The Skills Funding Agency has beefed-up funding rules to stop rogue bosses setting up new providers to get their hands on public money.

The agency has carried out a host of changes to its eight-page Funding Higher-risk Providers and Subcontractors guidance.

It outlines the criteria that would stop a provider being considered for funding, either directly or through a subcontracting arrangement, and explains why bids might be rejected.

Among the key changes is that funding could be turned down if a senior member of staff is in place at a provider having been dismissed for gross misconduct from another provider.

The rule, which used to apply to just directors, is now in place for governors, senior employees or shareholders.

An agency spokesperson said: “The earlier version of the policy only mentioned a director and the change is intended to prevent these additional individuals from having any position of control or influence in an organisation seeking to be funded by the chief executive of Skills Funding.”
The agency can now also say no to bids if a provider has previously had their funding stopped early for any reason, failed to comply with a notice of funding withdrawal or failed to “remedy a serious breach of contract”.

It can even turn down bids where just a senior member of staff (or someone in a post already mentioned) was in place at a firm that had its funding stopped early — whatever the reason. The changes come just weeks after NTQUK bosses revealed how they were trying to breathe life back into their business after its agency contract was terminated early.

The move resulted in almost the entire 100-plus workforce losing their jobs, before the firm, which delivered apprenticeships in health and social care, customer service and business administration, went into administration.
But bosses at the 1,400-learner firm took the agency to an arbitration judge and successfully defended it against claims there had been “significant errors and missing data which constitute a serious breach of contract”.

Former NTQUK director Alex Mackenzie (pictured) said the new system was not “transparent”.

“Take the example of a training provider who has been through arbitration with the agency,” he said.

“If, for example, it is proven that the agency had acted unlawfully in terminating the providers contract, the agency could then restrict the trade of that provider — and its directors — without providing any transparent reason for doing so, other than the fact that it had previously terminated the contract.

“If a training provider considers, having won in arbitration, that it would like to re-establish itself, any future application for funding would certainly not be transparent. The application could be rejected automatically.”

The agency declined to comment on whether any specific instances had triggered the policy change. It also declined to comment on why the changes were needed.

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