Department for Education criticised over £750m spend

The Department for Education (DfE) has come under fire from MPs over its failure to improve the financial performance of University Technical Colleges (UTC), which it has funded at a cost of nearly £750m over the past decade

UTCs were established in 2010 as an innovative model of secondary education focused on providing practical, technical education and qualifications for young people aged 14 to 19.

However, a report from the Public Accounts Committee (PAC) says they have struggled to provide a distinctive, financially sustainable education offer. 

DfE is nearing the end of a three-year programme to improve the financial and educational performance of UTCs.

Despite this, the committee’s report concluded the department does not have a clear vision for UTCs in the future, and is a long way from achieving its aim of improving the financial performance of UTCs by summer 2020.

At January 2019, the 48 open UTCs were operating at 45% capacity on average, with 13,572 students in total compared with a maximum capacity of 29,934. Ten of the original UTCs had already closed.

Over half of UTCs were rated as less than good by Ofsted in October 2019, and 14 UTCs accounted for nearly 10% of the total cumulative revenue deficits of all academy trusts in 2017/18. 

PAC’s inquiry found the department has put nearly £750m into opening UTCs and keep them going, including £680m in capital funding and nearly £37m in extra revenue funding.

The committee says the lack of students means the department has been propping up the finances of UTCs for several years, and most of the extra funding will not be paid back. 

MPs said the DfE has still not defined what success looks like for UTCs, as distinct from other secondary schools, in terms of appropriate metrics or a performance framework.

While the limited available data shows that a higher proportion of UTC students go into apprenticeships compared with other secondary schools, most of these apprenticeships are at a level equivalent to secondary school qualifications rather than any higher.

The Baker Dearing Educational Trust, which owns the UTC ‘brand’, received £893,000 between 2012/13 and 2017/18 to support the opening of UTCs but also charges each school an annual licence fee. The Trust increased the fee from £5,500 to £10,000 in 2019/20.

The committee expressed concern about what MPs characterised as ‘the DfE’s apparent lack of interest in what UTCs are getting from paying out taxpayer’s money in this way’.   

The committee’s recommendations for DfE include setting clear three-year financial targets for each UTC, with the ability to close UTCs that are not meeting those targets at the end of that period.

It also wants the DfE to works with to gain assurance about the value schools are getting from payments to the Baker Dearing Educational Trust, and submit its findings to the committee within three months.

Meg Hillier, PAC chair, said: ‘An awful lot of money has gone into this idea with good results alarmingly thin on the ground – although it’s very hard to tell when the department hasn’t managed in 10 years to say what a good result is.

‘While the department determines what success is for the students already committed to a UTC education, it needs to look to the future and financial management of UTCs. 

‘For students in UTCs it’s not an expensive if innovative experiment, it’s their future – more uncertain now than ever as we face what the Chancellor has described as an unprecedented recession.

The department must show us how it is going to make UTC education worthwhile – for students, their parents and the taxpayer.’

University Technical Colleges report

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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