GK insights

GK insights is a weekly update from GK consultants, looking at the latest political, policy and regulatory developments that investors and businesses need to be aware of, as well as into Government funding, initiatives, proposals and consultations aimed at boosting innovation in the business world.

Get in touch at: info@gkstrategy.com.

Government responds to Buy-Now Pay-Later Consultation

The Government has responded to its consultation on new measures to ensure that the Buy-Now Pay-Later (BNPL) market is regulated sufficiently. Under the proposed plans, lenders will need to conduct affordability checks (similar to the checks regularly conducted in other markets within consumer finance) to ensure that loans are affordable for consumers. Current financial promotion rules will also be amended to ensure that Buy-Now Pay-Later advertisements are ‘fair, clear, and not misleading’. Lenders offering products will require Financial Conduct Authority (FCA) approval, and borrowers will also be empowered to make complaints relating to BNPL products to the Financial Ombudsman Service (FOS).

HM Treasury has cautioned, despite its commitment to tightening regulation within the BNPL market, that it will not rush to implement new measures. Instead, it will publish a consultation on draft legislation later this year, which will include more detailed proposals. This means that legislation widening the scope of the FCA’s regulatory power over the market may not be introduced until mid-2023.

ESFA announces increase to AEB over-delivery threshold

The Education and Skills Funding Agency (ESFA) has stated that the threshold for over-delivery of the national Adult Education Budget (AEB) will be increased by one year. This means that Colleges and training providers are likely to be paid up to 110 per cent of their contract value for 2021/22 for any over-delivery – up from the usual threshold of 103 per cent.

The ESFA has taken this decision “in recognition of providers’ efforts to focus on delivery following the coronavirus pandemic and accommodating additional eligible learners recently resettled from other countries including Ukraine and Afghanistan”. It should be noted that the over-delivery threshold increase applies to the national AEB administered by the ESFA only. In areas where the AEB has been devolved, mayoral combined authorities or the Greater London Authority will continue to set their own thresholds.

Furthermore, the ESFA has confirmed that the threshold for under-delivery has reverted to 97 per cent following two years of lower thresholds – 68 per cent in 2019/20 and 90 per cent in 2020/21 – which resulted directly from the coronavirus pandemic and the consequent lockdowns.

Ofsted launches consultation on care leavers inspection judgement

Ofsted has launched a consultation on proposals for a new judgement on the experiences and progress of care leavers to be included in the local authority children’s services (ILACS) inspection framework. Ofsted hopes that the proposals will help to shed more light on the experiences of care leavers and facilitate the evaluation of the effectiveness of local authority children’s services. The specific proposals relate to reviewing and updating the existing evaluation criteria to ensure they remain relevant and reflect on what optimal scenarios would be for care leavers. Ofsted has also asked for responses on the timing of the introduction of the new judgement. Chiefly, they are concerned with whether the judgement should only be introduced after all local authorities have had at least one ILACS inspection outcome.

this week’s blogs

GK Point of View – Digital Strategy announced during London Tech Week

GK Associate, Nicole Wyatt, analyses the biggest talking points from the recently published Digital Strategy.