Minister explains 'anomaly' leaving majority of apprenticeships ineligible for ESFA supplier relief

The majority of apprenticeship providers are not eligible for supplier relief from the Department for Education because of the Cabinet Office’s “very specific” policy notice, according to Gillian Keegan.

The apprenticeships and skills minister described the support as an “anomaly” and said her team worked closely with Treasury to see what parts of the FE sector could use the coronavirus supplier relief scheme.

When asked during an FE Week webcast yesterday why apprenticeships funded through the DfE’s digital system, mostly those with large levy-paying employers, are excluded, she said: “The only exception [to support from the coronavirus business interruption and job retention schemes] has been, and I suppose this is an anomaly, the Cabinet Office notice – where there are direct government relations for critical suppliers, that there is a little bit more flexibility added to those people that qualify for that.

“I will be honest it did take us a little bit of time to come out with this. That was because the original purpose of that Cabinet Office notice was actually more for critical suppliers to government in terms of direct services to government, so people maybe operating prison services and all that kind of thing.

“So we had to work with Cabinet Office and Treasury to see if it related to this sector and that is what resulted in that guidance on Friday. It really is only for those covered under that very specific Cabinet Office notice PPN 02/20.

“You need to look at this as quite specific, quite special under this Cabinet Office notice that has allowed a bit of extra support that goes to those where it has more of an impact, on small and medium sized business apprenticeships and providers.”

In a letter to all MPs reported by FE Week earlier this month, Keegan had said the supplier relief “does not apply in relation to apprenticeships funded from employer digital accounts” because “the contractual relationship is between the employer and the provider.”

Keegan stopped short on the webcast of expanding on the contractual issue, which many in the sector have queried and the Association of Employment and Learning Providers is seeking legal advice over.

FE Week analysis shows that of the 198,632 apprenticeship starts in the first six months of 2019/20, around two thirds of the provision would be ineligible for supplier relief.

The minister said the “only thing we could have done to include everybody the same was to leave it as it was and to have no supplier relief scheme”.

“That would be in line with every other business across the country,” she added.

“Saying we will come up for an exception for this sector which means they have all their income protected over and above what they are not delivering is not actually very fair to the rest of the businesses in the economy, is probably what the Treasury would say to us.

“This is something this sector is getting over and above most other sectors in the country.”

Keegan explained that she has spent a lot of time talking to other businesses that have had their income “completely turned off 100 per cent overnight” and they are “understandably looking for some kind of additional help because we have in many cases put a handbrake on sectors of our economy”.

She said the FE sector “is not really in that position” and there “is a way to continue to earn money if you can continue to deliver the services online to apprentices”.

“In a way there is some extra relief being afford to this sector that hasn’t been afforded to other sectors. They have access to 100 per cent of revenue if they can provide 100 per cent online.”

Keegan claimed to have spoken to many different providers and she has “not actually spoken to one that has said they have not been able to switch anything online”.

“I am sure they exist but there is not many of them.”

She admitted her “biggest worry” is the recruitment of new apprentices and “how to keep the whole pipeline going with all this uncertainty”.