Latest news from FE Week

A college was bailed out twice in December, to the tune of £1.5 million each time, FE Week has learned.

Figures revealing the amount of exceptional financial support dished out to Bradford College – which is currently in FE commissioner intervention – were published accidentally by the Department for Education last week.

No reason is given for the bailouts, and the college didn’t provide one when asked for a comment – nor has it published its 2016/17 financial statements.

The grade three-rated college was hit with a financial notice to improve in November, after requesting an unspecified amount of EFS.

The FE commissioner was then sent in to carry out an assessment of the college’s “capability and capacity to make the required changes and improvements”, and shortly after it was announced that its chief executive, Andy Welsh, would be stepping down at the end of the academic year.

But, according to its website, Chris Jones – a former adviser to the FE commissioner – was appointed interim chief executive in January to focus on “student experience, the college’s strategic recovery plan and financial sustainability”.

Bradford’s finance director, Chris Malish, is also new, having replaced former post-holder David Hambleton in August last year.

Minutes from a meeting of the college corporation in July reveal little sign of the trouble to come; the college had self-assessed its financial health as ‘satisfactory’.

But the college’s 2015/16 accounts revealed it had £43 million in bank loans taken out to fund a number of capital projects, and concerns were raised that it would be in breach of covenant on one of these by the end of 2017/18.

And accounts for the college-sponsored Bradford College Education Trust show it to have had an operating deficit of almost £1.3 million in 2016/17, although the college is in the process of withdrawing its sponsorship of the trust.

Bradford College, which had a turnover of £53.3 million in 2015/16, slipped from ‘good’ to ‘requires improvement’ in November last year. It emerged from the west Yorkshire area review, which completed in June 2016, with a plan to remain standalone.

But, according to last November’s financial notice to improve, one possible outcome of the FE commissioner’s involvement is a structure and prospects appraisal, which could see the college paired with another.

A spokesperson for the college told FE Week it had been “working closely with the ESFA and the FE commissioner to formulate a robust financial recovery plan”. 

“As that work is ongoing, we will not be making any further comment at this time,” they added.

EFS is only available to colleges that are “encountering financial, or cash-flow, difficulties that put the continuation of provision at risk”, and which have “exhausted all other options”, according to ESFA policy. Any request leads to an automatic ‘inadequate’ financial health rating and a referral to the FE commissioner.

It’s set to be phased out with the introduction of the new FE insolvency regime later this year, proposals for which are currently under consultation.

The accidental publication of the EFS figures – which were quickly retracted – comes amid growing concerns over transparency, as a number of colleges have received multimillion-pound bailouts from the restructuring facility.

“The department does not normally publish information relating to EFS to ensure the college’s financial position can be managed effectively during the period of support,” a DfE spokesperson said. “Where appropriate, EFS is declared in colleges’ accounts.”

 

The £170 million funding pot for new Institutes of Technology will not enable them to have a significant impact on the skills system, the FE commissioner has told a parliamentary hearing.

Richard Atkins (pictured above) was asked about the role of the government’s new project during a House of Lords economic committee hearing on the funding gap between FE colleges and universities this afternoon.

He explained there would be a small number of IoTs and that their concept was a “very good idea” which will be “excellent” in promoting technical and professional education.

However, the “amount of funding going into them is modest and therefore I am not sure it will transform the system”, he claimed, adding: “But hopefully they will regionally add value to the skills agenda.”

A total of £170 million is available for providers that want to apply for new Institutes of Technology status.

A procurement process is underway for providers to apply for a slice of the funding, and it is expected that around 10 IoTs will be created from it.

Institutes of Technology were first mooted in the Productivity Plan in July 2015.

Even though the Department for Education repeatedly said it planned to “establish high-quality and prestigious institutions”, funding is a relatively small three-year wave of capital funding for mainly existing colleges, not to create new ones.

Julian Gravatt, the Association of Colleges’ deputy chief executive, agreed with Mr Atkins that IoTs are a “good experiment” but said he feared “too much pressure” had been heaped on them to “revolutionise the system”.

“It is a relatively modest programme and doesn’t necessarily deal with some of the wider issues about FE,” he added.

Mr Gravatt also pointed out that while T-levels are a “great opportunity”, he is “slightly concerned” that the “pretty big reform programme” is being done “a bit on the cheap”.

Talking to FE Week after the hearing, he explained: “All colleges are being forced to make difficult decisions as the impact of cuts continue to surface. The DfE 16-18 budget has fallen by approximately £1billion since 2010-11 and this is being felt across the sector.

“We welcome additional funding for T-levels but note that colleges are also being asked to cover the cost of additional staff time, support robust work experience programmes, and meet the cost of English and mathematics resists.

“When all of those factors are taken into consideration, there are question marks over whether this is really additional funding at all.”

Off-the-job technical qualifications can now be included in apprenticeships, the Institute for Apprenticeships has officially announced, confirming a significant U-turn which FE Week revealed last week.

It is one of a number of reforms from the IfA to make the approval of new apprenticeship standards “faster and better”, after skills minister Anne Milton admitted that “some oil on the wheels” was needed.

Strict rules preventing the use of qualifications, such as technical certificates that show evidence of knowledge, have frustrated many across the sector for years.

But officials at the Institute, who have committed to improving process and policies, have now overturned them (see image below).

“We are now adding one more reason why a qualification can be mandated,” new guidance states. “If it is an off-the-job technical qualification that does not accredit full occupational competence and would either add breadth to the apprenticeship or provide structure for the off-the-job training.”

We have listened and responded to what trailblazer groups have been telling us

Previously, the criteria permitted a mandatory qualification in an apprenticeship where it is a regulatory requirement, required by a professional body, or such a “must-have in the labour market that an apprentice would be disadvantaged in job applications without it”.

Last summer the rules were tightened to include a bar on allowing employer groups to submit a standard for approval if it includes a qualification that’s still in development. This ban has now been binned.

Today’s addition means that where there is no mandatory qualification for an apprenticeship, an employer can use one “voluntarily” if the content “aligns with the standard and the employer pays the registration and certification fees”.

Another significant change announced today is that the IfA will align the process for recommending funding bands to the timelines for approving proposals and end-point assessment plans, to “shorten the time a standard spends waiting for approval for delivery”.

FE Week reported in December that 13 separate apprenticeship standards with approved assessment plans had been left in limbo for two or more months because their costs still haven’t been agreed.

The Institute’s “faster and better” programme also aims to simplify aspects of the standards development process by “changing” some of the policy criteria for approval of apprenticeship occupations and standards, as well as introducing improved trailblazer guidance, and “intensive” trailblazer workshops.

“We have listened and responded to what trailblazer groups have been telling us since the Institute’s launch last April: that the apprenticeships standards development process needs to be faster and better,” said Sir Gerry Berragan, the new chief executive of the IfA.

“These improvements should address these concerns.”

Emma Horne, co-chair of the Human Resources and Learning and Development trailblazer group, welcomed the changes.

“We very much look forward to simpler guidance, clear templates, best practice examples, the use of videos and webinars,” she said. “We think the idea of intensive workshops will really help speed things along too.”

Neil Carberry, director for people and skills at the Confederation of British Industry, added: “The Institute’s plans to put the customer front and centre will be heralded by those businesses who are developing quality training for our next generation of apprentices.

“Speeding up the standards process and improving support to trailblazer groups are vital steps to delivering a system that is responsive to needs on the ground.”

 

Ofsted will increase its focus on management and quality in subcontracting, according to its most senior director for FE and skills.

The letter is being sent out today by Paul Joyce, with new “sample based” monitoring visits on the horizon.

“This letter is to inform you that Ofsted will be increasing its focus on the management and quality of subcontracted provision on its inspections with effect from February 12, 2018,” he writes.

“We will do this primarily through our regular inspections of directly funded providers, as they are accountable for ensuring the quality of provision delivered by any subcontractors they choose to use.”

Inspection reports will, where relevant, contain “more detail about the quality and management of subcontracted provision and may refer to named subcontractors in the body of the report”.

Ofsted will be “undertaking a sample of risk-based monitoring visits to directly funded providers to look specifically at the management and quality of subcontracted provision for specific subcontractors”.

These monitoring visits will focus solely on provision delivered by the subcontractors, he added.

“Her Majesty’s chief inspector is concerned that all education and training provision should be ‘good’ or better, including provision that is subcontracted.

“Some recent inspections have underlined that poor management of subcontracted education and training can be a key reason for poor quality provision.

“You will wish to inform any subcontractors you have of this increased focus on subcontracted provision and the form it may take in terms of inspection and monitoring visits. To that end, we recommend that you forward this letter to them.”

There has been an increasing focus on how Ofsted monitors subcontracting in recent months.

The chair of the Commons education committee called last November for a “wholesale review” into why Ofsted had not yet inspected a single subcontractor more than a year after the rules changed.

Robert Halfon, a former skills minister, was speaking days after chief inspector Amanda Spielman admitted that she too was worried by this lack of action.

“We need a wholesale review into subcontracting and whether it enhances or curtails quality apprenticeships,” he told FE Week.

“I strongly believe that Ofsted needs to make the inspection of subcontractors a priority.”

It is “wrong that so many subcontractors are not inspected”, he continued, as it is hard to know otherwise whether apprentices get the quality of training “they deserve”.

The rules appeared to change in September last year, when Ofsted inserted a line into its handbook to emphasise that it “reserves the right to inspect and grade any subcontractor and its provision as a separate entity”.

Mr Joyce also explained in today’s letter that the extra efforts about to be ploughed into keeping watch over subcontracting standards “may entail additional inspection resource”, especially on inspections where the directly funded provider uses multiple subcontractors.

That could help strengthen Ofsted’s requests for more funding.

There are growing worries about the extra strain on Ofsted’s limited resources, through the massive expansion in the number of approved apprenticeship providers.

The government increased the size of the register of apprenticeship training providers by more than 350 last week. It means the number of apprenticeship providers now in scope for Ofsted inspection, assuming the vast majority recruit level two and three apprentices, has more than doubled since the levy reforms were introduced last April.

Ms Spielman has repeatedly warned of the “challenge” faced by the education watchdog following the influx of new training providers who deliver apprenticeships.

Two former professional footballers and two other men have been found guilty of scamming colleges out of £5 million in apprenticeship funding, through a con which involved “ghost” learners.

Mark Aizlewood (above right), who played for Wales 39 times in the 1980s and 1990s, and Paul Sugrue (above left), who played for clubs including Manchester City, Middlesbrough and Cardiff City, had the verdicts delivered today at Southwark Crown Court, following a five month trial.

Two of their former colleagues at the now-defunct provider Luis Michael Training, Keith Williams, 45, from Anglesey, and Jack Harper, 30, from Southport, were also found guilty on fraud charges.

Throughout the trial, the court heard that LMT used its well-known footballing names to defraud the taxpayer between 2009 and 2011 by persuading nine colleges to use it as a subcontractor, using cash they got from the government to deliver apprenticeships.

Sparsholt College came out worst off, having signed contracts worth more than £4 million, although not all of this money was handed over before the scam was exposed. 

Also involved were South Staffordshire College, Hopwood Hall College, Newbury College, Barnet College, Barry College, Leek College, Dearne Valley College and South Thames College.

Many of them were living the dream thinking they would be coaches for clubs like Manchester City – but it was a farce

The total value of all the contracts the colleges signed with Luis Michael Training was £5,188,355, of which more than £3.5 million was actually paid.

The losses were all reimbursed by the Skills Funding Agency.

For the con to work, LMT had to prove they had learners enrolled and ready to train. It did this in part by creating “ghost” learners – where the personal information of real people was used to claim apprenticeship funding. The use of their data was unbeknown to these “ghosts”.

Others actually enrolled, but they were vulnerable young people, most of whom were not in education, employment or training and had dropped out of school before 16.

A total of 3,008 learners, all aged 16 to 19, were hoodwinked in this way. Those enrolled were under the illusion that they were doing an apprenticeship in NVQ activity leadership, which would lead them to a career in football coaching.

Some were told that this was an accredited FA coaching scheme.

Using this lure of a career in football coaching, LMT even employed other high-profile former players, such as Welsh international Neville Southall, the Republic of Ireland’s Alan McLoughlin and Manchester United player Russell Beardsmore, as tutors to deliver some of the training.

The provider also used almost 150 professional football clubs as part of the scam, roping in big teams like Manchester City, Leeds United and Nottingham Forest.

They would receive a “facility fee” for employing the apprentices, often amounting to around £10,000.

When working at the clubs, the apprentices had tasks such as handing out match day programmes and sweeping floors – nothing to do with coaching.

“Many of them [the young people] were living the dream thinking they would be coaches for clubs like Manchester City and gain an NVQ – but it was a farce,” said a spokesperson for the Serious Fraud Office, which investigated the case.

The learners were having trouble putting food on the table for their families

The learners were meant to be given 20 hours of guided learning per week, but they actually received much less, with just two to three hours per week.

To give the impression that students had completed all academic aspects of the course, LMT used a number of young people on work experience from a school in Wales to complete tests learners had been supposed to complete, and filled in false learner comment reviews.

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

Of the millions of pounds claimed by LMT, Sugrue, 56, from Cardiff, took home the majority (£516,568), while Aizlewood, 57, from Aberdare, cashed £424,002.

The former stars were spending the money on day-to-day luxury items, such as Range Rovers, trips to Paris, and shopping sprees in Harrods.

In the meantime, the colleges were cash-strapped. Sparsholt in particular had to put off building programmes as a result of the financial loss.

The court heard that the learners, who were meant to be paid £95 in weekly wages but rarely received more than £10, couldn’t afford Christmas presents for their children because of the scam.

“We condemn the deliberate deceit and criminal actions of these fraudsters who have either admitted their guilt or been convicted and we hope this acts as a deterrent to others,” Tim Jackson, principal of Sparsholt College, said.

“The college is pleased to have fully co-operated with the Serious Fraud Office throughout this long and complex investigation and subsequent trial.”

He added that college worked “tirelessly” to ensure as many as possible of the affected learners were able to complete their apprenticeships.

“As an ex-international footballer, Mark Aizlewood knew the industry and how the system worked and his gravitas helped the company get in with colleges, football clubs and learners,” the SFO spokesperson said.

“As a result of the failure of Luis Michael Training, many of the learners were having trouble putting food on the table for their families.

“They then had to attend court and were nervous and scared of what that meant. Instead of transforming their futures, this ordeal had made many of them even more vulnerable.”

The Serious Fraud Office was made aware of the situation in 2011 and arrested the men in 2012, as reported by FE Week. They were finally brought to court in September 2017.

Two more men involved in the con pleaded guilty before the trial began.

These were 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.

All of the defendants found guilty are to be sentenced on February 26.