Two former professional footballers and two other men have been found guilty of scamming colleges out of £5 million in apprenticeship funding, through a con which involved “ghost” learners.

Mark Aizlewood (above right), who played for Wales 39 times in the 1980s and 1990s, and Paul Sugrue (above left), who played for clubs including Manchester City, Middlesbrough and Cardiff City, had the verdicts delivered today at Southwark Crown Court, following a five month trial.

Two of their former colleagues at the now-defunct provider Luis Michael Training, Keith Williams, 45, from Anglesey, and Jack Harper, 30, from Southport, were also found guilty on fraud charges.

Throughout the trial, the court heard that LMT used its well-known footballing names to defraud the taxpayer between 2009 and 2011 by persuading nine colleges to use it as a subcontractor, using cash they got from the government to deliver apprenticeships.

Sparsholt College came out worst off, having signed contracts worth more than £4 million, although not all of this money was handed over before the scam was exposed. 

Also involved were South Staffordshire College, Hopwood Hall College, Newbury College, Barnet College, Barry College, Leek College, Dearne Valley College and South Thames College.

Many of them were living the dream thinking they would be coaches for clubs like Manchester City – but it was a farce

The total value of all the contracts the colleges signed with Luis Michael Training was £5,188,355, of which more than £3.5 million was actually paid.

The losses were all reimbursed by the Skills Funding Agency.

For the con to work, LMT had to prove they had learners enrolled and ready to train. It did this in part by creating “ghost” learners – where the personal information of real people was used to claim apprenticeship funding. The use of their data was unbeknown to these “ghosts”.

Others actually enrolled, but they were vulnerable young people, most of whom were not in education, employment or training and had dropped out of school before 16.

A total of 3,008 learners, all aged 16 to 19, were hoodwinked in this way. Those enrolled were under the illusion that they were doing an apprenticeship in NVQ activity leadership, which would lead them to a career in football coaching.

Some were told that this was an accredited FA coaching scheme.

Using this lure of a career in football coaching, LMT even employed other high-profile former players, such as Welsh international Neville Southall, the Republic of Ireland’s Alan McLoughlin and Manchester United player Russell Beardsmore, as tutors to deliver some of the training.

The provider also used almost 150 professional football clubs as part of the scam, roping in big teams like Manchester City, Leeds United and Nottingham Forest.

They would receive a “facility fee” for employing the apprentices, often amounting to around £10,000.

When working at the clubs, the apprentices had tasks such as handing out match day programmes and sweeping floors – nothing to do with coaching.

“Many of them [the young people] were living the dream thinking they would be coaches for clubs like Manchester City and gain an NVQ – but it was a farce,” said a spokesperson for the Serious Fraud Office, which investigated the case.

The learners were having trouble putting food on the table for their families

The learners were meant to be given 20 hours of guided learning per week, but they actually received much less, with just two to three hours per week.

To give the impression that students had completed all academic aspects of the course, LMT used a number of young people on work experience from a school in Wales to complete tests learners had been supposed to complete, and filled in false learner comment reviews.

To persuade colleges to join agreements, the court heard that LMT forged due diligence paperwork and submitted false accounts purporting to show the provider had a history of trading profitably.

Of the millions of pounds claimed by LMT, Sugrue, 56, from Cardiff, took home the majority (£516,568), while Aizlewood, 57, from Aberdare, cashed £424,002.

The former stars were spending the money on day-to-day luxury items, such as Range Rovers, trips to Paris, and shopping sprees in Harrods.

In the meantime, the colleges were cash-strapped. Sparsholt in particular had to put off building programmes as a result of the financial loss.

The court heard that the learners, who were meant to be paid £95 in weekly wages but rarely received more than £10, couldn’t afford Christmas presents for their children because of the scam.

“We condemn the deliberate deceit and criminal actions of these fraudsters who have either admitted their guilt or been convicted and we hope this acts as a deterrent to others,” Tim Jackson, principal of Sparsholt College, said.

“The college is pleased to have fully co-operated with the Serious Fraud Office throughout this long and complex investigation and subsequent trial.”

He added that college worked “tirelessly” to ensure as many as possible of the affected learners were able to complete their apprenticeships.

“As an ex-international footballer, Mark Aizlewood knew the industry and how the system worked and his gravitas helped the company get in with colleges, football clubs and learners,” the SFO spokesperson said.

“As a result of the failure of Luis Michael Training, many of the learners were having trouble putting food on the table for their families.

“They then had to attend court and were nervous and scared of what that meant. Instead of transforming their futures, this ordeal had made many of them even more vulnerable.”

The Serious Fraud Office was made aware of the situation in 2011 and arrested the men in 2012, as reported by FE Week. They were finally brought to court in September 2017.

Two more men involved in the con pleaded guilty before the trial began.

These were Christopher Martin, 53, from Newbury, who pleaded guilty to two counts of conspiracy to commit fraud by false representation, and Steven Gooding, 53, from Bridgwater, admitted one count of the same charge, both in relation to the case.

All of the defendants found guilty are to be sentenced on February 26.

Robert Halfon is set to give the keynote address on the theme of social justice and skills at an event run by the Centre of Social Justice, the Learning and Work Institute, and the Open University on Monday morning.

The chair of the Commons education select committee will set out his vision for how FE and HE can help the economy grow and deliver social justice.

FE Week has highlighted six of Mr Halfon’s ideas for how this can happen.

1. Tapered levy payments for employers taking on disadvantaged apprentices

Mr Halfon – who has previously spoken passionately about the need to better support disadvantaged apprentices – will urge the government to be “smarter” about how the levy is used.

“We could, for example, introduce a taper allowing employers to pay smaller contributions if they develop apprenticeships for disadvantaged pupils, and if they address skills shortages,” he will say.

“Once we are clear about what works best, we could then make a powerful case for expanding the levy.”

2. Massive roll-out of degree apprenticeships

The former skills minister will repeat his earlier call for half of university students to be on degree apprenticeships – but also to propose a penalty for those universities that don’t offer them.

“There are currently just 11,600 degree apprenticeships. I hope that one day, half of all university students are doing them,” he will say.

He will urge the government to “ring-fence some of the enormous public subsidy that still goes to universities, so that universities can only draw down on this protected funding stream if they offer degree apprenticeships,” by way of incentive.

3. Functional skills not GCSE English and maths

He will add his voice to those of other major sector figures, including Mark Dawe, chief executive of the Association of Employment and Learning Providers, by calling for the controversial GCSE English and maths resit policy to be scrapped.

“FE can be a vital player in helping the current and next generation build the basic skills they need,” he will say.

“However, rather than swallow valuable resources by insisting on retakes for those who fail English and maths (with failure rates of over two thirds in each case), we should be offering these individuals functional skills courses to improve their basic literacy and numeracy.”

4. Better support for FE colleges to deliver higher-level and technical courses

“There is a strong need for intermediate skills,” Mr Halfon will say – rather than the “over-supply” of graduates that currently exists.

Instead, he will propose that colleges “which are ideally place to offer flexible and local options” should be “better supported and incentivised to deliver intermediate and higher technical courses”.

5. Universities as centres of technical excellence

The “graduate premium” – the extra money that a graduate will earn over their lifetime compared with a non-graduate – “varies wildly”, he will say – with some returns “paltry”.

As part of his plans for “rebalancing higher education” he will suggest that universities “that do not provide a good return on academic courses could reinvent themselves as centres of technical excellence”.

6. Clear routes from FE into HE

Mr Halfon will call for the creation of “clear routes” from FE into HE, which could be supported through “Next-step loans for individual higher education modules”.

“To build a continuum of learning, we must also make it easy for people to learn flexibly throughout their lives,” he will say.

Strict rules that apprenticeships cannot involve qualifications are set to be overturned next week, FE Week understands, potentially unsticking a series of standards held up for years by the ban.

The Institute for Apprenticeships is expected to announce that qualifications, such as technical certificates that show evidence of knowledge, will be considered in the future.

Both existing qualifications and those in development will be covered in the rule change, representing a significant U-turn on previous guidance.

It’s part of the IfA’s promise to make its process and policies “faster and better”, announced in December after skills minister Anne Milton admitted that “some oil on the wheels” was needed.

The change – revealed exclusively to FE Week by a source close to the IfA – will be welcomed by many across the sector.

Current rules state that, except in “certain specific circumstances”, standards “should not incorporate qualifications”.

Exceptions exist where a qualification is a “licence to practise”, where one is required for professional registration, or if an apprentice’s career would be held back without it.

Last summer the rules were tightened to include a bar on allowing employer groups to submit a standard for approval if it includes a qualification that’s still in development.

In December, the IfA promised it would clarify when qualifications can be included in apprenticeships, because current policy had “led to some unpredictable results”.

Minutes from a board meeting held earlier that month reveal an upcoming shift in the rules.

These indicate that the board agreed to proposals from a presentation on mandatory qualifications, but noted that “there needed to be effective communication on the changes to both trailblazers and relationship managers”.

The minutes also reveal that, for the first time, Ms Milton attended the meeting, held on December 6.

A spokesperson for the IfA confirmed that this had been the skills minister’s first meeting, but declined to comment on the nature of the changes, ahead of a February 6 briefing on its ‘Faster and Better’ programme.

Since the IfA became operational in April last year, the process of standard development appears to have slowed down.

The number of standards approved for delivery fell from 84 in 2016, to 63 in 2017, according to the IfA’s own figures.

In total, just 222 (42 per cent) of the current 531 standards approved for development are available for delivery.

In a wide-ranging interview in November, Ms Milton told FE Week that she understood “where the sticking points are, where we need to put some oil on the wheels” in the apprenticeships process.

“Anything that the IfA does, anything on standards, it needs to be quick and responsive,” she said.

Anthony Elgey, the general manager at MP Futures, which is responsible for the national occupational standards for the quarrying, mineral products and mining sectors, told FE Week he’d been “fighting from the very beginning” to have qualifications included in standards for those sectors.

These included qualifications that were required by the Health and Safety Executive for someone to be permitted to work unsupervised.

But despite it appearing to fit the IfA’s criteria for an exception to the general rule, Mr Elgey said he’d been told “flat out” by the IfA that “you either remove that qualification requirement or we will never approve it”.

Without frameworks or standards the sectors could use for the last four years, “we’ve been turning apprentices away,” Mr Elgey said.

Richard Longthorp, the lead for three agriculture standards, said the issue of qualifications had “delayed the finalisation of the standards by a good 18 months”.

He enlisted the support of agriculture minister George Eustice, who raised the issue in a meeting with then-skills minister Robert Halfon, but “they still kicked it out”.

Meanwhile, Sarah McMonagle, the lead for two master builder standards, said employers in her sector had hoped to develop a “rebranded, high-quality, all-singing, all-dancing qualification” to include as the existing ones weren’t up to scratch – “but were told no”.

Employers are not alone in lobbying on the issue.

In a briefing paper published in September, the Association of Employment and Learning Providers argued that their omission “could adversely affect portability and transferability, while making it difficult to make comparisons between standards of level and breadth”.

The return of qualifications to apprenticeships is at the heart of  the IfA’s ‘faster and better’ regime

The Institute for Apprenticeships, under the new regime of Sir Gerry Berragan, launched its assault against government red tape in December.

Under the heading “faster and better”, the IfA outlined a number of improvements it would make in 2018.

“We’ve always recognised some of the systems, policies and processes we inherited needed improving,” it acknowledged.

In addition to clarified qualification rules, it promised to work with the Department for Education to refresh policy in a number of areas, including occupation and standards criteria.

The institute committed to “developing a quicker and more transparent system for making funding band recommendations” aligned to a new approvals process, “to cut out unnecessary stages and make sure new apprenticeships are ready as quickly as possible”.

It’s also pledged to speed up the process of standards development, with new two-day workshops on offer “to complete the writing of standards or assessment plans from start to finish, saving about a third of the usual time”.

It also plans work with the groups so that “standards and EPA plans can be submitted and approved in parallel, saving about six weeks from the end-to-end process”.

Other promises included a simplified process for reviewing standards, fixed templates for drafting proposals, standards and assessment plans, “strong upfront support for trailblazers” and improved communications.

Enforcement measures should be introduced to make sure that 16-to-18-year-olds participate in education and training, a leading sector figure has said.

The controversial proposal, which would see parents legally bound to ensure their children’s attendance, has split the sector.

The boss of the Association of Colleges, David Hughes, has said the idea deserves “serious consideration”, but his counterparts at the Association of Employment and Learning Providers and the Sixth-Form Colleges Association have lined up next to the former schools minister David Laws to condemn it.

The proposal was made in report from the NCFE and the Campaign for Learning written by New College Durham principal John Widdowson, and entitled ‘Mending the gap: Are the needs of 16- to 18-year-olds being met?’

Its stand-out recommendation is for the government to extend the legal duty on parents, which currently applies for children aged under 16, to make sure learners participate in education and training until 18.

“Sanctions should be introduced as a last resort to ensure young people and parents support the duty to participate, not to criminalise young people, but ensure cases of non-participation are highlighted to ministers to stimulate necessary policy change,” the report said.

In 2007, the Labour education secretary Alan Johnson announced in a green paper that participation in education and training should continue until 18.

This was subsequently legislated, and is referred to as “raising the age of participation” or RPA.

Mr Widdowson’s new report criticises the ways “successive governments” have “turned a blind eye” since then.

“The Labour government planned a range of enforcement measures on 16- and 17-year-olds to participate and on employers to offer jobs with training, but these were not introduced,” he wrote.

As a result, 8.5 per cent of the “cohort still remain uninvolved, with a relatively large number of ‘not-knowns’, quantified to around 99,000 individuals”.

Mr Widdowson said at the launch that “if you have a legal duty that then is explicitly not enforced, it’s not a duty”.

“Young people and families work it out pretty quickly,” he continued. “They know that if they don’t attend there’s not a lot that can be done; there are no real sanctions applied.

“It might be an appearance before magistrates, or some restriction on benefits entitlement which usually encourages families to encourage the kid out of bed in the morning. Something is needed that actually says ‘we are serious about this’.”

Speaking after the event, Mr Hughes said that this and other suggestions on improving participation deserve “serious consideration”.

Sanctions should be introduced as a last resort

“His proposal that Parliament shouldn’t pass laws that it doesn’t intend to enforce is right,” the AoC chief said.

“The RPA law is different to the law on school attendance, because the post-16 duty is on the young person not their parent. The Department for Education would need to also act on funding, curriculum and transport recommendations.”

However Mark Dawe, the boss of the AELP, disagreed: “While we should fight for a shift in culture towards more learning after 16, trying to impose sanctions on families won’t help.

“Many of those young people potentially in scope will come from broken homes or very disadvantaged backgrounds and they will end up alienated even more.”

Bill Watkins, chief executive of the SFCA, said his organisation “would like to see a focus on the carrot, rather than the stick”.

“For example, RPA ambitions are more likely to be realised if we can properly inform and advise young people at 16,” he said.

Mr Laws said he was “very cautious about a highly sanctions-driven approach for all the really obvious reasons”.

He warned of “issues that might be impairing young people from participating”, and questions over “how much parents are in a position to actually tackle some of the issues that are causing them not to participate”.

The DfE did not comment ahead of publication.

Around £25 million was given to providers entering the apprenticeship market for the first time in the controversial non-levy tender, Anne Milton has revealed.

In her first monthly column for FE Week, the skills and apprenticeships minister makes a robust defence of the government’s approach to the procurement exercise, explaining how it was unavoidable due to EU law.

But in what will likely be taken as bittersweet by the top colleges and providers that received no funding, she disclosed that five per cent of the £485 million pot – £24.25 million – went to new providers who were neither prime nor subcontractors before.

“We have enabled more new providers and employers to enter the market while still supporting the existing supply where we could; approximately 95 per cent of the funding awarded will be to providers currently delivering apprenticeships,” Ms Milton (pictured above) writes.

While disgruntled providers who were denied contracts in the tender continue to fight their appeals, the AELP has hinted that there could yet be some good news on the horizon.

“We are working very closely with ESFA to get a package of measures agreed that we hope should help ease the position for our members through to April 19,” the association’s chief, Mark Dawe, wrote in his newsletter to members this week.

“Usual line of ‘imminent’ I’m afraid, but we are aware how important this is to many of you.”

Meanwhile, Conservative MPs have begun weighing in on the debate, with one requesting that all colleges have access to funding for apprenticeships with smaller employers.

Jeremy Lefroy, the MP for Stafford, became the latest prominent voice to raise the issue in parliament after Newcastle and Stafford Colleges Group, which is in his constituency, was denied a non-levy contract.

“Just having the levy on its own is not necessarily sustainable,” he said in a written question. “Will the minister ensure that all further education colleges have access to funding for non-levy apprenticeships?”

Universities minister Sam Gyimah failed to address the latter issue in his response, but insisted that the levy is in its “infancy” and needs to be given time to work.

Mr Lefroy is likely to be joined in the non-levy fight soon by Royston Smith, the Conservative MP for Southampton, who is jumping to the defence of SETA, a registered charity who has delivered engineering apprenticeships in the area for 48 years.

We have re-appealed to the better judgement of government to see the damage this could cause our sector

The Ofsted ‘good’-rated provider was unsuccessful because it fell below the £200,000 threshold the ESFA used to apply its pro-rata methodology.

“We have re-appealed to the better judgement of the government to see the damage this could cause our sector,” Mike Driscoll, director of operations at SETA, told FE Week. “We have liaised with our local MP and will continue to fight the decision.”

He added that if the ESFA continues to deny them a contract, then the message to employers in the short term is that “size matters”.

“So, if you’re a large levy-paying employer you can continue to use SETA. However, if you are small, sorry – you will have to find another provider with the funding to train you,” he said.

“Or, perhaps you can hold off recruiting until April 2018 when we may well be able to fund the service you’ve enjoyed for the last 48 years.”

Other top training providers and colleges have also turned to influential MPs in an effort to squeeze the cash they need from the government after they were denied contracts in the much-delayed procurement.

Exeter College, which FE Week rates as the best college in the country, is working with Ben Bradshaw, a former culture, media and sport secretary who described the situation as “inexplicable”.

Meanwhile, ‘good’-rated HYA Training is liaising with its own MP, Emma Hardy, who sits on the education select committee.