A former Wales international footballer and three other men conspired to scam colleges and the government out of around £5 million of apprenticeship funding, in some cases faking “ghost learners”, a court has heard.

Mark Aizlewood, aged 57, from Aberdare, who played for Wales 39 times in the 1980s and 1990s, appeared today before Southwark Crown Court alongside his former colleagues Keith Williams, 45, from Anglesey, Paul Sugrue, 56, from Cardiff, and Jack Harper, 30, from Southport.

The four, who formerly worked for a provider called Luis Michael Training, face charges ranging from conspiracy to commit fraud by false representation, to fraud and using a false instrument, dating from between 2009 and 2011.

Alexandra Healy QC, prosecuting for the Serious Fraud Office, opened for the prosecution this morning where FE Week was in attendance.

“The case concerns fraud involving in the region of £5 million of public money,” she told the court. “That money was intended to be used to fund the training of apprentices.

“LMT persuaded colleges to enter agreements and that involved them enrolling learners. But a number of the learners were ‘ghost’ learners and did not exist. Others were real people but did not know their name was being used.”

The court heard that LMT did not only deal with “ghost learners”.

“Learners who were real were meant to have over 450 guided learning hours to achieve their qualifications,” Ms Healy said.

“LMT said they would deliver 20 hours of guided learning per week, but these real learners actually received much less, just two to three hours per week.”

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

A number of young people on work experience from a school in Wales were also said to have worked at the now-defunct provider’s offices, where it was alleged that they completed fake tests learners had been supposed to complete, and filled in false learner comment reviews.

Mr Aizlewood, Mr Sugrue and Mr Williams helped set up LMT in 2009, and were directors and equal shareholders of the firm, the court heard.

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

The court also heard that both Mr Sugrue and Mr Aizlewood were able, through other businesses that they operated (Luis Michael Trading and Aizlewood Consultancy), to “claim certificates for the learners’ completion of the component aspects of the apprenticeship framework as a result of the Direct Claim Status those businesses had with the various awarding bodies”.

Mr Harper got involved with LMT in 2009 and was supposed to provide level one and two coaching qualifications.

He is accused of allegedly committing a separate but linked attempt to defraud Liverpool Community College, through his company FootballQualifications.com.

“Mr Harper entered an agreement with LCC,” Ms Healy told the court. “Inquiries into the 39 learners that he had submitted to the college for enrolment revealed that many were not employed, a number were in full time education and so ineligible for apprenticeship funding, others were only attending very short training sessions.”

The college asked for evidence that the learners existed, but Mr Harper was alleged to have produced false bank statements purporting to show payments to the learners.

The four defendants deny all charges.

Two more men pleaded guilty before the trial began.

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

The trial continues and is expected to last 12 weeks.

Five new university technical colleges have opened their doors this month, including one that was so popular it had to increase capacity before it even opened.

But with four more of the troubled 14-to-19 technical institutions closing in the summer, this still represents a net increase of just one, bringing the total to 49.

Ron Dearing UTC in Hull, which will focus on engineering and digital skills and which is backed by the University of Hull, was one of the five new UTCs to welcome its first intake of students this month.

It bucked the trend of low student numbers among UTCs when it was obliged to increase its capacity months before it even opened.

It had planned to take on 150 students in its first year, but it successfully applied to the Department for Education in 2016 to up this to 200 after demand for places outstripped supply.

Other UTCs to have opened this month include SGS Berkeley Green UTC in Gloucestershire, which specialises in digital technology, advanced manufacturing and cyber security, and UTC Portsmouth, which will focus on mechanical and electrical engineering and advanced manufacturing.

Meanwhile, London has gained two more of the controversial technical institutions – making up for the two that recently closed.

Sir Simon Wilton Westminster UTC is backed by the University of Westminster and specialises in transport, construction engineering and the built environment, while Mulberry UTC, based in Tower Hamlets, will focus on the health and creative industries, and is supported by Goldsmiths University.

However, both Tottenham UTC, which opened in 2014, and Royal Greenwich UTC, which opened in 2015, closed in the summer after they failed to attract enough students.

Tottenham’s site has now become the London Academy of Excellence Tottenham, a sixth-form school, which opened this month.

Greenwich council spent £13 million to convert its UTC to a secondary school, Greenwich Trust School, which also opened this month.

Greater Manchester UTC and Daventry UTC also shut up shop due to low student numbers, meaning that a total of eight of the technical institutions have now closed.

The UTC model has struggled since the first one opened in 2010, as many have not managed to recruit enough students to be viable.

Freedom of Information requests submitted by FE Week in April revealed that learner numbers had dropped at two thirds of the institutions opened in 2014 or before.

Even Michael Gove, the former education secretary and a key architect of the UTC programme, admitted earlier this year that “evidence has accumulated” that the experiment with 14-to-19 technical institutions had failed.

And around half of the UTCs inspected by Ofsted have been rated as ‘requires improvement’ or ‘inadequate’.

Lord Baker, chair of the Baker Dearing Educational Trust which supports UTCs, said the schools “play a vital role in developing young people for the modern labour market”.

“In the ‘90s Blair called for ‘education, education, education’,” he said. “Today the call should be ‘employability, employability, employability’. 

“Focus on employability should start in schools, but too many of them only care about exam pass rates. What really matters is that students are ready for skilled work and, as we approach Brexit, the stakes could not be higher.”

Just 15 per cent of levy-funded apprentices to date are aged 16 to 18, according to experimental government statistics published today.

The new Department for Education figures, based on commitments made through the apprenticeship service since May, appear to make a mockery of Conservative party election manifesto commitments to support young people into apprenticeships.

They show that of the 18,600 ‘fully agreed’ commitments made through the service to July 31, just 2,900 were for apprentices aged under 19.

A further 6,000 commitments were for apprentices aged 19 to 24, while 9,700 – more than half – were for those aged 25 or older.

It comes after the Conservative party promised to “deliver our commitment to create 3 million apprenticeships for young people by 2020″ in its manifesto ahead of the June general election.

A commitment is defined as “where a potential apprentice, who is expected to go on to start an apprenticeship, has been recorded in the system”, according to the text accompanying today’s statistics.

For a commitment to be fully agreed it needs to have agreement from both the organisation and the training provider.

The statistics, which are described as experimental, do not reflect all apprenticeship starts since May as they only cover apprenticeships in levy-funded companies that use the apprenticeship service.

The Association of Employment and Learning Providers’ chief policy officer Simon Ashworth said: “As AELP exactly predicted, levy paying employers are already using half of their levy to place existing adult workers on to apprenticeships when at this time of the year.

“We would normally expect the recruitment focus to be more on school and sixth form leavers. 

He added: “It’s too soon to draw solid conclusions until we see the official starts data are published next month, but we are very concerned that the funding reforms for the programme are not providing sufficient incentive for employers, both large and small, to take on 16 to 18 year olds as apprentices.”

The Learndirect saga has taken a fresh twist today, after a government spokesperson admitted that the nation’s largest FE provider submitted and then withdrew a bid to the adult education budget tender, contrary to previous briefings.

It emerged yesterday that despite its recent ‘inadequate’ from Ofsted, Learndirect would receive another £45 million from the AEB budget for use until next July.

The Department for Education insisted at the time that the provider was getting the money even though it hadn’t submitted a bid under the tender process.

Now, however, a trusted source has informed us otherwise, and a DfE spokesperson has corroborated following pressure from FE Week today.

When exactly the bid was cancelled is unknown, but this now leaves serious questions over whether it was withdrawn on the advice of civil servants, in order to avoid future legal challenges as part of a public procurement process.

The Education and Skills Funding Agency’s rules are clear on funding tenders: providers with Ofsted’s lowest rating are much less likely to receive any cash.

Instead, Learndirect will receive 75 per cent of the £60 million it was allocated in 2016/17.

This new rule was also confirmed yesterday after the ESFA sent letters to providers informing them that if they did not participate in the procurement or were unsuccessful, they would receive three quarters of the value of their previous contract to use in 2017/18.

This is a significant change to the original tender rules, published in January 2017, which stipulated that providers which did not bid or were unsuccessful would be offered a contract worth no more than £589,148.

FE Week has learned, meanwhile, of other providers which were successful in the AEB tender, and which have ‘good’ Ofsted ratings, which have had their allocations slashed by up to 97 per cent.

Some providers are even gearing up to launch a judicial review against the government’s decisions regarding Learndirect.

In a statement, the DfE wrote: “Learndirect Ltd did originally submit a bid for the AEB procurement but then decided to withdraw it. They were treated in terms of contract award like any other provider not taking part in the procurement.”

The tender deadline was in February, Learndirect was inspected in March and the results, subsequently delayed, were due out in May.

It remains unclear how online bids can be withdrawn once submitted, given the communication facility is disabled and tender rules state that bidders cannot actively pursue any communication with the ESFA by other means.

FE Week is continuing to seek clear answers from the DfE on when, how and why Learndirect withdrew its AEB tender bid.

Learndirect Ltd had not responded to our request for comment at the time of publication.

A large adult community learning provider in Somerset has found itself at the sharp end of the adult education budget chaos, after its funding was slashed to just three per cent of its previous level.

Somerset Skills & Learning, which teaches around 10,000 students and has around 200 staff, won a new AEB contract in the Education and Skills Funding Agency’s recent tender, but was awarded just £111,000 – a shadow of the £3.4 million it had last year.

It applied for the same amount this year but despite scoring highly – 525 out of 600 – in the ESFA’s evaluation, it now faces a catastrophic reduction in its provision.

Meanwhile providers that did not even apply in the tender or were unsuccessful have been handed contracts for 2017/18 worth 75 per cent of their previous allocation.

Among them is the nation’s biggest FE provider, Learndirect, which the DfE today admitted had at first applied for funds, but which later withdrew its tender.

Learndirect had a contract worth £60 million last year, and will receive roughly £45 million to recruit and train adult learners until July 2018, even though it was recently slapped with an ‘inadequate’ rating from Ofsted – a situation which usually prompts the DfE to terminate a provider’s funding.

Kathryn Baker, a director at SS&L, which is currently rated ‘good’ by Ofsted, told FE Week that Somerset will lose a huge amount of community learning and that if the result is not overturned there will be “significant” repercussions.

“It will mean a loss of funding to our learning partners, who are out in the community delivering fantastic skills and education programs for a wide range of marginalised or minority groups and this will have a hugely detrimental effect on those organisations and their groups,” she said.

This is an outrageous result for Somerset

With 10 centres across the county, SS&L became an independent provider in 2015 after it split from Somerset County Council, and it has been running in various forms for more than 100 years.

Ms Baker said the DfE’s “unfair” decision to cut her budget by nearly £3.3 million “doesn’t make sense”.

“We are still deciphering what these cuts mean for our business as a whole and are embarking on a lobbying campaign with local MPs and councils in the hope we can overturn the funding decision,” she continued.

“The impact, if we can’t, will of course be significant, but we are currently focused on fighting for Somerset’s community and adult education provision and to keep our organisation in business.”

The provider’s chief executive Susie Simon-Norris has written letters to Somerset residents who recently signed up for courses, telling them their courses have been postponed by the funding loss.

“We learnt very recently, and totally unexpectedly, that a huge amount of this funding was withdrawn, virtually overnight, with no warning,” she wrote.

“We are having formal communication with the ESFA shortly and hope that their funding decision will be overturned. However, we cannot either confirm nor guarantee this will be the case at this time.”

Speaking to FE Week today, Ms Simon-Norriss said that the AEB tender was “outrageous”.

“We were encouraged by the government to leave Somerset county council to become a community interest company and now it seems we’re being penalised for that decision,” she said.

Had SS&L remained part of Somerset county council they would not have been forced to tender, and would not have had their funding allocation reduced.

SS&L is not the only provider which has been hit hard by the AEB tender outcome.

Since results were first announced on August 4 many providers have been rejected despite high scores, and now fear for their futures.

The AEB tender for private providers has itself been dogged with delays. Results were supposed to be first released on May 19 after it was first launched on January 27. It originally came to just £110 million for 2017/18.

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Editorial: 97 percent cut is a different sort of special treatment for Somerset Learning & Skills

We first reported the adult education budget ‘farce’ on 1 September. It’s important to stress that Somerset Learning & Skills surprise and shock at receiving a 97% budget cut (left with just £111k) is genuine and could not have been predicted. It has nothing to do with the overall national adult education budget, which far from facing cuts is protected by the Treasury at £1.5bn per year until 2020.

This is about the ending of recurrent contracts and surprise tendering window (Jan – Feb) announced in October 2016.

Had the Ofsted grade 2 Somerset Learning & Skills learning provider stayed part of the council they would not have been forced into this bidding round. They would continue to be funded as grant-in-aid colleges and local authorities that are considered to be outside the Public Procurement Regulations. Like colleges and local authorities they would have been given no budget cut at all (so kept £3.4m budget for 2017/18), and they would not have been discriminated against in the tender ‘priorities’ for being in Somerset, an large area of relatively low deprivation in the Index of Multiple Deprivation.

To add to this injustice, a grade 4 national private provider (Learndirect) that withdrew their own adult education budget tender application has been given £45m as the government has said (on the record) that they are too big to fail. According to their own rules the government should have given them less than £1m for failing to apply, but after the tender they changed their own rules and gave them a 25% reduction, taking it from £60m in 2016/17 to £45m in 2017/18, despite not tendering. This is not only unfair, it made the remaining pot much much smaller for local community providers. 

To add insult to injury, had Somerset Learning & Skills known the agency would change their tender rules and only reduce allocations by 25% for those that did not participate, they could have ignored the bidding round and instead of receiving £111k, they would have been awarded £2.55m (75% of £3.4m).

There are some news stories we really could not make up.

Nick Linford, editor

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.