ESFA developing ‘ITP risk assessment tool’ to root out failing private providers

The government is developing a tool to risk assess independent training providers, as part of “strengthening” oversight.

The plan, which was revealed in the Education and Skills Funding Agency’s management board minutes from January, comes as the agency ploughs more resources into its capacity to audit and intervene in training firms.

In September FE Week revealed the agency was recruiting assurance managers for a market oversight unit, who would have a specific focus on independent training providers.

It follows the collapse of a number of big providers, such as 3aaa in October and First4Skills in March 2017.

The move also follows the downfall of the nation’s biggest FE provider LearnDirect, which was bought up by Dimensions Training Solution last year after it lost its ESFA funding contract due to a grade four Ofsted report in 2017 and struggled to find new business.

Furthermore, the ESFA has also been looking into introducing contract caps for private providers, or recommended funding limits as it calls them, to limit the size of providers by regulating how much money a provider can earn from the government.

Last December, in response to an education select committee report recommending caps, the DfE said: “The ESFA is considering the introduction of provider earnings limits to ensure control, not just for quality reasons, but also to control the potential size and expansion of providers. We will be seeking views from the sector on this in the coming months.”

FE Week understands that part of the reason for developing an “ITP Risk Assessment Tool” would be to determine different contract cap levels (were the cap level policy to be implemented).

In October, the ESFA director of apprenticeships, Keith Smith said all providers on the Register of Apprenticeship Training Providers would have a financial cap and the agency would determine how much a provider could earn.

A proposal branded “absurd” by the chair of one of the country’s largest providers, HIT Training’s John Hyde.

Undeterred, the ESFA is also introducing contract managers for the largest firms.

In a letter from December, ESFA FE director Peter Mucklow wrote: “Our contract managers will work closely with ITPs to ensure that public funds are safeguarded, increasing our scrutiny in order to protect learners participating in apprenticeships and other ESFA funded programmes.”