The Skills Funding Agency’s decision to slash funding rates for a popular level three apprenticeship framework has been labelled a disaster. It was announced on Wednesday that the IT, Software Web and Telecom Professionals apprenticeship framework would be cut by about £2,000 from 1 April.
The SFA has not reduced apprenticeship framework rates since 2012/13, after a freeze was imposed during plans to switch to the new standards funding system.
Providers warned that the reduction in funding would only decrease the number of apprentice starts and quality of provision.
Ben Pike, managing director of QA Apprenticeships, one of the largest providers for this framework, said: “The lack of consultation and short notice for the drastic cut in funding for tech frameworks is met by surprise.
“The most significant concern for employers is that such large reduction in funding will directly lead to lower quality delivery, particularly as providers will have to reduce contact time and no longer be able to afford to utilise the high-cost specialist tutors and assessors that are required to develop the skills the sector needs.”
Anthony Hobbs, managing director of Baltic Training Services, another provider of the IT framework, said: “It comes as a complete shock and is nothing short of a disaster.
“This decision simply does not reconcile with the direction the economy is heading in where the need for a robust digital skills strategy and investment is needed.
“It will definitely reduce the number of apprentice starts, reduce the quality of provision available and reduce the investment available to ensure tech education remains current.”
The announcement comes three years after the National Audit Office criticised the SFA for a “lack of reliable evidence to support the estimate of training costs”, which it said “may mean that some frameworks have become more financially attractive to offer than others”.
The report added that the SFA was “not in a position to judge the extent to which providers may be generating significant surpluses or losses due to the rates paid on individual frameworks”.
“The agency is proposing to simplify the funding rates and increase transparency on adult skills funding from 2013/14,” it said.
However, the agency confirmed in December 2013 it was scrapping plans to simplify the rates, which until now have remained unchanged. The SFA said the rate for the competence qualification would fall from £8,673 to £6,650, a 23 per cent reduction.
For a fully-funded 16-18 year-old learner, this would equate to a fall from £9,299 to £7,131 as part of a framework that typically attracts funding of more than £15,000.
The update bulletin, where the announcement was made, said: “This is part of our regular review of apprenticeship framework costs to ensure value for public funds.
“From 1 April 2016, we will reduce the funding values for new apprenticeship starts only; those already on programme will remain on their existing rates.”
Stewart Segal, chief executive of the Association of Employment and Learning Providers, told FE Week he would be calling on the SFA to review the timing of its decision.
He said this “very short notice” change had not been thought through and would “inevitably disrupt starts for learners and employers”.