ESFA £650m non-levy tender has ‘descended into farce’

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The troubled second attempt at an ESFA non-levy apprenticeship funding tender descended into chaos last night as a series of  new “clarifications” and document updates were sent out.

With little over a week until the submission deadline, bidders were informed that the tender cap calculation for existing apprenticeship providers should be based on a proxy percentage for non-levy funding in 2015/16.

But that’s only for new starts, not all delivery which would include the funding for apprentices that started before August 2015.

By only including funding for starts, this will in many cases more than halve the tender cap funding value that providers have been working to.

Mark Dawe, chief executive of the Association of Employment and Learning Providers reacted angrily, describing the situation now as “totally unacceptable and makes a mockery of the process”.

He went on to say: “Changing documentation and requirements in a procurement process at this late stage is unacceptable.

“The whole process is in danger of descending into a farce.  To introduce a new criteria, starts, leading to a wholesale reduction in the maximum bid amount at this late stage, when many have completed their documentation, will lead to total confusion and chaos.”

David Hughes, chief executive of the Association of Colleges (AoC) this morning told FE Week (click here for full expert piece): “Colleges are very frustrated and deeply concerned about the timing and the details of this procurement.

“Concerned because their relationships with thousands of employers and students are at risk if they are not successful in bidding for the business, they have been successfully carrying out for many years.

“Frustrated because the complexity of the process has required detailed clarifications, some of which have come very late in the process and which have led, for instance, to extensive spreadsheets having to be completely re-worked.”

One college vice principal tweeted: “It really has descended into farce!” and a sector consultant asked: “Is this how to ruin apprenticeship providers course 101?”

The latest round of clarifications come after the ESFA scrapped the first attempt at the tender, and then extended the application deadline for this second attempt by three and a half days, to midday on September 8.

Mr Hughes added: “It is a relief that the deadline has been extended in recognition of the importance of the clarification issues. Of course, that then reduces the time that officials have to consider the bids, on what was already a very tight timetable.”

Some of the guidance and 570 answers to requests for clarifications also left many scratching their heads, as they contained different answers to the same question. One message, sent out last night, reads: “The Education and Skills Funding Agency has been clear that if you have already completed earlier versions of the documentation that is acceptable for submission.

“This remains the case for all documentation apart from Attachment 4 volumes and values sheet. Attachment 4 – Volumes and Values V1.3 This version [updated yesterday] needs to be used by all Potential Providers (including those that have already submitted their tender).”

And yet the latest clarifications document, also published yesterday, says: “All versions of Attachment 4 can be used, anyone starting completion now it is advisable to use the newest version of the attachments but it is not essential if you have already completed”

A Department for Education spokesperson said: “The ESFA issued a clarification to ensure that all bidders are provided with the information needed to submit high quality bids. We recognised that this may have an impact on the tender process, which is why have extended the submission deadline. This will not affect the delivery timetable.”

Read my NCFE blog about the complexity of the non-levy tender, written before this latest round of “clarifications”, here.

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UPDATE from AELP: “Unfortunately this is simply yet another unnecessary attack on existing high quality providers, when the government are keen to stress the importance of stability during this transitional period.

“We have been informed by the ESFA that this is simply a clarification and that “most providers have understood this anyway”.  From the plethora of responses we have already had from members, we know this is clearly not the case and AELP is not aware of any members who had interpreted it in this way.  In essence there was never any reference of historical ‘starts’ in calculating what providers could tender for.

“Our view is this significant change to the live tendering process and adds further backing for our calls to review the arbitrary £200k minimum contracting cap.  We have called for this cap to be scrapped, but the ESFA have told us that now that the procurement is live, it must remain.

“This late change to how the ESFA are measuring historical delivery means that yet more high quality providers will be pushed under the minimum contracting threshold and fall out of scope for a direct contract.  Just because providers are small doesn’t mean they are not high quality and play an important role in the marketplace.”



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17 Comments

  1. Absolutely unbelievable. Our tender cap is reduced by £2.5m at the drop of a hat with a week to go. And just been through the latest hundred or so clarification responses and found at least 3 questions that have been asked more than once and been answered differently by ESFA. Eeny meeny …. Farce is the right word.

  2. The incompetence of this tender exercise beggars belief, and builds on the omnishambles of the first round and AEB procurement which appears to be similarly descending into chaos.

    And it was all totally unavoidable if the ESFA had simply put their effort into bringing forward the roll out of the digital account to all providers (or lowering the payroll threshold bringing non-SMEs into scope – note not the same as making them pay the levy), combined potentially with an extension to existing contracts until the end of July 18.

    • Agree with your solution – could easily have been avoided. They also could have extended existing contract holder amounts, and opened it up to ‘new’ providers to tender, much like the AEB one. Although…

  3. Deeply disturbing -it’s like watching a car crash in slow motion….
    I have real concerns that established and successful providers are going to become casualties of this ITT process. My own confidence has certainly eroded with what has transpired over the last number of months with the original tender and now this re-tendering exercise.
    Maybe the ESFA should have carried out their internal questionnaire to evaluate their ‘readiness to deliver’!

  4. The points on the timing and the impact on small providers are absolutely valid and the ESFA should have clarified this from day one.

    However, the action to clarify the tender caps to reflect historical start delivery, as opposed to all apps delivery, is surely the correct one. If not then many providers would have overbid in an attempt to grab their slice of the pie which would have led to a hugely oversubscribed bid and more chaos.

    Most providers would have a 40/60 – 50/50 split in their new start/carry in apprenticeship income in a given year. The original document was effectively allowing them to bid for more start income than they have traditionally delivered.

    Timing and rework aside – then surely this is the correct decision with the caveat that a the impact for small value providers needs reviewing?

    • Re the historical start delivery, it wasn’t a clarification – it was a change. Total delivery income was the basis upon which the original tender was based. The correct action would have been for ESFA to issue a tender with a tender cap that was based upon funding secured for learners that were in year starts.
      What is infuriating is the entire lack of accuracy, clarity & due care, prior to tender release, on the part of the Agency which is creating inordinate amounts of extra work/stress/worry for providers across the country.
      I don’t think anyone is complaining that there is a max contract value – that’s generally the case on a tender. The issue is the fundamental change during the tendering window.

  5. It doesn’t seem to make sense! Surely the calculations are wrong on the spreadsheet. A new provider with £500k turnover can have £680k tender cap and then existing provider with £3m turnover can only get £1.5m when we already have a current contract with the ESFA of £1.9m for carry forwards and starts up to Dec. There doesn’t seem to be any logic because after spending weeks writing a tender about how we will be ready to deliver the esfa wont fund business as usual let alone opportunity for growth- its a joke!

  6. I brought this whole thing up around a month ago I could see it was a complete CAR CRASH going to happen.
    We have several problems we cannot get it wrong and change things we must get it right or suffer penalties. The Department which is in Charge is the Department for Education and the Minister has not taken the right action or indeed any real action. I see small providers going out of business i see large ones scaling down, I see more red tape when we were going to get rid of it. End Point Assessment in scrambles. I could go on about spreadsheets and calculations at the end of the day they appear not to listen to the industry I have only been in training 37 years, and many more wise and knowledgeable people around so why can they not ask us in the industry, will this work, is this fair is this good for the learners. Ok they may not have the money to do it all but they could have given out 300 million to all the AEB winners of bids and they would have got the same or better outcomes than Learndirect and saved peoples jobs and given training to so many especially some Not for profits.

  7. Surely time for our representative bodies the AELP and the AoC to jointly fund a legal challenge to embarrass those officials who still hang onto their jobs whilst many providers lose theirs

    Enough is enough and the bureaucracy involved in enrolling new apprentices is putting many employers off. 3 million new starts, lucky to.get 300k at this rate.

    This is so serious we must kick back against this gross incompetence

  8. Peter Cobrin

    And then there is the good news………………………..
    Aside from the technical issues surrounding the spreadsheets, the narrative sections, Questions 1-5, are appallingly and confusingly worded. I’ve worked on bids since 1995 both bidding side and reviewing bids and writing tenders. They should have put this whole process out to an expert and professional company to manage, but then, that would have involved an ITT………………….
    Don’t worry, it’s only kids’ futures they’re messing with.

  9. The Assessor council

    It’s not only the impact on learners and providers. The trainers and assessors within the sector are running scared. The uncertainty and misery it is causing is real and getting worse.
    Trainers and assessors are just nor sure of their long term future and are leaving the sector in droves.
    Good small providers will go to the wall leaving large providers and colleges. Less choice. The RSFSA if judged by OFSTED OTLA would score a 4.

  10. Absolutely joke, looks like an existing quality provider is punished for delivering only £250k of new starts in 15/16 and is given only a £300k cap (ignoring growth in 16/17) but a new provider with no track record whatsoever can rock up and bid for £750k!! How’s does that make sense?

  11. As a potential new entrant to the world of being a prime contractor for Apprenticeships, despite being one of the largest direct providers in the south west, I have come to the conclusion that the ESFA are doing everything they can to exclude us from becoming a prime contractor – this despite having awarded us a modest starter contract in Oct 2016. Count yourself lucky that your cap is not judged in the way ours is – on what amounts to 7 months numbers at the beginning of a very modest contract to deliver Higher Apprenticeships – look at you 16-18 numbers in that context if you dare!!!

    I hear all of the sector “whinging” about “high quality” this and that and how the ESFA are trying to destroy us and wonder why OfSTED and employers have been telling us for years that our “product” is not fit for purpose – might I suggest “sectoral group think” is the underlying problem ( I refer to this internally as the “FE disease” – you know where everything is brilliant or outstanding or excellent when really mediocre is the best adjective to describe our performance in the eyes of customers!!)

    The fact is Apprenticeships in their pre-1 May 2017 guise were not fit for purpose or indeed high quality, employers didn’t really value our provision because we gave it away – things certainly do NEED to change.

    That said though, I also wonder why the ESFA are intent on treating the sector with such utter contempt – not listening, ignoring our opinions, apparently steam rolling changes – and then back tracking to appear reasonable.

    On top of that the LearnDirect debacle also provides a great deal of evidence to support the “favoured few” argument – you know, the one where the usual suspects always get the contracts despite the “appearance’ of a level playing field and are to big to fail (also have a lot of “mates” in the ESFA??)

    By way of example I have personally spent weeks of my life responding to tenders only to find that there was never any real prospect of success….. why? …… because the ESFA have stacked the odds against me right from the “get go”. Consider the recent AEB tender – as anticipated, the “usual suspects” did bid high and forced my bid below the cap thereby excluding me from even being considered. As a result my very compliant AEB bid failed to deliver for the want of a £200K overbid – call me naive if you want but I thought delivering a costed and achievable programme was the requirement – lesson learned!! So it is with some relief that I see the cap criteria has been revised – at the very least we all now stand a chance.

    So please please stop whinging and engage with these changes – they are really necessary. Accept that the ESFA holds most of us in contempt – especially the non-prime providers – and that this non levy Apprenticeship tender will result in the current crop of “usual suspect” being successful. We also need to accept that the barriers to entry for the rest of us (who actually provide most of the current Apprenticeships at up to 20% below the funded value) will be very high in the future and we will all be effectively locked out and have to go cap in hand for the scraps of the table as usual.

  12. Here’s a good one from the latest ‘clarification’ document:

    Where your last published accounts were for less than 12 months, you must add in the deficit number of months from your previous accounting period to make a full 12 month period. Please note that you must only add in income generated in the relevant months to make up a deficit. In other words, if your last audited accounts only covered 8 months ending in March 2016, the income from April 2015 to July 2015 from the previous accounting period must be added in. However, the income added in should actually have been generated in the relevant months that are being included. It would not be acceptable to proportion the income across the whole of the 12 month period by dividing the turnover generated in that previous accounting period by twelve and then multiplying that by the number of months required to make up the deficit. The ESFA must be able to validate the information submitted from your audited published accounts. You are strongly advised to speak to your financial adviser before completed Attachment 4.

    Well, I’m a chartered accountant and spent many years as an auditor, and I know what my “financial adviser” will say. It is completely impossible for ESFA or anyone else to deduce, from a set of published accounts, how much of the reported turnover was earned in any specific month. Even if the accounts were audited, the auditors would not have paid any attention to cut-off between one month and another, because they are giving an opinion on the accounts for an entire accounting period. The only way that ESFA would be able to validate the information from published accounts is to do precisely what they are saying we should not do – ie pro rata the turnover from the previous year.

    Yet more proof – if any were needed – that ESFA have no idea what they’re doing.

  13. One of many concerns about the process is whether or not the people scoring the tenders understand the difference between targets, impacts and outcomes. They’re not the same thing and not transferable but the questions are poorly worded to differentiate between them unless you have psychic or powers of divination.

  14. The irony of all this is that, if my memory serves me correctly (and in all fairness with all the changes my memory may be overloaded), but I am sure at the AELP conference immediately after Brexit, when Peter Lauener was asked why we were having to tender, the reason he gave was nothing to do with the reform but was instead was something to do with EU regulations?