Labour hits out at government response to AELP’s claim ESFA provider relief is ‘unlawful’

Labour has accused the government of failing to make a “serious attempt” to answer AELP’s claim that the Education and Skills Funding Agency’s supplier relief scheme was “unlawful”.

Shadow education secretary Rebecca Long-Bailey and shadow apprenticeships minister Toby Perkins have expressed their “disappointment” today in a joint letter to education secretary Gavin Williamson that urged him to “abandon what appears to be a very flimsy case for excluding levy funded apprenticeships from the relief scheme”.

It comes after the Government Legal Department (GLD) responded to a legal letter sent from law firm Veale Wasbrough Vizards LLP on behalf of the Association of Employment and Learning Providers (AELP) on 27 April.

The lawyers challenged the government’s decision to exclude apprenticeships funded through their digital system, which officials claim is a contract with the employer and provider, stating that the ESFA’s alleged failure to comply with Cabinet Office guidance “displays a multiplicity of legal errors” and “an abuse of power”.

The government responded on 14 May and concluded that it is “not accepted that the relief scheme is unlawful on any of the grounds alleged by the AELP (or on any other grounds)”.

The GLD’s main claim was that it is “not arguable that the funding agreement between the ESFA and Suppliers delivering levy funded apprenticeships amounts to a ‘contract for services’ within the meaning, and for the purposes, of PPN 02/20”.

It added: “The contract for services in this arrangement is plainly between the suppliers and the levy paying employers who receive the training services delivered by those suppliers. This contrasts distinctly with the position of suppliers that support non-levy paying employers, and who deliver services specified in a contract directly with the ESFA.

“It follows that the ESFA is a contracting authority within the scope of PPN 02/20 with respect to suppliers holding contracts to deliver apprenticeship provision to non-levy paying employers, but not with respect to suppliers delivering apprenticeship provision to levy paying employers.”

AELP chief executive Mark Dawe told FE Week the GLD’s letter “really avoids the issues and just rebuts the argument”, adding that the response from AELP’s lawyers “is they don’t think that the government’s case has been made”.

The AELP board is now being consulted over whether to pursue legal action against the government.

Long-Bailey and Perkins have also been left unimpressed with the government’s response and are now calling for urgent action.

“I wanted to say how disappointed I was that a letter sent to your department has had no substantive reply to many of the issues raised,” their joint letter says.

“Neither the GLD nor the DfE have made any serious attempt at all to answer the case that it is a misinterpretation of the Cabinet Office guidance to suppose that levy funded apprenticeships are excluded by the guidance.  It is simply wrong for the GLD to claim that no contract exists between the ESFA and the provider for levy funded apprenticeships when in fact there is what the Education and Skills Funding Agency calls a ‘legal agreement’ between them.”

Long-Bailey and Perkins went on to say they “do not accept that there is any justification for the department to not extend that arrangement to those who supply to apprenticeship levy funded apprentices too”. 

“The government should recognise that many providers heeded the advice of the ESFA’s leadership when the levy was introduced that they should concentrate on building up business among levy payers and understand that this explains why only a limited number applied for non-levy relief and why levy funded apprenticeships now account for two-thirds of the market.

“Why should they be ‘punished’ for heeding official advice and being prudent about their finances?”

The letter continues: “As the DfE recognises that it has ‘a legal agreement’ with apprenticeship providers, and as those apprenticeship providers that are providing levy funded apprenticeships are doing precisely what the government requested of them, there seems to be an economic, moral and legal case for the government to provide this support, and we call on you to provide it forthwith.  

“Therefore we urge you to abandon what appears to be a very flimsy case for excluding levy funded apprenticeships from the DfE’s relief scheme, extend the scheme more widely and get behind the independent training providers and colleges wanting to continue to deliver apprenticeships and skills for people who are going to desperately need them in the coming months.”

Click below to read the letters from the relevant parties in full

Veale Wasbrough Vizards LLP challenge

Government Legal Department response

Labour letter to Gavin Williamson