Today I had my second comment piece published in the Guardian, which was about the return and risks of sub-contracting (previously know as ‘franchise’).
Link to article: http://www.guardian.co.uk/education/2011/may/24/colleges-subcontracting-scandals
Please do add a comment to the online article (or below)
My central argument is that the Government has created the perfect set of circumstances for significant growth in the sub-contracting of learning and skills provision (e.g. Apprenticeships), without regard for the damage this has done to the sector in the past. In the past few months I’ve even suggested this could quickly become for the current CEO of the funding agency (Geoff Russell’s) his very own version of the previous CEO’s (Mark Haysom’s) capital fiasco.
Let’s consider the evidence (current circumstances, and then the history).
The 5 sub-contracting bonanza circumstances:
1. Introduction of £500k Minimum Contract Levels for 2011/12 means several hundred providers (even after exemptions) will need to sub-contract their funding or lose the ability to continue providing courses
2. Far from restricting sub-contracting, officials are promoting sub-contracting in newspapers “in order to maximise the funding which reaches the front line“
3. The Skills funding agency has ”removed the maximum delivery threshold for subcontracting (previously known as the 51% rule)” Para 25
4. Recently released Period 2 allocations for this year (2010/11) show that “Of the 75% below expected performance, just over half had the tolerance applied which resulted in £33m being recovered for 19+ Apprenticeships and £43m for 16-18 Apprenticeships.”
So, as the Government keeps increasing the Apprenticeship targets, many providers will miss them without quick help from sub-contractors. Given the pressure, are they taking the time to do proper due diligence and contracting?
5. The Skills Funding Agency has already reduced its staffing levels considerably following an 11% reduction to its adminstration budget in the last financial year alone. (last page). Even where the NAS and the Skills Funding Agency can agree who is responsible, it is likely to mean much less financial oversight on their part (and more freedom to sub-contract). Most providers I have met (such as at the Sub-contracting Funding Summit) were not even aware that this relatively new policy statement even existed: Higher Risk Providers & Persons and Agency Contracting
Just a small selection of sub-contracting arrangements hitting the headlines before 2011:
July 1995 – Times Educational Supplement – Franchise courses in fraud inquiry
April 1999 – Times Higher Education – College face crackdown on fraud
May 1999 – Independent Newspaper – Fraud and scandal in further education
November 2001 – Times Higher Education – Whistleblowers: Bilston chaos continues
May 2005 – Serious Fraud Office – Training consultant charged with defrauding Progress Training Ltd
February 2007 – Guardian Newspaper – Corruption case closed
October 2008 - The Northern Echo - Pair face jail for £16m college con
July 2009 – Times Educational Supplement – Funding fraud claims up 20% to record high
June 2010 – Serious Fraud Office – Four sentenced in Shropshire training contracts bribery and money laundering case
What do you think?
~ Is the public purse and the FE sector’s reputation at serious risk?
~ What can be done now, to avoid repeating history?
