Two men plead guilty following Serious Fraud Office investigation into Luis Michael Training

Two men have pleaded guilty following a Serious Fraud Office investigation into now-defunct provider Luis Michael Training.

Christopher Martin, aged 53, from Newbury, admitted to two counts of conspiracy to commit fraud by false representation in court yesterday.

Steven Gooding, 53, from Bridgwater, had pleaded guilty to one count of the same charge at an earlier hearing on March 31 this year.

FE Week can only now reveal this, following the lifting of a reporting restriction on the case.

There will be a trial involving four other men relating to the same Newport provider, which is due to start tomorrow at Southwark Crown Court, and is expected to last three months.

Mark Aizlewood, 57, from Aberdare, who played for Wales 39 times between 1986 and 1994, will sit alongside Keith Williams, 45, from Anglesey, Paul Sugrue, 56, from Cardiff, and Jack Harper, 30, from Southport.

They face charges ranging from conspiracy to commit fraud by false representation, to fraud and using a false instrument.

LMT, which went into liquidation in 2011, purported to provide young people with football-based apprenticeship schemes, according to the SFO.

It worked as a subcontractor for eight FE colleges including Sparsholt College and South Thames College.

Non-levy tender: It will take over 8 hours just to read the current ‘clarifications’

The ESFA’s latest attempt at a non-levy apprenticeships tender now has over 100,000 words of ‘final’ clarifications. FE Week’s editor Nick Linford explores some of the reasons and pitfalls ahead of this Friday’s deadline

The level of interest in the £650 million non-levy tender should come as no surprise. Around 800 colleges and providers will lose access to funding for new starts from January if they don’t successfully win some funding, while 800 more companies that are on the register of apprenticeship training providers have been given their first opportunity to earn a contract. So the Education and Skills Funding Agency can expect around 1,600 serious applications from organisations already permitted to receive levy funding. Failure to acquire cash means that over 98 percent of employers, those not paying the apprenticeship levy, will be out of reach, so the stakes are very high.

The first attempt at this tender was delayed and then scrapped, with the ESFA blaming over-subscription despite all the obvious warnings.

Several hundred more companies have since been added to the register, so demand will be even greater the second time around. In an effort to avoid its previous problems, the ESFA has included several new and significant barriers, to either prevent, restrict, deter or arguably even trip applicants up.

Preventing any funding awards

The tender specification explains that any applicant awarded less than £200,000 will in fact receive nothing at all. Combine this rule with the tender value cap calculation (see below) and any eligible company with a turnover in 2015/16 of under £160,000 need not apply. There are likely to be several hundred companies on the register in this position. In fact, the register contains 48 companies that at the time of applying were a “new organisation without financial track record”.

Even if you were to successfully apply for, say, £300,000, the ESFA reserves the right reduce this to below £200,000 via “modelling”, in cases where it wants to prioritise a region or sector area, or simply if it faces general over-subscription. In this example, the successful tender would exceed the minimum, but would still result in being awarded no funding.

In the words of the tender specification (click here), “if the award modelling results in a contract value of less than £200,000 for the initial contract period, then the agency will not make an award to the potential provider”.

Restricting the size of the funding awarded

Assuming a provider get parts the first hurdle, it must apply for no more than the “tender cap”. In the first attempt at the tender, this was a straightforward £5 million. This time however, the cap needs to be calculated by the applicant, by applying one of four potential calculations depending on its “provider class”. A “new provider” that has never delivered apprenticeships is limited to £750,000 or less. A “subcontractor” that has never had its own contract is capped at £1.5 million. An “existing apprenticeship provider with non-levy historical delivery at or below £1.5 million for 2015/16” is also limited to £1.5 million. In all three cases, the final sum could be less, depending on 2015/16 turnover, multiplied by 1.25. Finally, the forth provider class comprises “existing apprenticeship providers with non-levy historical delivery above £1.5 million for 2015/16”; these are restricted to 110 per cent of their non-levy historical delivery, multiplied by 1.25.

As if working out what the most you can apply for isn’t complicated enough, last week the ESFA “clarified” what it meant by “non-levy historical delivery”; it now only includes funding in 2015/16 for starters. For existing apprenticeship providers, this excludes funding for apprentices who started before 2015/16, and will typically half – or more – what they had believed their tender cap to be.

Deterring providers from applying at all

For no obvious reason, the ESFA has more than doubled the amount of information it requires from applicants in the specification questionnaire, significantly increasing the cost. Across 17 questions, the applicant is expected to write more than 10,000 words regardless of the size of the contract it is applying for. I spoke to one consultant who as a result of this extra work has doubled his bid-writing fee to £7,000.

The ESFA also wants providers to complete its “volumes and values” spreadsheet, which does not actually calculate funding. You have to do that yourself, and only for starts from January 2018 and payments up to March 2019. The spreadsheet also contains up to 2,400 cells to complete, which is frankly ridiculous.

Taking into account this size, cost and complexity, alongside multiple changes to the tender documents, some companies that were initially interested in making a bid have been utterly deterred. The tender comes with nine attachments, two of which, the specification questionnaire and the volumes and values spreadsheet, have been revised four times each before of the deadline of midday this Friday.

Tripping applicants up

The ESFA has been at pains to stress that if you fail to understand the requirements, your application “may be rejected… and will not be evaluated”. In addition, the complex scoring matrix requires potential providers to “meet a threshold of 75 per cent of the total score (with no questions scoring below 50 per cent) in order to be eligible for an award. The necessary score is 1,275 out of the total of 1,700.”

What’s more, if any of the 17 questions score below 50 per cent, the ESFA “reserves the right not to complete the evaluation and to disqualify the potential provider”.

Now consider how complex the tender is, and the ensuing likelihood that a provider is tripped up by misunderstanding the requirements.

Yesterday the ESFA posted its final answers to clarification requests across three documents, which appeared after the deadline was delayed, which it blamed on the volume of clarifications it had to issue.

The “request for clarification document” (which is now on version five – click here) is a spreadsheet that contains an incredible 793 questions and answers, consisting of a staggering 97,566 words. Despite this, some answers are no more helpful than “See FAQ V2” – which forces providers to read an older version of the document! Many other answers are contradictory, for instance saying that you must and do not need to use the most recent version of the volumes and values spreadsheet. Others simply aren’t answers, stating “not confirmed”.

In addition to this clarification spreadsheet, there is a separate 13-page FAQ document in MS Word (click here), itself on its fourth version and updated as recently as yesterday. This runs to 4,019 words.

Combine the spreadsheet and the MS Word document and you have 101,585 words in the form of FAQs to read and cross-reference with other documents and versions. According to the all-knowing internet, the average reader will read 200 words per minute, which is 12,000 words per hour. So it would take eight and a half hours to read the current version of the FAQs alone, quite apart from the fact whether you are able to understand or interpret them correctly.

Will there be legal challenges once this mess of a tender is concluded? We only need one word to answer that: “yes”.

DfE keeps apprenticeship funding model report secret

The government is refusing to release a crucial report that would show whether or not the forecasting tool it has developed to predict apprenticeship starts is actually working.

The Department for Education is suppressing a report that scrutinises the model it uses to anticipate starts at large and small employers, even while arguments still rage over the outcome of the recent non-levy funding tender.

A firm called Cambridge Econometrics won a £15,000 contract to assess the DfE’s apprenticeships projection tool in March this year, but no-one will say when it will be published.

The due date for the research was May 31 – and FE Week understands it was submitted as expected.

However, the DfE denied our Freedom of Information request to see the report, and refused to even to specify when it would be unveiled.

“The final report by Cambridge Econometrics, for this tender, has just been received by the department and is being prepared for publication,” the DfE said in its response. “The department intends to publish the information.

“As the report will be published, the department is withholding releasing it now because an exemption under Section 22 of the FOI Act applies.”

In its tender for the research, it described a “forecasting model” that it had developed in-house which would project apprenticeship starts and costs at both levy and non-levy paying employers for the period between 2017-18 and 2020-21.

These projections are to be used to understand the “demands on the apprenticeship budget primarily for the purposes of the financial control of apprenticeship spending”.

Cambridge Econometrics researchers were to review the design of the government’s mathematical model, consider whether it worked or if other approaches might improve its quality and capability.

Apprenticeship starts were slow to get off the ground in the first half of 2016/17, as was the case during the previous year, despite the introduction of the levy.

But starts picked up when mandatory cash contributions from employers kicked in and between February and April they grew by 52,700, or a healthy 47 per cent.

Unofficial estimates suggest that starts since May are much lower.

Official figures for May, June and July this year will not however be known until the government’s next statistical first release appears next month.

The non-levy allocations process meanwhile continues to spiral out of control.

Apprenticeship providers first faced up to the potential of mass bankruptcy in April, after many received funding for May to December this year that amounted to a fraction of their former allocations.

The situation was so dire that AELP boss Mark Dawe labelled it a “horror story” and a “bonfire of the providers”.

A new tender for non-levy allocations was relaunched in July, but it took another twist last week following a series of “clarifications” that were sent out just over a week before the submission deadline.

Mr Dawe described the situation as “totally unacceptable” and warned the whole process was “descending into a farce”.

The DfE acknowledged that there is a public interest in disclosing the apprenticeships methodology report in its response to FE Week’s FoI request, but insisted that the “public interest in permitting the government to publish information in a manner and at a time of its own choosing is also important”.

Learndirect special treatment: ESFA changes policy and awards £45m tender

The nation’s largest FE provider has been handed around £45 million from next years’ adult education budget even though it didn’t participate in the tender process and despite its now-infamous grade four from Ofsted.

The news was confirmed by the Education and Skills Funding Agency in letters, seen by FE Week, sent to providers which either did not participate in the procurement or were unsuccessful, confirming our earlier predictions, that Learndirect would receive 75 per cent of the value of its previous contract to use in 2017/18.

This new commitment flies in the face of the original tender rules published in January 2017, which stipulated that providers which did not bid or were unsuccessful would be offered a contract of no more than £589,148.

The ESFA original tender policy – that has now been scrapped

Learndirect, which the DfE admitted had made no tender application, had a contract worth £60 million last year, meaning it will receive roughly £45 million to recruit and train adult learners until July 2018, even though an ‘inadequate’ rating from Ofsted usually prompts the department to terminate a provider’s funding.

Had Learndirect tendered for funding, the rules are clear: its grade four would have been taken into account during the evaluation.

FE Week approached Learndirect, which has more than 80,000 learners, over its AEB budget but refused to comment.

Last week, a spokesperson for the DfE also refused to reveal the true sum Learndirect would be allocated up to July 2018, claiming it was “commercially sensitive information”, though they then contradicted themselves when they conceded it would be “published at certain points in the year”.

This latest stage of the Learndirect saga has left providers who had been successful in the AEB tender furious, because many received only a fraction of their previous budget, leaving them worse off than had they not bothered to tender in the first place.

FE Week understands that one provider, which cannot be named at this stage, is so infuriated that is preparing to launch a judicial review against the decision.

Mark Dawe, chief executive of the AELP, labelled the move “highly unfair” and called on the government to give all providers the same treatment.

Mark Dawe

“Having seen the ESFA letter that unsuccessful and non-bidding providers have received, we believe that all providers should receive the same as a minimum for next year,” he told FE Week.

“The difference between the 75 per cent of their previous contract value and the notified awards which successful bidders have received should be treated as an extension of their current contract to support the winding down to the new lower level of contract. Anything else would be highly unfair.”

The ESFA’s letters claim the money has been made available to support a nine-month “run-down” period for Learndirect, lasting from November 1 to July 31 next year, which will “enable existing learners to complete their programme”.

Learndirect will be able to recruit new learners during this time as long as they finish by the July cutoff.

This nine-month period has been added to a three-month extension, which ends in October, and which providers have been given after multiple delays to the tender process.

“As you chose not to participate or were unsuccessful in that competition we are offering to modify your existing contract with us for a nine-month run-down,” the ESFA letter said.

“As set out in the AEB contract extension letter you received in July, as a result of extending existing AEB contracts for three months, there was less funding available for run-down provision than previously indicated at the start of the AEB competition. Contract values have therefore been calculated to fit within a revised budget.

“Your 12-month contract value is set at 75 per cent of your 2016/2017 AEB contract value for the 2017/2018 funding year.”

The ESFA’s letter confirmed that providers’ contract values are the “maximum amount of AEB funding available” and that they will not be able to request growth.

Providers can use this funding “for new starts and carry-in” but they must only recruit learners that can “complete their programmes by July, 31, 2018”.

The results of the AEB tender were first announced on August 4, but had originally been promised on May 19, and left many providers fearing for their futures after being rejected contracts despite achieving high scores during the procurement exercise.

The AEB tender for private providers was first launched on January 27 and originally came to just £110 million for 2017/18.

The shadow skills minister Gordon Marsden has meanwhile tabled a series of parliamentary questions about the AEB allocation for Leardirect.

Awarding such a large sum to Learndirect outside of the tender will also raise questions as to whether it circumvents predetermined thresholds values within the Public Procurement Act 2015.

The Department for Education has not been contacted for comment.

Cable speaks on new post-16 skills review after ‘dual mandate’ dumped

Vince Cable has accused the Conservatives of sweeping his “dual mandate” consultation for the FE sector under the carpet after he left government – so he sees a new joint report into post-16 skills from a learner perspective as his chance to put things right.

The new leader the Liberal Democrats spoke to FE Week in Parliament today, ahead of the launch of the report, entitled ‘Students shaping the post-16 skills plan’.

It was written in tandem with Shakira Martin, the president of the National Union of Students, after they spoke to FE students across the country.

The dual mandate, proposed while Dr Cable was business secretary, asked the FE sector how it wanted to reform itself looking ahead to 2025.

But the report on the responses and conclusions drawn from this was never made public, as the consultation closed shortly after the May 2015 election, at which he lost his seat and the Liberal Democrats left government.

He began his work on this latest consultation, which this time is focused on the views and needs of FE learners, before he was re-elected to parliament in June.

Reflecting on the demise of the dual mandate, he agreed this provided a chance to right some wrongs.

Vince Cable and Paul Offord

“I think there was a sense that this was coalition government, a Lib Dem minister, let’s try and pretend that never happened,” he told FE Week.

“It is rather regrettable because I think the colleges very much bought into it – this idea of looking at the mixture of remedial work for skills level one and two for young people who dropped out of school together, and advanced apprenticeships.

“Certainly, there was a lot of enthusiasm for a kind of rationalising.”

One recommendation from the new report is for a new applied level two qualification in English and maths, for those who don’t do well in their GCSEs.

“It kept coming up everywhere with students we spoke to,” he said. “I knew it was an issue, but I didn’t realise how strongly people felt about it.

“It’s the legacy of the introduction of [post-16 compulsory GCSE] maths and English resits.

“We found again and again you have huge numbers of people who just can’t cope with the academic approach, as part of their vocational courses, and they are either trapped unable to pass, or drop out.”

The report also calls for a review of plans for maintenance loans to ensure financial support is available for all learners on higher-level technical courses.

“One of the main complaints of the FE sector is that students can’t get maintanence loans, whereas at universities, the complaint is people can get them, but it leads to debt,” he said.

So why has take-up on the existing FE advanced learner loans, introduced during his time in government, been relatively slow?

“Probably interest rates is one factor,” he admitted. “The fact that a lot of people are adults with uncertain job prospects and income prospects, perhaps people with young families, means they are probably more cautious in their willingness to take on financial obligations.”

The needs of adults returning to education are declared a “glaring omission” in the report, something the government’s post-16 skills plan “does little to address”.

“The focus of the plan is clear on progression through both academic and vocational routes into higher-level qualifications, which we can presume adult learners can enter,” the report said.

“With an aging workforce, the retirement age getting later and later, and a rapidly changing employment market, the skills plan does little to address these challenges.”

Shakira Martin

Dr Cable and Ms Martin want a “voucher-style system” for older adults from disadvantaged backgrounds “to support them with the associated costs of re-entering education and training”.

The report was first conceived after concerns that students were not involved in the current wave of FE reforms.

Ms Martin said that while the NUS welcomed “many of the proposals” in the skills plan, “the discussions we have had with our members make it clear the government has really missed an opportunity to fully review the needs of FE in the round, not just skills and technical education”.

Consultation launched on mega-London college merger amid Grenfell opposition

A public consultation has been launched on merger plans between two London Colleges, amid mounting opposition from Grenfell Tower fire campaigners who fear it will end adult education for poorer people in the area.

The central London area review recommended that Kensington and Chelsea College merge with the City Literary Institute, a specialist designated institution, but the former announced in June it planned to join forces with Ealing, Hammersmith and West London College instead.

The public consultation on this move was launched on Friday (September 1), and closes on September 30, with the planned date for completion set at January 2 next year.

It is understood residents from the Grenfell Action Group and Save Wornington College campaign met with interim KCC principal Dr Elaine McMahon last week, during which they raised grave concerns about the merger.

“We don’t want this merger because EHWLC would ultimately take control, and we don’t think they would be interested in fighting local council plans to demolish the Wornington Road campus [near Grenfell Tower],” said campaigner Verena Beane.

“We think they would cut provision at Worthington even further than it already has been, and move out of the building to allow the council to demolish.

“Residents fear KCC’s teaching sites, particularly in North Kensington, would be massively pared back overall, in the long-term.”

The Wornington site, one of KCC’s two main campuses, was sold for £25.3 million last year to the Royal Borough of Kensington and Chelsea under a lease-back arrangement.

The local authority is looking to demolish the building for housing, in a deal that would at best result in greatly reduced college teaching space on the redeveloped site.

Ms Beane, a retired ex-KCC employee, said the college had assured campaigners it would hold a public meeting on the future of Wornington.

“We’ve told them there’s huge local opposition to the merger and demolishing the campus,” Ms Beane added. “If they held the meeting in the town hall it would be packed-out.”

Edward Daffarn, another campaigner, explained the Wornington campus has played a vital role in helping poorer people in the area, often with English lessons or access to higher education classes.

“It’s vital for the sort of people who lived in Grenfell Tower – often people who moved to this country from overseas and relied on college classes to help them learn English, integrate and find work,” he said.

“Poorer people feel they are being driven out of the area. These are the sort of vital services that are being taken away.”

Director of strategy and local services at the Royal Borough, Tony Redpath, sat on the college’s board of governors until July this year.

He warned about merger asset stripping, in an email to colleagues seen by FE Week, in February: “KCC’s problem, put baldy, is that its attraction to other colleges is based on its assets rather than its activities.”

When asked about the merger and controversy over Wornington, Dr McMahon told FE Week: “We understand very well the desire of the local community in North Kensington to see the college thrive”, adding “we certainly share that aspiration”.

The college answered criticism that the public were not informed about the sale of Wornington before it went through, on its website, alongside the new consultation document.

It said: “The current management team has not been able to ascertain why there was no engagement about the disposal plans and, with the benefit of hindsight, considers consultation at the time would have been advantageous.”

An EHWC spokesperson told FE Week: “The college will continue to engage with and support local communities and ensure that the appropriate provision is available and accessible.

“We will continue to provide adult education in North Kensington.”

A joint statement from the leaders of both colleges, in the consultation document, added: “We believe this merger will result in a financially secure college… allowing us to continue to meet the needs of our students, employers and the local communities.”

A spokesperson for the local authority told FE Week: “Kensington and Chelsea Council and Kensington and Chelsea College have agreed that nothing will happen without consulting the community first.

“RBKC and KCC will continue working to ensure there is minimal disruption to FE provision in North Kensington and a wide range of options for the Wornington Road site can be considered.”

Learndirect: Parliamentary questions pile pressure on ministers for answers

Labour’s shadow skills minister has demanded official answers on whether Learndirect is getting special treatment from the government after Ofsted hit it with its worst possible rating.

Gordon Marsden has tabled a series of probing parliamentary questions for the education secretary over the size of the adult education budget allocation the nation’s largest training provider has received – following reporting by FE Week.

The Department for Education recently admitted that instead of terminating Learndirect’s AEB contract, as is normal practice after an Ofsted grade four, it would fund the provider to recruit additional learners until July 2018.

The decision has caused consternation across the FE sector, and more than a few bigwigs are asking whether Learndirect, which has more than 20,000 learners, is being treated with kid gloves.

The DfE told FE Week that Learndirect did not apply for AEB funding in last month’s tendering round, but based on current rules, its allocation should fall from the £60 million it received in the last academic year to just over half a million in the nine months between November 2017 and July 2018.

But we understand that the Education and Skills Funding Agency has been reviewing its policy for providers that had either been unsuccessful or not tendered.

This review might see such providers receive a minimum allocation of 75 per cent of their 2016/17 sum – which would mean Learndirect takes in around £34 million for its next nine months of operation.

A spokesperson for the DfE last week refused to reveal the true sum Learndirect will be allocated from the AEB up to July 2018, and claimed the provider itself wasn’t yet aware how much it would receive.

They claimed the information was “commercially sensitive information”, though they then contradicted themselves when they conceded it would be “published at certain points in the year”.

In light of this uncertainty, Labour’s shadow minister Mr Marsden has now demanded official answers from Justine Greening.

He wants her to explain how much AEB funding Learndirect requested for 2017/18, how much was allocated between August 1 and October 31 of this year, and how much it will receive between this coming November and next July.

An irate Mr Marsden has also demanded to know why Learndirect has been permitted to recruit additional adult education learners in the wake of its ‘inadequate’ grade from Ofsted.

“We’ve put down these questions because the situation at Learndirect that was uncovered through the court proceedings and the work of FE Week is an extremely serious one which government ministers have been silent on,” he said.

“For the confidence of the sector and clarity for all those people who have been affected, we need answers now.”

It remains unclear why Learndirect failed to tender, but the ESFA did say that it “reserves the right not to award a contract to any applicant awarded grade four for overall effectiveness, after an inspection by Ofsted”.

Every private training provider has been given a three-month extension to its 2016/17 AEB contract until October 2017, after the tender evaluation process was rocked by a series of delays.

The results of the process were announced on August 4, but had originally been promised on May 19, while the sector was plunged into chaos after many providers with high scores failed to secure any funding at all.

Learndirect’s £60 million allocation in 2016/17 was 10 times larger than that of the second largest private training provider.

The AEB tender for private providers was first launched on January 27 and originally came to just £110 million for 2017/18.

Colleges ‘deeply concerned’ about £650m non-levy tender

The Education and Skills Funding Agency was accused of plunging the relaunched non-levy apprenticeship funding tender process into chaos last night, as new “clarifications” and document updates were sent out. David Hughes reflects on college concerns below.

Colleges are very frustrated and deeply concerned about the timing and the details of this procurement.

Concerned because their relationships with thousands of employers and students are at risk if they are not successful in bidding for the business they have been successfully carrying out for many years.

Frustrated because the complexity of the process has required detailed clarifications, some of which have come very late in the process and which have led, for instance, to extensive spreadsheets having to be completely re-worked.

That said, it is a relief that the deadline has been extended in recognition of the importance of the clarification issues.

Of course, that then reduces the time that officials have to consider the bids, on what was already a very tight timetable.

There are a number of wider issues here which are important to remember.

This a high risk process for everyone

Firstly, this a high risk process for everyone – the whole apprenticeship programme requires strong engagement with small and medium-sized enterprises and with potential apprentices.

Both will only be secured if the majority of existing college and independent providers are successful in the procurement.

New entrants will not be able to deliver the scale and quality required in short time.

Second, the procurement timetable is rushed, because the procurement laws are inflexible, because there’s a fear of legal challenge from disgruntled would-be new entrants and because the election delayed matters.

The legal challenge risk partly exists because companies have responded to repeated talk over the years from ministers and officials about bringing in new entrants, rather than improving quality and contestability of existing entrants.

Third, we are still concerned that there is simply insufficient money for SME apprenticeships, and that even if the procurement goes smoothly, we will have a very difficult 18 month period of uncertainty, with colleges unsure if they will get growth funding to meet demand.

The uncertainty is compounded by the complex interplay between multiple carry-in calculations and new starts, which the procurement has created at the same time as the levy is still making an impact.

It is sad that the biggest losers in all of this could be young people

Fourth, the rushed timetable means that ESFA has had to repeat a large single national procurement in one go rather than, say, dividing the market up by regions to create more manageable chunks.

That job is harder because ESFA staffing levels have been halved in the years since the financial crash and those working on this are managing a new set of policies and rules with very tight timescales.

Fifthly, we have repeatedly asked for DfE and ESFA to give more time and attention to developing the market over the long-run for apprenticeship provision.

We need to have an approach which ensures there’s a strong and sustainable training supply side able to meet employer and apprentice demand.

That requires long-term clarity for all current and potential new providers, to allow for proper investment in staffing, facilities, relationships and progression pathways for students.

The procurement approach needed to support this will probably be very different to the current approach.

It is sad that the biggest losers in all of this could be young people and adults missing out on good apprenticeship opportunities.

But, the most important issue for today, with the procurement deadline so close, is for ESFA to get correct and unambiguous information out now to assist bidders.

AoC members are battling to get this right at the busiest time of the year, as they register and induct hundreds of thousands of new students.

ESFA £650m non-levy tender has ‘descended into farce’

The troubled second attempt at an ESFA non-levy apprenticeship funding tender descended into chaos last night as a series of  new “clarifications” and document updates were sent out.

With little over a week until the submission deadline, bidders were informed that the tender cap calculation for existing apprenticeship providers should be based on a proxy percentage for non-levy funding in 2015/16.

But that’s only for new starts, not all delivery which would include the funding for apprentices that started before August 2015.

By only including funding for starts, this will in many cases more than halve the tender cap funding value that providers have been working to.

Mark Dawe, chief executive of the Association of Employment and Learning Providers reacted angrily, describing the situation now as “totally unacceptable and makes a mockery of the process”. 

He went on to say: “Changing documentation and requirements in a procurement process at this late stage is unacceptable.  

“The whole process is in danger of descending into a farce.  To introduce a new criteria, starts, leading to a wholesale reduction in the maximum bid amount at this late stage, when many have completed their documentation, will lead to total confusion and chaos.”

David Hughes, chief executive of the Association of Colleges (AoC) this morning told FE Week (click here for full expert piece): “Colleges are very frustrated and deeply concerned about the timing and the details of this procurement.

“Concerned because their relationships with thousands of employers and students are at risk if they are not successful in bidding for the business, they have been successfully carrying out for many years.

“Frustrated because the complexity of the process has required detailed clarifications, some of which have come very late in the process and which have led, for instance, to extensive spreadsheets having to be completely re-worked.”

One college vice principal tweeted: “It really has descended into farce!” and a sector consultant asked: “Is this how to ruin apprenticeship providers course 101?”

The latest round of clarifications come after the ESFA scrapped the first attempt at the tender, and then extended the application deadline for this second attempt by three and a half days, to midday on September 8.

Mr Hughes added: “It is a relief that the deadline has been extended in recognition of the importance of the clarification issues. Of course, that then reduces the time that officials have to consider the bids, on what was already a very tight timetable.”

Some of the guidance and 570 answers to requests for clarifications also left many scratching their heads, as they contained different answers to the same question. One message, sent out last night, reads: “The Education and Skills Funding Agency has been clear that if you have already completed earlier versions of the documentation that is acceptable for submission.

“This remains the case for all documentation apart from Attachment 4 volumes and values sheet. Attachment 4 – Volumes and Values V1.3 This version [updated yesterday] needs to be used by all Potential Providers (including those that have already submitted their tender).”

And yet the latest clarifications document, also published yesterday, says: “All versions of Attachment 4 can be used, anyone starting completion now it is advisable to use the newest version of the attachments but it is not essential if you have already completed”

A Department for Education spokesperson said: “The ESFA issued a clarification to ensure that all bidders are provided with the information needed to submit high quality bids. We recognised that this may have an impact on the tender process, which is why have extended the submission deadline. This will not affect the delivery timetable.”

Read my NCFE blog about the complexity of the non-levy tender, written before this latest round of “clarifications”, here.

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UPDATE from AELP: “Unfortunately this is simply yet another unnecessary attack on existing high quality providers, when the government are keen to stress the importance of stability during this transitional period.

“We have been informed by the ESFA that this is simply a clarification and that “most providers have understood this anyway”.  From the plethora of responses we have already had from members, we know this is clearly not the case and AELP is not aware of any members who had interpreted it in this way.  In essence there was never any reference of historical ‘starts’ in calculating what providers could tender for.

“Our view is this significant change to the live tendering process and adds further backing for our calls to review the arbitrary £200k minimum contracting cap.  We have called for this cap to be scrapped, but the ESFA have told us that now that the procurement is live, it must remain.

“This late change to how the ESFA are measuring historical delivery means that yet more high quality providers will be pushed under the minimum contracting threshold and fall out of scope for a direct contract.  Just because providers are small doesn’t mean they are not high quality and play an important role in the marketplace.”