English colleges will have to pay Jisc for essential IT services from next year, due to a “significant” funding cut enacted by the Department for Education.

The changes, which were announced today but stem from the 2015 spending review, will mean colleges will more than likely be forced to spend at least £15,000 a year – and potentially as much as £100,000 – from August 2019 for services including access to the Janet network.

“The DfE have confirmed their intention to change how they intend to fund Jisc which will involve a significant funding reduction,” wrote Paul Feldman, Jisc’s chief executive, in an open letter to members.

The technology organisation will continue to receive some government money, but will “need to introduce a subscription for our general FE college members in England to enable all of our critical services, including the Janet network and all of the cybersecurity benefits to be retained”.

“The decision to introduce the mixed funding model has been requested by the DfE – they feel it will mean members continue to hold us to account, to contribute actively to our work and make sure we continue to provide best value,” he wrote.

David Hughes, the AoC chief executive, said he was “disappointed” by the decision.

“College budgets have been hit harder than any other part of the education system over the last eight years and we continue to fight for fair funding for colleges and for college students,” he said.

“This new cost for an essential service will be a real struggle for many colleges on top of other rising costs over recent years.”

Shadow skills minister Gordon Marsden urged the DfE to reverse the decision to cut Jisc’s funding, which he said had “all the hallmarks of a department scraping around trying to find candle end economies at the end of the financial year”.

He warned that the funding cut risked “significant damage to colleges’ ability to take up” essential IT services, including cyber security. 

Subscriptions are likely to range from £15,000 a year for a medium-sized single-site college to over £100,000 for a large college group.

The “vast majority” of colleges are expected to have to pay less than £20,000, Mr Feldman said.

The change will bring colleges in line with HE institutes, which have paid Jisc subscription fees since 2012.

Mr Hughes said he had “made the case” to the DfE that universities are better funded and were therefore “able to better mitigate increased costs”.

“Unfortunately, that case resulted only in a one-year delay in implementing the new fees,” he said.

Today’s announcement only affects general FE colleges in England, and Jisc is still waiting to hear about its funding for sixth-form colleges, including those that have converted to academies, and independent specialist colleges.

It is not yet clear by how much Jisc’s funding would be reduced.

It has already had its budget slashed by £10 million over the past five years.

Jisc, formerly the Joint Information and Systems Committee was launched in 1993 and provides a range of IT services and support for FE and HE institutes.

Services provided by Jisc for the FE and skills sector include the Janet network and eduroam, which give colleges internet and WiFi access; a shared data centre; and telephony purchasing.

It also offers a range of support and advice, including a number of best practice guides and tools, for making the best use of digital technologies.

A DfE spokesperson said: “We have asked colleges to make a contribution towards their ICT costs which will mean that they have a bigger say in the services they receive and get the maximum benefit from Jisc.

“This will bring colleges in line with other parts of the education sector by making sure there is a real incentive to get value for money and an excellent service.”

The regional winners of the inaugural Annual Apprenticeship Awards have been announced at a special ceremony in the House of Commons today.

The categories included ‘apprentice employer’, ‘apprenticeship provider’ and ‘promoting apprenticeships campaign’, and winners will now head to the national finals on March 22.

The event was sponsored by the chair of the education select committee Robert Halfon, who is also celebrating the start of National Apprenticeship Week. The winners were as follows:

Shane Mann, the managing director of LSect, the group that runs both FE Week and the awards, said: “I would like to say a huge congratulations to our regional winners recognised today, as well as all the national finalists.

“Our panel had a rigorous process for drawing up the shortlist, and identifying the best of the best. It was extremely difficult to do this because we had so many fantastic entrants.

“Today’s event has been a major success and I would like to thank our sponsors and Robert Halfon for making it all possible.

“We now look forward to the national results on March 22 at the Annual Apprenticeship Conference in Birmingham.”

The other regional finalists were EDF Energy, BL Training Ltd, NOVA Training, the Home Office, Specsavers, Lookers PLC, Derby Teaching Hospitals NHS Foundation Trust, Greene King, the Cornwall Colleges Group, Barnsley College, Nova Training, Babcock Training Ltd, Cardiff and Vale College.

FE Week and AELP announced the full shortlists for the AAC Apprenticeship Awards in association with CMI in February, and the national winners will be unveiled on March 22 at the Annual Apprenticeship Conference in Birmingham.

The conference will run from March 21 to March 23 at the International Convention Centre in Birmingham.

The judges for this year’s awards included Alison Birkinshaw, the president of the Association of Colleges, Rob Colbourne, the managing director for Performance Through People & Chair, West Midlands Provider Regional Network, and Sue Taylor, network manager at ALPS Partnership.

Also on the panel were Sharron Robbie, managing director of Devon & Cornwall Training Provider Network and chair of the South-West Training Provider Network, Mike Cherry, the national chairman of the Federation of Small Businesses, Mark Dawe, the chief executive of the AELP, Bill Twigg, the senior apprenticeships manager at City & Guilds, and Stewart Segal, an AELP board member.

FE Week and LSect would like to dedicate a special thanks for the generosity of the sponsors which are supporting the awards in their first year.

Particular thanks go to our headline partner for 2018, CMI. “Without their support we wouldn’t be able to administer these awards,” said Mr Mann. The full list of national finalists are as follows:

Here’s video reaction from some of the delighted winners:

Sheffield County Council:

 

Walsall College:

Kent County Council:

BT:

 

A high-level advisory group made up of top government officials and industry and union leaders has met for the first time today to begin their work in developing a “historic” national retraining scheme.

The first meeting of the National Retraining Partnership was hosted by the chancellor Philip Hammond (pictured above) and joined by such luminaries as Carolyn Fairbairn, the boss of the Confederation for British Industry, TUC leader Frances O’Grady, the education secretary Damian Hinds and the exchequer secretary Robert Jenrick.

The industrial strategy white paper, published in November, contained the first plans for this partnership, which has a primary goal of driving up adult learning and retraining.

It will decide how the upcoming National Retraining Scheme can boost productivity and tackle skills shortages in sectors identified as areas of growth, including in construction, automotive, artificial intelligence and creative industries.

Top of the agenda for the inaugural meeting was finding ways the scheme would “ensure people are given every opportunity to succeed in this new economy, and how British firms can be supported to create better, higher-paid jobs”.

In his autumn budget, the chancellor announced £64 million to get the ball rolling with pilots in digital and construction skills.

“Today’s meeting underlines the importance of working collaboratively to rise to the challenges and opportunities of the technological revolution which is transforming our economy,” said Mr Hammond.

“We are determined to equip our workers with the skills they need to succeed as we make the UK a world leader in new technologies. This partnership is an important step towards doing so.”

Mr Hinds, who chaired today’s meeting, added: “Today’s meeting marks a historic partnership between government, business and unions, and is an important step towards implementing the National Retraining Scheme.

“For our economy to thrive we need everyone, regardless of their age, to be able to gain the skills they need to make the most of the opportunities that lie ahead.

“I’m proud to be working alongside CBI and the TUC to develop and deliver a programme that will boost productivity, which will truly meet the needs of employers and the economy.”

A total of £30 million will be invested in the retraining scheme to test the use of artificial intelligence and innovative education technology in online digital skills courses, so students can benefit from this emerging technology.

Meanwhile, £34 million will be used to expand “innovative” construction training programmes, to train people for jobs such as groundworkers, bricklayers, roofers and plasterers.

Ms Fairbairn said businesses are on board to make this retraining scheme a success.

“Businesses see investing in skills as critical to building an economy that is fit for the 21st century,” she said.

“It’s the best way to compete globally, seize the opportunities of the industrial strategy and increase people’s pay.

“We’re delighted to be involved in the National Retraining Partnership alongside the TUC and the government.

“The partnership, alongside improved technical education and a reformed apprenticeship levy, could drive a skills revolution. We are committed to designing a system that really delivers for those already in work, improving careers, opportunities and business performance. A great starting point is the skills base needed for the UK’s new industrial strategy.”

Jason Holt CBE, the chief executive of HoltsGroup, has been named chair of the Apprenticeship Ambassador Network, replacing its disgraced former chair David Meller.

This is a promotion for Mr Holt, who had previously been the apprenticeships ambassador for small businesses.

The Association of Employment and Learning Providers was quick to tweet its congratulations.

Fantastic news! Couldn’t be a better appointment

— AELP (@AELPUK) March 5, 2018

The Apprenticeships Ambassador Network is an employer-led body which aims to encourage more companies to get involved in apprenticeships.

Mr Meller was forced to resign from his government roles earlier this year, following allegations that sexual harassment took place at a charity dinner  he co-chaired.

Skills minister Anne Milton announced in parliament on January 24 that Mr Meller was stepping down as a non-executive board member for the Department for Education and from chairing the Apprenticeship Delivery Board.

“The government expects board members to adhere to the code of conduct for board members of public bodies. This quite clearly states that they should adhere to the seven principles of public life,” she said.

Although it wasn’t publically stated at the time, it’s clear from Mr Holt’s appointment that Mr Meller also stepped down from chairing the AAN.

Mr Holt has championed apprenticeships for small- and medium-sized businesses for many years, having authored a 2012 independent review for the government on the issue.

And in May last year he vowed to “continue to beat the drum” on apprenticeship funding for SMEs.

Sue Husband, director of the National Apprenticeship Service, said: “With his influence, his standing in the business community and his insights into how employers think, I can think of no better individual to lead the Apprenticeship Ambassador Network. Jason’s intense commitment to apprenticeships with SMEs over many, many years will unlock so many new opportunities with apprenticeships.”

Today’s announcement was made at the start of this year’s National Apprenticeship Week, during a launch event at the BBC featuring the education secretary Damian Hinds.

“Apprenticeships play a crucial role in helping people realise their potential as they learn and earn, and are providing employers with the skilled workforce our country needs,” he said.

“This National Apprenticeship Week we want to show that apprenticeships offer a great route into skilled employment for people of all ages and backgrounds, so that everyone can access the excellent career opportunities apprenticeships offer.”

 

HMRC has launched a major investigation into subcontracting that could result in tens of millions in fees and fines after it discovered many colleges and training providers are ignoring VAT rules on management fees.

FE Week understands that the tax office has put together a team of around 20 special investigators, who will find out why primes have not been applying the 20-per-cent charge to their top-slices, per the rules.

HMRC plans to investigate up to six years of unpaid VAT and will attempt to claim it back.

This could rise to 12 years if evidence is found that prime providers knew about the charge and failed to apply it anyway.

Substantial fines are also likely, according to one VAT expert who spoke to FE Week.

The news will send shockwaves through the sector, and providers fear the business and ramifications of any fresh charges.

Government rules – VAT Notice 701/30 (pictured) – state that while vocational training is exempt from the tax, management services in subcontracting relationships are not. This comes alongside the top-slice primes generally charge subcontractors, which is usually around 20 per cent of the government’s funding.

However, evidence seen by FE Week suggests the VAT rule is unknown to most providers, and has not been applied for years, meaning that hardly any has been claimed.

Around a £1 billion of funding per year is subcontracted across the ESFA post-16 funding streams, which FE Week estimates would generate around £40 million per year in VAT for HMRC.

For its own part, HMRC claimed the guidance has always been in place and in force.

“Vocational training management fees charged by a prime provider to a subcontractor are chargeable with VAT at the standard rate of 20 per cent,” said a representative.

“This applies regardless of whether the charge is netted off against government funding or whether the prime provider is a college of further education or a private provider.”

The spokesperson added that any under-declarations of VAT will be dealt with under the tax office’s usual compliance procedures.

Management fees charged by a prime provider to a subcontractor are chargeable with VAT

The sector will be worried that any fines or attempts to retrieve years of unpaid tax would plunge many small training providers into financial trouble.

Shane Mosley, a partner at accountancy specialist Malcolm H Preece, has offered advice to providers who have not complied with the rule and what the next steps are to take (see below).

“Prime providers should look back over their records and ascertain both how much VAT is involved and crucially who this VAT should have been charged to,” he told FE Week.

“They should also consider making initial contact with HMRC to put on record that they are aware of the potential problem and are currently looking into their own compliance – this will potentially mitigate penalties due to the cooperation of the taxpayer.”

If HMRC does come knocking, as well as any VAT that should have been charged, inspectors may be looking for penalties and interest.

“For a situation like this which appears to be an industry-wide error, rather than any individual concealment, I would envisage the initial fine to be at the lower end, perhaps 10 to 15 per cent.”

This is the second VAT crackdown HMRC has made against FE providers in the past two weeks.

On February 13, FE Week revealed that private providers were being let off millions of pounds in unpaid tax because HMRC had given them incorrect advice.

ITPs believe the crackdown will mean learner volumes will drop significantly.

Advice from a VAT expert: Expect 10- to 15-per-cent fines

Shane Mosley, a partner at accountancy specialist Malcolm H Preece, spoke to FE Week about what actions HMRC is now likely to take, and offered advice for affected providers.

“Prime providers should look back over their records and ascertain both how much VAT is involved and crucially who this should have been charged to,” he said.

“Are these subcontractors VAT registered themselves enabling to (potentially) claim back some or all the VAT from HMRC? Do they still exist?

“They should also consider making initial contact with HMRC to put on record that they are aware of the potential problem and are currently looking into their own compliance – this will potentially mitigate penalties due to the cooperation of the taxpayer.

If HMRC comes knocking it will be looking for penalties and interest

“If HMRC comes knocking, as well as any VAT that should have been charged, it will be looking for penalties and interest.

“Penalties are anything from zero per cent to 100 per cent, on the following bands: zero to 30 for a lack of reasonable care; 20 to 70 for a deliberate mistake; or 30 to 100 for something deliberate and concealed.

“For something like this which appears to be an industry-wide error, rather than any individual concealment, I would envisage the initial fine to be at the lower end, perhaps 10 to 15 per cent.

“It would then be down to the individual provider to prevent this going any further by conversing with HMRC in a timely and honest manner.

“In some cases, where an industry-wide problem has been identified, HMRC has levied at zero per cent as long as the other party acts in a transparent way, but management charges will be looked at by HMRC as an ‘error’ as opposed to a ‘lack of understanding’, and therefore it is my belief that at least 10 to 15 per cent will be levied as mentioned above, should HMRC pursue this.

“Finally in terms of time, HMRC actually has the power to go back 20 years in some cases. Standard procedure, which I believe will prevail here, is the normal four-year window open to HMRC without opening a specific enquiry.”

Read editor Nick Linford’s thoughts on this incoming bombshell here

University technical colleges have continued to struggle as two more received grade threes this week, while one FE college got its third ‘inadequate’ rating in five years.

South Devon and Buckinghamshire UTCs both had unfavourable reports published on February 26.

It was the second ‘requires improvement’ rating in a row for Buckinghamshire which had just 147 students on roll, with a capacity of 600, in the last academic year.

Inspectors said students are not doing “well enough” in English, maths and science at key stage 4.

“Their overall progress has been well below the national average for the last three years,” the report states.

“The quality of teaching is inconsistent. Expectations of what students can achieve are too low in some subjects, and so students do not make the progress of which they are capable.”

Ofsted added that rates of attendance are “too low”, in particular for disadvantaged students and those who have special educational needs or disabilities.

Leaders’ recent actions to improve attendance have “not yet had time to bear fruit”.

However, the report also pointed out that the recently appointed principal, Sarah Newall, has brought a “renewed sense of purpose to the school”.

She has “quickly strengthened the quality of teaching, learning and assessment and has improved the school’s systems for tracking students’ progress”.

This is the first time South Devon UTC has been subject to an inspection, after opening in September 2015. The college currently has just over 200 students, but teaching and achievements are below national standards.

“Last year, key stage 4 pupils attained well below their capabilities on the school’s flagship engineering programmes,” Ofsted said.

“Teaching is not providing sufficient challenge for the most able pupils. As a result, they are not developing their skills quickly enough.”

Senior leaders have also “not secured consistently effective” teaching across the school as it has grown in size.

Positives however include the fact that the principal has a “clear vision” for the college. “He is ambitious for all pupils and has the skills necessary to bring about the necessary improvement.”

And last year, as a result of the school’s “extensive business links”, all students found places in education, employment or training when they left.

Most UTCs have struggled since the 14-to-19 institutions fist came about in 2011, mainly because they’ve not been able to attract enough pupils to stay financially viable.

Their performance has suffered as a result. In April last year, FE Week revealed that just 39 per cent of UTCs inspected by Ofsted were rated ‘good’ or ‘outstanding’.

Meanwhile Stockport College, which was actually rated ‘outstanding’ in 2008, received yet another grade four this week. Its report repeatedly warned that lessons had not been learned from the previous ‘inadequate’ inspection findings in November 2016.

“Leaders and governors have not reversed the decline in standards since the previous inspection,” it said, nor had they “responded quickly enough to address all weaknesses identified”.

Ofsted did recognise that “partnerships with local employers and key stakeholders are good”, and accepted that the board had been strengthened since the last report.

Two sixth form colleges also had inspection reports published this week. It was ‘good’ news for Connell sixth form college as it climbed up one grade from ‘requires improvement’.

But The Sixth Form College, Solihull didn’t fare as well as it received a grade three in its first inspection since joining the Ninestiles Academy Trust in August.

The only two other Ofsted reports for FE providers this week came in the form of short inspections at two adult and community learning providers.

Maintaining their ‘good’ grades were the Milton Keynes Christian Foundation Limited and Suffolk County Council.

 

GFE Colleges	Inspected	Published	Grade	Previous grade
Stockport College	22/01/2018	01/03/2018	4	4

 

Other (including UTCs)	Inspected	Published	Grade	Previous grade
Buckinghamshire UTC	23/01/2018	26/02/2018	3	3
South Devon UTC	30/01/2018	26/02/2018	3	3

 

Sixth Form Colleges	Inspected	Published	Grade	Previous grade
The Sixth Form College, Solihull	30/01/2018	28/02/2018	3	N/A
Connell Sixth Form College	15/01/2018	28/02/2018	2	3

 

Short inspections (remains grade 2)	Inspected	Published
Milton Keynes Christian Foundation Limited	31/01/2018	01/03/2018
Suffolk County Council	07/02/2018	28/02/2018