Accounting officer assessment: institutes of technology wave 2
Updated 30 April 2024
Applies to England
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Accounting officers scrutinise significant policy proposals, projects or programmes and ensure the actions of the public organisation they lead meet the 4 accounting officer standards (regularity, propriety, value for money, and feasibility) as set out in managing public money.
From April 2017, the government has committed to making a summary of the key points from these assessments available to Parliament when an accounting officer has assessed a project or programme within the government’s major projects portfolio (GMPP).
Background
The institutes of technology (IoT) programme is intended to help achieve a step-change in the provision of technical education at higher levels, to meet the demands of employers. IoTs will offer higher technical education (including apprenticeships and continuing professional development) in capital-intensive science, technology, engineering and mathematics (STEM) disciplines that are aligned to the skill needs of their key sectors within the areas they serve (for example engineering, advanced manufacturing, digital, life sciences and construction). IoTs are collaborations between further education (FE) providers, higher education (HE) providers and employers. The first wave of 12 IoTs were selected through competition, where a lead provider, an FE college or university, collaborated with a group of employers and other providers to create an institute of technology for their area and were announced on 10 April 2019.
The IoT programme provides capital funding via grants, with no revenue funding. IoTs are required to justify, through their competition proposals, the need for building works and specialist equipment and to demonstrate a clear link from the delivery of the IoT proposal to the IoT curriculum and the needs of employers. The capital works generally comprise a mixture of new builds, refurbishments and specialist equipment. IoTs lead and are accountable for delivering their own capital proposals - therefore these capital projects are self-delivered.
Funding for a second wave of IoTs, which included £120 million capital funding, for up to 8 IoTs was announced at conservative party conference in 2019 as part of the manifesto. Following conclusion of the wave 2 IoT competition, 9 IoT applications were successful and are affordable within the £120 million budget and will deliver greater learner numbers and geographical coverage – therefore providing greater value for money. There will also be an uplift of £10 million for sustainability and to reflect new government sustainability policies from COP26, bringing the total capital cost to £130 million.
Assessment against accounting officer standards
Regularity
IoTs will sign a licence agreement and capital funding agreement. From wave one, we already have a model agreement for both. These agreements built on existing good practice in the Department for Education (DfE) and were drafted by specialist external lawyers and were agreed by government legal department commercial with input from DfE lawyers.
The Secretary of State has wide powers to provide capital funding to further education colleges and designated institutions under s.100 Apprenticeships, Skills, Children and Learning Act 2009 and / or section 14 of the Education Act 2002.
Expenditure on educational related purposes is covered within the departmental ambit.
As such, the programme does not require any new legislation and no issues are anticipated in maintaining compliance with established United Kingdom law.
Propriety
Ministers have agreed the broad outlines of the IoT programme in terms of its objectives, eligibility and assessment criteria.
The full business case covering these elements went through the department’s clearance process and was approved by the department’s investment committee and subsequently by HM Treasury.
Value for money
There is a strong case for growing higher technical education, which is the focus of IoTs. There is evidence of skills gaps at higher technical levels, and we would therefore expect these courses to lead to strong labour market outcomes for learners, and productivity gains.
In order to achieve value for money, all IoTs will need to achieve the minimum cohort of 1500 learners by academic year 5 (forecasts will be put into the legally binding Licence Agreement) and to match fund a minimum of 35% of the capital grant.
The delivery of higher technical education to learners in under-represented groups is likely to have socio-economic benefits. Studying STEM may unlock higher productivity gains, because there are greater skills shortages around technical occupations requiring STEM skills.
Feasibility
The programme is assessed as deliverable. Sufficient budget has been secured, and the programme team is resourced, has adhered to all internal review and approval processes and has established strong project and portfolio management methodologies and processes to monitor and manage the project.
Delivery processes for wave 2 are based on those previously used for wave 1 with improvements from lessons learned, to develop processes, governance and mechanisms to manage and mitigate risks.
All 9 IoT Proposals met the required quality standard and in the desired locations and all 9 were affordable within the £120 million funding secured at the spending review, with a further budget increase to £130 million to reflect new government sustainability policies from COP26.
Conclusion
As accounting officer for the Department for Education, I have considered this assessment against the four accounting officer standards, and I am satisfied that the institutes for technology wave 2 programme relies on clear legal powers, meets the standards of manging public money and accords with the generally understood principles of public life; represents good value for money for the Exchequer as a whole; and is feasible to deliver.
If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised summary, setting out my assessment of them.
This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons; and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.
Susan Acland-Hood
Permanent Secretary