The National College for High Speed Rail opened two sites 12 months ago to deliver the skills for HS2’s construction. One year on, funding and student shortfalls have raised questions about its viability, as Lucy Alderson discovers.
A man in his mid-30s is slumped against the wall of the Doncaster National High Speed Rail college, taking drags from his cigarette.
Alerted by the sound of a taxi door closing behind me, he looks up. He seems almost surprised to see me here. He’s the only person I can see on the NCHSR campus, and inside it’s also quiet. Two men in their early 20s hang around the entrance, and two women chat behind the till of a café. It’s hard to imagine them having much business today.
The college’s commercial finance director Martin Owen greets me. “You’ve visited us at the wrong time I’m afraid,” he says, casting his arm towards the empty building.
I’m given a tour of the college, which can hold some 1,600 students. Today, however, I see only 20 or so as classrooms await new academics. Some 300 new students are due to arrive across the two colleges in a few weeks’ time, though the campus is still open on the day of my visit to learners from the previous academic year.
According to the NCHSR’s records, there were 93 students studying across both the Birmingham and Doncaster colleges during the 2017/18 academic year.
As well as a low student uptake, the college has also run into problems with funding.
It has faced a £7.5m budget shortfall as well as difficulties with its loans from HS2 Ltd and the government. Indeed, in the same week the Doncaster college opened last year, the NCHSR board acknowledged in a meeting on 10 October 2017 that it was “operating at risk and building up debt”.
The college’s future appeared precarious. Having been set up to help secure the legacy of HS2 by inspiring a new generation of engineers, how did the NCHSR find itself in this position?
A less rocky start
The story of the college begins in 2014.
The coalition government was spearheading five new national colleges with the aim of boosting skills in key areas: high-speed rail, nuclear, onshore oil and gas, digital skills and the creative industries. In May 2016, the government announced that £80m of funding was to be pumped into creating the new colleges.
In the same month, Willmott Dixon was awarded a £52m contract to build both the Birmingham and Doncaster high-speed rail colleges through the Scape National Major Works framework. Planning permission had already been granted, with the go-ahead given to the £25m Doncaster campus in December 2015 and to the £22m Birmingham site in February 2016.
Doncaster National High Speed Rail college 3
Things seemed to be falling into place for the NCHSR. By this point, it had already received more than £2m in funding from HS2.
In March 2016, the Department for Transport wrote to HS2 finance director Steve Allen, giving approval for HS2 to loan up to £8m to the NCHSR. However, the loan was made on the condition that it be repaid by 1 April 2018. HS2 subsequently decided to loan the NCHSR £4m.
In addition, the college secured a £8.3m commercial loan from the Department for Education that is due to be paid back by March 2023.
With funding secured and construction of both colleges under way, things were running to plan. But by October 2017, the plans were starting to go off the rails.
‘Kick in the teeth’ from IfA
According to the minutes of an NCHSR board meeting on 10 October 2017, chief executive Clair Mowbray said “challenging times lay ahead”.
Her concerns lay in the fact that the college had initially expected to receive more funding per apprentice than what the Institute for Apprenticeships (IfA) had now decided to award.
The amount of funding given to every apprenticeship scheme is decided by the IfA. Schemes are divided into one of 30 funding bands, ranging from £1,500 (band one) to £27,000 (band 30). The Department for Education is in charge of distributing the funding for schemes from the apprenticeship levy pot, into which the industry pays.
However, the IfA was not in existence when the NCHSR made its business case in 2014. As a result, the college had budgeted for £29,000 of funding for each apprentice, based on the system for approving and funding apprenticeship schemes at that time.
However, when the IfA was created in 2017, a different funding scheme was introduced with the maximum amount of funding available per apprentice capped at £27,000. Furthermore, instead of awarding the NCHSR the top £27,000 rate (as the college had expected following the change in system), the IfA instead awarded just £21,000 per apprentice.
This left the NCHSR facing a £7.5m funding shortfall over the next seven years, according to the board meeting minutes. It also left Mr Owen and the college unclear as to why the lower band was selected.
“The IfA’s recent track record is that it keeps lowering and lowering funding bands. Personally, I don’t know to what end”
Martin Owen, NCHSR
“It felt like a kick in the teeth to be honest,” he admits. “The top funding band is for £27,000, which is typically for higher vocational technical engineers […] but this is exactly the sort of training we deliver.”
He adds that the college could never have anticipated a change in apprenticeship funding process when it drew up budgets under its business case. “The way the funding was done [in 2014] was different. No one could have pre-empted this,” he says. “The IfA’s recent track record is that it keeps lowering and lowering funding bands. Personally, I don’t know to what end.”
He adds that total apprenticeship starts have fallen by almost 39 per cent since the apprenticeship levy was introduced in May 2017, and that the past year has been “one of the most challenging periods on record” for further education providers as a result.
The college’s trailblazer group (employers / trade organisations / professional bodies in charge of creating the NCHSR’s apprenticeship scheme) challenged the IfA’s funding decision at the end of September.
Mr Owen says he expects to hear the outcome of the challenge imminently.
The next NCHSR board meeting was held in December 2017, by which point the IfA funding issue had become more heated.
Doncaster Council chief executive Jo Miller, who is a NCHSR independent board member, called it “morally reprehensible” that funding issues were frustrating the college’s work, and that it was “in the gift of the IfA to change the situation”. NCHSR chair Alison Munro, who was also CEO of HS2 from 2009 to 2014, said she was similarly disappointed by how the college had been treated.
Letters were sent from the college to the education secretary, education minister and the DfE’s accounting officer alerting them to the situation.
Meanwhile, time was running out for the college to repay its £4m loan back to HS2 – which it had under four months to do. It appeared increasingly unlikely the college would meet the 1 April 2018 deadline.
Minutes from a NCHSR board meeting in February 2018 show talks had taken place between the DfT, the DfE and the NCHSR about the HS2 loan, and that the government was aware of the cash issue facing the college.
On 21 March – 11 days before the £4m loan was due – the DfT wrote to HS2. By this point, the NCHSR had only repaid £1.31m of its £4m loan and said it was unable to repay the outstanding £2.77m. The DfT said it would give consent for HS2 to extend the loan repayment scheme, on the condition that the college must repay the remaining £2.77m by no later than 1 April 2027.
Six days later, the college and HS2 set up an amended payment schedule: the NCHSR would begin repaying the loan on 31 March 2022, making annual payments on the same date up until 2025.
Attracting fresh interest
As all of this has played out behind the scenes, the college has struggled to find another crucial ingredient necessary for any educational body to succeed: students.
Mr Owen confesses this is one of several ongoing challenges. “Being a start-up […] is both a curse and a blessing,” he says. “Clearly we want to open our doors and get to full capacity straight off. You’re never going to do that. But we’re in start-up mode, so the number of learners we’ve got are obviously going to [be] fewer.”
He adds that for this academic year, the NCHSR is expecting around 300 new learners on the books for its new semester starting in October. It is also confident of growing the number of new students to 1,000 for the 2021/22 academic year.
“This time last year, we were sat here thinking: are any learners going to turn up? But what I would say is that we have come a phenomenally long way in a very short space of time”
Martin Owen, NCHSR
At its most recent meeting on 16 May, the NCHSR board discussed ways to bring in more financial support. Chief executive Ms Mowbray confirmed that the DfE was looking at future financial support for the college.
She told the meeting that the DfE suggested the college broaden its scope instead of restricting itself to a high-speed rail focus. The DfE would give financial support to the NCHSR, but only on the prerequisite that it “helps itself”, Ms Mowbray added.
“Strategic opportunities” were also discussed by the board that could “deliver an income of up to £18m”, according to the meeting minutes.
Mr Owen tells me that these strategic opportunities include applying for £1.5m of European Social Funding, and visiting companies overseas in an attempt to secure investment into the NCHSR. He adds that the college is attracting interest from companies located in Saudi Arabia, China and Bulgaria.
In a further statement, the college added: “Many colleges and learning providers the length and breadth of Great Britain have been affected by [falling apprenticesip starts] and will now be facing shortfalls in their funding as a result. We have been, and will continue to be, proactive in developing strategic opportunities and identifying new sources of funding that will enable us to achieve our long-term goals as a high-quality and sustainable entity.”
Doncaster National High Speed Rail college 2
Considering the challenges the college has faced to date, I ask Mr Owen whether he would have done anything differently. “We haven’t had a chance to sit down and evaluate the college’s journey from making the business case to getting the keys to the new buildings, to getting new learners in,” he says.
“This time last year, we were sat here thinking: are any learners going to turn up? But what I would say is that we have come a phenomenally long way in a very short space of time. I can’t see any other further education college do as much as we’ve done in a short space of time. In terms of whether we’d do things differently… I’m sure we would, but I’m not sure what they are.”
Can the college make it?
As I finish my tour around the Doncaster campus, it’s clear that the college building itself – and the quality of equipment and technology available to students – is impressive.
More than £8m has been invested in specialist kit and equipment alone, and a head of a high-speed train – named the Donny Star – complete with control panel has been donated to the college for students to train with.
The challenge for the college now is to ensure these facilities reach their full potential.