Warning that massive competition for limited traineeship funding will repeat controversial non-levy tender

The traineeship tender is set to be deluged with “in excess of 3,000 bidders”, with the vast majority likely to miss out on a funding allocation, claims one consultant.

The Education and Skills Funding Agency finally launched the bidding process for 19 to 24 traineeship funding on 7 October, but it is being run on an “accelerated” timetable with a deadline for bids now just eight working days away.

Up for grabs initially is a slice of £65 million to be spent between February and 31 July 2021, which is split across nine regions in England – ranging from £20.8 million for London providers to just £2.6 million for the south west.

Jim Carley, a tender specialist in the FE sector, anticipates there to be “significant” demand with an extremely low success rate.

He expects “in excess of 3,000 bidders” based on eligibility and the level of interest and oversubscription seen on previous ESFA procurements, such as the controversial non-levy tender.

“However”, he added, “the number of contracts to be awarded will likely be well below half this number, based on the upper and lower contract value caps…Consequently, between 50 per cent and potentially as many as 95 per cent of bids submitted are likely to be unsuccessful”.

Carley explained that this is not to say that all but 5 per cent of applicants would put in a poor bid, it is “more a case of how many slices of cake can be given out in the form that they [the ESFA] have got”.

Just like with the non-levy apprenticeship tender, the funding agency is planning to apply a pro-rata methodology where there are winning bids of equal quality.

A minimum tender value of £250,000 has been set, so a provider would lose out completely if, after a new ranking method, they were successful but the pro-rata process took them under this value.

Writing in FE Week’s recently published traineeships supplement, Jane Hickie, the managing director of the Association of Employment and Learning Providers, also predicted that competition “will be very fierce” as the tender does not have any provider eligibility criteria, only caps.

Caps, subject to sufficient turnover, have been set at £1 million for brand new providers, £2 million for current subcontractors, and £3 million for existing providers.

The pro-rate methodology deployed by the ESFA in its non-levy apprenticeship tender caused huge controversy, as many universities and Ofsted grade one training providers and colleges did not receive and allocation as their successful bids were dragged down below the £200,000 minimum threshold.

In a message to the sector this afternoon, the skills minister Gillian Keegan said: “We will be looking for providers and employer providers.”

FE Week understands that many large employers are considering bids, including NHS hospital trusts.

The traineeships tender is one way the government plans to triple the number of traineeships starts this year – as pledged by chancellor Rishi Sunak over the summer as part of his plan to combat youth unemployment following the coronavirus pandemic.

Bids are being accepted until 5pm on 28 October.