Potential for extra funding for small employer apprentices – but no promises

The government “anticipates” it will be able fund all over-delivery on non-levy apprenticeships for providers who exceed their contract allocation in the January 2018 to March 2019 period.

The news will be met with a cautious welcome by the many providers who surpassed their share of funding to train apprentices with small employers this year, after many had run dry and some were even having to turn apprentices away, as revealed by FE Week earlier this month.

The unprecedented issue, which Association of Colleges boss David Hughes described as “market failure”, embarrassingly came just weeks after the Department for Education launched a new campaign to drive up the number of apprenticeships in England.

But following pressure from FE representative groups and FE Week’s revelations, the Education and Skills Funding Agency confirmed today that it should be able to fund all over-delivery.

“Over-delivery is subject to affordability and conditional on your compliance with the terms of the funding rules and your contract with ESFA,” an update from the agency said. “We anticipate having enough budget to fund all over-delivery.

“However, if after completing due diligence this turns out not to be the case, we will write further to all providers where there is over-delivery to tell them of the criteria that will be used to allocate the budget available.”

However, the agency will not fund any over-delivery from April 1 when providers’ new contracts come into play, which will run to March 2020.

“We plan to issue variations for over-delivery to R06 in February and will revisit 2018 to 2019 financial year capping again in May and November,” it said. “As a reminder, we will no longer be funding over-delivery from 1 April 2019.”

One sector expert has questioned what this means for carry-in apprentices.

“The ESFA have said they’ll review April 2019 to March 2020 allocations based on April returns which, by inference, means they’re going to fund learners who won’t finish until after March 2019 even if that means increasing the allocations,” said Steve Hewitt, an MIS and funding consultant for FE Associates.

“This, it seems, is different to funding growth somehow (if you start 200 learners next week it’s not going to be this year’s allocation that bares the brunt of it).”

He added: “I’m actually more annoyed that it’s taken them until six weeks before the end of the contract for them to confirm they’ll fund over-delivery. Are the ESFA getting a bung from the treasury to cover all the funding for these learners? Or could they really not do the sums until now?”

The ESFA has been approached for comment.

Responding to today’s announcement, Association of Employment and Learning Providers chief policy officer, Simon Ashworth, said: “This is welcome news and will help relieve some of pressure that we have seen build up.

“However the ESFA need to ensure that they take this support into account when they issue the contract extension values shortly for April 2019 through to March 2020; otherwise all they are doing is robbing Peter to pay Paul.”

Around £500 million was allocated by the ESFA for delivering apprenticeships to small employers for the 15 months from January 2018 to March 2019 – a major fall on the £1 billion that was available for this provision in the previous 12-month period, according to a previous estimate from the AELP.

Nearly 700 providers currently share the pot but many started to feel the financial strain towards the end of last year after being denied opportunities for in-year growth funding.

The AELP has been advising its members to be “very careful in calculating the risk” of going ahead with new starts.

In August, the ESFA announced it was going to extend current non-levy contracts from April 2019 to March 2020, but no growth funding will be available unless a “significant budget” becomes available.