Additional written evidence submitted by the University College Union (UCU)
GOVERNANCE STRUCTURE AND THE FINANCES OF PRISON EDUCATION PROVIDERS
In evidence to the Inquiry (Q.249), the prison education providers said that the value of the PEF contract to their business is:
Weston College Group: approx. £10m
Milton Keynes College Group: approx. £17m
People Plus: did not know
LTE Group (Novus): approx. £80m
The below is information we extracted from publicly available financial statements of prison education providers.
Weston College Group – The Weston College Group Corporation was established under the Further and Higher Education Act 1992 for the purpose of conducting education and training at Weston College. The College is a charity (an exempt charity for the purposes of Part 3 of the Charities Act 2011). The Offender Learning Services Ltd is a subsidiary of the Weston College Corporation. Its purpose is the provision of education services to prisons. The Offender Learning Services Ltd had an annual turnover of £14.2m, with a gross profit of £1.5m and a net loss of £1.5m (the actuarial loss in respect of pension scheme is £1.3m) (year ending 31 July 2020). From the Weston College Group Financial Statements, the value of their PEF contracts appears to be £17m (an increase from £10m) (p.14). The Weston Group had an income of £64.2m (year ending 31 July 2020), with a gross profit of approx. £197,000 and a net loss of £9.6m (the actuarial loss in respect of pensions schemes was £9.8m). The income for the College itself is £49.2m with a gross profit of £1.3m and a net loss of £7.1m (the actuarial loss in respect of pensions schemes is £8.5m) (p.28). The College received a gift aid (year ending 31 July 2020) of £410,000 from the Offender Learning Services Ltd (together with a gift aid of £334,000 from another of its subsidiary companies, Forward Futures Ltd) (p.38). The Group’s highest paid officer was on a salary of £240,000 - £245,000 (ex. pension) (year ending 31 July 2020) (this figure was £270,000 - £275,000 for year ending 31 July 2019) (p.39).
Observation on the governance and financial statements of the prison education providers
From the governance structures and financial statements of the prison education providers, we see that the PEF money is, in the main, mixed with larger, Group-wide monies. It is understood that business efficiencies are to be made through leverages of scale and sharing services that a Group structure can offer e.g. in relation to HR and payroll; however, those benefits are not passed on to the prison educators and there does not appear to be the transparency that one would like to see in relation to the expenditure of public funds, by the prison education providers. We therefore ask the Committee to consider the merits of requiring the prison education providers to be more transparent so that the PEF income can be traced within their governance structures.