There was a sharp rise in the number of EU students taking up advanced learner loans this year despite the looming spectre of Brexit, government statistics show.

Figures for take-up of all FE loans were released by the Department for Education last week, and the overall picture showed starts had gone up compared with the same period last year – to 73,500 from 56,100.

This was expected because the government last year extended the age range for students to be eligible to apply, down to 19 from 24.

More interesting was the percentage increase for EU (non-UK) learners.

The figures, which are taken from loans starting in August 2016 to April, show that 12 per cent (8,800 of 73,500) of starts came from EU learners, up from 9.8 per cent in 2015/16, and 7.6 per cent on the year before that.

This is despite concerns that the rights of non-UK residents will be affected by Brexit, following Britain’s vote to leave the European Union on June 23 last year.

Government officials have however moved to assure EU learners on loans provision that they will be allowed to complete their courses.

Jo Johnson, the universities minister, said that EU nationals or their family members who are currently in FE and are eligible to receive loans from Student Finance England, will “continue to remain eligible for these loans and grants until they finish their course”.

He added that these eligibility rules would also apply to EU students who are starting in either the 2017/18 or the 2018/19 academic year.

“SFE will assess these applications against existing eligibility criteria, and will provide loans and/or grants in the normal way,” he continued.

“These eligibility criteria set out that for students beginning study any time after August 2016, EU nationals must have been resident in the UK for at least five years or be EEA migrant workers in order to apply for a maintenance loan.”

Mr Johnson also said the migration status of EU nationals in the UK is “being discussed as part of wider discussions with the EU”.

A DfE spokesperson declined to release any more details.

The Conservative election manifesto promised a “major review of funding across tertiary education as a whole”.

It is likely that advanced learner loans will be a central feature in this review owing to the troubles the DfE has had with them over recent years.

The Education and Skills Funding Agency has previously recognised it has a problem overseeing loans-funded provision, particularly where much of it is subcontracted.

Since August 2016, the ESFA has banned new subcontracting contracts for advanced learner loans, with a complete ban coming into force from August this year.

In addition, growth requests for advanced learner loans were paused in September last year, while in November the SFA introduced caps for how much loan money can be allocated to a provider; for example where an approved loans facility is £500,000 or less, a maximum growth limit of £250,000 will apply.

The DfE would not be drawn on whether advanced learner loans would be considered in the forthcoming funding review.

SLC boss suspended pending investigation

The boss of the Student Loans Company has been suspended pending an investigation.

Steve Lamey was suspended from the organisation, which administers the government’s advance learner loans, on July 11.

An SLC spokesperson said: “The Student Loans Company, in consultation with the Department for Education, took the decision to suspend the chief executive pending an investigation into concerns which have been raised.

“The suspension is a neutral act and does not imply wrongdoing. As the matters leading to suspension are now subject to an independent investigation, it would be inappropriate to comment further at this time.”

The DfE would not provide any further comment.

Ofsted has completely failed to act on a change in its rules that allow it directly to inspect subcontractors despite an embarrassing succession of major scandals, an FE Week investigation has discovered.

Monitoring subcontracting is a huge and increasingly thorny issue – there were 1,200 subcontractors accessing an eye-watering £693 million in government funding as of January. Of these, 161 had a contract worth £1 million or more, the highest of which is Learning Curve with over £10 million.

The former Skills Funding Agency had been warning as long ago as 2010 that the arrangement was “prone to mismanagement and abuse”, words which proved prophetic after the sector was wracked by a string of scandals involving providers with huge government skills contracts.

Ofsted finally took action last year by inserting a line into its handbook stating that it “reserves the right to inspect and grade any subcontractor” in their own right for the first time.

However, FE Week has found that not a single subcontractor inspection had yet taken place.

The new chair of the education select committee, the former skills minister Robert Halfon, expressed concern with the situation, saying: “The issue of subcontracting and inspection of quality is incredibly important. I hope that Ofsted will make every effort to inspect subcontractors in the same way they inspect other providers.”

An Ofsted spokesperson told FE Week: “We already inspect subcontractors and their education and training provision, as part of the inspection of their main contractors.

“While we have not inspected any subcontractors as a separate entity yet, where necessary, we reserve the right to do so.”

Mr Halfon would not be drawn on whether he would consider launching a select committee enquiry into subcontracting.

His former counterpart, the current shadow skills minister Gordon Marsden also weighed in, and said he hoped Ofsted would make more of an effort.

“I know that the new chief inspector Amanda Spielman has taken a strong interest in apprenticeships and FE, and it is to be hoped that this subcontracting issue will form part of Ofsted’s closer engagement with the sector,” he said.

Ofsted has so far only directly inspected prime contractors involved in government-funded provision, and may visit and or comment in general terms on their subcontracted provision.

But there was increasing concern before the rule change that this allowed substandard and corrupt providers to pass under the radar, while some companies were found to be actively maintaining subcontractor status so as to avoid an inspection.

One example FE Week uncovered of the inspectorate’s questionable approach to subcontracting was at grade two-rated NCG.

Ofsted’s report on its most recent inspection of what is one of the country’s largest college groups lavished praise last September on its “rigorous” contract management for subcontractors, noting that the group decommissions those “who do not respond quickly enough to improvement plans”.

But it said nothing about the quality of teaching among those subcontractors.

FE Week asked Ofsted, via a Freedom of Information request, for the names of the subcontractors that inspectors visited during the inspection.

The response was that none were visiting, and admitted: “I can confirm that, having checked the evidence from the inspection and spoken to the relevant inspectors, we do not hold any information about any subcontractors being visited during the inspection of NCG.

“The management of subcontracted provision was discussed with the college during the inspection.

“Visits to subcontractors may not be a key focus on inspection dependent upon the provider and the size and scope of this provision.”

Geoff Russell, the then-chief executive of the Skills Funding Agency, wrote in 2010 to John Hayes, the skills minister at the time, concerned about the risks of fraud. The letter was leaked to FE Week and reported on at the time.

“Subcontracting is the area most prone to mismanagement and abuse, and is responsible for about 70 per cent of our current investigations,” wrote Mr Russell at the time.

We also reported in July 2014 how the Skills Funding Agency had indicated to the BBC’s consumer affairs programme Face the Facts that it wanted closer Ofsted focus on subcontractors.

It spoke out following the demise of major subcontractor Bright International Training Ltd, and the results of a four-month investigation by the relevant awarding organisation concluded there had been evidence of malpractice resulting in at least 225 learners losing their qualifications.

The agency told the BBC: “We are in discussion with Ofsted about the possibility of having more focus on the large subcontractors. Our priority is to ensure learner interests are protected and safeguarding public funds.”

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Editorial: What are Ofsted waiting for?

After several scandals involving large subcontractors that left learners out of pocket and without certificates, Ofsted rightly realised they had a blind spot.

They realised it was farcical to be undertaking full inspections on tiny prime providers with fewer than 50 learners whilst the multi-million pound subcontractors with thousands of learners remained off their radar.

But in the past year they haven’t undertaken their first full inspection of a subcontractor. Also concerning is that Ofsted didn’t visit a subcontractor when inspecting NCG; which they list as having subcontracting arrangements with 11 providers.

If I was being generous I would blame the government for reducing Ofsted’s budget, but is the inspectorate using the limited resource they have wisely?

Twelve hundred subcontractors with hundreds of thousands of learners and over half a billion pounds of public money.

It’s time Ofsted not only conducted a thematic review of subcontracted provision, but inspected the largest multi-million pound subcontractors.

Waiting for a scandal, as in the case of Bright, is too late for the inspectorate to make any positive contribution.

No excuses I’m afraid. Ofsted, on this issue, requires improvement.

Nick Linford, editor

 

Ofsted’s inspection budget is expected to fall by nearly £15 million over the next three years, despite more than doubling the number of providers in scope for inspection.

The education watchdog released its annual report and accounts this morning.

Since 2010/11, Ofsted’s financial resource has been reduced by over £54 million. It currently sits at £141,685,000 but this is expected to fall by 10 per cent to £127,100,000 up to 2019/20.

The accounts also revealed that its recently departed chief inspector Sir Michael Wilshaw received a bonus of between £15,000 and £20,000.

FE Week has analysed the Ofsted accounts for previous years and it is believed this is Sir Michael’s first bonus.

Its chief operating officer Matthew Coffey, a previous director of FE and Skills, was this year given the highest bonus of between £20,000 and £25,000.

The heavy decrease in Ofsted’s inspection budget is happening over repeated warnings from the new chief inspector Amanda Spielman that the watchdog faces a “real challenge” following the influx of new apprenticeship training providers.

Published in March, the Register of Apprenticeship Training Providers first held 1,473 organisations who were given the green light to deliver apprenticeships from May and which were therefore in scope for inspection from Ofsted.

RoATP was updated in May, adding 421 providers, and now sits at 1,894 who are in line to be inspected, more than double the number there were before the introduction of the new register.

Ms Spielman initially raised concern in an interview with FE Week editor Nick Linford in March, shortly after RoATP was first published.

She described the issue as a “big problem” in an interview with Laura McInerney, the editor of FE Week’s sister paper FE Week, at the Festival of Education and Skills last month.

But she also revealed that she doesn’t expect the inspectorate to need more money to deal with the issue, saying she would retain the same number of employees to work in the post-16 system.

After being asked how the inspectorate is coping with the new providers, Ms Spielman said: “As you can imagine it is something that we have got live discussions with government about to make sure that we have [enough cash] and understand where the apprentices are actually being trained to make sure we prioritise the places where there are significant numbers.

“There is a real challenge. We have got some unpredictable movements in where the apprentices are over the next couple of years so we will be doing our best to make sure that we track and put our inspection resource into the right places.”

Ms McInerney then asked if as a result of the scale of these new providers, there would be a risk that money or staff will have to come over from Ofsted school inspectors to deal with the influx, or if the inspectorate would get more resource to deal with the issue separately.

“Well there are the same number of bodies in the post-16 system so in the first instance it is thinking about how to allocate it to make sure we are putting the effort where people are,” Ms Spielman said.

Ofsted was not approached for comment.

Further details of a £50 million pot for ‘capacity building’ work placements was announced this afternoon by the Education and Skills Funding Agency.

Education secretary Justine Greening confirmed the investment would be made available from April 2018 to fund high-quality work placements, when speaking at the Business and Education Summit in London last week.

Additional ESFA guidance on gov.uk includes a timeline for implementation (below) and claims the funding will support “a significant step change for the sector”.

It will be used to deliver “occupationally specific” work placements of around three months for each T-level, “to ensure young people secure the workplace behaviours and the technical skills relevant to the occupation that they are studying towards”.

Once the government has identified which providers will be eligible for the funding, they will be invited to “submit an implementation plan” which “outlines their intentions” and sets out “how the available funding will be used during the 2018 to 2019 academic year”.

They will be expected to outline “short-term and longer-term plans for expanding work placement provision to meet the future demand for T-level delivery”, the guidance says.
Completing the implementation plan satisfactorily will be one of the conditions of securing any of the funding.

The announcement on gov.uk also indicates the ESFA anticipates that “the majority of funding will be used on building capacity with a commitment to commence an agreed number of work placements early to help ensure that the sector is ready”.

Further details will be issued by the ESFA in September to explain the government’s expectations for work placements, the assessment criteria for completing implementation plans, and more information about the funding formula.

Implementation plans should then be submitted by the end of October, to be reviewed by the Department for Education from early November through to mid-December.

The guidance says successful institutions will then be notified by the end of December and any institutions with incomplete implementation plans will be asked to resubmit by the end of January 2018.

These will then be reviewed by the end of February, when the allocation amounts will be finalised for each provider.

Institutions will be written to in order to confirm the allocation they will receive, and will be expected to “build the work placement funding offer into their funding strategies” in March.

The funding will finally be released between April and June 2018, with the first placements delivered in the autumn of that year.

The £50 million funding should then increase until the 2020/21 financial year, the ESFA anticipates, as the number of placements also increases.

The ESFA adds in the guidance that it “will be working with sector bodies over the summer and refining our approach”, but “further details are not available until we issue the September guidance”.

However, questions, comments or concerns can be submitted via an online enquiry form available on the gov.uk website.