NCG has been in the headlines lately, what with the visits from Ofsted, its falling achievement rates, mass redundancies, strike action and the closure of the free school it sponsors. FE Week senior reporter Billy Camden sat down with the group’s new chair, once the ESFA’s chief executive, Peter Lauener to discuss why he took the job, potential future expansion, and those falling standards.

 

Why did you take the role?

“I think the NCG model is very interesting. It has grown now to six colleges and two training providers (see map) after recently bringing on Carlisle College and Lewisham Southwark College, which was a big, big change.

“It changed from something that felt manageable in the old system into something that needed a new way of managing.

“There was opportunity for a different approach that said ‘we can operate more sufficiently across a large group and we can do that to save money which can be ploughed back in to improving front-line services’.

“We wanted to be tight nationally on finance, with autonomy locally on quality and the curriculum offer. I found this model intrinsically interesting and I liked the idea of it being fairly new and there was an opportunity to help formulate things.

“We think the model has saved around £2 million in the network of colleges, through savings on back office work.”

 

 

Standards have dropped across the group over recent years. Has leadership taken its eye off of frontline learning to focus on expansion?

“In some cases standards are slipping because of the changes in apprenticeships that have affected all parts of the sector.

“There have also been restructures at Newcastle College where we had to reduce the size because learner numbers were falling. It takes a while to get things back in focus but we think we’ve laid the base for quite rapid improvement over the next couple of years.

“The expansion has happened and we now have a sizeable group. We need to realise our potential and shift focus to improving standards.

“There were significant financial problems in Carlisle and Lewisham Southwark College which our leadership had to focus on, and Newcastle was having redundancies.

“So it was not that people weren’t looking at the quality, but inevitably there are other problems that need to be sorted and you have to sort the financial issues to move forward.”

 

NCG is expected to receive a ‘requires improvement’ rating from Ofsted in its upcoming report. What is the group doing to improve?

“The corporation feels it needs to do two things: a review of governance and a new drive on standards.

“We’re improving governance arrangements and how we put local and national views into effect. We want people to share expertise and experience across the group from Lewisham to Carlisle.

“We are also clear that standards are not where we want them to be and I would be surprised if the Ofsted inspection doesn’t confirm that.

“The important thing is we want them to improve and we have a lot of the right building blocks in place after restructuring and are expecting standards to improve rapidly. That is going to be our driving focus over the next several years.

“This is about our journey back to ‘outstanding’.”

 

Does NCG have any expansion plans?

“There is no point growing if we are not delivering on standards so we need to improve those first.

“I wouldn’t say we are too large but we are at a level where we have no plans to grow until we have gone through this next phase and consolidate the structures, and make sure governance is really working and address the standards.

“The group has had approaches from other colleges but we have not encouraged them.”

 

Ofsted is expected to criticise NCG’s leadership in its report. Do you have confidence in group chief executive Joe Docherty?

“I think Joe is a first-rate chief executive, and he has done an excellent job over the last couple of years. I am absolutely confident he is the right person to realise the potential of the organisation that he has helped to shape.

“Any restructuring is difficult and it is not a surprise that some people are not happy with it.

“I am confident Joe has the ambition, the nous, and the commitment.”

The number of colleges with financial warnings will nearly triple to 100 over the next 10 years, the government has estimated.

The Department for Education revealed the figure in its response to its insolvency regime consultation today, in which it urges all colleges with financial troubles to “fully familiarise themselves with the [new] insolvency procedures”.

There are currently 37 colleges with a published notice to improve for financial health.

The DfE estimates using “today’s assumptions” that over the first 10 years of the insolvency regime an additional 63 colleges “could meet the current triggers for a notice”.

“In the subsequent six years an additional 51 colleges may become in scope for intervention (using inadequate as a proxy as per current modelling assumptions). An additional 12 colleges may become in scope of a notice over the following three years (estimated based on current assumptions). Therefore a total of 100 colleges is estimated to be the ‘most likely’ / central scenario.”

These colleges would need to “ensure they were familiar with the insolvency regime procedures”, specifically they would need to know the “details of the regulations”.

The department is expected to pull the plug on exceptional financial support for colleges once the insolvency regime is introduced later this year, and it expects “all colleges to be working to make sure they get on a financially sustainable footing by the end of this financial year” while funds from the restructuring facility are still available.

But new arrangements will be put in place, a spokesperson said, which will be “centred round the new insolvency regime”.

In an exclusive interview with FE Week, the FE commissioner Richard Atkins said that colleges will continue to “occasionally get into difficulty”, and therefore they will need “some sort of funding to oil the wheels in these situations” to ensure stability and protect learners.

“I would have thought that something will need to be put in place, and I know there are people in the Department for Education looking at that at the moment,” he said.

David Hughes, chief executive of the Association of Colleges, pointed out that the DfE’s 100 figure may be “misleading and is certainly not intended to imply that 100 colleges are at risk of insolvency”.

He said the regime being introduced in itself is “not a bad thing”, but “the problem is that it is likely to come into effect at an historic low point in college funding”.

“The Children’s Commissioner just this week pointed out that 16- to 18 funding in 2019-20 will be at the same level in real terms as 30 years ago.

“That lack of funding has made running a college harder than ever, just at a time when colleges want to provide a full and rich curriculum and support for young people and adults.”

An eight-week consultation on the regime was launched in December and sought views from staff at general FE colleges, sixth-form colleges, local authorities, financial institutions and others from across FE, as well as insolvency practitioners.

“We recognise that some colleges may face financial difficulties in the future and we cannot rule out the possibility, however small, that a college could become insolvent,” skills minister Anne Milton wrote in the foreword.

“We therefore introduced primary legislation in the Technical and Further Education Act 2017 to create an insolvency regime for further education and sixth-form colleges.”

Scenarios requiring insolvency arrangements are expected only to be “rare”, and will only apply where colleges are in “severe financial difficulties and there is no alternative viable solution for managing the college out of that situation”.

Today’s consultation only received 30 formal responses. Additional comments were “recorded from discussions at a number of events and forums during the consultation period”.

The secondary legislation on the regime will be introduced “when the parliamentary timetable allows, and our current intention remains that the insolvency regime will be in force in late 2018”.

Low-level apprenticeships should not be rubbished by “commentators and policy makers”, the Association of Employment and Learning Providers has claimed in a new report.

The body wants ministers to use government spending and post-18 education reviews as an opportunity to “reverse the sharp fall in level two apprenticeships since May 2017”.

The apprenticeship levy is encouraging large employers to “prioritise higher and degree-level apprenticeships over intermediate levels”, it claims in a paper that hits out at people who believe level two is “not a proper apprenticeship”.

AELP’s boss Mark Dawe (pictured above left) said it is “extraordinary” how many government figures “don’t appreciate how significant level two attainment is for both the economy and the large proportion of young people who leave school without it”.

“The knowledge, skills and behaviours defined at level two are some of the most transformational in the apprenticeship suite of standards,” the paper states, and these are “vital starting points for the young, the inexperienced and the disadvantaged”.

AELP’s report takes aim at, among others, Tom Richmond (pictured above right), a former senior advisor to two skills ministers who now works for the Reform think-tank, who has been highly critical of many level two apprenticeships.

“If all apprenticeships are high-quality at level two, then we would expect to see the numbers increase, because it would be a genuinely attractive option for young people,” said the former advisor to Nick Boles and Matt Hancock.

“It is disappointing to see AELP refuse to acknowledge that some level two ‘apprenticeships’ are nothing more than low-skill, low-wage roles that have been rebadged as an apprenticeship to attract government funding.”

Reform strongly supports more apprenticeships in the service sector, but “too many level two programmes fall well short of international standards and simply would not be recognised as apprenticeships in other countries because they offer so little training”.

AELP believes government intervention is necessary because “the market alone will not incentivise” a reversal.

The proportion of level two apprenticeship starts has fallen below 50 per cent for the first time, according to exclusive FE Week analysis. It has dropped from a high of 65 per cent in 2013/14 (see table). The proportion of apprentices aged 25 has fallen below 30 per cent, from a high of 42 per cent last year.

Mr Dawe’s counterpart at Association of Colleges, David Hughes, said the AELP paper had asked “searching questions” about level two apprenticeships and agreed “there are some sectors where numbers have dropped significantly”.

“We have urged the government to refocus attention on its own definition of an apprenticeship as being for new job entrants,” he said.

Mr Hughes has previously suggested that apprenticeships should start at level three

“Where young people start a level two apprenticeship, the aim should be to get them to level three at the minimum,” he said.

“Level two apprenticeships are helping people to train and progress in their careers,” said apprenticeships minister Anne Milton. “In fact, we have seen nearly 174,000 starts on apprenticeships at levels two and three in first half of 2017/18.”

She wants to “improve the quality of apprenticeships across the board”, by replacing old-style frameworks with new employer-led standards “from level two right up to degree or masters level”.

The Institute for Apprenticeships also weighed in, and claimed it supports “the development of all high-quality apprenticeships at levels two to eight”.

“The Institute sees high-quality apprenticeships as crucial routes in helping young people reach their potential, providing excellent career development, as well as retraining opportunities later in life,” it said in a statement.

T-levels will be watched for “potential for losses and fruitless payments” according to the comptroller-general at the National Audit Office.

Sir Amyas Morse has turned his eye towards the new post-16 technical qualifications after a rare ministerial direction published last month.

The education secretary Damian Hinds last month refused to delay the initial 2020 rollout of the upcoming technical qualifications despite a request from his permanent secretary, Jonathan Slater.

The NAO is automatically informed of all ministerial directions, and it advises the chair of Public Accounts Committee on whether action is necessary.

Sir Amyas wrote to PAC chair Meg Hillier on June 7, and she has told FE Week her committee is planning on grilling Mr Slater about the issue in two weeks’ time.

In his letter, the comptroller-general said he had “no concerns at present” that the department is using public funds “irregularly” in delivering T-levels.

But he will “monitor future spending and consider the potential for losses and fruitless payments arising from T-levels as part of my audits of the department”.

“I have asked my staff to discuss with department officials the reasons for the permanent secretary seeking the ministerial direction, and the plans and risk management arrangements in place to introduce T-levels from 2020,” he added.

“I will then be in a position to decide whether I should undertake any further work on this now.”

Sir Amyas also informed Ms Hillier that should she “wish to ask Jonathan Slater about this matter, he will next appear before the committee on 25 June to give evidence on Ofsted’s inspection of schools”.

Ms Hillier confirmed she would be present to quiz him, in his role as the DfE’s most senior civil servant.

“There are certainly a lot of concerns over the viability and potential for value for money of T-levels,” she said. “They are a nice idea with young people in industry from the beginning, like a super-duper apprenticeship with more education than work, but it is going to be practically quite challenging.”

She added that there is currently no planned PAC inquiry into T-levels but that could change “depending on what the permanent secretary says”.

Ministerial directions are formal instructions from ministers telling their department to proceed with a spending proposal, despite an objection from their permanent secretary.

The DfE published Mr Hinds’ direction on May 24.

“As things stand today, it will clearly be very challenging to ensure that the first three T-levels are ready to be taught from 2020 and beyond to a consistently high standard,” wrote Mr Slater a week before.

As the DfE’s accounting officer, he is required to “consider the regularity, propriety, value for money and feasibility of public spending”.

“If these were the only considerations, you are aware that I would advise deferring the start date to 2021 in order to mitigate the feasibility and consequential value for money risks.”

Despite these concerns, Mr Hinds insisted he would be sticking to the 2020 start date for the first three T-levels, claiming that none of the advice he had received “has indicated that teaching from 2020 cannot be achieved”.

T-levels have been designed as match for A-levels.

They were originally intended to begin in 2019, but in July last year the skills minister Anne Milton announced they had been put back to 2020.

A subsequent announcement in October revealed that pathways in just three subject areas would go live in the first year, with the remaining subject routes launched by 2022.

But the full roll-out of T-levels has now been delayed until September 2023 after concerns were raised about the planned pace of the scheme, particularly by the Confederation of British Industry.

Three financial health notices and two breaches of minimum standard college reports have been published by the Department for Education.

It was double-trouble for Easton and Otley College, rated ‘inadequate’ by Ofsted’, which received one of each and has been told to stop recruitment of learners in some areas.

The other financial health notice was given to Havering College of Further and Higher Education, while the minimum standards notices to improve were for Morley College and Prospects College of Advanced Technology.

The proportion of leavers below the minimum standard threshold for Easton and Otley’s adult education is 49.2 per cent,

The ESFA now requires the college to “suspend the recruitment of learners on the learning aims listed in red text in Schedule B, with the exception of Access to HE; and Functional Skills and GCSE maths and English”, and “withdraw from all 19+ education and training subcontracting arrangements that have reported provision below the ESFA minimum standard”.

The funding agency also requires the college to “not enter into any new subcontracting arrangements until such time that you have demonstrated, to the ESFA’s satisfaction, that the quality of subcontracted provision has improved and you have improved the monitoring of delivery by sub-contractors”.

The college must also work with the ESFA and the FE commissioner to make the “required changes and improvements, as they deem appropriate” regarding its finances.

“The college must prepare and share with the ESFA the revised financial recovery plan within four weeks of the receipt of this letter.”

Havering College’s notice brings it into scope of FE commissioner intervention, meanwhile.

It must prepare a financial recovery plan “that will give the ESFA sufficient confidence that the actions planned will bring about sufficient and sustained improvements”, on the basis of being a standalone entity.

The recovery plan should aim to secure the college’s financial position by demonstrating a financial health grade of at least ‘satisfactory’ for two successive years.

It was announced last month that Havering College and the neighbouring Havering Sixth Form College are in talks about merging with New City College – a move which would create one of the largest college groups in the country.

PROCAT, which found a merger partner this week after it was told it would struggle to survive as a standalone institution by the FE commissioner, has shockingly bad achievement rates.

The ESFA said the proportion of leavers below the minimum standard threshold for its adult education is 83.6 per cent.

The funding agency now requires it to “suspend/withdraw from all 19+ education and training subcontracting arrangements that have reported provision below the ESFA minimum standard”.

“We also recommend that you inform learners funded through advanced learner loans and bursary that you have failed the ESFA’s minimum standard for 19+ education and training,” it added.

PROCAT, which already has a financial notice to improve, must also “produce an improvement plan that demonstrates immediate action will be taken to bring about significant and sustained improvement to the 19+ education and training provision that failed minimum standards”.

Morley College is required to also produce an improvement plan, after the ESFA found the proportion of leavers below the minimum standard threshold to be 47 per cent.

Its action plan should be “sufficient to improve provision to meet minimum standards in 19+ education and training provision that failed in 2016/2017 when the QAR data for 2017/2018 is published”.

The metro mayors overseeing skills budget devolution have joined forces to demand control of apprenticeship levy cash that employers fail to spend.

The devolved adult education budget will come into effect from 2019/20.

In a joint statement, they insisted that with Brexit approaching it is more important than ever to ensure local workers have the right skills.

“We recognise the government’s efforts to reform the skills system and applaud its ambition to see three million apprenticeships by 2020,” they wrote. “However, the reality is that the number of apprenticeship starts has dropped sharply.

We call on the government to give us the flexibility we need to address these issues, specifically by granting city regions control of the apprenticeship levy funding which levy-payers do not spend

“With that in mind, we call on the government to give us the flexibility we need to address these issues, specifically by granting city regions control of the apprenticeship levy funding which levy-payers do not spend, and by further devolving control of 16-to-19 skills policy.

“We also call on the government to provide additional funding for us to ensure that there are enough quality providers in our city regions, and to drive the quality of apprenticeships.”

Large employers have been forced to pay the levy since it was launched last year.

The money goes into a pot which they have two years to claim back to spend on apprenticeship training, but concern is growing that many will not be able to spend this in time.

London’s mayor wants even more powers over apprenticeships funding and devolution powers.

“In London, I want to go even further, and for London’s whole contribution to the apprenticeship levy to be ringfenced and devolved to spend on meeting the capital’s complex skills needs,” said Sadiq Khan.

It emerged last week that employers have used just 10 per cent of their levy funds in 12 months after it was introduced.

In London, I want to go even further, and for London’s whole contribution to the apprenticeship levy to be ringfenced and devolved to spend on meeting the capital’s complex skills needs

The education minister Lord Agnew admitted to Parliament that between May last year and the end of this April, levy-paying employers “drew down £207 million from their apprenticeship service accounts for new starts”.

This amounts to just a tenth of the ring-fenced budget set by the government “regardless of how much levy receipts are each year”.

The government had hoped the levy would force more employers to invest in training, and help it hit its manifesto target of three million apprenticeship starts by 2020.

But starts have actually fallen since its launch: it emerged today that apprenticeship starts for March are down 52 per cent compared with the same period in 2017.

The directly-elected regional mayors met in Liverpool to back the joint statement and discuss their devolution plans.

It is understood that taking part were Andy Street representing the West Midlands, Tim Bowles for the west of England, Andy Burnham for Greater Manchester, Sadiq Khan of London, Ben Houchen for Tees Valley, and Steve Rotheram for Liverpool.

James Palmer of Peterborough and Cambridgeshire, and Dan Jarvis for Sheffield were unable to attend but signed the statement.

Mr Burnham wants more powers over apprenticeships and the incoming T-levels.

“With the Whitehall machine creaking under the strain of Brexit, it’s time that ministers gave devolved regions the chance to get on,” he said.

“Further devolution to allow a less fragmented post-16 skills system with clear and attractive choices for young people, including apprenticeships and T-levels, would go a long way to connecting residents and businesses with the growth of Greater Manchester.”

Apprenticeships and Skills Minister Anne Milton said: “Our reforms to the apprenticeship system are about increasing the number of quality apprenticeships in this country to give people and businesses the skills they need to thrive. To do this we have put employers at the heart of designing the new apprenticeship standards and we have seen a big increase in people starting on our new, higher-quality apprenticeships.

“Levy funding is already, quite rightly, fully devolved to employers – giving  them direct control so they can invest in high quality training, to suit the needs of their business.”

 

Pic from left: Ben Houchen, Andy Street, unknown, Sadiq Khan, Steve Rotheram, unknown, Tim Bowles, and Andy Burnham