The decision over funding allocations for apprenticeship provision for non-levy-paying employers has been be paused by the government, to allow time a careful review.

The Education and Skills Funding Agency today revealed that the recent procurement process had been significantly oversubscribed, due to overwhelming interest from the training provider market in the apprenticeship reforms.

It said pausing the competition would allow it to “review our approach to ensure that we achieve the right balance between stability of supply and promoting competition and choice for employers”.

The announcement acknowledged that “it is important that we fully consider how best to achieve these outcomes in a way that achieves the best value for employers and apprentices, as we move to a fully employer-led system”.

In the interim period, the ESFA will extend existing contracts held by all current providers until the end of December 2017.

Current providers with extended contracts will be able to undertake new starts on those contracts provided they are on the Register of Apprenticeship Training Providers.

It comes after FE Week revealed last month that allocations worth up to £440 million, for delivering apprenticeship training to non-levy employers, had been delayed by the government.

A key meeting that the former Skills Funding Agency was supposed to hold on March 8, to reach final decisions on which providers would be allocated a non-levy employer funding allocation, was also cancelled.

Mark Dawe

The ESFA said today it would notify providers of specific arrangements shortly, to make sure amended contracts are in place ahead of May 1, and confirmed that provision for existing learners would not be affected.

It also said it intends to engage further with the market to about its approach to the procurement process, to ensure it “meets the government’s wider objectives of securing stability in the market, good sectoral and geographical coverage of provision, and a market which meets the skills needs of employers”.

FE Week understands that further guidance will be issued “shortly”.

In response to the ESFA’s announcement, Association of Employment and Learning Providers chief executive Mark Dawe said: “AELP fully supports the government’s welcome announcement which is right for the sector and right for the apprenticeship programme.

“It clearly shows that the government is as serious about the quality of the programme and the social mobility benefits of apprenticeships as it is about hitting the 3 million target.”

He added: “The decision also gives the new providers on the register [of apprenticeship providers] more time to prepare their offer for non-levy paying employers but more importantly, existing providers can continue to support their employers and start new apprentices while a more considered review of anticipated programme demand takes place in the context of the Industrial Strategy and the skills implications of Brexit.

“We recognise that some providers who invested a great deal of effort into last autumn’s procurement will be frustrated by the announcement but the programme’s reputation will be better served by this rethink of the government’s approach.”

David Hughes

David Hughes, chief executive at the Association of Colleges, said: “I am pleased that the pause on the apprenticeship procurement process has been announced by the ESFA. It is a sensible and helpful recognition of the scale and complexity of change which is happening at the moment.

“This provides welcome stability to colleges and providers as well as to employers and apprentices through the coming months; this will give more time to get the procurement process right.”

He added: “We know that there are many new providers wanting to enter the apprenticeship market, but the government needs to find a way to ensure that their introduction does not inadvertently undermine current high quality, trusted colleges and providers that have built strong employer relationships over many years and for which apprenticeships are a key opportunity for progression for their students.”

On March 14, FE Week reported that the allocations, worth up to £440 million for delivering apprenticeship training to non-levy employers, had been delayed by the funding agency.

A message was sent out to non-levy funding applicants via the government’s ‘Bravo’ e-tendering portal – seen by FE Week – which confirmed that the announcement of the allocations would be postponed.

The update stated that “the timetable for communication of results to applicants” had been “amended”, and further advice would be revealed “as soon as we are able”.

Previously on March 8, FE Week had also reported that a key funding agency meeting which was supposed to decide which providers would receive a non-levy employer funding allocation and how much they would get had been cancelled.