BREAKING: Agency writes to apprenticeship providers with further details on non-levy pause

Today the Education and Skills Funding Agency has written to providers regarding non-levy funding for apprenticeship from 1 May (see full ESFA letter below).

After the pause to non-levy allocations, many providers will be relieved that “to maintain stability through the transitional period we will continue to apply current subcontracting rules to the delivery of new starts to non-levy-paying employers through to December 2017.”

Mark Dawe, chief executive at the Association of Employment and Learning Providers, told FE Week: “AELP has pressed really hard and constantly for the existing subcontracting rules to remain in place until the end of December because we need stability in the relationships between the main providers and the subcontractors.  The Agency’s decision to respond positively to our call is very sensible; otherwise we could have seen massive shifts in relationships unless agreed by both parties.

“However while this element of today’s communication is very helpful, providers will only learn by 25 April what their allocations will be for the remainder of 2017.  This is good news, but it only leaves 6 days until 1 May.  The notification is vital because providers really need to know what funding they will have available for starts and carry-over learners.”

Full story to follow.



Dear colleague,

Re: Extension of existing apprenticeship contracts for delivery to non-levy employers

We recently published news about the procurement exercise for apprenticeship training provision. I am writing to provide you with further details on the actions we will take to extend existing contracts held by eligible providers. A summary of actions is included at the end of the letter.

Funding Allocations

By 25 April we will confirm your allocations for funding starts to non-levy-paying employers through to December 2017. Your allocation will be for the full 8 months and you will have flexibility to use it over this period. We will issue separate allocations for 16-18 and adult apprenticeships. We will continue our simple approach to calculating your allocations, based on your delivery track record. All existing apprenticeship contract holders will be informed of their allocation so that once they enter RoATP they are able to deliver.

We will also confirm the value of Apprenticeship Grant for Employers (AGE) available to you through to the end of July 2017. These will be calculated using our previous allocation method.

Contract Variations

Before 28 April we will vary your existing contract to include funding for new starts from 01 May. These starts will be funded in line with the Apprenticeship Funding and Performance Management Rules 2017 to 2018 and Apprenticeship Technical Funding Guide for starts from May 2017. This means that the rules on co-investment will apply and funding will be calculated using the new funding bands. 

To maintain stability through the transitional period we will continue to apply current subcontracting rules to the delivery of new starts to non-levy-paying employers through to December 2017. This is an extension of the existing subcontracting rules with the exception that all subcontractors must have entered the Register of Apprenticeship Training Providers (RoATP) to deliver during this period where they are delivering in excess of £100,000 of apprenticeship delivery.

We will send variations to those providers who have entered the RoATP and have an existing apprenticeship contract. We are currently assessing applications to RoATP following the recent re-opening. Results will be notified and published as early as possible in May 2017. As soon as existing providers enter RoATP they will be able to deliver to non-levy paying employers and will receive a contract variation.

We will vary contracts again in June to extend the contract duration into the 2017 to 2018 funding year and fund new starts until the end of December 2017. This variation will be issued as part of our annual contract cycle.

Performance Management

We will update our Apprenticeship Funding and Performance Management Rules 2017 to 2018 to reflect these transitional arrangements to contract extensions. Our performance management approach will focus on ensuring stability over this period. The rules will set out that we will continue to reduce contracts where performance is below our expectation.

We will continue to update you over the coming weeks. If you have any questions, please refer to your Provider Manager.Your training provision for existing learners that start before 01 May is not affected by this.

Yours sincerely,

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  1. Another sensible call and much better than a messy U turn further down the line when damage has been done by an ill thought through stipulation. However, there is (and always has been in my view) a huge responsibility for primes (colleges and training providers) to provide a good service where they add tangible value to the partnership. My organisation has always done this but I do shudder when I hear of scenarios where this is not the case. Thankfully the latter had not (yet) led to the dismantling of the many good and outstanding prime-subcontractor partnerships.

  2. A much needed breathing space, but agree with SEL inasmuch as whilst there have been a great many distractions, providers may not have noticed the number of Ofsted downgrades for a variety of reasons invariably emanating from poor leadership. I suspect that all colleges and training providers should all take a hard look at current practices and many will have to accept that they are in the business of providing a service to meet the needs of a discerning market’ as there is unlikely to be another chance.

  3. Everyone is focussing on the subcontracting rules, but what about the allocations being based on track record? Unless a college/provider has been delivering standards at the 1:3 employer payment level, then they have limited track record delivering apprenticeships with an employer contribution. The ability to get the 10% contribution is a much bigger issue that the subcontracting one. How confident are colleges in being able to get the cash for lower level frameworks when it’s been free for employers for years?

    • Michale

      Couldn’t agree more. Health and Social Care for example can’t afford the the 10%. If the ESFA think they’ll get employers to pay they are very very mistaken

      • Maybe this is a regional issue, but we (London and Southeast) have been charging employers of all sizes well in excess of 10% employer contribution for all 19+ learners for years for all our programmes (Admin / H&SC / CYPW being the main ones).

  4. Last week’s announcement was in effect an immediate cap on our business. In effect, as subcontractor, it removed our ability to trade. This has at least been avoided but I mustn’t let the huge sighs of relief disguise the fact I’m still left looking at how I find tens of thousands of pounds to pay primes for services I have already invested considerable resources in being able to deliver for ourselves.

    • A Prime

      Shop around for a prime and find one that can give you valuable support (at an acceptable price) in the period up to December to give you the best chance of success if and when the standalone opportunity comes back around. This could include working with your (presumably) recently strengthened workforce and providing you with ready-made systems and processes. Not an ideal scenario for you, but it could be turned to an advantage. The change of heart on subcontracting rules will be helpful in this regard.