The traineeship funding processes could be simplified to help successful providers grow their provision more successfully, writes Joe Crossley

Providers are pulling out of the traineeship market with alarming regularity and it is not hard to see why: the funding methodology is complicated, growth is hard to achieve, and the client group is one of the most challenging to engage with.

After several years of hard work to create an effective traineeship programme, we are finally seeing substantial development, but this was hindered, rather than helped, by the surrounding bureaucracy. We believe that traineeships are valuable for young people and providers can manage them successfully but there are things the government could do to make that easier.

Understanding the rules for each funding stream is the first challenge, as 19+ trainees are funded differently to 16- to 18-year olds.

It would make a lot of sense for the ESFA to amalgamate the funding methodology into one model

For the younger students, financial backing is calculated based upon the hours delivered, regardless of the content included in the programme. What’s more, there is no additional “job outcome” payment outside the base funding rate. This alone disincentivises providers from working towards the outcomes for which traineeships are built: progression to an apprenticeship or employment.

Students aged 19 to 24 are easier to understand and are backed through a combination of a single traineeship programme rate and any embedded qualifications that are included in their plan, with 80 per cent paid on programme and the rest upon achievement. An additional payment is made for students who progress to an apprenticeship or employment, providing they retain this outcome for at least six weeks.

It would make a lot of sense for the ESFA to amalgamate the funding methodology into one model, adopting the latter method as the norm. This would enable providers to make more accurate projections based on actual instead of planned delivery, and reward providers’ hard work.

Growth is difficult to achieve. Although 16- to 18-year-olds are seen as a priority area, many providers are denied it. Overperforming on a contract is a risk, but necessary for businesses wanting to increase their provision or enter new markets.

When growth is not granted, particularly where overperformance is the case, it puts pressure on providers: do you stop your growth plans and reduce your staff base? Or use networks and contacts to find new partners, a different type of risk, with a reduction in revenue based on the management fees involved.

More than any other year in recent memory, 2017 demonstrated how vulnerable training providers are

We know of one provider which, due to an unsuccessful growth request, did not get paid between January and March in 2015. Then, in April, after several months of uncertainty, it was told that its overspend would be paid by the ESFA and was retrospectively awarded the growth for which it originally applied!

More than any other year in recent memory, 2017 demonstrated how vulnerable training providers are, with numerous centres closing their doors due to insufficient funds. Providers used to have a real, tangible relationship with a dedicated ESFA account manager, and this ongoing association allowed funding to be awarded based on actual, physical evidence of good work. This is no longer the case.

One solution would be to allow for a rolling, monthly window to apply for increased allocation, but to limit the number of times per year one provider can apply.

The roll-on/roll-off recruitment of trainees means that growth is required at almost every point throughout the academic year. Sometimes its award has negative consequences – we were given more than we asked for in March 2017 and missed our maximum contract value by around 20 per cent at the next review point, meaning exclusion from the most recent growth opportunity in

October as the ESFA, “would not expect to support an increase where your performance in 2016/17 was less than 97 per cent of your final allocation”.

It would be a real victory for the sector if the ESFA redesigned the system, because when delivered well, the traineeship programme is the most rewarding I have had the pleasure to oversee.

Joe Crossley is CEO of Qube Learning