In accordance with its powers under Section 152A(1) of the Apprenticeships, Skills, Children and Learning Act 2009 (“the Act”), and pursuant to its obligations under Section 152A(4) of the Act, the Office of Qualifications and Examinations Regulation (“Ofqual”) gives notice that, having imposed a Monetary Penalty on Qualifications for Industry (“QFI”), it has decided to require QFI to pay Ofqual’s costs in relation to impose that penalty in the sum of £15,846.22 (“the Costs”).

Summary

1. Ofqual may require a recognised body (an awarding organisation) on which a sanction has been imposed to pay the costs incurred by Ofqual in relation to that sanction.

2. QFI was an awarding organisation previously recognised by Ofqual. On 6 December 2024, Ofqual’s Enforcement Panel (“the Panel”) decided to impose a sanction on QFI as defined under Section 152A(2) of the Act, in relation to failures to comply with its Conditions of Recognition.

Decision

3. The Panel considered the costs incurred by Ofqual in relation to the decision to impose a Monetary Penalty on QFI and has decided that QFI should be required to pay Ofqual’s Costs in the sum of £15,846.22.

5. Ofqual calculated its internal legal costs at prevailing Government Legal Department rates.

Considerations

6. Ofqual imposed a monetary penalty on QFI in the sum of £50,000, that sum reflected the Panel’s assessment of the seriousness of QFI’s non-compliance and represented the minimum penalty necessary to meet the requirements of deterrence and public confidence in all of the circumstances.

7. It is in the interests of the regulated community generally, as well as the interests of users of qualifications, that Ofqual will use its enforcement powers where this is necessary. Ofqual’s ability to exercise its powers may be undermined if the public purse does not recover the costs associated with taking enforcement action.

8. Ofqual’s policy, Taking Regulatory Action (2012) (the TRA policy), specifies that Ofqual will normally recover its costs in all applicable cases where those costs exceed £10,000.

9. The total sum of the costs which Ofqual has incurred in this case exceeds the minimum level indicated in the TRA policy.

10. The Panel considered whether there are any countervailing factors which indicate that the public purse, rather than QFI, should meet any of the costs of imposing the sanctions on QFI.

Amount of the costs

11. A significant part of Ofqual’s investigation related to allegations 3 to 8 which were not determined following the Panel’s decision to leave those matters on file at the Notice of Intention stage. In addition, a proportion of the legal costs up until the Notice of Intention stage would have been incurred in relation to allegations 3 to 8.

12. The Panel does not think it would be appropriate in this case to recover costs relating to breaches left on file. To reflect this decision, the Panel decided not to recover the investigation costs.

13. In relation to the external legal advice, noting this relates to allegations 1 to 8, the Panel considers it would be reasonable to reduce these costs by 75% to reflect the Panel’s decision not to determine allegations 3 to 8. The costs for external legal advice will be reduced by 75% from £5,832 to £1,458.

14. In relation to the internal legal costs up until the Notice of Intention stage, a proportion of these costs will similarly be reduced by 75%. All of the work completed after the Notice of Intention stage pertained to the breaches determined by the Panel and those costs will accordingly be recovered in full.

The costs for internal legal advice will therefore be reduced from £17,017.20 to £14,388.22.

15. In the circumstances of this case, the Panel considers it reasonable to require QFI pay costs in the total sum of £15,846.22. The Panel considers that Ofqual’s costs were incurred in connection with imposing sanctions which Ofqual considered necessary in view of its statutory objectives and duties. The Panel considers it proportionate that the awarding organisation, and not the public purse, should meet those costs.

Impact

16. The Panel recognises that costs recovery will impose regulatory burden on QFI. The Panel has considered its obligations pursuant to section 170 of the 2009 Act, not to impose (or maintain) any unnecessary regulatory burdens. For the reasons given in this Notice, the Panel considers that the regulatory burden associated with costs recovery in this case is a necessary burden. Ofqual’s costs were incurred in connection with imposing sanctions which Ofqual considered necessary in view of its statutory objectives and duties. The Panel considers it proportionate that the awarding organisation, and not the public purse, should meet the costs.

17. The Panel has had regard to the desirability of promoting economic growth, in accordance with the Deregulation Act 2015. QFI has submitted that it has ceased trading, imposing costs recovery is therefore unlikely to have an adverse impact on QFI’s economic growth.

18. The Panel has not identified any equalities implications arising from costs recovery.

Payment

19. QFI must pay the Costs within 28 days of the date of this Notice, in accordance with the Payment Instructions provided with this Notice.

20. In the event of non-payment, interest may be charged and the outstanding amount may be recovered as a debt, in accordance with section 152C of the Act.

Appeals

21. QFI may appeal to the First Tier Tribunal in respect of Ofqual’s decision to require it to pay the Costs and/or in respect of the amount of the Costs, in accordance with section 152B of the Act.

23. Any appeal must be made within 28 days of the date of this Notice. Further information is available from HM Courts and Tribunals Service.

Name: Chris Paterson

Chair of the Enforcement Panel

Date: 27 January 2025

Enforcement Panel:

Chris Paterson

Hardip Begol CBE