Funding clawback warning to colleges for deliberate under delivery

Colleges that deliberatley under deliver their adult education budget allocations this year will have their funding clawed back, the government has warned.

This will apply to either direct delivery or through subcontractors.

The Education and Skills Funding Agency revealed the rule today in an update to its operational guidance for FE providers during the coronavirus pandemic.

It said: “We reserve the right to clawback funds where it can be demonstrated that a grant funded provider has not sought to continue delivery wherever possible online or otherwise, either directly or for ESFA funded AEB through their existing subcontractors.”

Training Providers have shared instances with FE Week, in recent weeks, of colleges no longer wanting to undertake subcontracting of potential AEB underspend.

Providers cited examples of colleges saying there was potentially no requirement for them to spend their allocation and therefore they would rather retain all monies and not subcontract.

Today’s ESFA guidance update said that for 2019 to 2020 only, the agency will “not carry out the final reconciliation for grant funded providers in receipt of AEB and the advanced learner loans bursary fund”.

These providers will be “funded in line with the current agreement schedule with no clawback”, but they must “continue to deliver learning online wherever possible including for ESFA funded AEB via existing subcontracting arrangements to support existing learners to successfully complete their courses/qualifications or retain evidence where this is not possible”.

They must also “support furloughed workers to enhance existing or develop new skills”.

Where it is not possible to deliver online, for example where learning requires physical access to specialist equipment or materials, colleges should “keep and provide records of where this applies and keep evidence of efforts made to remain in contact with learners and prepare them for a return to learning in the future”.

However, there will be “exceptions for grant funded providers who had already forecast significant under-delivery in their mid-year returns for ESFA funded AEB and/or Advanced Learner Loans Bursary Fund, in advance of the impact of COVID-19”.

ESFA will contact affected providers to “discuss their forecasts and potential clawback”.

The agency added: “When planning ESFA funded AEB allocations for 2021 to 2022, we will consider how we set a fair baseline given our default position would have been to use funded delivery in 2019 to 2020.”