Over two thirds of learners from providers that have collapsed – leaving them with huge loan debt but no qualifications – have still not been moved onto alternative courses.
The situation has become so dire that Robert Halfon (pictured right), the new chair of the Commons education select committee, is now backing FE Week’s campaign to get the government to refund all the affected learners.
We have been demanding justice for the hundreds of adult students who’ve been left in the lurch by failed providers since January, when it emerged that the Department for Education was refusing to write off advanced learner loans held by over 200 Londoners left high and dry by the collapse of John Frank training in November.
This situation was echoed at Hampshire-based Edudo Ltd, and Darlington’s Focus Training & Development Ltd, so FE Week launched its #SaveOurAdultEducation campaign to get the debts cancelled.
However, just 112 of the 344 affected students have since been transferred to other providers.
Mr Halfon told FE Week that he was “incredibly concerned” about the figures, which were obtained through a Freedom of Information request.
It is “the duty” of the Education and Skills Funding Agency to refund learners if they cannot be found “adequate” alternative provision, he insisted – which must be close enough to home to make travel affordable and practical.
The DfE confirmed that 93 of the 112 transferred learners studied at JFT, and the other 19 were at Edudo.
Twenty more of Edudo’s 95 former learners are apparently meanwhile “in the process” of transferring, meaning 42 per cent are still unaccounted for.
How the hell am I supposed to sort myself out?
Worse yet, not one of the 37 affected students from Focus Training have been found new providers since the organisation went under last December.
In total, there are still 212 students from these defunct providers – with no end in sight for their loans misery.
Asim Shaheen is a former student of JFT who has been unable to complete a level three hospitality and catering course which was funded by a loan of over £8,000, and who became a focal point of our campaign after he travelled from Stoke to Westminster in February to confront Mr Halfon – then the skills minister.
“After I came all the way to Westminster to see the minister I’ve heard nothing,” he told FE Week. “The government sent me one letter saying it was my responsibility to go and sort out a new provider for myself and that was that.
“I’ve got no portfolio because it was with JFT, who I can’t contact, so how the hell am I supposed to sort myself out?”
He claimed the government “has no back up plan” and that learners like him have been “left in the middle of nowhere, expected to find our own way home”.
A Department for Education spokesperson said: “The student loans company made contact with all affected learners. Of the 344 learners affected, and of whom wished to continue their learning, 132 have chosen to continue with an alternative provider.”
Our FoI only focused on the three failed training providers we investigated last year, but there may well be many more learners in the same situation who simply have not yet been brought to light.
Mr Halfon said he was “keen” for the education committee to “look at the quality of both public and private training providers and the role government plays in terms of how students are treated if these institutions fail”.
So, the tenders are in for the second attempt at procurement for apprenticeship provision for non-levy paying employers, and it’s over to the ESFA.
As well as evaluating tenders, we’d suggest it’s also time to hold the ESFA’s own performance to account. It’s fundamental this time that the procurement is successful and works to the skills needs of employers, localities and the country as a whole. No one would argue that managing anything on this scale is easy – but isn’t it the ESFA’s job? And they designed it, complexities and all. In apprenticeship terminology, shouldn’t the ESFA have the knowledge, skills and behaviours to manage a successful procurement?
The University Vocational Awards Council (UVAC), as a representative organisation, has raised concerns along with others on the procurement. The unstable nature of the process, the repeated updates to forms, the 800 tender clarifications, the last-minute deadline extension with 48 hours to go, the changes to threshold calculations, and even the fact that a critical procurement exercise was run over the summer have all been problematic.
The fact that getting this procurement right is so important for the apprenticeships reforms in general and degree apprenticeships in particular was outlined in a recent report from HEFCE, the higher education regulator. Remember also that apprenticeships are the government’s flagship productivity programme and that around a third of new employer-developed standards are at higher-education level. We’re not therefore talking about niche provision.
There’s been a loss of confidence in the ESFA – or at least this part of the organisation
HEFCE’s report identified three things in particular. Just 13 per cent of degree apprenticeship starts planned with non-levy payers remained after the ESFA’s first attempt at procurement. After the first round was paused, one higher education provider adjusted its targeted starts for non-levy paying employers downwards from 90 to two, while a London institution went from 77 to zero. One region had no provider with any allocation to deliver degree apprenticeships to non-levy paying employers.
In one case study, a higher education provider “had conducted a survey of demand for apprenticeship provision among (its local) SME population, which showed around 50 SMEs had an immediate or future interest in degree apprenticeship, and a further 60 SMEs requested further information”. After the pause, the provider was unable to follow up even “such clearly evidenced local demand”.
From UVAC’s perspective, this is a rather worrying position for what’s supposed to be England’s flagship productivity programme. It’s also important to realise that the damage caused by the failure of the first attempt at procurement isn’t just a short-term problem. There’s been a loss of confidence in the ESFA – or at least this part of the organisation. Higher education providers had developed partnerships not just with SMEs, but also with LEPs and further education providers, many of which have been delayed or abandoned. Momentum has been lost and some HEIs took the decision to focus on levy-paying employer business, to the detriment of the productivity agenda.
The silence, at least in public, of the Institute for Apprenticeships on the ESFA’s approach to procurement of provision is surprising. I appreciate that the Institute’s remit focuses on the quality of standards and assessment plans and advising on funding bands. But, if ESFA’s funding system prevents non-levy payers from using the new apprenticeships developed through the trailblazer process, such employers can’t benefit from new high-quality standards.
The attempt will reveal whether the ESFA is a “skills” funding agency able to fund the apprenticeships developed by employer groups. I suspect no-one will be entirely happy with the outcome, but if the ESFA is able to demonstrate it has been based on the offer developed by employers, clearly reflective of employer demand and the policy pillars of enhancing social mobility and raising productivity, it may be able to redeem a reputation.
Adrian Anderson is chief executive of the University Vocational Awards Council
A college in one of London’s richest boroughs has delayed its final decision on whether to abandon one of its campuses to make way for housing, amid mounting protests from Grenfell Tower campaigners determined to defend adult education for poorer people in the area, FE Week understands.
The site on Wornington Road is one of Kensington and Chelsea College’s two main campuses, and it was sold for £25.3 million to the Royal Borough of Kensington and Chelsea last year under a lease-back arrangement.
The local authority wants to demolish the building for housing, in a deal which would at best result in greatly reduced teaching space for the college at the redeveloped site.
But the LA’s plans have become entangled in the fallout from the Grenfell Tower fire tragedy in June, in which at least 80 people were killed.
Campaigners including Edward Daffarn, who escaped the blaze, have met Dr Elaine McMahon, the college’s interim principal, and the college’s chair of governors Mary Curnock Cook, to raise concerns both about Wornington’s future and KCC’s planned merger with Ealing, Hammersmith and West London College.
The Wornington campus and wider FE is the sort of vital service that they have been trying to take away
KCC refused to confirm what was said in the meeting, but Mr Daffarn, speaking on behalf of the Grenfell Action Group, said campaigners were told the college had “pushed back” its final decision on whether to assent to plans to redevelop the site from the end of this month until December 30.
“It’s a good sign,” he said. “I firmly believe that as a consequence of the fire, the council and college now not only has to listen to us – because they will be under pressure from the government – but they have a duty to do so.
“People in the Grenfell area have for too long felt they are being driven out of the area. The Wornington campus and wider FE is the sort of vital service that they have been trying to take away.”
Another campaigner, Verena Beane, told the council about the “huge local opposition” to the merger, which she fears “will ultimately diminish the chances of saving Wornington”.
“We still came out of the meeting feeling they weren’t taking enough notice of the community needs, but we won’t give up,” said the retired KCC employee.
The central London area review recommended that KCC merge with the City Literary Institute, a specialist designated institution, but the former announced in June it planned to join forces with EHWLC instead.
A public consultation was launched on September 1, closing on September 30, and the planned date for completion has been set at January 2 next year.
KCC is understood to be planning a public meeting to address residents’ concerns on September 26.
The borough’s director of local services, Tony Redpath, sat on the college’s board of governors until July this year.
He warned about asset-stripping in an email sent to colleagues and 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,” he wrote.
KCC and the borough council issued a joint statement on the matter, saying: “The council and college have agreed that nothing will happen without consulting the community first.
“RBKC and KCC will continue working to ensure that there is minimal disruption to FE provision in North Kensington and that a wide range of options for the Wornington Road site can be considered with the communities involved.”
The ESFA has ridden rough-shod over the work of many vital third sector providers. Tim Ward wants answers
Imagine the outcry if, at the beginning of the year, the ESFA had come out with a policy that would move money from one area to another without any reference to local stakeholders. What if it took non-formula-funded community learning away from third sector organisations, effectively closed the a major county’s largest community learning service, and reduced the budgets of long-established learning providers by 50 per cent or more in the middle of their operating year?
At least if the ESFA had announced this as a policy we would have had the opportunity to challenge and debate its implications and impact. We could have highlighted the potential loss of opportunities for disadvantaged learners, for rural areas and for those whose needs don’t fit neatly into nationally determined “priorities”.
As things stand, this is exactly what has happened as a result of the adult education budget procurement exercise. It was done without any public consultation or discussion about the impact on current and potential learners that will result from the ruination of learning opportunities. Many of these opportunities were offered by providers who have been praised by Ofsted for their work in supporting vulnerable learners to progress to further learning and work.
All the procurement is actually testing is the ability to answer exam questions, rather than genuine capacity and intent
When challenged, the ESFA has argued that the process was legally compliant with the Public Contracts Regulations 2015. In other words, it did things in the right way. What is missing from its response is any consideration as to whether it did the right thing.
I do not personally believe that as a general principle that this procurement approach is the way to ensure that public money is spent well and effectively. However, this is the world we live in, though the process could have been designed in a way that recognised the richness of the learning activities delivered through the AEB, and the variations of need that exist in different areas and communities.
Unfortunately, those responsible chose not to approach it in this way, and used a simplistic, top-down approach. Worryingly, there seems to have either been a lack of understanding, or a lack of concern, about the impact of the methodology used. I leave you to decide which of these applies.
Looking beyond the issue of the process’ impact on learners, there are two particularly irrational consequences that strike me. Those who won a contract are facing in-year cuts of 50 per cent compared with previous years, while those who were not successful or did not bid are being given transitional contracts with much smaller reductions. The ESFA argues that the former will have the opportunity for in-year growth, but recent experience of cuts and zero growth suggests that this opportunity is theoretical. At the very least, the ESFA should provide “successful” bidders with similar transitional support to those provided to the unsuccessful bidders.
The second is that unless the funding rules are changed, those who have won a contract will have the flexibility to deliver anything within the AEB rules including “non-priority” learning, for example to meet local priorities determined by an LEP. In other words, all the procurement is actually testing is the ability to answer exam questions, rather than genuine capacity and intent.
Many providers, particularly third sector providers, originally gained their contracts in the early days of the LSC some 15 years ago. Until this year, their funding was renewed annually subject to performance and policy direction. This public investment allowed the development of a network of providers with accumulated expertise and experience.
Both the data and Ofsted show the quality, relevance and success of their learning programmes. It is a tragedy for the most vulnerable and disadvantaged in our communities that a poorly designed procurement process will lead to the loss of this capacity at a time when it is needed more than ever.
Tim Ward is chief executive of the Third Sector National Learning Alliance
The Department for Education did not launch a funding audit of Learndirect at the end of March, even though Ofsted sent damning evidence that apprentices were not receiving enough training, FE Week can reveal.
An experienced independent apprenticeship funding auditor confirmed Ofsted’s evidence should have raised significant concerns at the department.
FE Week understands that the education secretary was briefed by officials on the situation just days after an inspection that eventually saw the UK’s largest training provider graded ‘inadequate’.
Justine Greening was also made aware that Learndirect was threatening to enter administration.
Justine Greening
According to evidence given by Learndirect during its judicial review into Ofsted’s report, the Education and Skills Funding Agency indicated that it could not be seen to be giving special treatment once the grade was published, and that early contract termination notices would follow.
But in a move that may now become the focal point for an impending National Audit Office investigation, Learndirect seems at some point to have been deemed “too big to fail” by the DfE.
Once Learndirect lost its judicial review and FE Week had the related gagging order overturned, the report was published in full in early August.
No early contract termination notices were issued at that point, and we now know that because Learndirect withdrew from the adult education budget tender, it was given a £45 million contract extension until July 2018.
Both the DfE and Learndirect have refused to say when this decision was made.
And Learndirect’s apprenticeship provision, which had already been slapped with an ESFA notice of breach before its fateful inspection because 70 per cent of its apprentices were below the minimum standard, will nevertheless be funded until July 2018.
Worse still, new apprentices will be funded indefinitely through a company registered last year: Learndirect Apprenticeships Ltd.
Even though FE Week shared Ofsted’s damning evidence in the court room itself, the DfE has stuck to its line, insisting: “It is normal procedure for the department to wait until an inspection report is finalised and published by Ofsted before taking any formal action.”
Repeatedly pressed over the course of several days on whether an audit had taken place, the DfE said only that it “would not be providing a running commentary on this matter”.
Meg Hillier
The chair of the Commons public accounts committee, Meg Hillier, is reportedly furious at the situation, and has referred the case to the National Audit Office to consider an investigation.
“It does not seem to me that in this case the DfE has been a smart client,” she told FE Week. “It got to a point where … if it had started digging it might have gone in and found its problems – so it does seem that Learndirect has been too big to fail.”
The NAO told FE Week that its investigations, such as the Kids Company scandal in 2015, are “reactive to a situation” and “offer a rapid assessment of service quality, failure and financial management”.
The DfE has admitted it wanted to protect Learndirect’s contract with the Home Office, as the sole supplier of the Life in UK tests.
However, when FE Week approached the Home Office for comment, it didn’t seem to share this concern.
A Home Office spokesperson said: “The Ofsted report does not relate to services delivered on behalf of the Home Office. The Life in the UK test is delivered by Learndirect and they continue to provide a high-quality service on this contract.
“As with any contract, the Home Office has detailed contingency plans which cover a number of possible scenarios, including where a supplier ceases trading.”
DfE confirms: Learndirect IS too big to fail
The government told FE Week that they did not terminate any contracts as the decision had been taken to: “protect learners and maintain other key public services run by Learndirect Ltd, including Life in the UK tests [Home office contract] and Initial Teacher Training skills tests [Standards & Testing Agency contract]. Had we terminated, there would have been a real risk of Learndirect Ltd quickly entering into administration resulting in significant disruption to learners and others who use their services, such as prospective teachers.”
Ofsted emailed evidence to ESFA in March
“We usually share provisional grades and main findings with the funding agency and the provider at the final feedback meeting,” Ofsted said. “The agency therefore knows what the provider’s strengths and weaknesses are as soon as the inspection concludes. In the case of Learndirect, at the request of the provider, the final feedback meeting did not take place, so the provisional grades and main findings were emailed to the agency on the Monday following the inspection. This meant that the agency was aware of the weaknesses with Learndirect’s provision within three days of the inspection.
“We do not routinely share draft reports with the funding agency. This position is consistent with our framework and practice in other remits, where the provisional grades are confirmed immediately following inspection, but the report is only shared immediately prior to publication. And as you know, once the Learndirect report was ready for publication we were delayed by purdah and then by the courts.
“Should the funding agency or department ask to know the findings of the report prior to publication we would ordinarily share them… Neither the EFSA or the DfE requested a copy of the draft report prior to publication… To confirm, the report was not sent to anyone else externally by Ofsted before publication.”
Why didn’t the ESFA investigate Ofsted’s evidence
Taking a fortnight to reply, the DfE eventually refused to tell FE Week what, if anything, it did before the was being published in August. It would seem no audit has taken place.
Evidence from the judicial review
Nobody from the Department for Education nor the Education and Skills Agency attended the court hearing in Manchester, nor did they request a copy of the draft inspection report. However, FE Week was in attendance to record what Ofsted said, along with a related ESFA funding rule for 2015/16.
Learndirect failed to ensure apprentices received their entitlement to off-the-job training. Out of 19,940 Learndirect could only say that 11,729 were getting the training entitlement. So 8,211 apprentices at the time of the inspection (41 per cent) were not getting the off-the-job training entitlement, according to Learndirect’s own employee (the inspection nominee). [Issue here with SASE minimum hours and rules such as B18.2 which states: “You must record the agreed average weekly hours including study hours in the learner file.”]
Learndirect managers were not able to provide evidence of what was completed and there was complete confusion on how data is recorded. Ofsted said it was told there was evidence of monitoring progress in audio files. So it asked for the audio files and when it listened, it found no evidence of monitoring progress. The inspector asked in his notes if they were “gaming evidence?” [Rule A84: “The learner file must contain evidence to support the funding claimed and must be available to us if we need it.”]
Failure by Learndirect to ensure apprentices learned new skills: “systematic approach to assessment targets focused on units evidence required rather than new skills”… “learner had difficulty evidencing the new working skills they were developing on the programme”. [Rule B4: “To receive funding for an apprenticeship you must be satisfied that this is the most appropriate learning programme and it is a new job role, or an existing job role, where the individual needs significant new knowledge and skills.”]
Learndirect failed to monitor the starting point of apprentices or to properly understand the rate of progress made [Rule A97. “You can only claim funding for learning when activity directly related to the learning starts.”]
Five apprentices selected at random; none had any progress monitoring or any evidence or targets being set in individual learning plan. There was no individual learning plan. [Rule A89.3 “If applicable, the learner file must contain all initial, basic skills and diagnostic assessments.”]
“System of learning and development is based on assessment only. No planning of learning or execution thereof takes place”. When Learndirect’s national operations director was challenged on what, if any, quality assurance process were in place, they put their hands on their head and said: “I will need to look into it” [Rule A98. “You must have evidence that the learning took place and that the learner was not just certificated for prior knowledge.”]
Auditor’s opinion
FE Week showed the evidence to an experienced apprenticeships auditor. This is their expert opinion on possible breaches of contract, and why funding might warrant clawback.
Looking at what you’ve provided here, we would be raising a significant number of issues if any of this came up at funding audit. The key issues for us would be as follows.
No evidence of learning would result in us in asking for the provider to prove the learner is still active. If there’s no evidence, we would be recommending to the agency that the learner is either withdrawn from programme at last date of learning activity. If there’s no evidence of maths and English then the end date would have to be the start date. If it was proved that the learner were still active, we would push for them to be put on break and have all funding removed for the period we are testing. The ESFA may overrule us and let the funding stay, so then it becomes a timeliness issue.
Unclear evidence to support start dates can create problems round minimum duration if programmes are set around six and 12 months. For all 16-18 learners, we may be deeming funds ineligible if it’s apparent that the learner has not completed 12 months. This usually results in a) losing all funds for year two, though year one is retained as we can’t recover it, or b) for a learner that starts in the year we audit, we either remove funds or the provider corrects the start and planned end date to ensure the minimum duration is met.
If the number of hours worked is not confirmed, we can’t confirm that the appropriate minimum duration has been recorded. If learners work less than 30 hours a week, we confirm if the programme has been extended accordingly. Without confirmation of hours, we can’t sign the claim off and the provider must get us the data so we can.
If they are working 16 hours and are only on programme for 12 months, 16-18 apprentices are ineligible unless the dates can be amended – this would be a funding error as the level of claim for the year would reduce as funding is pushed into subsequent years,
If achieved then funds would be removed. For 19+ we would either seek an extension if the learner has done at least 12 months, we would amend to completed and failed. All achievements funds would be removed.
If it’s apparent that the learner is only being assessed we’d refer to the agency and expect all funds to be removed as this model is ineligible for funding.
It’s difficult for auditors to comment on progress unless we’re clearly seeing that reviews and so on show no clear progress. Where we find this we will ask why funding claims are being made when learners are clearly not progressing. Again, we’d expect referral to the agency.
Amanda Spielman, Ofsted chief inspector, tells FE Week editor…
I think the single most shocking thing was that something like a third of the apprentices at Learndirect were getting no training at all. These are young people often in their first job who most need training and their interests looking after. They weren’t getting trained.
In this particular case we have played our part by publishing our report. It is not for us to describe what then happens to Learndirect, but of course we can carry on monitoring and making sure that while it continues to operate, we do what we believe we ought to be doing, [and] that action is taken in the light of recommendations we’ve made. Of course we are very concerned to make sure that people recognise that we made significant recommendations and that the action that needs to be taken is taken.
I hope that the lessons from Learndirect will really focus people’s minds, both on what can be done up front to make sure that we don’t get into these situations, especially with very large providers, and also to make sure that we are geared up to take prompt action as needed.
The question of whether Learndirect is too big to fail is for the DfE at the end of the day; it’s not for us to answer. It’s one of the things to think about for the future: what is manageable. Because in any system there are always going to be some problems. Making sure the system can cope with the failure of any individual provider is an essential aspect of a functioning market.
I hope that the lessons from Learndirect will really focus people’s minds
The system must be able to cope rapidly with the failure of an individual provider, so that apprentices get what they should have: really good training no matter what.
Acting sooner is clearly a big lesson that people should take away from Learndirect, [and] looking forward, making sure that every provider has system capacity to handle the failure of any other one.
Ofsted’s accountability systems are evolving but I believe they are fit for purpose.
With the apprenticeship reforms, we can see the system reshaping, which is why we are thinking the topic of campus inspection has already been floated.
Discussions happen about that. There are conversations all over the place about evolution of inspection and risk management which I think go ahead pretty intelligently, but we need to make sure we never get complacent about what we’ve got, and that we keep looking forward next year.
How do we line up and make sure we’re all doing the right things for that? It’s more complicated than it’s ever been.
I’ve got a particular desire that we really make the most of our power to have a bird’s-eye view of the whole system and that we aggregate what we see on individual inspections.
Since I arrived at Ofsted I’ve really been trying to make sure we think about how best to draw together the evidence we get from individual inspections and those findings, to say what is it that we’re seeing about the whole, that we should be concerned about and should be talking about.
Meg Hillier, public accounts committee chair, tells FE Week editor…
We had hoped to have a hearing [this month] with Jonathan Slater, where we were going to put forward some of the key points about how come Learndirect is too big to fail, how come it is still getting money and we haven’t terminated its contract, and questions like that.
We have also been in touch with the National Audit Office which is considering doing an investigation. This is a quick-hit inquiry so it is not a long-term value-for-money one. It will probably be just six to eight weeks. If that did go ahead it would probably come out late October at the earliest.
We will make sure that when Jonathan Slater is in front of us again, which we expect to be at some point in October, we will obviously be putting these points to him.
I hope Learndirect will open itself up to auditors
I have also been talking to Robert Halfon, the chair of the education select committee, to make sure we are looking at what we can both do to make sure we really draw out any wider lessons of government as a wider issue, which is pretty critical.
This is money that has gone to a provider that has not delivered. There is the issue around management fees and subcontracting which I know the education select committee is keen to look at, but it is also an issue which the public accounts committee has looked at a lot, where you have one big subcontractor or a few swooping up the money, but other people are actually doing the work.
We need to look at whether that is really what government means by “outsourcing”.
Outsourcing is here to stay I think, but we have said several times to the government in many reports that once you outsource you do not absolve yourself of this responsibility from making sure it is delivered.
We have been hitting very hard on how you manage that contract as a smart client.
There is no real prospect of Learndirect surviving this scandal
It does not seem to me that in this case the DfE has been a smart client.
It got to a point where it was dealing with a provider that if it had started digging they might have found their problems, so it does seem that Learndirect has been too big to fail.
If the NAO do an investigation, which I hope they will, then we would expect to have all of the data and information about what money has gone in, what has been spent, what management fees were charged and all of that.
If the NAO goes in, they have access to all the contracts and information at the DfE, and I would hope if Learndirect has any conscience, given it now has this publicity anyway, it will open up itself to the auditors because there is now nowhere for them to run and hide.
There is no real prospect of them surviving this scandal.
Nick Linford editorial – Learndirect: No scapegoats, no excuses
The Learndirect scandal might have looked very different had it taken place before the funding agency was subsumed into the DfE.
My hunch is that, as a non-departmental public body, the Skills Funding Agency might have been able to handle decisions and their related communications very differently.
The ESFA does not have its own press office, and over several weeks the DfE has first avoided and finally refused to answer two key questions. Firstly, why didn’t it act on the evidence supplied by Ofsted at the end of March, and secondly, when did Learndirect withdraw from the tender for which it was subsequently awarded a £45 million contract extension?
The NAO is poised to investigate, and ministers and civil servants will need to account for their actions.
At the heart of any investigation will be Peter Lauener, the ESFA’s chief executive and accounting officer.
He will face a torrid few months before his retirement, but it needs to be remembered that the ESFA is now an executive agency to the DfE.
Gone are the days when it would refuse to toe the government’s line.
And because the ESFA was brought in-house, the buck stops with the secretary of state, Justine Greening and DfE’s permanent secretary, Jonathan Slater.
An ‘inadequate’ community learning provider has been caught breaching government funding rules, after Ofsted found most of its construction apprentices were unemployed.
North Liverpool Regeneration Company Ltd, which trained around 129 learners last year with an Education and Skills Funding Agency apprenticeships allocation of more than £600,000, was given a grade four across the board in a report published on September 8.
In the latest sign that Ofsted is taking a more proactive role in sniffing out misuses of funding, inspectors said the “vast majority” of construction apprentices “are not employed” – a “key principle” of any apprenticeship.
As such, they do not receive their entitlement of on-the-job training, which is supposed to amount to 80 per cent of the time they spend on their course.
This, the report added, is “limiting the skills and experience that they should acquire on an apprenticeship”.
Apprentices who do not participate in employment are ineligible for funding under ESFA rules.
In addition to the strong possibility that its skills funding will be cancelled – usual when a provider gets a grade four – questions are now being asked about whether the ESFA should demand a full refund.
“North Liverpool Regeneration Company will be removed from the register of apprenticeship training providers,” said a Department for Education spokesperson.
“We will always exercise our right to terminate contracts where a provider is not meeting the expected standards, working with employers and learners to ensure minimum disruption.”
It is unclear whether the contract for pre-May apprentices has been terminated or whether any funding will be clawed back.
North Liverpool Regeneration declined to comment.
Other issues that raised during the inspection included apprentices who had an “insufficient awareness of the dangers associated with radicalisation and extremism” and ineffective safeguarding.
Trustees, leaders and managers had “presided over a significant decline in achievement rates since the previous inspection”, while tutors had not set “sufficiently challenging” targets for apprentices.
“The vast majority of construction apprentices make slow progress on their apprenticeship programmes and do not develop the skills that they need to gain meaningful employment in the construction industry,” the report continued.
Managers’ monitoring of subcontractors was “poor”, and they placed a “disproportionate emphasis” on achieving financial and recruitment targets, rather than “improving the standards of education and training of subcontractors”.
The report concluded that North Liverpool Regeneration had “no strengths”.
This is not first time Ofsted has uncovered practice that breaks funding rules.
In March this year, FE Week revealed certain colleges and providers were hiding banned subcontracting through the use of so-called “associate partnerships”.
Ofsted first brought it to light in a report on Expedient Training, a provider based in Tyne and Wear, which was rated ‘inadequate’ in January, and was subsequently put on the ESFA’s list for early contract termination.
Inspectors took the unheard-of step of stating that the “vast majority” of the provider’s remaining apprenticeships and advanced learner loans training was “provided by an associate partner”, an arrangement that had not been sanctioned by the ESFA.
Asked this week whether it was purposefully becoming bolder, and beginning in effect to act as an auditor, a spokesperson for Ofsted said inspectors were reporting “as they find against the criteria in the FE and skills inspection handbook”.
Private providers have given the government until the end of this week to find a solution to the “tragedy” of the botched adult education budget tender – or else they’ll launch legal action.
The fallout from the Education and Skills Funding Agency’s contentious AEB procurement process has stoked “immense anger and frustration” across the sector ever since results were finally published on August 4, according to AELP boss Mark Dawe.
Most of the anger stems from the special treatment the government has given to the nation’s biggest FE provider, Learndirect.
While most providers who were successful in the AEB tender have had their funding slashed dramatically, in one case by an incredible 97 per cent (see below), Learndirect was handed a contract worth £45 million despite a very recent grade four from Ofsted – something that usually prompts the DfE to terminate a provider’s funding.
Mark Dawe
DfE officials finally admitted last week that contrary to earlier statements, Learndirect had at first applied for funds during the procurement, and that it later withdrew its bid.
As a result it reaped the benefits of a significant change to the ESFA’s tender rules that had been made at the eleventh hour.
The original policy, published in January, stipulated that providers which did not bid or were unsuccessful, would be offered a contract worth no more than £589,148.
But on September 4 the ESFA told those providers, including Learndirect, that they would now receive 75 per cent of the value of their previous contract to use in 2017/18.
It was this situation that led the Financial Times to describe the FE sector as a “topsy-turvy world where losers end up winners, and where ‘winners’ end up on the brink of insolvency”.
In an exclusive expert article for FE Week on page 20, Tim Ward, the chief executive of the Third Sector National Learning Alliance, said it was a “tragedy for the most vulnerable and disadvantaged in our communities” that a “poorly designed” procurement process has lead to “the loss of this capacity at a time when it is needed more than ever”.
It is a tragedy for the most vulnerable and disadvantaged in our communities
After they heard about the government’s largesse towards Learndirect, a group of providers clubbed together to begin legal action over the government’s handling of the tender.
These organisations, which do not want to be named at this point, say they’ve suffered financial loss and damage to their business as a result of the process – and they believe they have sufficient grounds to launch a judicial review against Justine Greening, or even to appeal to the EU Commission.
After receiving initial legal advice from lawyers, the decision over a solution is now with the skills minister Anne Milton who has until the end of this week (September 15) to come up with a plan.
The group alleges that the government was negligent of – or even complicit in – corrupt practice under the Public Procurement Act 2015, which states that a procurement must not be interfered with once underway.
It also believes the ESFA has breached the Public Contracts Regulations 2015, specifically with its “failure to treat bidders equally and without discrimination, failure to act in transparent and proportionate manner and artificially narrowing competition by unduly favouring or disadvantaging bidders”.
In a letter sent to AELP members on September 14, Mr Dawe said he hopes “common sense prevails” eventually.
“There is immense anger and frustration that the losing bidders are in a better position than the vast majority of successful ones – and the Learndirect situation is just rubbing salt in the wounds,” he said about the AEB tender.
“We hope that some form of solution is proposed by officials this week, otherwise I fear this is in danger of dissolving into a legal battle and further accusations of foul play.”
The AEB tender for private providers has been dogged by delays. Results were supposed to be released on May 19 after it was first launched on January 27, for a sum that originally came to just £110 million.
The initial notification of tender results quickly descended into chaos after many providers with high scores failed to win any funding.
The Education and Skills Funding Agency has acted after an FE Week investigation earlier this year found employers in three sectors preparing to exploit a loophole that would allow them to grade their own apprentices.
The new conditions for organisations on the register of end-point assessment organisations are stark.
“You must not collude with other EPA organisations, providers, employers or any other organisation in the delivery of end-point assessment,” states the guidance, released on September 5.
It defines collusion as organisations entering the register “with the express intention of delivering end-point assessment to each other’s apprentices” or “circumventing the requirement both for the employer to select the EPA organisation and for separate and independent assessment”.
“We will view such reciprocal arrangements as deliberate collusion which will not only undermine the independence of end-point assessment but also limit open competition in the EPA organisation market,” it warns.
EPA rules dictate that exams must be carried out by an independent assessor to ensure impartiality.
This normally means that the person who does the assessment must work for an organisation separate from both the company employing the apprentice and the training provider.
But, as FEWeek reported in February, an exception granted by the former skills minister Nick Boles in 2015 allows employers in the retail, hospitality and travel sectors to assess their own apprentices, provided they can show the assessor is independent from the apprentice.
The Department for Education told FEWeek that any employer wishing to do so would need to be on the register of assessment organisations.
However, we found evidence that certain employers had sought to circumvent this rule.
One established assessment body admitted it was in talks with employers about taking on members of the employer’s staff as consultants to carry out assessments.
Other bodies which may have less-than-robust processes for ensuring an independent assessment are also understood to be exploring this model.
Stephen Wright, the chief executive of the Federation of Awarding Bodies, warned that the new guidance was “full of requirements that are open to interpretation”.
He suggested that organisations were not being given enough time “to properly digest” the guidance, as they “are required to sign a statement of compliance within less than three weeks”.
He hit out at the “complete lack of consultation” on the new conditions, which he said had led to “confused interpretation, contentious clauses that need proper discussion and a timescale that is far too short”.
He claimed that the regulatory burden for assessment bodies had “exploded” in the past two years.
“There is only so much regulation that an organisation can bear, and the real risk is that good assessment organisations will withdraw from situations where they can provide excellent assessment but just can’t keep up with the regulatory demands,” he said.
A DfE spokesperson said: “As part of the administration and operation of the register of end-point assessment organisations, the ESFA reviews all applications received in line with the criteria set out in the pre-application guidance.
“In terms of organisations who are on the register, as indicated in the conditions, the ESFA will collect information on the end-point assessment organisations on a regular basis in order to build a profile of their activity and ensure they are operating within the conditions.”
A major retailer has failed to improve its in-house apprenticeship provision beyond a grade three, in a less than positive week for the sector.
Halfords, which delivers training to its own apprentices in retail, management and warehousing, was rated as ‘requires improvement’ across the board in a report published September 13 and based on an inspection in early August.
The employer provider’s board was deemed “slow to respond to the recommendations of the previous inspection” in 2016, which also resulted in a grade three rating, and “to recognise the subsequent decline in performance”.
Managers were criticised for “weak” planning of functional skills delivery, and for failing to improve the “quality of teaching, learning and assessment quickly enough” or to “monitor apprentices’ progress and achievements in sufficient detail for them to take swift actions for improvement”.
As a result, “too few” apprentices completed their courses on time, or improved their English and maths.
But the report noted that apprentices’ progress and achievements were improving due to “recent management changes and the appointment of new and experienced assessors”.
Another employer provider, Select Service Partner UK Limited, also received a grade three this week – down from its previous grade two – in a report published September 13 and based on an inspection in early August.
Senior leaders at the firm, which operates catering and retail outlets in airports and train stations, were found to have “limited understanding of the strengths and weaknesses of the apprenticeship programme” and to have failed to “recognise that for too long, too few apprentices have completed their qualification”.
And workplace managers “do not involve themselves sufficiently in the planning and coordination of training”, and “as a result too many apprentices make slow progress”, the report said.
But inspectors also found that: “Apprentices develop good technical skills and knowledge because well-qualified trainer assessors match learning closely to apprentices’ individual job roles”.
Adult and community learning provider Blackpool Unitary Authority also dropped from ‘good’ to ‘requires improvement’, in a report published September 8 and based on an inspection carried out at the end of June.
Tutors at the provider, which delivers mainly non-accredited courses, were criticised for not setting “sufficiently challenging targets on non-accredited courses to ensure that learners make the progress of which they are capable”, while learners were not given “useful and appropriate guidance” to help them to move on to other learning or work.
Learners’ attendance on the majority of courses was found to be “too low”.
But learners on accredited courses “progress well and achieve their qualifications”, the report said.
The provider, which delivers apprenticeships in construction and childcare, was slammed as having “no strengths”.
Among the failing identified in the report were “ineffective” safeguarding, “poor” monitoring of subcontractors and the “large majority” of apprentices not being employed – “which is a key principle of being an apprentice”.
“Leaders and managers have failed to maintain the strengths and address the key areas for improvement identified at the previous inspection, leading to a decline in the standards of education and training,” the report said.
