Household names get SFA budget cuts

Household names get SFA budget cuts

Government funding budgets for training at major UK firms has been slashed, new figures have shown.

Firms such as British Gas, BT and McDonalds all under-delivered on the training they had been expected to deliver, according to the latest quarterly allocation figures from the Skills Funding Agency.

British Gas had its 16 to 18 apprenticeship contract for 2012/13 (ending July 31, 2013) reduced by 44 to £1.2m, while its combined apprenticeship budget (including 19 plus) decreased by 38 per cent to £1.8m.

British Telecom’s combined in-year budget fell 10 per cent to £8.1m and McDonalds had both its 16 to 18 apprenticeships budget and its combined apprenticeship budget squeezed by 10 per cent.

Meanwhile, the Alternative Hotel Group (owned by Lloyds Banking Group) had the greatest cut in combined 2012/13 budget with a 28 per cent reduction in its apprenticeships contract to £6.6m.

The conference and hotel business had its 16 to 18 apprenticeships budget cut 37 per cent to £3.8m.

A spokesperson for the Alternative Hotel Group said the reduction was caused by an increase in the length of apprenticeships they were offering and difficulty in recruiting apprentices.

She added that the company had fewer “progression opportunities” with employers due to “the current economic climate”.

A spokesperson for British Gas said: “Funding contracts are always forecasted in advance and during the period in question, we simply did not need to recruit the forecasted numbers via the funded route.”

A BT spokesperson said: “We work closely with the agency to ensure that the amount granted matches our apprenticeship provision.”

She added: “Factors such as changes in our recruitment profile can make a difference to our contract value.”

A spokesperson for McDonalds said: “The reduction in allocation of funding is not indicative of any reduction in training for McDonalds’ employees. It is the result of natural fluctuation in the training we deliver as we have seen new employees come into and through the business, started to introduce new training programmes and transitioned between providers.”

The agency said 521 contracts overall had been reduced due to “underdelivery by providers”.

Government commentary on the allocations said this meant £10.9m was “recovered” from adult provision and £41.8m from 16 to 18 apprenticeships.

“We have reduced contract values where actual delivery was below profile in line with our published performance management arrangements,” said an agency spokesperson.

She added: “As a result we funded an additional £19.1m growth for adult provision and £6.4m for 16 to 18 apprenticeships.”

The figures showed that overall the Adult Skills budget had grown by 2 per cent from August 2012.

However, 16 to 18 apprenticeships funding slumped 20 per cent from £858.5m in August, while funding for 19 plus apprenticeships was up 2 per cent to £3.28m.

The Association of Employment and Learning Providers’ chief executive, Stewart Segal, said: “It is important going forward that the agency clearly establishes the priorities for 2013-14 so that providers can plan their delivery.”

It comes just weeks after FE Week reported how Education Secretary Michael Gove’s Department for Education (DfE) had cut its projected budget for 16 to 18 apprenticeships by £165.5m.

The cut came, in part, because of “competition” from older applicants — who are funded by the Department for Business, Innovation and Skills (BIS), rather than DfE. And last month FE Week reported how the latest Statistical First Release showed 4,000 fewer 16 to 18-year-olds started apprenticeships from February to April (Q3) this year compared to the same period last year — a 19 per cent drop.