All private training providers told current adult education contract will terminate next July

Private training providers have been told their current adult education contracts will end next July – rather than be automatically renewed as before.

The news came in a letter from the Skills Funding Agency to all training providers, dated October 12, and seen by FE Week.

It stated that changes to contracting regulations, which came into force in February, meant that the SFA could no longer automatically renew contracts when they ended and instead “must procure future training provision”.

The letter continued: “Please therefore accept this letter as formal notice that your current contract will terminate on 31 July 2017.

“We will shortly be launching an open and competitive procurement exercise for AEB [adult education budget] funded provision.”

Further information about the procurement exercise would be provided “over the coming weeks”, it said.

Colleges – which contract with the SFA through a grant funding agreement – are not affected by the changes, the letter said.

The news has prompted Association of Employment and Learning Providers chief executive Mark Dawe to call for all providers – including colleges – to have to compete to deliver adult education budget provision.

He said: “If it is true that all providers, including those that already have a grant, are able to tender for this part of AEB, then we believe that all AEB funding (contract and grant) should be put out to tender.  

“Without this, it would seem the process is incredibly biased against large independent providers.”

As previously reported by FE Week, the requirement to procure the AEB provided by private training providers is the result of changes to European Union law.

The changes were first revealed in an SFA document, Adult Education Budget: Changing context and arrangements for 2016 to 2017, published on January 28.

That document said: “In advance of 2017/18, changes to EU procurement regulations will require us to procure the adult budget provided to ITPs.

“This means that the AEB will be subject to competition as part of a procurement process.”

The new contracts would be for 2017/18 “with an option to extend contracts for a further two years, which we will review on an annual basis,” according to the letter seen by FE Week.

Procurement would be open to all providers on the register of training organisations “that have passed capacity and capability for the delivery of education and training services, and selected relevant interests”.

The change will not affect apprenticeship provision, which will be procured separately through the new register of apprenticeship training providers.

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  1. Cynicalman

    Got to laugh. Is this an anti-competitive market/procurement process to protect colleges?. The government harp on about how vital it is to the national interest be able to access free markets. Being a cynic (quite a popular/easy stance nowadays), it may have been designed by civil servants to protect colleges from ITP competition during the area wide review merger ‘fest’. Is the government restricting competition – a cartel? It is an interesting legal point.

  2. Adrian Johnson

    The SFA could be in trouble here.

    They’ve created a legal precedent with their treatment of Apprenticeship contracts – making all providers (including employers and colleges) re-tender for funding through RoATP.

    They’re wide open to challenge if they treat the AEB differently. EU procurement legislation means contract holders have to be treated fairly and equitably at contract entry and contract exit. The SFA have abided by this rule with Apprenticeships but not with AEB.

    To avoid lengthy and costly legal battles, the SFA have got two options:

    1) Put all providers’ AEB into one pot (including colleges and ITPs) and run a comprehensive open and competitive tendering process like they intend to do with RoATP.

    2) Find an exemption for ITPs, similar to the one they appear to have found for colleges.

    This is a mess that could easily spill over into EFA contracts too.

  3. Simon Griffiths

    So much for the consultation. I will never understand moves like this, sent out in isolation. Why not simply, for once, deliver the whole package. I am pretty sure many of those responding to the consultation would have queried timescales, the need to register again, where it is a legal requirement or simply the process tale wagging the apprenticeship dog. You have no more answers at this point for private providers but genuine worry out there and a paralysis in being able to proactively engage with employers and generate new business because the nuts and bolts may change. I would expect more information come the ALP and AELP conferences, but I suspect that, with the exception of finding a bit more money for 16- to 18-year olds, the many valuable and constructive contributions made during the consultation phase will be ignored.

  4. Sadly it is a further indictment that the system is broken – there is little capacity for the SFA to properly manage these arrangements. All policy areas for post 16 vocational training, be it Apprenticeships through to AEB are all subject to a raft of piecemeal changes, with few appearing to be thought through. In the 6 years I have now worked on the delivery side of the system I observe a continuous erosion in provision and a widening gap in the arrangements that support the most needy and an amazing leap in faith that having an Employer led system will achieve a more comprehensive and improved delivery of relevant vocational training.In my 35 years of this business it is important to recognise the system requires a sensible balance between Employer and State, that enables both parties to get the best return from their respective investments. Upset this balance and the result will be skewed to the needs of the majority holder. As a rule of thumb Employers want to invest in Level 3 plus (or sensible routes to this) and see the States job to put public investment for those unable to enter the arrangements provided by the employer. Any sensible funding system needs to maintain the balance and connection of joint investment in these needs.
    The same applies to how these opportunities are delivered and many ITPs play a key role in helping make the connections in the system. Of course the taxpayer should rightly expect a return on the amount of money spent on the FE estate but that is one part of the system.
    Almost by the day I observe policies drop down, be it changes to the approach with Apprenticeships or AEB that directly threaten the balance of investment in the system and mostly in respect of the funding for those most in need.

  5. David Hoskins

    So, from FE Week this week I have learned that colleges get their AEB contracts protected and they’re allowed to tender for the ITP’s contracts? And they’re also getting £3.5m consultancy grants and nice commissioners to sort them out? On top of their capital funding grants and financial bail-outs?

    And ITPs get Apprenticeships, Traineeships and 10% higher satisfaction rates.

    We should have a referendum and allow the tax payer to decide how the AEB is spent.