Providers ‘at fault’ for new funding system fiasco says Skills Minister Matthew Hancock

Skills Minister Matthew Hancock has laid the blame for the Skills Funding Agency’s new payment software fiasco on providers’ “own internal management information systems”.

He claimed providers were at fault as they struggled to work out what they are owed for delivery of education and training — calculated with the agency’s new and troubled funding information system (Fis).

It comes after the agency itself had acknowledged and held its hands up to problems with the new system.

But, in a written parliamentary answer over the issue [also available to view on the WhatDoTheyKnow website], Mr Hancock wrote: “There have been some issues for colleges and other providers in calculating funding due to them where their own internal management information systems have not been able to report accurately their management position.”

It comes as FE data staff continue to pull their hair out over ongoing problems with agency funding software.

Management information system (MIS) officers have repeatedly told FE Week of the strain and financial burden of trying to prepare and submit monthly funding data returns through Fis.

Prime and sub-contractors with the agency, and also Education Funding Agency (EFA), use Fis in the hope of generating the values of provision delivered.

But a message on the agency website conceded it had been plagued with problems. It read: “We apologise for any difficulties caused by the delayed delivery of the data collection system and technical issues.

“We are committed to ensuring you can make accurate data returns, recognising that key funding and allocations calculations are based on them.”

The problems prompted a written question to the minister from Tory MP Caroline Dinenage.

She asked: “What representations has the Department for Business, Innovation and Skills [BIS] received from colleges and other providers on (a)funding data not being reconciled by the Skills Funding Agency’s systems and (b) resulting delays in payment to private providers?”

Mr Hancock replied blaming providers, adding: “The agency is moving to a new data collection system that underpins a more streamlined and less complex funding system.

“The system will remove the need for thousands of different funding values for each course and qualification, replace old and complex funding formulas with a single cash figure and replace the different funding systems with a single one.”

He continued: “BIS and the agency have been working with representatives from the sector to develop the new system.

“The agency has continued to pay all providers and colleges on time. The agency is not aware of any late payments being made by the agency to private training providers.”

Is the minister right to say providers are at fault? Please leave your comments below.

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  1. We have had multiple problems where we have not been able to claim for learners as the FIS system has not accepted the combination of codes published in the ILR specification. This has included an inability to claim funding for Traineeships, ALS funding for classroom learning, and the fact that it has only just been decided that we have to send data for HE outcomes for Higher Apprenticeships for the first time. It is therefore not about being paid late, but an inability of providers to claim for work done because the FIS system is so clunky. For P4 the PFR and the Remittance Advice had no relationship to each other, and FIS also does not yet have full reporting capability so we can’t check if funding rates are being calculated in line with last years earnings.

  2. It would be tragic if it wasn’t so laughable…
    If I was a minister and my civil servants gave me an answer so palpably incorrect as this I would sack the lot of them. I wouldn’t suppose that the minister knows the ins and outs of the problems we’ve been having, why should he, but for his aides to give a reply like this shows complete disregard for the truth as well as for the pain and suffering that hundreds of people have been going through over the last three months.

  3. Country Bumpkin

    Why let the facts get in the way of a good denial. The SFA ‘have’ simplified their funding method and made it easier for providers. Unfortunately it’s different from EFA funding & chuck in ESF and 24+ loans for good measure and providers have never had it so simple!

    Could there be any reason he would want to distance himself from providers?

    • ha, I was ignoring that particular bit of cant, I’ve given up on the idea that we can persuade any of them that it’s not simpler…
      it is, as least, an agreed, much-repeated SFA line that we shouldn’t be surprised to see the minister use, unlike the other bit!

  4. Mark Gould

    I think that the reply is both typical and a sad indictment of how bad it has got with education and funding.

    Providers have become used to a piece of software provided by a government agency calculating funding for them, only for providers to be blamed that they had nothing else in place when this software was no longer able to do its job.

    Making the suggestion that we shouldn’t rely on the products of monies gathered by the exchequer to determine how we might get monies from the exchequer should tell us very much how government views education providers in general.

    The rules are arcane – not simple – and the byzantine calculations required should not be replicated up and down the land – only in this country are we obliged by our government to reinvent the wheel.

    Why blame us for the failings of one of their agencies? What else can they do – take more money away and leave us even less able to have the resources to do these calculations?

  5. Lou Vaine

    Quite clearly the confusion is spreading…wires crossing… that said…
    Would someone like to appraise the Department that we had to build our own internal system to make up for their shortcomings…! We anticipated them and committed valuable resources so we weren’t left high and dry – ie without details of our learner/funding levels etc. from August (2013 btw)

    We built a system which took probably 4-6 weeks to get fully functioning – to fill the gap/mess that was likely to ensue…
    This allowed us to function as a business despite the shortcomings of the SFA/Data Service.

    I’ve never believed that the agengies/companies involved could get it right or publish their re-incarnated software systems for changed methodologies, on a timely basis and in line with our business needs – in any year.

    Every year we build/rebuild our system in line with the perceived/planned methodologies and work to get it within 10% of actual values – we reconcile when real funding data comes out… eventually…

    We built our system this year a lot quicker than the release of the FIS beta and its subsequent XX versions… and without its known issues encyclopedia volume XXX.

    I have worked in 5 different providers over the course of 15 years and the delay has never been this bad, service so poor, functionality so disappointing etc.

    Add to that the fact that we still have no audit software and no “real” learning aims database… not so much LARS as LAR-THARGIC…

    Hello!…Its January 2014 of the academic year 2013/14.
    I start planning for 2014/15 at the end of the month…

    So when we talk about delays to internal management information systems let us have an imaginary conversation with our colleagues in the agencies/Departments – (likely to happen in the coming weeks):

    Provider -” Hi. I’d like to plan provision effectively for my provider in 14/15. Please can i have your revised funding methodology 14/15 & new funding mechanism for apprenticeships etc now please? ”
    Advisor – mumbled statement
    Provider -” …Sorry what’s that?… you’re still working on it?… ”
    Advisor -” It will be out in June/July”
    Provider -“… oh great…June/July … which year?”

    Seriously though – delays due to internal MI – they wrote the book on it…(or a serious of pamplets that superceed each other, once published/if published; sometimes collated and indexed.. sometimes not…)
    Anyway… i think this joke is most apt…

    How many civil servants does it take to change a light bulb?
    … One to change the bulb, and 44 to do the paperwork.

  6. TGI Friday

    We have just had an internal 13/14 student records audit. Our auditors had not had any guidance from the SFA on how to audit the data and they couldn’t read our ILR as they couldn’t get the FIS to work on their machines. So I assume that it’s also their fault for relying on the SFA?

  7. The fact that this situation has received a question which required a formal parliamentary response from the Minister should set alarm bells ringing that all is not well. Bigger question is (in my opinion): is it right in a world of ‘doing more for less’ that we still work within such a complicated and costly payment system.

  8. What an absolute joke. It is easy to lay the blame on providers. They still have no PDSAT software to check validity of data and highlight any issues. Us Auditors also do not have access to this at present to help highlight data errors with our provider clients. Every single year there is a delay in releasing the latest version of PDSAT Software. Providers run reports from their own MIS Systems in a bid to carry out compliance checks,of course they do, but the PDSAT tool is supposed to be a ‘sophisticated’ support mechanism that takes into account the data requirements of the SFA. This is promoted during PFA audit and evidence of PDSAT being used is required. We are now in P6 and not only does the FIS not work correctly but there is no PDSAT Software available (not to mention the ongoing issues with LARS Lite). When queried with the Data Service/KPMG, they put the ownership on the SFA, EVERY SINGLE YEAR. It will be interesting to know if there are any SFA PFA’s as they utilise the PDSAT tools during their Audit visits too, then question any providers that are not using the PDSAT. They can’t use if it not available. I suppose the issues with LARS is the providers fault also? As I suggested to Nick Linford last night via twitter, since he has come up with a viable and reliable tool for funding rates (ladet) maybe he can come up with a reliable tool to substitute the PDSAT tool while we all wait for the IA/Data Service to sort themselves out?? But really should he have to be doing this?? Thank god that he does!

  9. This truly does beggar belief – the statement reads as if it is the pesky providers trying to ensure that they don’t over or under achieve, go bust or over deliver without possibility of payment who are to blame … Of course!!

    Heads need to roll!!

  10. I truly have no words with which to adequately convey the disgust this chaos warrants. I agree with my esteemed MI colleagues across the sector whose collective experience and skill far outweighs that of anyone defending the current position. This has been nothing short of a PR sleight of hand from start to finish. Sadly I suspect no heads will roll. However there are some who should be thoroughly ashamed of themselves and they know very well who they are.

  11. Medium sized general FE college here and we’re in the same position as many providers appear to be:

    No reliable funding data
    No reliable FIS installation
    No reliable success rate reporting for 13/14 delivery (as a very well known and widely used software provider has confirmed to us)

    Insult to injury – the latest SFA update asks providers to give evidence of over achievement against profile and/or make a case for virement across periods 1-8 and 9-12. How can you do this if you don’t have confidence in data due to FIS/LARS issues?? It’s just lunacy.

    God help any provider due for OFSTED and/or PFA in next few months where 13/14 data will be critical for judgements.

    Also, just to echoe a previous comment – our PFR4 report showed we were on track for £34 million against our ASB line. Marvellous you might think. However we are just a medium sized college and £34 million is about 10 times more than our ASB contract and 10 x more than the reality!

    Lastly – if you are delivering Prince’s Trust provison, please make sure you are up-to-date with funding guidance.

    Good luck all – we all need it.

    • John Littler

      You are right about OFSTED, Graham. I am very worried that we may receive an OFSTED visit before the released of ProAchieve for this year, meaning we are unable to access reliable 2013/14 performance statistics. I am not confident that OFSTED will accept the fact that the problems lie with the Data Services software fiasco in a sympathetic light, especially in the light of the government’s comments.

  12. The issues continue – in our R05 return we had rejected learners because LARS didn’t have the correct pathway codes. We have to wait another month to get paid for these now. That is nothing to do with provider incompetence – I wonder whose it is?

  13. Joan Mitchell

    Every year we have the stress and worry that goes along with the new academic year. Every year the delays get longer and the problems increase. Every year we think “it can’t get worse”…………….. every year it does!
    It’s depressing, it’s frustrating and it shows just how incompetent this HM Government department is.
    HM Government needs to take a good long hard look at what it has done to providers this year and take responsibility for their mistakes instead of “passing the buck”.
    This must never happen again. A vote of no confidence must be cast.

  14. Beulah Felstead

    The failure of the SFA to provide fully functioning LARS, FIS and DSAT prior to August 2013 is inexcusable and heads should roll. The failure of their development has cost colleges dearly in terms of resource and poor information. We deserve compensation (as a % of our allocation).

  15. Yet another example of Mr.Hancock being totally wrong and not living in the real world!!
    We (the training provider) are forced to work with these issues and as so many of us have reported problems with the new system we cant be all wrong.
    What do you think will happen when they expect employers to process apprenticeship contributuion through such systems….will they be branded ‘a bit thick’ also!!

  16. It really is sad that providers seem to be taking yet another undeserved kicking for the failings of expensive and ineffective government systems. Thanks should really go to in house software developers, without whom, we would have struggled to have had any idea what our earnings looked like for the first four months of the contract year. We use PICS and the on-board reports where an absolute godsend and proved to be within 0.25% of FIS generated reports across both SFA and EFA funding streams, once these became available.

  17. Eugene Greco

    Mmmm – could be a fairly career limiting response / position. As Skills Minister I would hope that he’d have better interpersonal / relationship management skills than that, particularly to maintain goodwill with key delivery partners.
    Oh well, press self destruct and watch the odds rack up against how long you’ll be in that job then Matthew…

  18. Jo Wright

    This is a disgrace.
    We are perfectly able to calculate what we believe we have earned due to our superb suppliers’ software. The trouble is that none of the systems provided by the Data Service agree with these figures. Indeed none of the figures supplied by the FIS, the OLDC and the Hub even agree with each other and it is that determines what we are paid.

  19. I have worked for a national provider for 12 years and can honestly say this has been the worst system change we have dealt with. We know that these things never run as smoothly as they like to think and as a result have also had our own internal systems to fall back on to keep a track of our finances. The worst part of this years change is not to have a PFR to reconcile against to ensure we are calculating our funding correctly and the PDSAT to verify data, but we have managed with the help of our MIS Provider which we moved to in September so we have had to cope with the Data Service new systems (which of course failed to work properly) and our own internal changes, but we managed not only to ensure that we had returns submitted on time and to keep a track of our finances manually within both contract years we have also been able to implement changes within our own internal systems and ensure our data moved from one MIS to another with a minimum amount of disruption. We did have data errors but only ones that were a result of FIS/LARS not being up to date! This was helped by our MIS provider who has excellent financial reporting functions which has allowed us to keep a track manually against our MIS and FIS. So as far as we are concerned we weren’t at the mercy of the Data Service systems!! So to blame providers for their MIS systems seems short sighted bearing in mind a vast number use the same system as we moved from and too and they both provider excellent MIS, but they are at the mercy of information coming from the SFA to set up the systems with the financial information needed to allow providers to pull off their financial reports. So Mr Hancock before you make outrageous comments you should first check your facts with the MIS providers and Training Providers!

  20. This is beyond a farce now and we all need to be pushing for the truth to come out. The SFA have screwed up the implementation of the new software and are having the gall to blame the providers for this. If we can’t rely on Hancock to get to the bottom of this then we surely need to go to the shadow team and demand an investigation.

    This is not the fault of the providers and In light of some conversations I have had, I no longer blame the SFAs IT vendors. The fault lies firmly at the feet of whoever it was within the SFA who designed such a ridiculous system in the first place. Some IT director there, probably a freelancer, is laughing all the way to the bank.

  21. I give up! The stress this situation has put on us as a subcontractor is unbelievable, I cannot support the company through another month of only being paid on profile and not on actuals, funding cuts (we are turning away potential learners who are unemployed as the only funding we can access is 16-18 apprenticeships and student loans)and the slow uptake of student loans; we are on the verge of going bust. Thanks Dave!