Elmfield Training dishes out cash to Morrisons

The provider behind the UK’s biggest apprenticeship programme has defended handing over taxpayers’ cash to the firm whose staff it trains.

Elmfield Training, which was allocated £41m by the Skills Funding Agency (SFA) for the current academic year, said it was “only right to share costs” of its programme with Morrisons.

The payments — understood to be £60 for every learner — began after the provider started one-day development sessions on key skills with apprentice staff at the giant supermarket chain, which last financial year had a turnover of £17bn.

“We’ve always supported Morrisons learners one-to-one with key skills, and last year we decided to add a one-day development day with groups of learners,” said a spokesperson for Elmfield, which claims to have delivered around 100,000 apprenticeships for Morrisons since October 2009.

Where additional costs are incurred to improve the quality of the programme, it is only right they are shared fairly, with ourselves as the provider.”

“The extra tuition means that we’ve been able to maintain high pass rates on both literacy and numeracy.

“For many of our learners in Morrisons, it’s the first time anyone has supported them with these skills — and obviously it’s had a very positive effect on people’s confidence, as well as their ability to perform well at work.

“Morrisons makes a huge financial contribution to the apprenticeship through all the training and support they provide learners. Where additional costs are incurred to improve the quality of the programme, it is only right they are shared fairly, with ourselves as the provider.”

Funding rules state providers “must not use apprenticeship funding provided by the SFA to pay apprenticeship wage”.

However, a Morrisons spokesperson said the company was happy that the payments from Elmfield were above board.

News of the payments system comes just a week after FE Week reported claims that Elmfield was proposing to shed a third of its 600-strong workforce.

Two out of every three of Elmfield staff were warned on October 4 that they could face redundancy, according to a worker who wanted to remain anonymous.

The Elmfield spokesperson described the redundancy figures supplied to FE Week as “inaccurate, selective and misleading”.

The proposed job losses follow a national media report that provider Pearson in Practice had also opened consultation with 300 employees in its IT apprenticeship arm.

The firm’s accounts indicate it had more than 3,000 students a year studying in its IT programme and had a turnover of £30.7m.

A Pearson spokesperson told FE Week: “No business can honestly rule out job losses 100 per cent, but there are no timescales or detailed plans and none were set in the recent business review meetings.

“Nothing has been discussed, announced or decided on redundancies, or the closure of our training centres.”

He added: “Pearson in Practice holds regular business review meetings with all its staff.

“We endeavour to hold these on a quarterly basis — neither redundancies nor centre closures were discussed.”

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Editors comment

It takes a minute to get your head around a provider paying an employer to train their staff.

Obviously, the government has introduced wage incentives to help persuade small employers to take on apprentices.

However, while providers are paid by the government to deliver training, they are banned from using SFA money to pay apprentice wages.

Former funding agency LSC even felt the need to publish a seperate document in 2009, warning of providers making ‘employer inducements’.

Costs may well be shared “fairly” with Elmfield and Morrisons, but just how much SFA money has ended up with the supermarket giant?

It is unclear what costs would need sharing, and it is a shame that this arrangement did not come out when both firms were before the BIS Select Committee in March.

It would be interesting to hear what committee members think of this arrangement.

We already knew Morrisons paid nothing for Elmfield’s services, but to learn that in fact they get paid raises serious questions about the use of public money.

Nick Linford, Editor