A massive 58 per cent of FE loans funding – amounting to almost £1 billion – has not been spent since 2013, FE Week can reveal.

This shocking figure, revealed by a Freedom of Information request, has been branded a “systemic failure” that could unravel the government’s plans to upskill the nation in a post-Brexit world.

The Student Loans Company, which processes advanced learner loans on behalf of the Education and Skills Funding Agency, revealed that just £652 million in loan-funded provision had actually been delivered since 2013, against a massive £1.56 billion in allocations.

There has also been a near-40-per-cent fall in the numbers of level three and four learners since the loans were introduced, sparking dire warnings across the sector.

Gordon Marsden described the figures as “extremely concerning” and claimed they indicate “a systemic failure in the Department for Education and the ESFA in delivering this policy”.

“The general message that this is sending out to adult learners and people wanting to reskill makes a mockery of the government’s alleged commitment to promoting adult skills and learning,” said the shadow skills minister.

“We are going to need the contribution of older people reskilling to keep our economy afloat,” he added, and called on the government to “look urgently at what can done”.

David Hughes, the chief executive of the Association of Colleges, said that demand for FE loans had been “lower than expected”, leading to a “big drop” in adults studying at levels three and four.

“The government should be worried about that impact, particularly at this time when skills gaps are growing for many employers,” he warned.

“The industrial strategy is clear that we need more adults to be trained in STEM subjects, so we need a plan to make the loans work for more adults and employers,” he added.

But the influential vocational education adviser Professor Alison Wolf told FE Week that the government had actually anticipated that take-up of courses at levels three and four would fall when the loans were introduced – a fact she said she had been “shocked” to learn.

Prof Wolf pointed to an impact assessment carried out by the now-defunct Department for Business, Innovation and Skills in 2012, which estimated a 45 per cent drop in learner numbers once loans appeared, though it did plan for all the available loan funding to be taken up.

“They certainly did not predict or expect this massive underspend, coming at a time when we have major skill shortages, and can expect the situation to get worse, post-Brexit,” she said.

FE loans, originally known as 24+ loans, were introduced in 2013/14 for learners studying courses at levels three or four and aged 24 and older.

Their introduction corresponded with a fall in adults studying at levels three and four+, from 273,400 in 2012/13 to 195,200 in 2013/14, according to the DfE’s own statistics.

By 2015/16, that number had fallen further still, to 169,400.

Despite this persistent under-delivery, loan eligibility was expanded in 2016/17 to include 19- to 23-year-olds, and courses at levels five and six.

But that expansion in learner eligibility appeared alongside a reduction in the overall loans budget – and a crackdown on loan growth requests [see box-out].

FE Week asked the Department for Education why its loan policy was underperforming so badly, and what action it was taking to address the problem.

“We continue to work with the sector to raise awareness of advanced learner loans, which offer important help with the costs of a course at a college or training provider, allowing more people to study and gain new skills,” said a spokesperson.

“The overall allocations figure for advanced learner loans represents the amount received from the Treasury based on demand.

“No funding, beyond what is required for advanced learner loans to current students, is issued to providers.

“Any use of taxpayers’ money is kept under regular review, and this is no exception.”

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A long year of loans scandals

In a desperate bid to boost the amount of loans-funded provision being delivered, the SFA handed out huge sums of loans cash to untested providers before it was forced into a crackdown in the wake of a series of scandals exposed by FE Week.

These include John Frank Training, which went bust under mysterious circumstances in November 2016.

The provider used the advanced learner loan scheme to deliver and subcontract courses in areas such as IT and health and fitness, and had been allocated £10 million in loans facilities over the last two years.

While £6.4 million was paid for around 2,200 learners to complete their training, a further £464,000 was thought to be effectively missing – leaving around 500 learners with large debts but no courses.

Loans-related scandals followed with Hampshire-based Edudo Ltd, which went under in January, and Darlington’s Focus Training & Development Ltd, which collapsed last November.

The SFA had previously recognised they had a problem overseeing loans funded provision, particularly where much of it is subcontracted.

In August 2016 the SFA banned new subcontracting contracts for advanced learner loans, with a complete ban coming into force last month.

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.

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Colleges lose out in loans market

Colleges are losing a vital source of funding: figures show their share of the loans market has been falling year on year, even as private providers cash in.

FE Week analysis of Student Loans Company figures shows that colleges received 83 per cent of loans cash in 2013/14, while private providers’ slice of the market stood at just eight per cent.

But by 2016/17 private providers were responsible for 39 per cent of delivery, and colleges’ share had dropped to 55 per cent.

If the current trend continues, private providers could enjoy the majority by 2018/19.

Simon Ashworth, the chief policy officer at the AELP, told FE Week that loans growth was “another example of independent training providers being proactive in the learner marketplace” and that it demonstrated “a very encouraging level of demand for loans around the country”.

“It is frustrating for many of them that they find that their growth requests are being capped at a time when many learners need to acquire new skills to sustain their employment in a changing economy,” he complained.

The AoC’s David Hughes defended colleges’ falling share.

“Colleges have developed their loan-supported courses and enrolments in a sustainable way, with little support from the government in terms of marketing and public awareness,” he said.

Mr Hughes pointed to “recent incidents” of loans-funded learners “left high and dry by private training providers going to the wall”, which he said was “very worrying” and could even “undermine confidence in the loans”.

FE Week understand that colleges and private training providers as groups have both increased the total amount of loans-funded provision they’ve delivered since 2013 – but that private providers increased their delivery at a much faster rate.

In 2013/14 colleges delivered loans-funded provision worth £99.8 million, but by 2016/17 this had gone up to £112.2 million – an increase of £12.4 million or 12.4 per cent.

Meanwhile, private providers delivered loans-funded provision worth £9.4 million in 2013/14, but by 2016/17 this had risen to £78.8 million – a far chunkier increase of £69.5 million, or 640 per cent.

The former skills minister Nick Boles warned colleges in 2015 not to let private providers “nick your lunch”, after it was revealed that private providers were delivering a far greater share of apprenticeships than colleges.

A civil servant who led the Department for Education’s response to the Grenfell Tower blaze has been appointed as its new director for apprenticeships.

Rory Kennedy has taken the reins from David Hill, and is now responsible for the whole apprenticeships programme, as well as a number of other important policy areas including the levy, the target for three million apprenticeships starts by 2020, and the work of the Institute for Apprenticeships.

Mr Hill, who was appointed in October 2015, left the role in July and was replaced on an interim basis by Carl Creswell, the DfE’s deputy director of apprenticeships.

He then left the position himself earlier this month to become director for better regulation at the Department for Business, Energy and Industrial Strategy.

Mr Kennedy’s start date has not yet been confirmed but it is “expected to be some time from mid-October onwards”, according to an email from the DfE.

He has already been working with the DfE: after finishing a year on secondment to Haringey council as assistant director for schools and learning, he has led the department’s response to the Grenfell tragedy since July.

According to his LinkedIn page, Mr Kennedy has been a policy manager at the DfE since 2004, spending time as the relationship manager for the New Schools Network, when he designed free school applications and assessment processes.

Then between June 2008 and April 2010 he was head of exams delivery, and also enjoyed a stint as the policy manager responsible for the Building Schools for the Future programme.

UPDATE: The Department for Education has now confirmed they’ve published documents launching the IoT invitations on the lep network website. You can access them here.

 

After more than two years and three Skills Ministers since the Institutes of Technology (IoT) concept was announced, FE Week can exclusively reveal the “process and timeline” ahead of their launch in 2019. 

Institutes of Technology were first mooted in the Productivity Plan in July 2015 , which said: “The government anticipates that many colleges will be invited to specialise according to local economic priorities, to provide better targeted basic skills alongside professional and technical education, and that some will be invited to become Institutes of Technology.”

In documents seen by FE Week that have been “agreed by ministers” and were due for publication this week, the DfE sets out details of the IoT invitation process.

The DfE will be calling on those that “would like to register an interest in the IoT initiative” to complete a short form and email it back to institute.technology@education.gov.uk by the 31 October 2017.

Despite the DfE repeatedly saying the plan is to “establish high quality and prestigious institutions”, in truth and as previously reported by FE Week, the IoT funding is in fact a relatively small three year wave of capital funding for mainly existing colleges, not to create new ones.

The “successful bidders will receive the right to call themselves Institutes of Technology (precise branding to be confirmed)” and receive funding “for capital investment to support high quality, industry-standard facilities and equipment” as well as “cover new build investment or upgrades and improvements to existing assets.”

Much like the ill fated 400 Centres of Vocational Excellence (CoVE) scheme for colleges under the Learning and Skills Council, it is expected that funding for new equipment will come with IoT plaques and IoT kite-marks for websites and email signatures.

But the invitation is not only for colleges, in fact the ‘IoT policy statement’ seen by FE Week says: “Delivery will be through partnerships of employers, FE and HE but could be through a range of legal structures and delivery models ranging from Joint Venture or Special Purpose Vehicles, wholly new  FE or HE institutions  or other entity of a type which is permitted to conduct HE and/or FE provision under existing FE and/or HE legislation.”

To get the IoT kite-mark and capital funding, the DfE says an IoT will need to “have employers at the heart of their leadership and governance, and in the design and delivery of curriculum. IoTs will strengthen and grow provision to fill gaps in the market; they will focus particularly on technical (eg Science, Technology, Engineering Mathematics) skills at levels 4 and 5 but will extend to degree level and above (level 6+) to strengthen routes into higher levels of technical education, as well as directly into employment.”

And the DfE has recently set-up an IoT LinkedIn group (click here) to “facilitate connections between potential collaborators who are interested in establishing an Institute of Technology.”  

David Hughes, chief executive of the Association of Colleges told FE Week: “I’m pleased to see clarity on the way forward on the Institutes of Technology after the original proposal way back in July 2015.

“New capital investment in colleges is always to be welcomed and this will undoubtedly help provide great facilities and equipment for much needed higher level technical skills and education. I expect lots of great bids to come forward and with collaboration between employers, colleges and others which will really start to increase demand for Level 4 and 5 in this country.

“We must also invest more in careers advice and maintenance support for people to participate if these new Institutes are to be successful.”

FE Week understands the delay to the policy was to enable synergy with the new T-level policy concept launched in July 2016 Skills Strategy,  followed by the Industrial Strategy in January 2017 which promised to fund IoTs with £170m in capital funding over three years.

The imminent launch of the invitation to apply to become an IoT will come as a relief to everyone in the further education college sector, after the Conservative manifesto referred to universities, stating: “World class technical education, underpinned by prestigious new institutes of technology with the freedoms that make our universities great.”

The DfE document seen by FE Week concludes: “We expect the first IoTs to open in 2019.  More details on the bidding process will be published at the competition launch before the end of 2017.”   

The register of apprenticeship training providers will open for a third time starting on Monday, FE Week can reveal, and the window will last for one month.

An email from the Department for Education said applications would “reopen for applications on Monday, 25 September”.

“This reopening will close on Friday, 27 October,” it continued. “This opening is open to all organisations, including those organisations that have not previously been successful.

“If you have already been successful in your application to the RoATP, you do not need to reapply as this opening is not a refresh.”

This is the third time the register has opened for applications.

The first window ran for a month in November 2016, while the second window opened in March – just days after the first register was published.

That first register prompted shock across the sector as many established providers – including all of Birmingham’s general FE colleges – failed to make it on, while large numbers of new, untested providers were successful.

Although many of those who failed first time around made it onto the second register, published in May, a number of one-man bands also made it on – including one provider with no previous experience, and no registered office address except for a semi-detached house in Birmingham.

In June, the apprenticeships and skills minister Anne Milton announced that the register would not open for new applications while the new procurement process for delivering apprenticeships to non-levy payers was open.

That process closed on September 8.

Click here for more on how to apply to the register (gov.uk)

An awarding organisation is under investigation by regulators for the second time in two years after an anonymous tip-off.

Ofqual was alerted in May to irregularities at Focus Awards, an AO based in Rotherham, and official inquiries began on September 11.

In a statement, it said it was “currently investigating allegations made to us in relation to Focus Awards Limited”, but refused to make further comment.

Last year, the AO was investigated by the Northern Irish exams regulator, the Council for the Curriculum, Examinations and Assessment, between February 2016 and June 2017, following a complaint from Leisure Industry Academy, a private training provider based in Belfast which went into insolvency last November.

It was alleged that Focus moved LIA students onto courses that they had not registered for and sent them the wrong awarding certificates, meaning many never got their qualifications.

CCEA’s report found that it was in compliance with its general code of operating rules, but that its learner registration system did not have “sufficient controls for the maintenance of learner numbers that allows learners to be clearly and uniquely identified”.

“Focus Awards became aware on September 11 that Ofqual is investigating a purported issue raised by an unidentified party,” Joshua Cole, the owner, sole director and chief executive of Focus, told FE Week.

“This is of course its duty as our regulator and we would expect nothing less. Ofqual can expect to receive our full cooperation.

“In a recent investigation carried out by our regulators in Northern Ireland, we were found to have acted in compliance with the general code of operating rules and in the interests of learners. We are confident Ofqual will draw the same conclusion.”

A spokesperson for CCEA told FE Week that it was aware of Ofqual’s new investigation and that both regulators were cooperating.

“Since Focus Awards is an English-based awarding organisation, it is appropriate that Ofqual leads on this investigation,” she said.

Mr Cole also runs a private training provider in Rotherham called My Distance Learning College.

This hit the headlines back in 2014 when FE Week reported that 32,000 paying learners might not get their certificates after a number of awarding organisations pulled their approval due to payment issues.

NCFE claimed it had around £20,000 of “outstanding invoices owing”, while the Council for Awards in Care, Health and Education claimed the provider had been reselling its qualifications through other firms without permission.

Mr Cole disputed both claims but Reed, a major recruitment agency, decided to stop reselling the troubled provider’s courses.

He describes himself on his AO’s website as “an inspirational, visionary leader with a unique blend of entrepreneurial skills and business acumen”.

He says he employs more than 25 staff across his various enterprises, and is “skilled at managing and controlling multidisciplinary teams. Some of the staff operate remotely from Ireland, Spain, India, Serbia, Pakistan and the USA”.