in the short term”.

They said that if the merger “does not proceed the college will need to seek additional long term funding from the ESFA in order to remain in existence in the long term”.

A DfE spokesperson said: “‎All bids for funding from the Restructuring Facility fund are assessed through a rigorous governance and approval criteria including whether a college is financially sustainable in the long term.”

Sarah Stannard, principal of City College Southampton, told FE Week today: “I’d like to reassure students, staff and parents that it’s business as usual for City College and all courses are being run as normal.

“The government has assured us that they are committed to ensuring further education provision in Southampton and we now have an opportunity to explore other options as to how the college moves forward.”

Both Eastleigh and City College declined to reveal how much funding the colleges had requested from the restructuring facility, but said the FE Commissioner has now been asked to carry out a review of the options for securing further education provision in the Southampton area.

City College Southampton teaches around 5,000 students. Its 2017/18 accounts show that its cash deficit deepened from £257,000 to £585,000, and its total comprehensive income was just £1.3 million.

The national finalists of the AAC Apprenticeship Awards 2019 were recognised and celebrated at a special reception at the Houses of Parliament today.

Around 150 people packed into the Terrace Pavilion for the event, which also coincided with the start of the 12th annual National Apprenticeship Week.

The awards event was sponsored by the chair of the education select committee Robert Halfon, who received last year’s Lifetime Achievement Award.

Addressing the finalists today, he said: “There’s a massive amount of work to be done and policy changes to be had but having an event like this isn’t just a nice event in the Houses of Commons, it is unbelievably important for apprenticeships.

“What this does is say we believe in the prestige of apprenticeships in our country. We want to build a skills nation and make sure every young person can climb the education and skills ladder of opportunity.

“All the award nominees are change makers, so thank you to all the providers and organisations who are here today.”

Mr Halfon added: “If we do this together and carry on it won’t just be a few small steps it will be a giant leap for apprentice kind.”

Managing director of FE Week publisher Lsect, and chair of the judging panel, Shane Mann, said: “The majority of you here today are individuals celebrating the very best in the apprenticeship sector in the UK.

“Today is about celebrating and recognising your achievements.”

Also speaking on stage was Mark Dawe, chief executive of the Association of Employment and Learning Providers, which co-runs the awards with FE Week.

“We’ve got the best of the best here when it comes to apprenticeships so it really does feel like a launch of National Apprenticeship Week,” he said.

“This is what it’s about. It’s about celebrating providers and recognising their excellence.”

More than 350 entries were submitted from colleges, training providers and employers for the awards, which are in their second year and run by FE Week and the Association of Education and Learning Providers.

Andy Bates, chief financial officer at Gloucestershire College, up for outstanding contribution award at #Apprenticeshipawards19 tells us how excited he is to be here today pic.twitter.com/To6y7hkQGw

— FE Week (@FEWeek) March 4, 2019

There are now two types of awards: Route Apprenticeship Provider of the Year and National Awards.

The former will celebrate excellence in 13 individual apprenticeship routes, and winners will be named ‘apprenticeship provider of the year’.

Organisers have also introduced an award to recognise employers and providers work with SEND apprentices and increasing diversity.

@RemitSueP tells us how great it has been to celebrate Remit’s nomination as SEND apprenticeship champion at #apprenticeshipawards19 pic.twitter.com/RJmpfNFZYe

— FE Week (@FEWeek) March 4, 2019

Winners of all awards will be announced at a glittering ceremony during the Annual Apprenticeship Conference Gala Dinner on March 28 at the ICC in Birmingham.

The awards are part of the Annual Apprenticeship Conference, which is run in partnership with the Department for Education and will take place from 27 to 28 March at Birmingham’s ICC.

Pictured: Representatives from In-Comm, Gen2 and Abingdon and Witney College receive their finalist certificate

 

AAC Apprenticeship Awards 2019 shortlist (click here to enlarge)

The Department for Education has today ruled out demands for employers to be given more time to spend their apprenticeship levy funds.

The decision comes as the 24 month deadline approaches in May and after the Institute for Apprenticeships and Technical Education warned there could be an imminent levy overspend.

In its ‘Nursing degree apprenticeships – in poor health’ report, the education select committee recommended that the government should double the time employers have to spend their levy funds to 48 months, as this would allow the NHS to develop more apprenticeship standards to train apprentices on.

The DfE responded today and explained that the 24 month expiry period for apprenticeship funds was “set at the time” the levy was developed and launched in May 2017, “having been extended from 18 months in response to employer feedback”.

The funds expire on a monthly, “first in first out” basis, meaning NHS employers will only see one month’s worth of funds expire in May 2019 if they have not spent these funds in the previous 24 months.

The response then said the DfE has “no plans” to extend this expiry period, “which was agreed with HM Treasury in order to support the Department for Education to manage its budgets and limit financial liability should vast amounts of funding remain sitting unused in employers’ accounts”.

In November, FE Week revealed that the Institute for Apprenticeships and Technical Education estimated there could be a £500 million overspend on the apprenticeship budget in 2018/19.

When quizzed about this in January by FE Week, skills minister Anne Milton said she “thinks” the apprenticeship budget will be “alright until July”.

The warning of a levy overspend came just before training providers began reporting that they were having to turn small employers away as their non-levy funding has run dry and the government has no more to dish out.

The issue, which one sector leader described as “market failure”, came just weeks after the Department for Education launched a new campaign to drive up the number of apprenticeships in England.

The concern over a levy overspend is expected to feature in the National Audit Office’s report into whether the apprenticeship programme is offering value for money, which will be published on Wednesday in the middle of National Apprenticeship Week.

Adult and community learning providers have come out the best from this week’s Ofsted reports as two improved to ‘good’ and one ‘inadequate’ council was found making ‘significant progress’.

It has been a mixed bag elsewhere, with seven grade three reports and five grade two reports.

Bromley London Borough Council upped its Ofsted grade to ‘good’ after inspectors the proportion of learners who achieved accredited qualifications has improved “dramatically” in 2017/18, with most of the improvement being down to learners on English for speakers of other languages courses.

Managers have made the monitoring of subcontractors more efficient and have terminated contracts where the outcomes for learners for adults with fragile mental health were not good enough and value for money was not maintained.

Blackpool Unitary Authority also improved from grade three to a two.

There is a “high standard” of teaching, according to the report, with tutors using information they collect about learners’ starting points to plan learning.

However, managers were found to be not using data well enough to inform their priorities. For example, managers did not identify the difference in the outcomes for learners who have a learning difficulty or disability.

Sunderland City Metropolitan Borough Council, also known as Sunderland City Council, made significant progress in four out of six areas of the monitoring visit after receiving a grade four last year.

Inspectors commended the adult and community learning provider for improving safeguarding measures, as well as for implementing a ‘Prevent’ duty action plan.

Managers have also improved their use of information to evaluate the quality of teaching, assessment and learning.

“For example,” inspectors wrote, “managers identified a significant gap at a number of subcontractors between the overall achievement of learners and the proportion of learners who achieved their qualifications within the allocated time.

“This enabled managers to direct the subcontractors to tackle the reasons for the slow progress of some of their learners.”

The College of West Anglia, an FE college, scored a grade two on its first inspection since being banned from entering into subcontracting arrangements in August.

This latest result is an improvement on its previous grade three from 2017. Inspectors wrote how leaders and governors ensure “students and apprentices can progress through higher qualification levels and can develop good skills for employment”.

The college’s senior leadership has recently revised the arrangements for the management and monitoring of subcontractors, which inspectors remarked were now “effective”.

After the ESFA’s counter fraud investigation in 2018 found the college did not know where their subcontracted provision was taking place, Ofsted has reported the college staff now visit subcontractors to enrol all students and managers have increased the number of unannounced quality assurance visits.

Richard Taunton Sixth Form College, a 16-19 academy, did not fare as well. It picked up a grade three on its first inspection.

South Bank Engineering UTC performed just as well: it scored a grade three on its first inspection as well.

Inspectors wrote: “Teachers do not routinely check what pupils and students in the sixth form know and can do. They do not always plan activities that challenge or support gaps in pupils’ and students’ knowledge or understanding.”

Many students also failed to achieve their A-levels.

South Wiltshire UTC was found to have a fit for purpose statement of action and action plan following a grade four report last year.

Trinity Specialist College Ltd improved from a grade three to a grade two.

Inspectors wrote that senior leaders have “successfully rectified most of the areas for improvement from the previous inspection”.

It was a mixed week for independent providers, with many making reasonable progress in areas of their monitoring visits, while others scored grade three in Ofsted reports.

ACE Training and Consultancy Limited maintained its grade two. But APM Learning and Education Alliance Limited, NDA Foundation Limited, Watertrain Limited, YH Training Services Limited and Catch 22 Charity Limited were all rated grade three.

Watertrain had been suspended from taking on new apprentices after it was found making ‘insufficient progress’ in a monitoring visit report last year. This ban has now been lifted owing to its grade three.

Total Training Company (UK) Ltd made ‘insufficient progress’ in meeting the requirements of successful apprenticeship provision, but made reasonable progress in the other two areas.

Cilex Law School Limited made reasonable progress in all three areas of their monitoring visit, as did Fit UK Training & Education Ltd.

Employer provider EJ Markham Ltd, which trades as Markerstudy Limited, made ‘reasonable progress’ in all three areas of its inspection.

GFE Colleges	Inspected	Published	Grade	Previous grade
The College of West Anglia	07/01/2019	27/02/2019	2	3

 

Sixth Form Colleges (inc 16-19 academies)	Inspected	Published	Grade	Previous grade
Richard Taunton Sixth Form College	22/01/2019	27/02/2019	3	N/A

 

Independent Learning Providers	Inspected	Published	Grade	Previous grade
ACE Training and Consultancy Limited	15/01/2019	25/02/2019	2	2
APM Learning and Education Alliance Limited	29/01/2019	26/02/2019	3	3
NDA Foundation Limited	22/01/2019	27/02/2019	3	N/A
Total Training Company (UK) Ltd	23/01/2019	28/02/2019	M	M
Watertrain Limited	14/01/2019	26/02/2019	3	N/A
Cilex Law School Limited	19/01/2019	25/02/2019	M	M
Fit UK Training & Education Ltd	17/01/2019	25/02/2019	M	M
YH Training Services Limited	21/01/2019	27/02/2019	3	3
Catch 22 Charity Limited	29/01/2019	26/02/2019	3	2

 

Adult and Community Learning	Inspected	Published	Grade	Previous grade
Bromley London Borough Council	15/01/2019	27/02/2019	2	3
Sunderland City Metropolitan Borough Council	22/01/2019	26/02/2019	MM	MM	SSSSRR
Blackpool Unitary Authority	22/01/2019	01/03/2019	2	3

 

Employer providers	Inspected	Published	Grade	Previous grade
E J Markham Ltd	16/01/2019	27/02/2019	M	M	RRR

 

Other (including UTCs)	Inspected	Published	Grade	Previous grade
South Wiltshire UTC	29/01/2019	28/02/2019	M	4
South Bank Engineering UTC	22/01/2019	28/02/2019	3	n/a

 

Specialist colleges	Inspected	Published	Grade	Previous grade
Trinity Specialist College Ltd	30/01/2019	27/02/2019	2	3

Providers are fuming at the Education and Skills Funding Agency after officials started conducting short-notice mystery audits in the wake of the 3aaa scandal, FE Week can reveal.

In what appears to be the second major investigation into achievement rate data at FE providers in the past ten years, the agency began carrying out a significant number of data reliability checks at providers in February.

They’re understood to have been prompted by ESFA’s concern at the unpublished results of the qualification achievement rates for 2017/18, as well as its investigation into disgraced apprenticeship firm Aspire Achieve Advance (3aaa). The company went bust in October after the government pulled its skills funding contracts following allegations of fraud.

They would not say what they were looking for and haven’t been in touch since

It is understood the agency will soon write to the whole FE sector expressing concern over data gaming, just as Geoff Russell, then-chief executive of the Learning and Skills Council, infamously did in 2010.

FE Week has spoken with numerous providers who have experienced the new audits, which have all followed the exact same format.

They were given two days’ notice to hand over up to 100 apprentice files – dating back to 2015/16. Staff from ESFA’S provider risk and assurance team and its counter-fraud team then turned up onsite to go through the files.

After two days of working through the files they left, without taking away any of the material. Providers were not told what they had been looking for, nor anything about what the officials found.

One provider, who was angered by one of these audit visits, and who did not wish to be named, told FE Week: “The ESFA staff refused to say why they needed to audit a huge number of apprentice files. This was also the experience of other providers we have spoken to.

“They would not say what they were looking for and haven’t been in touch since they spent two days reviewing the files. Gathering so much paperwork for them with just two days’ notice took a significant amount of resource, and to not tell us why really makes me angry.”

FE Week understands that since the demise of 3aaa the ESFA has found that significant sums of funding was paid for learners at the provider that should have been withdrawn.

This inflated not only the company’s funding, but also their achievement rates – something that almost resulted in a second ‘outstanding’ rating from Ofsted last May.

FE Week understands the ESFA is now urgently looking into whether other providers have inappropriately taken funding and boosted achievement rates for apprentices, misusing reporting of withdrawals as well as the way they recorded breaks in learning and transfers.

The agency has now closed a loophole relating to the coding of transfers.

When asked about the mystery audits, including their scope and purpose, an ESFA spokesperson would only say that the agency’s “priority” is to “protect learners and ensure public money is being used effectively by training providers and these checks are a key part of our assurance process”.

He added: “As recent cases have demonstrated, if we find evidence of any wrongdoing we will not hesitate to take appropriate action.”

The audits took place in February as this is the window between providers giving feedback on provisional 2017/18 qualification achievement rate data and the date on which it becomes final.

It is understood that providers with what is considered to be suspicions or unreliable data will be excluded from the official figures when they are released later this year.

Writing in his weekly update on Thursday, Association of Employment and Learning Providers boss Mark Dawe warned his members that the ESFA is “looking at the data far more closely, running various reports to check integrity and also coming to the provider for clear evidence”.

He added there will be “less tolerance for ‘mistakes’ and no tolerance for potential manipulation”.

This all comes at a time when Ofsted is turning its focus to providers’ “integrity” during inspections.

 

The shaky history of achievement rate data

Achievement rate data has been an increasing cause for concern among ESFA officials in recent years.

In early 2017 the agency admitted to a “loophole” relating to breaks in learning in its calculation for 2014/15, which, until it was closed “artificially”, boosted the rate for around 10 per cent of providers.

Later in 2017 the ESFA attempted to hide the botched data by publishing revised national achievement rate tables for 2015/16 for individual providers but without comparable figures for previous years, which are needed to give any kind of indication of providers’ progress.

Activities in 2010 were a response to circumstances at the time

But following a call for an investigation into the agency’s failure to be forthcoming with the necessary data, the ESFA U-turned and eventually released the comparable figures.

And in the 2015/16 achievement rate data some providers, notably the biggest college group in the country, NCG, were absent from the tables owing to what they claimed were “data glitches”.

After being omitted, Ofsted delayed its inspection into NCG as the inspectorate couldn’t analyse the group’s achievement rates. When Ofsted eventually went knocking in 2018 it downgraded NCG from ‘good’ to ‘requires improvement’.

And during the course of its enquiries into the now-defunct 3aaa, Ofsted admitted to FE Week that the inspectorate didn’t visit providers with big falls in achievement rates because they had “limited resources”.

The ESFA’s audits appear to be a re-run of what happened 10 years ago, which led to Ofsted doing their own data checks ahead of inspection, but which stopped only a few years later.

In 2009 the Learning and Skills Council – the predecessor organisation to the Skills Funding Agency – along with Ofsted, the Data Service and the Information Authority looked into “suggestions that data manipulation goes beyond routine data cleansing to improve the accuracy of the data”.

They concluded: “Some of the practices identified at the fact-finding visits have led to an artificial increase in success rates.”

Geoff Russell then wrote to the sector (see here) to “ensure this practice ceases with immediate effect”.

FE Week asked Ofsted why it had stopped carrying out the data checks that it had introduced following the Russell letter, to which a spokesperson replied: “Activities in 2010 were a response to circumstances at the time. ESFA are responsible for the quality and reliability of provider data and they have been taking forward this role ever since.”

Asked if Ofsted plans to change its approach, such as returning to checking data, under the new Education Inspection Framework set to be released this year, the spokesperson said: “Ofsted inspectors pursue relevant lines of enquiry during inspection, and will continue to do so under the new framework.”

He would not say whether the education watchdog currently has full confidence in the credibility of official achievement rate data.