Coronavirus: ‘Furious’ AELP boss says government wants skills sector to collapse

The government’s goal seems to be for the skills sector to “collapse”, a “furious” Mark Dawe has told FE Week after officials failed to provide apprenticeship funding support during the Covid-19 crisis.

The Association of Employment and Learning Providers chief executive tonight lambasted the “disgraceful” decision and demanded an urgent meeting with skills minister Gillian Keegan.

New guidance released by the Department for Education stated that policy “does not allow payment for services in advance of delivery”, so funding for apprenticeships cannot be made until the training has taken place.

The situation has left providers in a “battle to survive”.

Dawe told FE Week: “I am furious that after weeks of discussions the government has made no attempt to provide any assurance to independent providers and end-point assessment organisations as to any future funding relating to any of their delivery.

“It seems their goal is for the sector to collapse and remove any delivery to apprentices, other learners and their hundreds of thousands of employers.  As things stand tonight, there is only one word – disgraceful.”

Here is his reaction in full: “The omission of any DfE funding support for apprenticeships and other skills training goes completely against the assurance offered by the Secretary of State to the House of Commons last week.

“We are left to conclude that the government is not serious about apprenticeship training or any other forms of skills training continuing while the pandemic goes on or that it is very happy to preside over many independent training providers (ITPs) going out of business over the next three months.

“How are providers expected to implement the proposed flexibilities in today’s statement if they have vastly reduced income coming in? It is now a battle for survival. The majority of provider staff will be furloughed which means they will not be available to support the training of apprentices and other learners.

“Coming after Friday’s guaranteed funding support for mainstream FE provision, the DfE statement adds insult to injury. For example, it says that “government policy does not allow payment for services in advance of delivery” and yet this is precisely what it announced for colleges on Friday.  ITPs delivering adult education, traineeships and other forms of training have similarly been offered zero assurance by today’s statement.

“Then on apprenticeships, the statement goes further and lays down terms for clawback of funding from independent training providers if the crisis means that apprenticeships can’t be completed.  Given that it is not their fault that they cannot gain access to apprentices or assess them, this is beyond the pale.

“Unless the government urgently rethinks its stance that it has had two weeks to think about, we are likely to see the start of the collapse of the training and assessment sector over the next week unless action is taken on funding, and those employers who want training and assessment to continue will have no place to go when this is over.

“Colleges only deliver 2 per cent of apprenticeship training.  This means that they are no position to rush in and fill the gaps that will appear in key sectors and in many towns and rural areas across the country, including the Red Wall areas, if ITPs, who deliver nearly seven out of 10 apprenticeships, start going bust.  Niche provision in sectors like textiles will also suffer very badly.

“Another important point on the quality of provision is that nearly all ITPs have made the transition across to the new apprenticeship standards whereas less than six months away from the switch-off of frameworks, many colleges are lagging in making the change.

“So employers looking to get back on their feet after the end of the pandemic will find that the apprenticeships that they want won’t be available to them.  And soon that other oven-ready solution of EU migrant labour won’t be there either to fill the gaps.

“What about this year’s school-leavers aged 16 or 18?  Where are the opportunities going to be for them if lots of apprenticeship training providers are no longer around?

“This is why any further delay on a funding support package for apprenticeships and ITPs is totally unacceptable.

“AELP has this evening demanded an urgent meeting with the apprenticeships and skills minister.  We also hope that MPs on the Commons Education Committee will be raising these issues with the minister when she appears before them on Wednesday.”

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  1. Maxine lambe

    The decision to not fund apprenticeships and ITPs during this unprecedented times is outrageous. When this pandemic ends, who will provide the training and skills to all those that were on a course to gain much needed skills, or halfway through an apprenticeship. The government are sending the country into a state that will take years for people to recover from and will send unemployment through the roof. How can the government agree to forward pay colleges who do not deliver on the scale that ITPs and apprenticeships do. Urgent rethink on funding is required NOW

  2. Philip

    One could paint this dystopian picture that no one would believe.

    Half empty colleges offering subjects that have no relevance
    Bankrupt colleges with criminally bad financial governance
    Newly built colleges with no students
    Independent learning providers working on razor thin margins
    Experienced coaches and trainers leaving the industry in droves………….

    It’s not as though it would cost the government a fortune to just let the payment system ride, compared to what they are promising to pay out to others. But this is where the rub lies – The ESFA (aka the government) have always regarded the independent sector as corrupt, profiteering and self serving. They will doubtless be pleased to see providers fail.

    A hard FE rain is going to fall.

  3. Grumpy from Medway

    Guess this is one way to make the levy stretch to cover the sector need.

    This will kill the apprenticeship sector.

    You cant expect us to pay wages, support learners and then either not to be paid or have punitive recovery mechanisms in place.

    Utter lunacy.
    RIP ITAPs 1999-23 March 2020

  4. steve beaumont

    In 30 mins from now I have an online meeting scheduled with my training team. We have invested in an online package for remote delivery of training. Webinars, interactive online classroom, updated our Moodle space. This is our response to the current times. We have even looked at how we can ensure all apprentices have the necessary hardware and software for full engagements with the training. We have employers pledging to support the content at work, Reading this makes we wonder why we have bothered!

  5. I work in the sector and will probably be furloughed or lose job, but…

    If you guarantee funding for ITPs then you open up all private business to be wholly supported by the state, beyond that of the staffing costs. They have effectively guaranteed 80% of the wage bill ( to £2500 per month per individual), so ITPs have equity there.

    When this is all over, there is going to be a massive repair job on many many levels. The theory of publicly funded apprentices across all subjects will be too much of a luxury in that environment.

    In an ideal world, as ITPs have established systems and staffing structures, it would be great if they repurposed all staff towards fighting the virus, then gov funded them for that. But I don’t see leaders (gov nor sector) having the foresight to follow that strategy.

    Normal rules don’t apply at the moment. Loads of massive upheaval happening and coming. Bemoaning the effect on you personally is out of date.

    • Terry Bentley

      ITPs can’t furlough apprenticeship staff as they are supporting learners with their off-the-job-training. ITPs won’t be able to get a loan either as they will not be able to evidence a profitable business plan for the next 12 months+ as starts come to an end, learners are furloughed and breaks in learning starve us of cash.

      • re. Apprenticeships. Surely, generally, the demand for staff to support off the job training relates directly to the number of apprentices on programme and therefore the monthly amount of funding?

        Yes there is clearly an issue generally with reduced numbers of starts (possibly to zero). Also clearly some sectors (such as retail, events, even NHS) have specific Covid-related issues which have put them flat on their backs and so providers in these sectors have a real challenge. Bu the nature of apprenticeships is that they are long term contracts with ongoing cash flow.

        It is for us to (re-) organise to provide the best service to the greatest number of people at an economic cost. If my firm (an ITP) needs to use furlough then we will and I can’t see any industry specific challenges to doing so. perhaps I have missed a communique?

        The business lesson (for colleges and ITPs) in this is to keep your overheads low, costs variable and your capital requirements as light as possible. You will be disadvantaged in the good times but in the good times you are ok anyway. It is in these dark times that an institution benefits.

  6. Majella Cocks

    This demonstrates yet again a lack of knowledge of our sector and the young people we work with.
    We have moved our Study Programme and apprenticeship delivery from face to face to online, with our teachers delivering learning packages remotely from home. This will enable our students to achieve their qualifications this academic year and progress with their career plans in September.
    In these circumstances why should we, as an Independent Training Provider for more than 20 years, not be paid our contract by ESFA for the service that we are still delivering?
    If our contract with ESFA is honoured we will:
    continue to pay our staff as normal;
    continue to pay our learners the weekly performance bonus that is their only source of income;
    ensure learners achieve their qualifications this year
    ensure their career progression in September
    Alternatively we could:
    furlough our staff and claim financial support for them from the government;
    withdraw our learner bonus and leave them penniless
    have learners miss the opportunity to complete their qualifications
    have learners unable to progress to higher levels in September

    Which do you think seems the best option for everyone concerned?

  7. ian williams

    The government is within its rights totally here. Many of the current ITPs are run for profit and have millionaire owners. Funding should be given to non profit making ITPs who work on behalf of the learners and not to line the pockets of overpaid directors and owners. The rich owners of the ITPs can take out a loan or pay from their own pocket.

    • I work with several ITP’s and not one of them is owned by a millionaire or even close to making a reasonable profit, what profit they would make is taken from them by the need to respond almost weekly to changing goalposts within the sector. I only hope that there is some common sense applied down the line and additional measures are made available.

      To add insult to injury there will be millions of pounds of earned Levy funding locked up right now that providers can’t access because the ESFA’s payment systems are not still fit for use 30 months after their introduction. my customers have an average of over £25k locked up in this way that they can’t get in to their cashflow to help them ride this out.

    • Voiceofreason

      A very appropriate response. If the ITP is a privately owned enterprise they should get the same degree of support as any other privately owned business, ie fourlough payments and business loans. If the ITP is a charity then there is a different argument. There are plenty of ITPs that make significant profits, with some of them being owned by private equity companies with shareholders who have made millions.

    • Yes, some ITPs actually make a profit and in some circumstances that profit almost matches the salaries of College Principals. The vast majority are not owned by millionaires, don’t receive financial bailouts if they mismanage their finances, are small businesses, that are creative, responsive to employer and learner needs and probably have adapted to non classroom delivery in the light of COVID-19 faster than many larger organisations. They employ people willing to sacrifice salaries, work shortened hours and don’t have healthy public sector pensions. They deserve to be treated as fairly as all employers and employees in the sector. It’s time for the sector to work together , not against one another.

  8. Just Saying

    The propaganda mentioned here that ITP’s are run by millionaires is incredibly ill informed and naïve. How does this help the current situation? Should the ITP world now be hitting back that all FE Colleges are run by Principals who are millionaires……. yes that’s right most of them are. They will have probably all accumulated £1m plus in their pension funds by the time they retire…… oh and guess what …so will most of their senior colleagues too!!

  9. Karen Redhead

    We are in the middle of a global crisis and we are all fellow human beings. I understand that anxiety and stress levels are very high, but this sniping is really unhelpful. Let’s try to practice a bit of kindness towards one another – after all, we work in the same sector so must have more that unites us than divides us. I am a college principal, and have worked in colleges and funding agencies for the last 30 years. I also have the upmost of respect for the ITPs I have worked closely with over pretty much all of those years. Colleges did not create this situation, and did not create the current guidance – so why take pot shots? Personally, I will be making sure our ITP strategic partners are ok during this crisis and will be extending an extra hand of friendship and support.

    • I.Ron Pyrites

      I agree Karen. I spent over 30 years in FE and over a decade of that as a College Principal. Providers squabbling amongst themselves, setting ITPs against FE, parading prejudice and ill informed twaddle helps no one, least of all the learners, the staff and the providers. Time for unity, collaboration and kindness rather than vitriol, rivalry and points scoring which are unedifying at best.

    • P. Dant

      I think that’s “the utmost respect” Karen. I can’t see how anyone who reads FE Week, filled as it has been for years with copious stories of snouts-in-the-trough profiteering and sharp practice (at least) in ITPs AND colleges, can seriously believe that one part of the sector has a monopoly on such behaviour.

  10. Phil Hatton

    The key here is to allow furloughed apprentices to not have a break in learning but to continue their learning remotely so that ITPs do not have to furlough their staff. Over three months a lot of progress can be made and it will also help the mental health of apprentices to have a purpose everyday. It is blindingly obvious and will help apprenticeships to survive this storm. Unless you are offering higher level management and ICT most ITPs cover their costs. Areas such as health and social care delivered correctly are unsustainable on current tariffs.

  11. David Priestly

    Amazing number of comments when it comes down to personal impact and money. Whilst the sector is fearful and has the culture of business versus education versus regulation versus cashflow, conflict will be rife.

    There will be no unity until this is resolved, and the ESFA and DFE wish to see it to further ‘prove’ FE needs to disappear as it is not ‘for for purpose’.

    Go figure……..

  12. Sadly it’s not just apprenticeships being affected here – all public sector contracts (including ESIF) are time bound and there has been no movement from the DfE /ESFA /DWP to extend contract end dates to allow providers to deliver once this crisis is resolved and restrictions are removed – learners and providers are left in limbo (again !) – how can anyone work effectively without some support …. !!

  13. Pete Johnson

    It’s clear to me that we’re being set up by our leaders in Govt to play us off against each other. To answer points above yes there are profiteering people at the top of both college’s and at the top of ITP’s, but importantly, NOT at the top of all of these. And tbh I defy you to find me any industry where you don’t find profiteering people at the top of the proverbial tree.

    I really think we need each other at times like these and we need to put forward a united front towards Williamson et al to show that we all make a valid contribution towards student learning, not just one branch or another. So please let’s stop the sniping and lets do something as a sector that shows Gavin Williamson that he needs ALL of us on his side.

  14. David Russell, CEO of the ETF

    There are amazing teachers, trainers and assessors at ITPs of all types, large and small, making a huge difference, often to the learners who most need a leg up. It doesn’t matter in that respect whether they are employed by zero-margin charities or private-equity-owned businesses that make a tidy return for owners and investors.

    Mark is right that Govt wishes the structure of the sector was different. But using the Covid situation to allow ITPs to go to the wall would be a terrible mistake, because of my first point.

    If Govt wants a shake-down of the sector they should have the courage to do that on objective criteria of quality and public value, not allow it to happen by default through cashflow crises as “unfortunate collateral damage” in a time of exceptional stress.

  15. Alice

    I work for an ITP and have read some government guidance surrounding furloughing staff etc. It seems that ITP’s cannot furlough staff, teaching or not if they continue to deliver training to their apprentices. What if a college has a private income too and adult education? I am furloughed and not entirely sure I should be whilst training is continuing online. I’m so confused. Thank you Alice