Revealed: 5 danger signs threatening the future of UTCs

Lack of students and rising deficits highlighted in worrying watchdog report on the DfE’s flagship technical schools
30th October 2019, 12:05am


Revealed: 5 danger signs threatening the future of UTCs
The Nao Report Highlights Several Key Concerns About The Finances Of Utcs

A new investigation into university technical colleges has highlighted a series of concerns about the financial viability of schools in the government’s flagship technical programme.

UTCs were launched in 2010 to provide technical education in specialist areas to be delivered to pupils between the ages of 14 and 19.

However, a report by Parliament’s public spending watchdog highlights how 10 of the first 58 of these schools have closed and the government has concerns about the viability of 13 more.

Full story: Half-full and underperforming - damning report on UTCs

Background: DfE to reduce pressure on technical schools over Progress 8

Exclusive: UTC to shut ahead of Ofsted report

Here are five key findings from the National Audit Office report about the finances and viability of the UTC programme.

Fears over the future of UTCs

1. UTCs’ empty places threaten their viability

The NAO report warns that across the programme UTCs are less than half-full - with 45 per cent of available places taken up.

It warns that this has an impact on their financial viability.

Occupancy rates range from schools being completely full to a UTC that only had 10 per cent of its places filled.

The report says that the 10 UTCs that shut were typically around one-quarter full in the two years leading up to the closure.

2. DfE has ‘significant concerns’ about the finances of 13 UTCs

The Department for Education is said to be concerned about 13 UTCs that operate in single academy trusts. Twelve of these were a cause for concern because of a school’s financial position, and another was because of compliance issues.

These UTCs all featured in the DfE’s “national concerns report”, which highlighted academy trusts that were of most concern.

Of the 13, two had a deficit and five more had a predicted deficit of more than 5 per cent of their annual income.

Another five UTCs faced a clawback of funding because of the over-estimating of pupil numbers that exceeded 30 per cent of their core school grant. The Education and Skills Funding Agency concluded that the clawback was unaffordable and the financial viability of the trust was a concern.

3. UTC deficits have risen

The NAO warned that the total cumulative deficit of UTCs rose from £3.5 million in 2014-15 to £7.7 million in 2017-18, when 14 of the 32 UTC academy trusts reported being in deficit.

The report notes that the overall deficit of UTCs dropped from 2016-17 to 2017-18 but this was because four UTCs that were in deficit closed down.

Deficits held by UTCs accounted for almost 10 per cent of total aggregate revenue deficit of £78 million across the academies sector - which was held by 195 academy trusts in 2017-18.

4. The government has intervened at eight UTCs

When the Education and Skills Funding Agency has significant concerns it can intervene by issuing a financial notice to improve to the UTC’s academy trust.

It has so far issued eight notices to UTCs.

Of these, four remain in place. In two UTCs, the issues have been addressed, and two of the UTCS that had been given the warning have since closed down.

5. Millions has been spent closing UTCs or covering their debts

The NAO report warns that the government has spent £9 million on closing UTCs. This includes meeting the costs of covering debts and staff redundancies.

The DfE has also spent another £8.8 million covering UTC deficits and only expects to be able to recoup half of this funding in the future, the report says.

The bulk of government spending on UTCs has been on capital costs. The NAO report says that £680 million - which accounts for 86 per cent of the overall spending  - went towards capital grants for land, buildings and equipment. This included up to £600,000 per UTC for specialist equipment.

Responding to the National Audit Office report, Lord Baker, the chairman of the Baker Dearing Educational Trust, which supports UTCs, and a former education secretary, said: “This report records the price of everything and the value of nothing. UTCs should be judged by the success of their students becoming apprentices, studying Stem subjects at a university and getting a job as a technician or an engineer.

“For that we have the best destination data of any schools in the country. Because of this the Department has encouraged us to make applications for new UTCs and we are working with local employers and universities for the next round in November.”

A Department for Education spokesperson said: “We have been clear that the department is committed to ensuring that people have access to high-quality technical education across the country.

“UTCs are helping to deliver on that, with 21 per cent of pupils progressing into apprenticeships after completing their post-16 education, more than double the national average.

“As this report recognises, we have taken significant action to support and raise the profile of UTCs to make sure they continue to play a role in our diverse education system and provide the skills that employers need.”

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