College apprenticeship provider cuts staff wages by 25% to ‘buy time’

Staff at a college owned apprenticeship provider have taken a 25 per cent pay cut for the next sixth months to keep the business afloat during the coronavirus crisis.

Matt Garvey, the managing director of the West Berkshire Training Consortium part of Basingstoke College of Technology, told FE Week this “drastic” measure was taken by all 28 of his employees to “postpone disaster” and prevent the organisation from going out of business.

His provider currently trains around 400 apprentices.

So far the Department for Education has committed to continue funding colleges in advance of delivery for many funding streams including for 16 to 19s and the adult education budget, but officials have refused to provide the same support for private providers.

This is despite Cabinet Office guidance stating that in light of the Covid-19 pandemic, the Treasury will give consent to payments in advance at least up until 30 June.

Garvey said the position is “unsustainable” for independent providers such as his, and they have now been forced into the business of “buying time”.

“We hope the ESFA will come to their senses and be more equitable with independent providers,” he told FE Week.

“It is quite a drastic thing for our 28 staff to endure [to cut their wages]. It was clear if we did not do something like that then we would run out of money within six months.

“This has prevented that from occurring.

“I know of people in much worse circumstances than us. We are a charity so we are obliged to always keep some reserves and it does provide a buffer in the short term but unless something changes I don’t think any independent training provider can sustain themselves.”

Garvey added: “Longer term, if the employers don’t return to enrolling apprentices then ITPs are doomed without meaningful government support on a par to that rightly offered to colleges and other institutions.”

In a survey published by the Association of Employment and Learning Providers last week, 49 out of 279 private providers said they could soon go bust, 79 will “mothball” and 154 will downsize.