What FE needs to know about competition law

Why should the corporate world of mergers, cartels and market abuses apply to those teaching and training young people? Lindsay Draffan explains

I was rather surprised by the number of times the words “competition” and “competitors” were used at the recent FAB conference in Leicester.

I didn’t expect that. Neither did I expect references to “collaboration”, “market dynamics” or difficulties for new entrants against the relative comfort for more established players.

What was lacking, however, was any mention of competition law as a means to help a) establish a level playing field for those providing educational services and b) choice, quality and innovation, all at a reasonable price for the learner.

What does competition law have to do with FE?

In a nutshell, competition law regulates the activities of those offering services (or goods) for the benefit of the consumer. So a training provider offering an FE course for a fee must comply with competition law. To price-fix a course with a competing provider, for example, is a complete no-no.

To price-fix a course with a competing provider, for example, is a complete no-no

In exactly the same way, awarding organisations must comply when they carry out their business activities. And those with the good fortune of holding a leading market position, usually 40 per cent or more, must not try to prevent a rival from offering a competing product. That can happen through abusive behaviour in related markets, not just in the award process itself. You might think it’s a great tactic to make sure your competitors cannot get their materials to print due to a network of exclusivity with publishers, but it’s highly unlikely the competition authorities would agree!

What are the penalties for anti-competitive behaviour?

The law penalises anti-competitive agreements with fines based on annual turnover, and the severity and duration of the infringement. The maximum financial penalty is 10 per cent of worldwide turnover, not just that generated in the UK. The same goes for abusing a dominant position.

In addition to unlimited fines, the cartel offence (usually price-fixing between competitors) also carries potential criminal penalties for individuals of up to five years’ imprisonment, and 15 years’ disqualification as a director.

Competition law also includes merger control, where merging or acquiring competitors can be reviewed for approval or prohibition by the Competition and Markets Authority (CMA), should certain turnover or market-share thresholds be met. In the current climate of amalgamation, merger control is highly relevant, although reviews are carried out in the context of many factors, including market conditions, financial sustainability and sometimes unavoidable “direction” from local government.

How can we tell if we’re breaking the law?

It is a complex area of law with a firm economic basis that often sits outside the comfort zone of many competent professionals. Nevertheless, when I am asked questions about whether a commercial agreement or behaviour is on the right side of the law, I tend to ask whether an organisation would be happy for their agreements or behaviour (confidentiality aside) to appear in the local or national newspapers. Your gut instinct can go a long way, and so can being transparent, objective and non-discriminatory in your commercial direction and relations with others in the sector, whether they’re a competing organisation or active at a different level.

There is, however, no magic remedy other than being compliant. You can’t really ask the CMA for help – this has been a self-assessment regime since 2000. You have to make sure you understand as best you can what is and isn’t permitted (ask a friendly lawyer for assistance if need be). Compliance is also a useful exercise if you believe your competitors are not playing by the rules.

From the first foray into the price-fixing of school fees many moons ago, to the recent shaming of the Law Society which abused its position as a combined AO and training provider, the competition authorities and courts are more than capable of tackling the education sector. The time has come to educate yourself.

Lindsay Draffan is a senior associate at Bates Wells Braithwaite

Ditch job-specific apprenticeship standards

Simply put, there are too many pathways, says Rob May, and they’re more than likely too specialised to be truly useful

More than a few people in the sector believe that multiple regulators and a lack of standardisation will fundamentally undermine the apprenticeship reform programme. It’s an opinion I’ve shared in the past, but I’m now starting to reconsider.

We need an elementary reframing of what an apprenticeship actually is, and, importantly, what it isn’t. The definition varies, and the one offered on gov.uk lacks any razzmatazz: “Apprenticeships combine practical training in a job with study.” That’s true, but as an explanation it neglects the helpful, subtle distinction that separates apprenticeships from other forms of vocational learning.

An apprenticeship is when someone is learning under a master in a particular field. It describes a relationship, not an outcome. Leonardo Da Vinci served as an apprentice, and so did Benjamin Franklin, although there were no “gateways”, EPAOs or 20-per-cent off-the-job training rules in their day!

That’s because, unlike A-levels, applied generals or GCSEs, an apprenticeship is a concept, not a product.

An apprenticeship is a psychological and cultural contract, the terms of which are often implied on the basis of custom, or a tradition of usage. It’s a dynamic approach to industrial continuity and evolution.

An apprenticeship is when someone is learning under a master in a particular field. It describes a relationship, not an outcome

So, it’s not really surprising to see trailblazers, employers and trade bodies interpret apprenticeship content, assessment and regulation very differently. Industries have evolved their understanding of apprenticeships over centuries and now they’ve been asked to codify the concept as a “product”. We’ve seen an army of designers each bring divergent wisdoms about what an apprenticeship actually is and how it should be configured, but they often show no real understanding of the robotic assessment pipeline into which they stuff their reworking of the concept.

The government was right to throw open the drafting of new standards to industry, but it is now funnelling apprenticeship delivery and assessment into a market that relies heavily on consistency, coherence and cohesion to ensure public confidence in the education system.

This is a system that is used to commodified qualifications, linear progression and performance tables, and above all to reliable, comparable assessment. Equating academic levels with levels of apprenticeship only adds to the potential for the implosion of the system, and it’s not how parity of esteem is achieved. We must recognise that there are different, equally valid ways of learning, with different rules. The idea that one institution can regulate an increasingly atomised learning environment is fallacious.

Arguably, apprenticeships are not subject to the same natural laws as qualifications, but likewise, not every qualification can become an apprenticeship, as this risks stripping away the very thing which determines distinctiveness. Some trailblazers seem intent on transforming anything they touch into apprenticeships when they are clearly not.

The idea that one institution can regulate an increasingly atomised learning environment is fallacious

My dad undertook his carpentry apprenticeship in 1960. It lasted five years and led to a broad range of occupational possibilities. But some of today’s apprenticeship standards are way too job-specific; for example ‘mineral weighbridge operator’, or ‘electronic door opener’. With respect, these are not apprenticeships; they are specific jobs requiring specific, contained training. There may be transferable skills involved, but enough to become a specialist in a trade? Doubtful.

So, the answer to the question, when is an apprenticeship not an apprenticeship, is, unfortunately: most of the time.

Addressing the complexities of the vocational education system by making everything “an apprenticeship” won’t work, and dilutes the value of the concept in fields where it is a well-trodden pathway, in areas such as engineering, construction, tailoring and carpentry. To return credibility to the concept, some of these job-specific apprenticeship standards simply have to go.

In the world of apprenticeships, multiple accountabilities are unavoidable. Let’s reassess how we think of the regulation landscape, stop resisting compromise and accept the inevitable, if accidental redesign of the technical education system.

Rob May is CEO of the Association of Business Executives. Piece inspired by ‘Skilling up for a future’ at The Centre for Education Economics on 7 Nov

How can college governors impact government policy?

Dr Sue, director of policy and external relations at Holex, answers your questions on college governance, backed by her experience as principal of Canterbury College and in senior civil service posts in education and skills.

Question One: Devolution

What can governors do to reassure staff about their jobs as we move to funding devolution?

Answer: Although devolution to combined authorities doesn’t come in until 2019/20 and covers only eight areas, it amounts to half the students and half the total national adult education budget. It will touch not only all colleges and providers in the CAs, but also those who border on a CA or work nationally.

I understand why staff and managers are concerned. They know CA strategic planning really needs to happen this winter. Prospectuses for the 2019/20 academic year would normally be ready in the year before enrolment, and devolved areas need to be in a position to say what they will be commissioning in the spring of 2018. Without plans in place, staff will feel vulnerable.

The other major concern is the impact on financial viability for a whole college, provider or service. Although only the AEB is being devolved to CAs, most colleges operate a mixed model, where programmes are only viable to run if both adult and young people’s funding is available.

It is important as governors for you to ensure there is early dialogue with the relevant CAs and start to assess risk and impact immediately.

 

Question Two: Lobbying

With the current environment, it seems most of what matters is outside our control. How can we influence higher authorities to make sure we have been heard?

Answer: Setting the strategic vision is a vital for governors and to do that effectively you really need not only to understand the national policy landscape but also your local requirements.

It is your role to ensure your institution’s plan and education offer meets the needs of your locality. If there are rules in the system, or barriers to doing what is needed, they need to be flagged up to the government, either directly or through your representative bodies. If that doesn’t work, talk to your MP.

It is for you to lead the skills agenda, and advocacy should be seen as an important characteristic of a 21st century governing body.

 

Question Three: T-levels

I’m beginning to believe all T-levels will do is reduce the number of students on A-levels and displace BTECs. This might improve the technical brand image, but what’s in it for students without five good GCSEs?

Answer: I think the direct answer is not much! Many of us have been here before, but previous attempts to ensure parity between academic and vocational routes have understood the need for a proper progression route and allowed those who were failed by the secondary school system to regroup and start afresh on a level two or even a level one vocational route.

Like you, I think more work needs to be done on working out who are the client group for this award. At present, it looks like T-levels are just for those with five to eight good GCSEs including maths and English, who want an alternative to A-levels. This is fine, but really, can we afford to spread these students thinly, which will result in inefficient class sizes, and would not they not do just as well in their future careers by doing A-levels?

What I would like to see is as much energy and resource going into supporting the 40 per cent of young people who will not be eligible for T-levels. The present offer of traineeships and a transition year is not sufficiently intensive or resourced. 

Apprenticeship budget must be guaranteed

The gloomy outlook for our economy risks reduced investment via the levy in apprenticeships when we need it most, says Stephen Evans

We all have times when we wake up and know it’s going to be a tough day ahead. Theresa May has perhaps had more than most since June’s general election, and the budget is going to be another such day for the chancellor, Philip Hammond.

We know it will be tough because a range of experts, including the Bank of England and Office for Budget Responsibility, have signalled they’ve changed their mind about the potential of our economy. They’re gloomier now, and think our economic growth speed limit has permanently fallen since the 2008 financial crisis.

This has profound implications for living standards and public services: if economic growth is slower, then wages and taxes (which pay for public services) will also rise more slowly. This is a big problem for a chancellor under pressure to loosen the purse strings and to balance the books – he can’t do both. It is a bigger problem for households across the country, who will find their living standards not improving as they’d hoped.

I want to focus on the impact on the apprenticeship levy, a payroll tax on large employers that’s ring-fenced for spending on apprenticeships, specifically on the amount it will raise, rather than how it is spent.

Last year, the amount the levy was expected to raise by 2020 was revised down by £200 million. This year at the Learning and Work Institute, we think there might be a further downgrade.

We all have times when we wake up and know it’s going to be a tough day ahead. Theresa May has perhaps had more than most

The amount the levy raises is determined by how many people are employed in levy-paying firms. Employment rates are at a record high and have been stronger than many forecasters have expected. So there’s unlikely to be an issue there.

But earnings growth has consistently been weaker than expected. And a permanent downgrade to the speed limit of the economy means a permanent downgrade to potential growth in earnings.

Which means, all else being equal, a downgrade to the amount the levy will raise.

We’ve crunched the numbers and think this could mean anything from a £50 million drop (based on the most recent Bank of England forecasts) to £100 million (based on more recent earnings growth levels). Taken with the previous £200 million downgrade, this would see the levy raising almost 10 per cent less than was originally forecast by 2019/20.

We don’t have long to wait to find out the answer – the budget will reveal all. And while the revisions may get lost in the roundings this time, particularly if employment is stronger than expected, but ultimately lower earnings growth will definitely mean the levy raises less.

This points to a bigger challenge for the levy than changes in economic forecasts. The way it is set up will cut investment in apprenticeships when the economy slows, arguably when we most need to increase investment in training. This would reinforce the falls we usually see in employers investing in training during a downturn. It could also mean too little resource for non-levy-payers, and put the government’s at risk three million apprenticeship starts target.

The Learning and Work Institute has argued that the overall apprenticeship budget should be guaranteed over the economic cycle. There should also be guaranteed levels of funding for non-levy-payers, who are as important to our economy as large employers.

One way to increase the speed of our economy is to invest in skills. We should protect investment so slower growth doesn’t become a self-fulfilling prophesy. The introduction of the levy is a good thing. To make it work, we need to guarantee investment in learning and apprenticeships.

Stephen Evans is CEO of the Learning and Work Institute

Aspiring motor vehicle engineers renovate two ambulances ready for 3,000 mile trip to west Africa

Motor vehicle engineering students are helping to renovate two ambulances, which are to be driven over 3,000 miles to west Africa.

The group of 11 students from West Nottinghamshire College will prepare the vehicles for a 3,390-mile drive across France and Spain into Gibraltar, which will then cross the sea to Tangiers, traversing Morocco and entering the Gambia as part of the Aid2Gambia project.

Led by former police sergeant Mark Hammans, the project aims to provide people in the Gambia with medical supplies, books and stationery – and ambulances are next on his list.

“Once we deliver the ambulances we’re hoping that they will be self-funded and put to great use helping ladies who are in difficult labour get to a safe environment, as the mortality rate there is very poor,” he explained.

“We’ve already driven ambulances to the Gambia before, so we know it can be done. We’re really grateful for the students’ help on the vehicles.”

The ambulances were paid for with fundraising by Aid2Gambia staff, and dropped off at the college for the necessary repairs.

“It’s great to be involved in this project as it’s going to help people less fortunate. It’s something different for us to work on in the engineering workshop,” said level three student Simon Wicks.

Fundraising walk will help establish dementia café at New College Durham

Health and social care students have raised over £850 to help set up a dementia café service at New College Durham with a sponsored memory walk.

Around 70 people including staff and students, and their friends and family, took part in the 1.6-mile walk on the perimeter of County Durham’s Beamish Museum.

Some of the funds will be used to set up a dementia café service for two hours a month at the college’s Café 50 with the support of the Alzheimer’s Society, and the rest will be directly donated to the charity.

The café will help reduce isolation for those suffering from the degenerative disease, and it will provide opportunities to socialise, while guest speakers will come to offer advice and information to carers.

“The Dementia Café project will provide an excellent opportunity for our students to work in partnership with the local community and gain hands-on experience of working closely with individuals with a diagnosis of dementia and see the impact it has on their lives, and the lives of their family,” said Helen Owen, head of school for health, care and public services at the college.

Skills Show 2017: Ministers descend on Birmingham in their droves

An A-list parliamentary cast arrived in Birmingham today to help tackle the “nightmare on skills street” that Britain currently faces at this year’s Skills Show.

Early visitors to the NEC arena this morning got the chance to speak with the skills and apprenticeships minister Anne Milton (pictured above), the chair of the education select committee Robert Halfon, and the transport secretary Chris Grayling.

Other high-profile government guests appearing at the Skills Show over the next couple of days include the Department for Education’s permanent secretary, Jonathan Slater, and the shadow skills minister Gordon Marsden.

Mr Halfon has said the country is “playing catch up” with other developing nations, but Ms Milton told FE Week that having over 70,000 people come and watch more than 500 apprentices compete in dozens of disciplines would be “critical” to boosting the profile of skills in this country.

Anne Milton (centre left) and Chris Grayling (centre right) having a go at racing trains at the HS2 stand at the Skills Show

“WorldSkills is the best-kept secret and we need everybody to be aware of it. We have young people here competing for three days. Unlike at the Olympics where your event can be over in 10 seconds, these young competing are doing it over a long period of time and doing it at an extremely high standard,” she said.

“This is also the big apprentice recruitment drive, and it is a message to employers to shift yourself, start spending that levy, get apprentices in.”

She visited Abu Dhabi last month to witness Team UK maintain its top-10 position at the international finals of WorldSkills.

The Skills Show is “as good as” the event in Abu Dhabi, she insisted, and wished all the young people competing the “best of luck”, as their victory could see them visit Russia to compete at WorldSkills Kazan in 2019.

Mr Grayling used his visit to launch his department’s ‘Year of Engineering’, for which the government has pledged to offer a million “direct and inspiring experiences of engineering to young people throughout the year”.

The UK faces an estimated shortfall of 20,000 engineering graduates a year, or more than 180,000 new engineers by 2024.

“If you look at what the skills show is all about, bringing thousands of young people to see engineering in action and to see what they would be doing if they chose engineering as a career, there is no better place to send the message,” Mr Grayling told FE Week.

“This is all about talking to the next generation of school, college and university leavers about engineering as a potential profession for them.”

Mr Halfon, who last year was the first skills minister to visit the Skills Show in four years, brought the education select committee to the show first the first time ever today.

Robert Halfon (right) arrives at the Skills Show

“The Skills Show isn’t just an exhibition; it shows the future of where Britain could be,” he said.

“We have ‘a nightmare on skills street’ in our country, where we are behind many other leading countries in terms of skills. The fourth industrial revolution is coming, with robots and artificial intelligence, and we’re playing catch-up so we need to put a rocket booster under this.”

Skills Show 2017 will run until Saturday November 18, and sees 500 apprentices and students competing in 55 skills competitions, from which the squad for EuroSkills Budapest 2018 and Kazan 2019 will be selected.

There will also be over 25,000 job and training opportunities on offer from exhibitors including BAE Systems, Dyson, HS2, Health Education England and colleges including BMet, South Cheshire College and West Cheshire College and South and City Birmingham and Bournville College.

FE Week & FE Week are proud media partner of WorldSkills UK, The Skills Show, WorldSkills UK Competition Finals. You can follow our live coverage on Twitter @feweek using the hashtag #SkillsShow17.

SEND students raise concerns about transport at second meeting of the Natspec Student Voice Parliament

Students with disabilities and learning difficulties came together in Coventry for the second meeting of the Student Voice Parliament.

The event, organised by Natspec, a membership organisation for specialist colleges and independent providers, gives students a chance to raise awareness of the issues that are affecting them in their studies.

Concerns centred on accessibility and transport on the commute to college, and there was lively debate on how to make sure taxis use the appropriate safety belts on wheelchairs.

Two students from Hereward College, Harvey Duncan and Callum Klaptyi, spoke of a campaign they have launched to stop people parking on pavements in Coventry.

“We’re trying to raise awareness for people to think before they actually park on a pavement because it creates a danger for people who use wheelchairs and people cannot see,” Mr Klaptyi explained.

Twenty students from nine specialist colleges attended the event, which met for the first time in June.

“The voice of students with disabilities and learning difficulties is too often forgotten about,” said Emily Chapman, the NUS vice president for FE. “I’m here to speak to them directly and make sure we get their voices heard.”

West Herts student wins Whipsnade Zoo’s app-making competition

A student from West Herts College emerged victorious in a competition to make an app teaching children about climate change.

The College App Challenge, hosted by Whipsnade Zoo, asked students from local colleges to create an interactive app educating key stage 3 and 4 pupils on the topic, which they then had to present before a panel of judges.

Rebecca Nash was chosen as the winner for her Eco Earth app, which featured an animated map students could click on to explore different ecosystems and find out how greenhouse gases are produced.

She will present the app to school pupils taking part in the zoo’s ‘Climate Change and Animals’ education session in the coming weeks.

Five teams from across Aylesbury College and West Herts College took part in the challenge.

“Given the fact that they had other college projects to carry out simultaneously, they did a great job,” said Michelle Lindson, the zoo’s discovery and learning officer. “Particular teams showed huge dedication to the project, working into the night and at weekends, which really showed when they presented their apps.”