16 to 19 education: accountability
Information about the intervention actions available to the Education Funding Agency.
16 to 19 accountability
Minimum Standards, Inspection, Financial Health and Control
It is important young people and their parents are able to make informed choices about where they will continue their education or training post-16. In order to do this they need to be able to compare the performance of schools and colleges in a fair and consistent way.
At the same time, we need to raise standards so all young people are participating in good or outstanding schools and colleges, and we need to hold schools and colleges to account for their performance. In April 2013, the Department for Education (DfE), jointly with the then Department for Business, Innovation and Skills (BIS) published Rigour and responsiveness in skills. This document sets out the rapid and decisive intervention actions that will be taken where performance is poor.
Further information on EFA’s approach to managing risk in sixth-form colleges before formal intervention is triggered is available on GOV.UK.
Where a provider of education or training to 16 to 19 year olds is under-performing, the Education Funding Agency (EFA) will implement the DfE policy in line with its contracts and funding agreements. The contracts and funding agreements provide the detail and take precedence over information on this page.
There are two triggers that identify if education or training to 16 to 19 year olds is under-performing. These triggers are:
- an overall Ofsted judgement of inadequate (or, in the case of a maintained school sixth-form or an academy sixth-form if the separate sixth-form grade states the sixth-form is inadequate); or
- performance below the National Minimum Standard set each year.
In addition to education standards, there is also a trigger based on the assessment of the financial health and/or control of institutions made by EFA.
- where financial health and/or control is assessed as inadequate
Apprenticeship quality will continue to be assessed against the Minimum Levels of Performance applied by Skills Funding Agency (SFA). Apprenticeships are therefore not covered further by this section.
Ofsted inadequate trigger
Commercial and charitable providers (CCPs)
Where a CCP receives an Ofsted inadequate judgement the contract will, normally, be terminated and a better provider sought if required and subject to protecting the interests of learners.
School sixth-forms, sixth-form colleges and FE colleges
If a school sixth-form, including academy sixth-forms and 16 to 19 academies is judged inadequate by Ofsted, Regional School Commissioners will consider appropriate improvement action in the first instance. Local Authorities should issue warning notices to LA maintained school sixth-forms.
If a sixth-form college is judged inadequate by Ofsted, EFA Director for Young People, in his capacity as Sixth-Form College Commissioner, may undertake an assessment of the capacity and capability of the Sixth-Form College’s current leadership and management to lead improvement, and make recommendations to the minister about the appropriate intervention action in each case. An inadequate inspection judgement may also attract a Notice to Improve that sets out additional conditions that must be met in a time bound period in order to receive continued funding.
FE colleges will be subject to an assessment by the FE Commissioner. Further information about the FE Commissioner can be found on GOV.UK.
Where the institution is jointly funded by SFA and EFA, any intervention action will be considered jointly by the agencies, although the solution may be different for the 16 to 19 students and the adult learners.
16 to 18 minimum standards for 2016
School and college accountability systems have been reformed to set higher expectations, and to make the system fairer, more ambitious, and more transparent. Further information on how the DfE is applying the minimum standards to the performance of schools and colleges can be found on the 16 to 18 minimum standards page published on GOV.UK.
Financial health and control trigger
EFA assesses the financial health and financial control of sixth-form colleges. It also carries out an assessment for those CCPs funded only by it or where it is agreed with the SFA that EFA should lead the assessment.
All financial intervention is underpinned by a framework of six key principles. These are:
the protection of the taxpayer from excessive or unnecessary expenditure or future liabilities
the protection of high quality and relevant education and training to meet the needs of local learners and employers
that the future provision of education and training will be determined on an area-wide basis rather than from a single institution’s perspective, with options explored openly and transparently, and with analysis to be publicly available of both the current and future economic and educational needs and the current education and training provision
that provision must represent value for money, be financially viable and delivered through financially sustainable institutions
that institutions taking on existing institutions or provision, and some or all of the related assets, will take on all, or an appropriate share, of the associated costs and liabilities
that the Secretary of State has no obligation to assume, discharge or provide funding for the liabilities of an institution which is dissolving or in financial difficult, but might decide to do so in particular cases, to protect students or secure outcomes, or otherwise in the public interest
Sixth-form colleges (SFCs)
The assessment of SFCs is carried out through a combination of:
- assessment of financial health based on a review of SFCs 3 year financial plans and their audited accounts
- reports of SFCs’ own appointed auditors
- funding audits commissioned by EFA
- other relevant information indicative of financial health or financial control weakness
The financial health of an SFC is monitored and assessed in line with the established approach set out in the most recent financial planning handbook.
Financial health is reviewed using the college’s financial plans and audited financial statements, and each college’s financial health is awarded a grade ranging from outstanding to inadequate. The financial planning handbook defines the grades and details the approach for financial health scoring.
Where an SFC is graded inadequate in relation to its financial health, for either the previous, current or next forecast year it is deemed to be in financial failure.
The financial control arrangements at a SFC are also assessed by EFA. To assess the overall financial control arrangements EFA will consider:
- outcomes of audits undertaken by or reported to EFA
- compliance with funding and regulatory requirements, including an SFC’s instrument and articles of governance (where applicable)
An SFC is assessed as inadequate in relation to financial control where typically one or more of the following exists:
- it receives a qualified true and fair audit opinion on its financial statements
- it receives a qualified regularity opinion on its financial statements
- it receives a qualified audit opinion on a funding audit
- a significant fraud has taken place
- a critical review of financial management and governance
Where an SFC is graded inadequate in relation to its financial health or is under-performing in relation to its financial control, EFA will write to the SFC to confirm the position and consider the range of potential interventions as set out in the SFC funding agreement, and in accordance with the most recent departmental policy. This may include an assessment by the SFC Commissioner and/or the issue of a Financial Notice to Improve.
Financial Notice to Improve – financial health
When EFA issues an SFC with a Financial Notice to Improve (FNtI), the SFC will be required to improve its financial health. This may include the preparation and implementation of a financial recovery plan.
EFA will determine when the SFC has made sufficient progress for the FNtI to be lifted.
Further information on ESFA’s approach to college financial health and control notices in cases of structural change and/or merger is published on GOV.UK.
Financial Notice to Improve – financial control
It will be made clear to the SFC what needs to improve, and the financial recovery plan that an SFC has to produce will be used to monitor progress against the weaknesses identified. It is expected that a SFC will address all financial management and control weaknesses within a specified timescale.
EFA will determine when the SFC has made sufficient progress for monitoring to cease.
Where the SFC is jointly funded by the SFA and EFA, any intervention action will be considered in consultation with the SFA and the FE commissioner, although the solution may be different for the 16 to 19 students and the adult learners.
Commercial and charitable providers
The financial health of a CCP is assessed, based on its annual accounts, this generates an auto financial health score. Where the auto score is inadequate EFA will consider each case on its merits but reserves the right to take action in accordance with the contract with the CCP.
Acting on under-performance in all institutions funded by EFA for 16 to 19 provision
All institutions funded by EFA that are in receipt of a contract or funding agreement are advised to refer to the clauses in the quality assurance sections of those documents which provide for EFA to take specific or particular action where under-performance is identified. More information on under-performance in local authority maintained schools is set out in Schools Causing Concern.
More information can be found on GOV.UK about under-performance in academies.
Published: 23 June 2014
Updated: 20 December 2016
- Updated information has been added.
- Financial health and control trigger updated
- Updated information added on new performance measures from 2016
- First published.
From: Education Funding Agency
Related guides: 16 to 19 education: financial management and assurance