Training providers without a current apprenticeship contract have hit back against the government’s surprise announcement this morning to deny them direct access to non-levy funding from May, saying their time tendering has been “wasted” and their viability “threatened”. 

Earlier today the Education and Skills Funding Agency announced that the decision over funding allocations for apprenticeship provision for non-levy-paying employers had been be paused by the government, to allow the situation to be reviewed.

The government were due to release the results on the 14 March, and until today there had been no information about the delay beyond statements of “in due course”.

The recent procurement process for up to £440 million of funding was said to have been significantly oversubscribed, and the ESFA claimed the postponement would allow it to “review our approach to ensure that we achieve the right balance between stability of supply and promoting competition and choice for employers”.

The ESFA confirmed it will extend existing contracts held by current providers until the end of December 2017 to help continuity, but the hold up has frustrated those who were applying for a contract for the first time and now find themselves in limbo until further announcements. 

FE Week estimates over 400 main providers on the new Register of Approved Apprenticeship Providers (a third of the 1,303) will now not be able to directly deliver to over 98 per cent of the non-levy employers from May, owing to the pause. 

All main providers on RoATP without existing contracts will be able to continue to subcontract with a lead provider to access the non-levy funding. However, there is no indication that the tighter subcontracting rules from May, whereby the lead provider must deliver some training for the employer, are also being paused or delayed.

FE Week spoke to Liam Ryan, owner and commercial director at First Avenue Training, a specialist training provider for the early years childcare sector, about his concerns. 

Mr Ryan said: “Ninety nine per cent of our employers are SMEs [small- and medium-sized employers] so we only applied for RoATP to get the ITT [invitation to tender] contract.

“Like many others we spent a lot of time (and money for consultancy) which has been wasted and not a word of apology.”

He added: “We can continue as a subcontractor for the time being but I’m not sure that there is currently a viable business model in our sector when you combine cuts in funding rates, 20 per cent “off the job” [training] and mandatory 10 per cent contributions.

“I predict starts will plummet, particularly for 19+ learners, which is a great shame since we just spent two and a half years overturning the last government mistake in the sector (the mandatory GCSEs in early years).”

Mr Ryan said the refusal of the ESFA to grant Advanced Learner Loan contracts to providers that don’t have Adult Education Budget funding or apprenticeship contracts was a further problem for his company. “Once again this threatens our viability and I’m sure that we aren’t alone,” he said. 

Others took to Twitter to express their concerns about the ESFA announcement. Here are some of their comments:

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  1. Anne-marie Morris

    The procurement process has been “significantly oversubscribed” there were mistakes in judgements to answers provided on the first round of RoATP,there were mistakes with the “rigorous checks” which enabled some financially unstable inadequate providers on to the RoATP, training was rushed to be put in place to support inexperienced providers, so I feel time is needed to ensure a more considered review of the whole process can take place. I know how unfair this may seem to some and the difficulties the pause may cause, but we do need to get this mess sorted for the long term to ensure quality support and training is given to the Apprenticeships who are at the heart of all of this.

      • There were more ITPs who didn’t get through. The register was meant to be a process that would ultimately ensure high quality apprenticeships. A college with an outstanding judgement for its apprenticeships and with the second highest achievement rates in the country didn’t get through. If anyone thinks that’s a fit for purpose process, they are at best delusional.

      • Norman

        Perhaps they should have used the same consultants as most ITPs seem to have done and everyone would have passed. Has it not hit home how inept this whole debacle has been and the temp marking Birmingham was out of kilter with the rest. How else can you explain this geographical anomaly. Engage brain please before assuming the process was spot on

  2. Gemma Hall

    The pause may well be appropriate but the pause needs to be pressed on the new subcontracting rules, at the very least for existing subcontracting relationships. With only 2 weeks notice current subcontractors and leads have not been given sufficient opportunity to prepare for the new subcontracting requirements.

  3. This is the right decision for our employers & apprentices. The SFA were advised not to run the ITT the same time as RoATP to allow the reform to get underway at a managable pace. It’s just a shame it’s got to this stage before they’ve agreed!

  4. R callaghan

    Successive restructures have stripped out of the SFA the majority of people who had any meaningful experience of the ‘coalface’ of FE and empathy with the challenges they face in reality. Restructures were also used to strip out anyone who would provide any internal critique or challenge – however constructive – towards what the most senior leadership were doing, or any ‘push back’ against the latest whim of Ministers or senior civil servants who have zero experience let alone understanding for the reality of FE. All in all a complete disconnect between those now steering the ship and the rest of us who are passengers on it, pointing our where the icebergs are.

  5. As the director of an ITP with 4 sub-contracts with different primes (all with their own systems, processes and paperwork) I had meticulously planned and invested time and resources to be ready to deliver a direct contract from May 1st.

    I have budgeted and cash flowed carefully for new starts without having to pay 15+% management fees. I have done a variety of scenario planning to ensure we can meet potential obligations we have been discussing with employers. 95% of our business is with SMEs. As someone who runs a social enterprise I have done everything that it is apparent the Government and ESFA have not.

    There are a number of ‘new’ providers who are not new at all. We have been delivering apprenticeships effectively and successfully for years and are ready to go NOW. Why can’t those Providers be issued with a contract from May 1st?

    I am aware that AELP as a membership organisation can’t possibly reflect all the interests all of the time of all their members. It is disappointing though that further thought was not given to and acknowledgement made of Training Providers like ourselves who are severely and adversely affected by this decision.

    On Tuesday we had no idea how much contract we were going to have to deliver but at least we knew (or thought we did) where it was coming from.
    Today we not only still have no idea how much contract value we will have to register new starts from May but we have no idea where it is going to come from.

    Only lunatics would attempt to run a business under these conditions.

    As my last shreds of sanity slip away please don’t let me forget that we did all tell the Minister and civil servants that their process and timetable would not work. First rule of leadership: listen. You didn’t. Now I, the team, our clients and learners will be seeing what we can salvage from this fiasco of your making.

    Noel Dunne, Director of Creative Alliance: specialists in creative, digital and marketing apprenticeships

    • Norman

      Be careful what you wish for as you’ve been protected from submitting your own ILR and dealing directly with Ofsted and audit. You would not have survived in the past without primes yet you criticise 15+% management fees. I hope for your sake that they don’t read this article when you have to go back to them for contracts up to December as your article smacks of annoyance at paying them legitimate fees and after all you have the choice of who you go with or should I now say had the choice.

  6. Stuart

    So the Register process resulted in a small proportion of Colleges (who screwed up) potentially not being able to deliver.

    Political lobbying (by and on behalf of Colleges who messed up) has now resulted in 33% of all providers deemed ‘fit to deliver’ via a fair and open process not being being allowed to deliver?

    While the Register process was not perfect, we all had to jump through the same hoops.

    Many of the providers who passed this fair and open process and are now left with no route to delivery were probably innovative start ups filling localised or niche sector gaps in the market. Probably targeting SME.

    As for the Non Levy Paying Employer ITT. The £400m funding available always meant it would be oversubscribed given historical delivery, aspirational 3m Apprentice target and higher value funding bands for new standards. The funding cap of £5m always meant provider investment would be stifled and shareholders twitchy too. Hardly things that would not have been identified months ago?

    Nice one.