Just 15 independent training providers would be eligible to receive the government’s new £3,000 apprenticeship top-ups if recent trends continue, FE Week analysis has revealed.
Treasury ministers this week announced 13 apprenticeship standards have been chosen to attract an extra £3,000 on top of their current funding band through a £50 million apprenticeship “growth pilot” from April.
But strict rules require training providers to start at least 15 apprentices to access the bonus funding.
The two-year growth pilot was announced in November’s autumn statement, but details only emerged this week ahead of the spring budget.
The chosen standards include laboratory technician, science manufacturing technician, and machining technician and all range from levels 3 to 5. In 2022/23, between 100 and 340 apprentices started each of the 13 standards.
Gareth Davies, exchequer secretary to the Treasury, stated in a written statement to Parliament on Monday: “The pilot will boost funding for eligible providers delivering 13 high-value advanced manufacturing and engineering, green and life sciences apprenticeship standards.”
The Treasury said growth pilot top-ups are “intended” for capital funds, like tools and machinery, that will “last beyond delivery of a single apprenticeship.” It’s not clear what, if any, checks officials will do to make sure the growth top-up is spent on capital.
‘Not just colleges’
Independent training providers, unlike further education colleges, rarely get access to capital funding. The apprenticeship funding rules explicitly categorise capital purchases and maintenance of parts and machinery as “ineligible costs” when pricing up how much they can claim in funding.
Further guidance on growth pilot spending is expected later this month.
Simon Ashworth, director of policy at the Association of Employment and Learning Providers (AELP), said: “Although the pilot of 13 initial standards in phase one is quite narrow, what is encouraging is that capital investment is being supported as part of this pilot funding – and is open to all provider types and not just colleges.
“This is something AELP have been calling for and we are pleased this has been recognised by DfE and HMT. ITPs deliver most apprenticeships, so we welcome this agnostic approach to extra funding to support growing additional capacity in the apprenticeship programmes.”
FE Week revealed earlier this week that training providers will have to deliver at least 15 starts to access the growth pilot funding, indicating a minimum payment of £45,000.
Using training provider starts numbers from 2022/23, the top-ups would cost at least £6.7 million per year from the pilot. It’s not yet been announced what the remaining pilot funding will be spent on.
Just 15 ITPs
Our analysis shows that just 35 of the 147 training providers that deliver the 13 apprenticeships started at least 15 apprentices last year.
Of those, 15 are further education colleges, another 15 are independent training providers, four are employer providers, and one is a university (London South Bank).
Some training providers will do very well out of the pilot. If the pilot scheme was in place for 2022/23, 12 training providers would receive over £100,000.
Bridgwater and Taunton College delivers five of the growth pilot apprenticeship standards. It clocked up over 15 starts in two of those: 131 apprentice water environment workers and 16 apprentice pipe welders. Combined, that could yield a windfall of £441,000 through the growth pilot in one year alone.
Meanwhile, for laboratory technician apprenticeships, Tiro Training Limited delivered 114 starts in 2022/23 which, if repeated from April 2024, could generate £342,000. Jancett Childcare and Jace Training Limited would receive £279,000 for their eligible starts and West Suffolk College would receive £192,000.
Large employer providers such as BAE Systems and the National Grid could also stand to benefit.
BAE Systems started 42 apprentice plate welders#, and the National Grid and the British Army started 22 and 23 apprentice electrical power network engineers, respectively. If repeated, this could see an extra £126,000 go to BAE Systems, £69,000 go to the British Army and £66,000 go to the National Grid through the pilot.
FE Week understands the growth pilot has been specifically designed to help existing providers scale up the chosen apprenticeships to deliver value for money.
Matt Butcher, vice principal for commercial, skills and partnerships and New College Swindon, questioned the minimum number of starts threshold.
He said: “My concern here is the minimum number of starts required for the additional funding. I can’t see the rationale, as surely the point is around incentivising providers to grow into these sectors. As most of them are currently low in terms of start volumes, 15 is actually a sizable cohort. Incentives only work if you can achieve them.”
Five of the 13 growth pilot apprenticeships already attract the highest apprenticeship funding band rate of £27,000, meaning eligible providers could claim up to £30,000 for those starts from April.
An interesting list. I think a minimum of 15 starts is a reasonable number per provider but the total number of students to date is very low for some programmes.
I wonder what the current drop out rates are and the current salary rates for qualified employees?
When the fees to be paid to providers reach £30 k per student, we are in the undergraduate revenue sector. It seems odd to me that a level 3 award is so costly to provide.
Are employers getting value for money? Are tax payers?