DWP revisits unloved 30/70 apprenticeship unit payment split

The payment model for apprenticeship units may change after providers warned the current structure was destabilising delivery.

Speaking at the Association of Employment and Learning Providers’ national conference, Department for Work and Pensions work-based skills director Kate Ridley-Pepper revealed officials were already exploring alternatives to the 30/70 payment split.

It comes months after FE Week reported provider concerns that the apprenticeship unit funding model was stacked against them and deterred some providers.

Currently, providers receive 30 per cent of funding at the start of delivery and the remaining 70 per cent on completion.

It means a provider that delivers 90 per cent of planned hours when a learner drops out risks suffering a huge shortfall.

Ridley-Pepper said early feedback from providers had highlighted the model’s unsuitability for longer units.

“As promised, we are committed to undertaking a period of test and learn to make sure those apprenticeship units give employers what they need and that the design works for providers. That work will be completed in the next few weeks,” she said.

The government had expected “high levels of retention and achievement” and therefore wanted “a payment model that gets the money to providers in a sensible way with as little admin burden as possible, because obviously additional milestones mean extra audit”.

Feedback from providers suggests the model works for shorter units but not longer units, she added.

“Feedback is telling us that this 30/70 payment model has worked well once a programme is up and running, however, it’s not perfect.

“It works for smaller units of up to 60 to 70 hours, where funding is likely to be drawn down over one or two paper cycles, but it won’t work as well for larger units, such as the modular building, which has 140 hours of content.

“So we’re already exploring options to make some changes for those larger units, and we’ll keep you posted.”

Proposals by late summer

Asked when the sector could expect a decision on potential changes, Ridley-Pepper suggested recommendations would reach ministers within weeks.

“It’s very sort of live information. We’ll be giving that to ministers before they finish for the summer, so hopefully that will be relatively soon.”

She declined to speculate on what a revised payment profile might look like, indicating providers would play a key role in shaping any changes.

Positive early feedback

The government launched the first ten apprenticeship units at the end of April as part of its drive to offer employers more flexible training options alongside full apprenticeships. This is the first time that non-apprenticeship training can be funded through the levy.

Ridley-Pepper told delegates that units in artificial intelligence and mechanical fitting had generated encouraging responses from providers.

“The first of these in key industrial strategy priority areas are now well underway, and early feedback from the providers who delivered the first cohorts in AI and in mechanical fitting has been incredibly positive,” she said.

Ridley-Pepper also confirmed more apprenticeship units were coming, and added Skills England would reveal which sectors would get them, and when.