Apprenticeships with small businesses funded via an employer transfer or that have recently transitioned onto the government’s digital system will not be eligible for supplier relief.
The Department for Education confirmed this afternoon that the support, details of which are expected to be unveiled later this week, will only apply to non-levy apprenticeships where a provider holds an Education and Skills Funding Agency funding allocation.
It means that any starts with small businesses via the digital apprenticeship system – for both employer transferred funds and the transition period that launched in January – will be ineligible.
Transfer funding, where large employers share unused funds, was launched in April 2018 and small employers began transitioning onto the digital system in January of this year.
The confirmation comes after DfE minister Gillian Keegan revealed that more than 1,000 apprenticeship providers that only train levy-paying employers, through the digital system, will not be eligible for supplier relief support.
In a letter to MPs she said that the relief will “not apply in relation to apprenticeships funded from employer digital accounts where the contractual relationship is between the employer and the provider”.
The move has prompted a fierce reaction from the Association of Employment and Learning Providers, which has sought legal advice to challenge the decision.
The membership body’s board met yesterday agreed that Keegan’s letter “made it clear that the proposed support would only be available to providers in respect of apprenticeships offered by non-levy paying employers where providers hold ‘a direct contract’ with the Education and Skills Funding Agency”.
They unanimously agreed that the statement “ignores the fact that the levy is a tax as defined by the Finance Act 2016” and that levy-funded apprenticeships “also have a direct contract with the ESFA and so the DfE’s grounds for excluding relief for them were not justified”.
“Therefore the board has instructed AELP’s secretariat to immediately seek formal legal advice on whether the department is still failing to comply with the Cabinet Office guidance to which the minister’s letter refers,” a statement from the membership organisation said.
The DfE told FE Week that the Cabinet Office’s Procurement Policy Notice 02/20, which underpins their supplier relief scheme, applies only to circumstances where the service was procured under the Public Contract Regulations 2015 and is being delivered under a contract for services.
A total of 593 providers currently have non-levy allocations amounting to £690 million, the contracts for which have recently been extended to cover the financial year 2020-21.
As well as non-levy apprenticeships funded through a “direct” ESFA contract, the support will be offered to adult education funding.