ESFA to ‘review’ rules on subcontracting fees and charges

Subcontracting fees and charges will be reviewed to ensure government funding is being used for “recognised costs”, the Education and Skills Funding Agency has revealed.

“In the coming months, we will be reviewing… aspects of the subcontracting funding rules,” it said in its announcement, published online last night.

This includes “subcontracting fees and charges, so that we can be assured that our funding is being used for recognised costs”.

Any subsequent changes to subcontracting rules will come into force from August.

The ESFA also “believes it’s important that government funds are not diverted away from training and assessment in the form of fees and other charges”.

The priority is to “make sure that the main and subcontracted providers both add value to the employer’s apprenticeship programme”.

FE Week has exposed many situations in which cash meant for learning has been diverted to third-party brokers who fix deals between prime providers and subcontractors, and examples of primes levying excessive management fees of up to 40 per cent.

The government had already promised to crack down on brokering, which can see subcontractors charged up to five per cent of total their contract funding in commission.

The Association of Employment and Learning Providers has also demanded reforms to “ensure the need for brokerage is eliminated”.

The apprenticeship training provider funding rules for 2017/18 is now on its sixth version, yet it still includes no direct references to subcontracting fees or charges.

Paragraph P91.16 does however rule out using apprenticeship funding for “managing agents”, “brokerage” and “procurement registers or opportunities to secure business”.

But as reported by FE Week in January, there is a loophole that permits charges that aren’t included in the negotiated levy price.

Even the civil service has launched a brokerage charge to recoup millions of pounds in apprenticeship levy payments.

Providers who want to train government apprentices were told to register with the Crown Commercial Service, which is a government agency representing the Cabinet Office.

But a group of 16 given access to at least £360 million funding learned last month that CCS will retain a one-per-cent “management fee” on any apprenticeships that they deliver.

We also found two examples last year in which the NHS attempted to charge providers around one per cent of the value of their contracts in brokerage schemes. Such one-per-cent brokerage charges could reach up to £2 million across the country.

Nottingham city council was found attempting a scheme on similar lines last summer.

Subcontracting management fees have caused added controversy by reaching as much as 40 per cent, a figure infamously levied in some cases by Learndirect.

Lead providers often claim the fees are needed to cover administrative costs, but many in the sector, including MPs on the education committee led by chair and former skills minister Robert Halfon, believe that too much money is being diverted from frontline learning. 

The AELP, Holex, and provider group Collab signed-up last month to new best-practice guidance on relationships between primes and subcontractors.

These state that management fees should not be more than 20 per cent of the programme funding. However, it was quickly undermined when the Association of Colleges confirmed it would not commit to any recommended limit.

It claimed it was developing other guidance “properly” with the ESFA and University Vocational Awards Council.

Repayments deferred to next April for loans scandal victims

Debt repayments from hundreds of victims of an FE loans scandal have been deferred for another 12 months.

FE Week has been coordinating a campaign to have the advanced learning loan debt written off for blameless former learners whose training providers folded unexpectedly and who have been unable to finish their courses – often leaving them owing thousands of pounds.

The government still refuses to cancel the loans outright, but the Student Loans Company has now deferred repayments until April next year.

Political and sector leaders at the #SaveOurAdultEducation campaign launch

“Following instruction from Department for Education, we have written to those students affected advising that their repayments have been deferred for the tax year 2018/19,” said a spokesperson.

Repayments had already been delayed for 12 months until the end of March 2018, under the pressure exerted by our #SaveOurAdultEducation campaign.

FE Week reported last September that just 112 of the 344 students affected by the collapse in 2016 and 2017 of John Frank Training, Edudo, and Focus Training, had been transferred to other providers.

As of February this year, just 17 more had been found alternative providers.

This means that the rest still have loans debt, some of which have topped £8,000, but no prospect of completing their qualifications.

A further 10 learners were left in the lurch when a fourth provider went bust in the summer of 2016, FE Week has learned.

The Education and Skills Funding Agency said it has “no record” of learners from Pursuit Training Ltd transferring to other training providers to complete their course.

The letters confirming the latest 12-month deferment were only sent to former learners last month.

Shadow skills minister Gordon Marsden has been lobbying the government to write the loans off through Parliament, and insisted this must still happen.

“Whilst this action is a start, it is not acceptable as a proper solution to what has happened to these learners,” he said.

Asim Shaheen and another aggrieved former learner Mussarrat Bashir

“It still leaves them with uncertainty and worries over what happens with their loans, which the DfE has still failed to address or write off.”

FE Week has been demanding action since January last year. Asim Shaheen, 50, is one of the former John Frank Training learners who was unable to complete his qualification but who still owes £8,000.

The ESFA offered to send him to South Cheshire College to complete his training at the time, but this wasn’t viable because it is over 20 miles from where he lives.

He still feels that he has been “left completely in the lurch” and thinks the ESFA and SLC should have updated him and other former learners much earlier on what was happening with their loans for the upcoming financial year. “There’s no way that we should not be left with loans if there’s nothing to show for it,” he added.

Anne Milton: The restructuring facility won’t be used to prop up colleges

The government has put up £300m to keep struggling colleges on their feet, but it’s not a hand-out for failures, writes Anne Milton

FE Week readers will know that a strong further education sector can change the lives of both young and older people. I want to do what I can to make the sector more resilient, which means helping providers prepare for future changes and rise to the new challenges ahead.

We need colleges to be financially secure and able to reinvest in learning and improving quality. The structural changes that have followed area reviews are the foundation for improvement – through greater efficiency and stronger leadership. The expanded remit for the FE commissioner, the introduction of the Strategic College Improvement Fund and National Leaders of Further Education will now bring a broader focus and greater support to raising standards – working with some of the most outstanding current college leaders.

The area review programme, and the structural changes that followed are proving to have a big impact. Our programme has identified places where FE providers would benefit from long-term structural change – and thanks to the hard work of colleges and local partners during reviews, many recommendations have already been implemented, including 42 mergers to date.

Throughout this process our priority has been making sure colleges have good leadership, manage their finances well, and are on a firm financial footing for the future. This is essential if we want to deliver high quality FE provision for all.

I know that any change can be challenging and where colleges have needed to make major changes as the result of a review, which they cannot fund themselves, we have been providing extra funds. What’s important is that young and older people are able to get the high-quality provision they need to get on. The restructuring facility is there to help colleges become financially sustainable, often through a process of structural change. To date we have approved over £300 million of funding and spent over £150 million, supporting 19 significant applications, as well as providing compensatory VAT funding and transition grants for a wider group of colleges.

“Where colleges have needed to make major changes which they cannot fund themselves, we have been providing extra funds”

The facility has made the merger between South Cheshire College and West Cheshire College possible. WCC had experienced serious financial issues, having required exceptional financial support from the government for day-to-day spending and quality issues, not to mention a previous Ofsted rating of ‘inadequate’. The merger in March 2017 meant the combined 13,000 learners are now under one leadership team which has been recently judged ‘good’. This merger is providing a solid foundation for sustainable and high-quality provision across this region.

This funding is not about propping up failing colleges. Funding from the restructuring facility is only available after a rigorous assessment to help implement changes which will result in sustainable, effective institutions. Successful applicants have to show that they have developed a clear plan, with a realistic schedule for making this happen. This must include financial plans for the next three years, with realistic forecasts for student numbers and planned income, a clear curriculum plan which meets the needs of local employers and students, a staffing plan which reflects actual need, and a strategy for making best use of their buildings and facilities.

The window for applications remains open until September 28, and so we are not yet publishing detailed information about the previous allocations. By putting the FE sector on a sustainable footing we are making sure that people can benefit from a wide range of choice and quality education, wherever they live and whatever stage of life they are at. I look forward to sharing with you how the restructuring facility is helping to achieve this later this year.

We want to provide the right framework and targeted support to help colleges become resilient, well governed and high-quality providers. We are looking at the resilience and sustainability of the FE sector at the moment because we do understand the challenges colleges face. I want to make sure that we do all we can to help them thrive and succeed.

Carole Stott to step down as WorldSkills UK chair

Carole Stott will step down as chair of WorldSkills UK in the autumn, after more than five years in the role.

The former teacher, who was awarded an MBE in 2012 for services to adult education, has led the board through a period of “extraordinary change” ever since she took on the position in April 2013.

Team UK has placed consistently in the top 10 at international competitions during her tenure, and the Skills Show has grown from a legacy project of WorldSkills London to become the “largest and highest-profile fixture in the skills and apprenticeships calendar”, a spokesperson for WorldSkills UK said. 

“Along with merging two organisations to become a more effective and cost efficient single organisation unified under a coherent brand, with Carole’s guidance, WSUK has developed an ambitious long-term strategy to increase its impact for young people and the UK economy.”

With Carole’s guidance WSUK has developed an ambitious long-term strategy to increase its impact for young people

Ms Stott (pictured above) said it has been a “privilege” to serve as chair of the organisation.

As she enters her sixth year as chair, WorldSkills UK has decided to start planning for her succession now, aiming to make an appointment in the summer.

The spokesperson said the board will be looking for a chair with “strong business sector connections and influence” to “ensure that WSUK’s voice is relevant and heard by UK employers”.

She added that the new chair will take a leading role in the organisation’s plans for the next five years, as it looks to “change the national conversation, so that more young people enter vocational and apprenticeship career routes”.

“A crucial part of this will be ensuring more young people are inspired about the benefits of apprenticeships and technical careers which in turn will help us create a home-grown, productive and highly-skilled workforce that will continue to position the UK as a world-class destination for trade and investment,” she said.

Ms Stott added: “We have now set an ambition of helping 1,000,000 young people by 2022. As part of our new strategy, we want to change the balance of the board to strengthen representation from business stakeholders alongside leaders from the education and skills sector.

“This is why we want the new chair to come from a business background to lead the next stage of our development.”

Ms Stott is also stepping down from her role as chair of the Association of Colleges – a position she has held since January 2013. Alongside her other jobs, she is currently chair of City of Bath College.

WorldSkills UK runs regional and national skills competitions, including the annual Skills Show. It takes a selection of the winners from these competitions to compete internationally against others from all around the world in WorldSkills.

The most recent one was held in Abu Dhabi last year, where Team UK retained its top-10 position, with competitors bagging one gold, three silvers, three bronzes and 13 medallions of excellence.

Third early monitoring report a success – but provider targeted isn’t ‘new’ to apprenticeships

Ofsted’s third early monitoring visit to a new levy-funded apprenticeship provider has uncovered a “clear focus” on delivering high-quality training.

However, it is the second of the three reports to focus on a company that is not a total newcomer to apprenticeships.

Inspectors visited Jigsaw Training, which featured on the government’s subcontracting register for 2016/17 as J & S Blackhurst.

It had a subcontract worth almost £2 million with grade two-rated Mitie Group last year, but it has now fallen under the gaze of Ofsted inspectors because it became a prime-contract independent training provider in May 2017.

Directors and senior leaders “have set a clear strategy to focus on delivering high-quality training to apprentices employed in the facilities-management sector”. They were however “aware that a few apprentices are not released on a regular basis from their job and of the adverse impact that this has on their progress”.

This first of this new wave of monitoring reports, which came out in March, heavily criticised Key6 Group, for having provision that was “not fit for purpose”.

The second, into London College of Apprenticeship Training, was more positive – though this might have been expected as it has a longer track record: it was set up in 2014 and was operating as a subcontractor until the apprenticeship levy came in last May.

Many thought that these new early monitoring visits were introduced in response to mounting concern about the proliferation of largely untested providers, following significant apprenticeship reforms.

Chief inspector Amanda Spielman announced last November that Ofsted would conduct early monitoring visits at new providers which appeared on the government’s register of training providers, so as to sniff out “scandalous” attempts to waste public money.

A spokesperson for the inspectorate subsequently explained that while these could include “totally new providers”, they would also cover “those who have previously been subcontractors, and those who have provided other forms of education and training in the past but ceased to be directly funded”.

Today’s report said that inspectors had intervened “as part of a series of monitoring visits to a sample of new apprenticeship training providers that are funded through the apprenticeship levy”.

Since becoming a levy-funded provider, Jigsaw Training had “strengthened the management team” and “set high expectations” of staff.

The company was formed in 1997, and inspectors recognised that “for the past 14 years it has specialised in providing apprenticeship training for workers in the facilities management sector”.

There were 281 apprentices enrolled and funded through the apprenticeship levy at the time of last month’s visit.

Mitie is an outsourcing company based in Scotland. It got a grade two in May 2016, and according to the report, it “has held a work-based learning contract since November 2008 and subcontracts all aspects of its provision to Jigsaw Training.”

Today’s report recognised “an ambitious vision to be an outstanding provider of apprenticeships to develop new talent and build a highly skilled workforce for the facilities-management sector”.

The majority were enrolled on frameworks in facilities services, with 35 studying new standards in property-maintenance operative, team-leader supervisor and facilities management.

Bosses have in recent months “identified accurately the majority of weaknesses that exist” and “implemented a number of changes to practices to bring about improvements”.

For example, senior leaders recently created an apprentice logbook so that off-the-job training can be recorded accurately.

Apprentices also receive regular visits and reviews from their tutors.

There was concern that “not all employers and apprentices” have a sufficient understanding of the 20-per-cent entitlement to off-the-job training.

“We welcomed the Ofsted monitoring visit, we found it rigorous and included a high level of scrutiny,” said a representative from Jigsaw. “While we recognise that there are areas for improvement most of this was already within our improvement plan and progress was underway.

“Overall we are pleased we our progress and remain absolutely committed to becoming an outstanding provider.”

DfE launches consultation ahead of college campus performance reporting

The government has launched a consultation on proposals to “strengthen” public reporting on performance for colleges which are in groups and have multiple sites.

Running for nine weeks, the consultation comes ahead of a new college campus identifier which could pave the way for campus-level inspections at mega-colleges.

It seeks views on two proposals.

The first is on the introduction of separate performance reporting for colleges that are part of a group.

“That would mean that performance information was available for all colleges, irrespective of whether they were part of a group or not,” a spokesperson for the Department for Education said.

Secondly, it wants options for separate reporting for delivery sites that are part of the same college.

“That would provide greater transparency on the quality of local provision, alongside performance information relating to the college as a whole,” the spokesperson said.

The consultation web page explains that changes in the “structure of the sector” have “implications for how well the existing performance reporting system now works, including the information that is available to learners, support for local accountability, and quality improvement”.

It says this consultation is focused on supporting the existing educational performance measures, such as achievement rates, progress measures, learner destinations and outcomes. It does not propose any changes to the measures themselves.

The DfE said other, non-educational performance measures, such as financial indicators, are not in scope of this consultation. No changes are proposed to the current system for allocation of funding.

The new college campus identifier will be introduced into individualised learner records from 2018/19. Its intention is to “allow identification of provision delivered across the various sites of merged institutions”.

This new identifier could lead to campus-level inspections at mega-colleges from as early as next year, and would allow for reports on colleges that were previously independent, but which now sit within merged groups.

The nation’s largest college group has welcomed the change. Joe Docherty, the chief executive of Newcastle-based NCG, said moving to inspections of individual campuses was a “logical next step” that the group would “strongly welcome”.

Today’s consultation proposals apply to both general and specialist FE colleges, as well as sixth-form colleges. It closes on June 10.

Army recruits: IfA boss appoints his second-in-command

The Institute for Apprenticeships has appointed another military man as its second-in-command, following a “fair and open competition”.

Robert Nitsch CBE, the army’s director of personnel for the past three years, will take on the role of chief operating officer in the next few months, the institute announced today.

The IfA’s chief executive Sir Gerry Berragan, a former adjutant general in the army, said he had worked with Mr Nitsch in previous roles and “know that he will an excellent fit for the post”

“He brings a wealth of senior leadership and practical experience of optimising performance to the Institute,” he said.

“I’m absolutely delighted to have been selected to join the IfA at such a pivotal time in the evolution of technical education,” Mr Nitsch said.

“I look forward to joining the excellent team at the Institute and contributing to the delivery of this great endeavour.”

Mr Nitsch joined the army in 1983, and worked his way up to become director of personnel for the army in June 2015.

Other senior army roles included general officer commanding support command from August 2013, director of manning and chief employment officer from June 2012, and chief of staff to the adjutant general from April 2011.

He was named CBE in the New Year’s Honours in 2014.

Sir Gerry was appointed chief executive of the IfA in November last year, having previously served as a board member since January 2017.

He revealed in an interview with FE Week in January that he’d been selected without competing directly against any other candidates, and as such had been appointed for just a two-year period.

His army career included a period as director general personnel from February 2011 to August 2012, before his appointment as adjutant general.

Both role were based in Andover, as were Mr Nitsch’s roles at the time.

The role of chief operating officer is new, and follows the departure of former deputy chief executive Mike Keoghan at the end of January.

It comes with an annual salary of around £120,000, according to the candidate information pack.

Mr Nitsch, who will report directly to Sir Gerry, will be responsible for the daily operation of the IfA, and will oversee six deputy directors.

Institute for Apprenticeships boss blasts AELP for ‘inflammatory’ end point assessment concerns

The boss of the Institute for Apprenticeships has hit out at the Association of Employment and Learning Providers for being “inflammatory” for repeatedly raising concerns over apprenticeships without end point assessment organisations (EPA) in place.

The accusation by Sir Gerry Berragan (pictured above), made this morning at an event in London to mark the first anniversary of the apprenticeship levy, prompted an immediate response from AELP boss Mark Dawe.

Speaking exclusively to FE Week he said: “The government and the agencies keep swerving the question on the true picture of EPA and external quality assurance arrangements being actually able to deliver and the great majority of EPA organisations are working blind.” 

“Never in a million years would the current position be accepted for A-levels and GCSEs.”

At FE Week’s Annual Apprenticeships Conference last month, Sir Gerry said that 99.1 per cent of apprentices due to undertake EPA in the next 12 months were on standards with at least one organisation in place to deliver the final exams – statistics he is understood to have repeated at this morning’s event.

He promised the IfA and the Education and Skills Funding Agency were “on the case” to resolve the issue for the remaining 0.9 per cent of apprentices to ensure they are able to complete their apprenticeships.

But Mr Dawe pointed out at the time that simply having an EPA organisation in place wasn’t enough.

“We know of many EPA organisations registered but not yet ready to deliver, and the external quality-assurance above them also not ready,” he said during the Q&A session that followed Sir Gerry’s conference speech.

FE Week analysis found almost a third – or 77 out of 253 – of the standards currently approved for delivery by the IfA have no registered EPA organisation.

Of these, 21 have been approved for more than a year, and six have been waiting for more than three years.

Many of these standards have already had starts – such as the level three fire emergency and security systems standard, which has had more than 300 starts since it was approved in August 2016, but which still doesn’t have a single EPA organisation in place. 

This morning’s exchange took place at the launch of the first annual Apprenticeships Anthology, which included reflections on the first year of the levy from skills minister Anne Milton among others, hosted by Queen Mary University London.

Sir Gerry was responding to a question from Paul Warner, AELP director of research and development.

Mr Warner asked Sir Gerry why apprentices had been allowed to start on standards with no EPA organisations in place, and what steps the IfA was taking to address the issue.

In response, Sir Gerry was reported to have said that neither the apprentices nor their employers considered it a problem, and that AELP was “being inflammatory in consistently raising the issue”.

Speaking to FE Week after the event Mr Warner said that – far from being inflammatory – the issue was “a point of considerable importance, not least to the apprentices concerned”.

“I think it’s perfectly reasonable to ask the guy in charge of the IfA how did we get here and what are you doing to address it, and I was rather surprised to hear him take the tone he did. I don’t think it’s entirely helpful,” he said.

Sir Gerry was also reported to have said that many AELP members had been making “healthy profits” from apprenticeship frameworks, but that they had to “accept that the days of frameworks are long since over”.

Mr Dawe said it was “disappointing” to “hear the IfA trying to throw the blame back on others when many providers are desperate to move on to standards, which aren’t in place yet, from frameworks that are now unviable”.

“Too many standards are simply not ready and the approvals process must speed up.” 

College restructuring support update: £300m for 19 ‘significant’ applications approved

The government has approved more than £300 million to cover the cost of implementing post-area review changes, although the skills minister insisted this cash will not be “propping up failing colleges”.

The figure, which amounts to around 40 per cent of the £726 million on offer, was revealed in the latest Education and Skills Funding Agency progress report on the restructuring facility, published today.

According to today’s announcement, 29 colleges have applied for restructuring support, and a further 29 applications have come from 31 sixth form colleges to cover the costs of converting to academy status.

It confirmed what skills minister Anne Milton has said in her latest exclusive column for FE Week, also published today.

“To date we have approved over £300 million of restructuring facility funding and spent over £150 million, supporting 19 significant applications, as well as providing compensatory VAT funding and transition grants for a wider group of colleges,” she wrote.

The minister denied that the cash is being used as a bailout fund.

“This funding is not about propping up failing colleges,” she claimed. “Funding from the restructuring facility is only available after a rigorous assessment to help implement changes which will result in sustainable, effective institutions.”

Successful applicants must have “a clear plan” along with a “realistic schedule for making this happen”.

Today’s announcement doesn’t give any details of which colleges have received the cash nor how much.

The Department for Education is “not yet publishing detailed information” about successful bids while the application window is still open.

“By putting the FE sector on a sustainable footing we are making sure that people can benefit from a wide range of choice and quality education, wherever they live and whatever stage of life they are at,” Ms Milton explained.

“I look forward to sharing with you how the restructuring facility is helping to achieve this later this year.”

FE Week has previously reported on a number of colleges in dire straits that have received multimillion-pound handouts from the fund.

These include Lambeth College, which was expecting a whopping £25 million to pay off its exceptional financial support and bank loans, according to its 2016/17 accounts.

And struggling Telford College of Arts and Technology received £21 million for its merger with New College Telford – a sum that came in the form of a grant, according to its accounts.

The restructuring facility, first announced in March 2016, is part of a package of support for colleges to help them implement recommendations arising from the area reviews, or other structural changes such as a merger brokered by the FE commissioner.

The cash, usually available as a loan, comes from a pot amounting to £726 million.

The deadline for applications was originally six months after a college’s final area review meeting.

But in November last year, two months after the last deadline passed for colleges in the final wave of reviews, this was extended until September 2018 – with the funding available until March 2019.

The Department for Education denied that this meant the fund had failed, even though just 10 colleges had been allocated a combined total of £120 million to date.