Training providers without a current apprenticeship contract have hit back against the government’s surprise announcement this morning to deny them direct access to non-levy funding from May, saying their time tendering has been “wasted” and their viability “threatened”. 

Earlier today the Education and Skills Funding Agency announced that the decision over funding allocations for apprenticeship provision for non-levy-paying employers had been be paused by the government, to allow the situation to be reviewed.

The government were due to release the results on the 14 March, and until today there had been no information about the delay beyond statements of “in due course”.

The recent procurement process for up to £440 million of funding was said to have been significantly oversubscribed, and the ESFA claimed the postponement 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 ESFA confirmed it will extend existing contracts held by current providers until the end of December 2017 to help continuity, but the hold up has frustrated those who were applying for a contract for the first time and now find themselves in limbo until further announcements. 

FE Week estimates over 400 main providers on the new Register of Approved Apprenticeship Providers (a third of the 1,303) will now not be able to directly deliver to over 98 per cent of the non-levy employers from May, owing to the pause. 

All main providers on RoATP without existing contracts will be able to continue to subcontract with a lead provider to access the non-levy funding. However, there is no indication that the tighter subcontracting rules from May, whereby the lead provider must deliver some training for the employer, are also being paused or delayed.

FE Week spoke to Liam Ryan, owner and commercial director at First Avenue Training, a specialist training provider for the early years childcare sector, about his concerns. 

Mr Ryan said: “Ninety nine per cent of our employers are SMEs [small- and medium-sized employers] so we only applied for RoATP to get the ITT [invitation to tender] contract.

“Like many others we spent a lot of time (and money for consultancy) which has been wasted and not a word of apology.”

He added: “We can continue as a subcontractor for the time being but I’m not sure that there is currently a viable business model in our sector when you combine cuts in funding rates, 20 per cent “off the job” [training] and mandatory 10 per cent contributions.

“I predict starts will plummet, particularly for 19+ learners, which is a great shame since we just spent two and a half years overturning the last government mistake in the sector (the mandatory GCSEs in early years).”

Mr Ryan said the refusal of the ESFA to grant Advanced Learner Loan contracts to providers that don’t have Adult Education Budget funding or apprenticeship contracts was a further problem for his company. “Once again this threatens our viability and I’m sure that we aren’t alone,” he said. 

Others took to Twitter to express their concerns about the ESFA announcement. Here are some of their comments: