MPs question £3m spent on UTC membership body

An influential cross-party group of MPs has raised concerns over the value for money offered by the membership body for university technical colleges, after its cost to the public purse reached £3 million.

The costs smack of a far too close, special relationship with too little scrutiny from government and too much entitlement from the BDT

The Parliamentary public accounts committee has today published a report following a National Audit Office (NAO) inquiry last year, which laid bare the extent of financial failure among UTCs.

In its report, the committee criticised the “unusual setup” of the Baker Dearing Trust – the owner of the UTC brand – and its relationship with the Department for Education.

Analysis of BDT accounts by Schools Week’s sister paper FE Week found that since the programme launched in 2010, Baker Dearing has charged and received almost £2 million in “licence fees” from the technical colleges, whilst also receiving £1 million in grants from the DfE.

Meg Hillier, the PAC’s chair, said the costs “smack of a far too close, special relationship with too little scrutiny from government and too much entitlement from the BDT”.

She said it was “very curious” how the Baker Dearing, which she claimed had not offered value for money considering the poor performance of most UTCs, has “managed to brand a type of school and milk the taxpayer and schools just for their brand to be used”.

As revealed by FE Week last August, the annual licence fee UTCs have to pay to Baker Dearing rose from £5,500 to £10,000 this year, despite the majority of the technical colleges struggling to survive due to dwindling student numbers. This situation has seen 11 of the institutions close or announce closure to date.

It comes after Jonathan Slater, the DfE’s permanent secretary, was grilled about the licence fee at a hearing in March.

Meg Hiller

The PAC’s report raised concerns about an “apparent lack of interest in what UTCs are getting from paying out taxpayer’s money to the trust in this way…on top of the already generous funding that the department gave to the trust”.

The fee increase came as Baker Dearing saw a massive reduction in donations, which have been its biggest source of income since its inception. Accounts show it received £1.7 million in donations in 2017-18, but just £388,000 in 2018-19.

Hillier said it was “very suspicious” that the licence fee doubled this year, and she doesn’t know whether “they were trying to fill another hole in the budget somewhere”.

A spokesperson for Baker Dearing defended the trust’s licence fee and claimed the increase was suggested by UTCs themselves.

He said the payment goes towards BDT’s work in delivering “hands-on educational, financial, student recruitment, and multi-academy trust rebrokerage support for all UTCs, as well as fulfilling the central role of government liaison and raising the programme’s profile”.

£60k spent on secretary for ex-education minister

FE Week analysis of the BDT’s accounts also show the trust has spent £60,000 since 2011 on a personal secretary for its chair, the former education secretary and UTC architect Lord Baker.

The trust’s spokesperson also defended the payments made to Baker’s diary manager, insisting the cost represented “very good value for money”.

He explained that Baker devoted a few days per week unpaid to help UTCs, and needed help to arrange his diary, but also with drafting letters and speeches.

The personal secretary is still on Baker Dearing’s books, but they have been furloughed during the Covid-19 pandemic.

The £1 million grants paid by the DfE to Baker Dearing were for the trust to support the opening and running of UTCs. The grants stopped last year.

Hillier said her committee “could not see the value for money of the licence fee” as “we do not see UTCs performing particularly well”.

The UTC model, originally for students aged 14 to 19, has been fraught with setbacks since its inception.

The PAC’s report cited many of the findings from National Audit Office’s inquiry into UTCs last year, which found £792 million was spent on the programme between 2010-11 and 2018-19.

The majority of this was capital funding but the DfE has also propped up financially struggling UTCs with £36.8 million in extra cash between 2015-16 and 2018-19, most of which will not be paid back.

The report also found that the 48 UTCs open as of January 2019 were operating on average at just 45 per cent of capacity, and in terms of quality, over half of UTCs were rated as less than ‘good’ by Ofsted in October 2019.

No clear vision

Despite the DfE launching a three-year programme to improve the financial and educational performance of UTCs in 2017, the PAC said the government still 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”.

Hillier concluded that the taxpayer is paying over the odds for the UTC programme where good results are “alarmingly thin on the ground”.

Her committee has called on the government to set “clear” three-year financial targets for each UTC and close those that do not meet them.

MPs also want the DfE work with UTCs to “obtain the information necessary to gain assurance about the value schools are getting from the licence fee they pay to the BDT”, and write to the committee with its findings within three months.

The DfE said UTCs have a “key role” in improving technical education but are “still relatively new”. “We have always sought to make improvements and address challenges that individual UTCs may face,” they added.