Secrecy around funding band formulas protects against ‘misuse’, says IfATE chief executive

The government’s apprenticeships agency is not willing to share the formula it uses to calculate funding bands for apprenticeship standards as it fears employer groups will “misuse” it to “inflate their costs”.

Sir Gerry Berragan, the Institute for Apprenticeships and Technical Education’s chief executive, acknowledged that it is a “common refrain that we are very secretive about how we do funding band calculations” during an interview with FE Week this week.

He said he wanted to tackle this by becoming more transparent about how the costs are arrived at by the institute as they often differ hugely to what trailblazer groups suggest.

The calculus is where we will probably be less willing to be open

“What trailblazer groups sometimes say is that they do not understand why the IfATE made that funding decision and I think we need to be much better at explaining why decisions were made in the way they were and that might include interaction with the route panels,” Sir Gerry said.

But the “calculus” is “where we will probably be less willing to be open”.

“That is an area where the more open we are, the more danger there is that people will misuse that information to try to inflate their costs,” Sir Gerry said.

“We have to strike a balance between being straightforward and balanced, which we want to be, and not being so open that, frankly, it opens us up the system to being gamed.”

The IfATE’s lack of transparency around funding band decisions has been an issue for many in the FE sector ever since the institute launched, and has led to various appeals and subsequent delays to standards getting up and running.

FE Week reported in August that the institute refused to publicly reveal the recommendations from its controversial first funding band review of 31 apprenticeship standards – although it did share them with the employer groups involved.

The review was launched in May and led to numerous standards being hit with rate cuts of up to £5,000.

The trailblazer group behind three popular management apprenticeship standards in the review was backed by more than 150 employers – including retail giant Tesco – in its fight to overturn plans to slash their funding bands.

The chartered manager, operational manager and team leader standards all faced cuts of between £500 and £5,000, and the employer group appealed on the grounds that the process behind the decisions wasn’t “fair and transparent”.

I think we need to be much better at explaining why decisions were made in the way they were

The group ultimately lost the appeal.

Meanwhile, the trailblazer group creating three FE teaching standards, which have been in development since 2015, accused IfATE of exceeding its powers last year after claiming their proposed funding bands were just half what they would cost to deliver.

The group claimed that the recommended funding bands were not “based on evidence and on a formal, transparent process”.

The group successfully appealed the decision and two of the funding bands were increased, but it severely delayed the rollout of the standards, which will finally be ready for delivery from next week.

As revealed by FE Week last week, the number of appeals against the IfA skyrocketed by 425 per cent last year as a result of the funding band review.

According to minutes from a November meeting of the IfA’s approval and funding committee, there were just eight appeals from trailblazer groups in 2017 and 42 in January 2018.

Out of all of the 2018 appeals: 21 were rejected, 13 were upheld, 13 were considered not in scope and three are pending a decision.

The institute is likely to be hit with more appeals this year after launching the second wave of its funding band reviews in December – of which 30 apprenticeship standards are involved.