The government has been urged to clarify a new clause in apprenticeship contracts that suggests struggling small providers could be terminated without the chance to improve.
Under the apprenticeship provider agreement, the Department for Education has the discretion to impose intervention requirements, such as improvement targets, on training organisations that miss accountability framework quality standards.
But a new variation to the agreement published this week suggests providers could immediately lose contracts if their size is “disproportionate” to the resources needed to monitor an improvement.
In section 6.2 of the agreement, which outlines “what intervention, if any” the DfE can take, new clause 6.2.5 says officials will consider: “If the resource the department must commit to manage this agreement is disproportionate to (i) the total number of apprentices that are/were supported in the current, or prior academic year; and/or (ii) the total number of apprentices that are/were supported in a non-priority area in the current or prior academic year.”
Power to terminate
Tony Allen, a former Education and Skills Funding Agency contract manager, and fellow consultant Paul Blackshaw, both suggested the changes give the department “even more power to terminate”.
Blackshaw told FE Week the clause is “clearly open to interpretation” and called on the DfE to explain and quantify its meaning.
He said: “In the meantime it will undoubtedly be perceived as positioning smaller providers at greater risk of termination.
“Apprenticeship providers, like any responsible contractor, should be entitled to agreements that are transparent in their meaning and with fair and reasonable terms that bring about mutual respect and longevity.”
The DfE declined to respond when asked what sized company would be “disproportionate” and define “non-priority” areas, but added the accountability framework ensured any intervention actions taken were proportionate.
The legal view
Education solicitor Mark Taylor, partner at Shakespeare Martineau, said the new clause “does not make a lot of difference” as the department already has “very wide powers” to terminate or intervene with providers.
But he added: “The interesting bit is this shows the department considers this to be an issue.
“Clearly the department does not want to spend time and money on providers which are too small or delivering in non-priority areas – it would be useful if the department would explain what a non-priority area is.”
Tom Morrison, head of further education at law firm Stone King, told FE Week he could “understand the concern” about the contract change as the clause covers new contractual ground for “a range of adverse consequences” for providers, up to and including termination.
He said: “It is not clear what limits there are on the DfE around the resources which it believes it ‘must’ commit.
“It would be good to understand what the harm is which DfE is seeking to address through this change”, he added.
Performance tweaks
The clause, which took effect last month, comes six months after the DfE tweaked performance measures that trigger intervention or termination under the apprenticeship accountability framework in a bid to “drive up quality”.
Based on measures and thresholds such as achievement rates and off-the-job training data, as well as Ofsted grades and employer feedback ratings, the DfE can class providers ‘at risk’ or ‘requires improvement’.
Aside from immediate termination, intervention actions include setting specific targets, requiring professional training for staff, serving a formal notice of failures, or placing a cap on the volume of new apprentices.
‘Too early’ to know
Thomas Pollitt, principal associate in corporate education at law firm Eversheds Sutherland, said: “It’s too soon to draw any firm conclusions on this change.
He added: “The DfE had the discretion under the previous version of the framework to take into account the resources it would need to commit to an intervention in proportion to the number of apprentices and area of provision – if it considered this to be a relevant factor – when deciding what, if any, intervention to take.”
Simon Ashworth, deputy chief executive officer of Association of Employment and Learning Providers, agreed it was “far too early to jump to conclusions” on what the clause will mean for small providers.
He said: “Small providers are a vital part of the rich skills tapestry and play a critical role in the delivery of high-quality training, including in some very niche specialisms.
“With the introduction of the growth and skills levy the DfE will clearly need to carefully consider the capacity and expertise within the marketplace as part of their role in market stewardship.”
DfE restructuring
The DfE recently announced plans to close the EFSA, its funding management agency, and integrate its functions into the department by the end of March.
The ESFA employed 736 staff as of July this year but has seen a rapid decline in staff in recent years, with many policy staff transferred to the DfE following a 2022 review and others handed restructure exit packages.
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