Plans to create a new list of government-approved training providers have been put on ice.
Leaders have been bracing themselves to go through what they fear will be a “costly” and “bureaucratic” process to join the mandatory register next year.
The next stage will be to define the conditions for the list, which are expected to include a new form of expensive insurance to cover costs when a provider exits from the market, in law following the passing of the skills and post-16 education act 2022.
But the Education and Skills Funding Agency has decided to pause the development of the regulations in light of the “changing” FE provider market due to wider skills reforms.
“We want to assess the totality of change to understand the impact on providers and what is needed to protect learner interests in a proportionate way,” the ESFA told FE Week.
The agency said it will set out a timescale at the start of 2023/24 for undertaking a review of the “changes to the FE provider market to inform a decision on proceeding with making the regulations”.
The conclusion of the review will determine the timeline for the development of the list.
Jane Hickie, chief executive of the Association of Employment and Learning Providers, said the delay will be welcome news to the sector.
“The sector hardly needs yet another bureaucratic hoop to jump through, when we’ve only just had another refresh of the register of apprenticeship training providers and when many providers are still getting back to business as usual after a difficult few years,” she said.
Any provider not on the new list will not be granted funding agreements or be allowed to subcontract with another provider who is on the list. It will be additional to the existing register of apprenticeship training providers, which has gone through multiple refreshes since it launched in 2017.
An impact assessment report for the skills bill explained that the new list of ITPs and its conditions are required because there are delays in the current system of finding a new provider for learners when another goes bust.
The delays come about because providers often have to take on the learners and receive no additional funding. This “makes it difficult to place some affected learners with alternative providers and this brings with it the risk that the learner may disengage and then fail to complete their learning”, according to the DfE.
The impact assessment stated that provider failings also “incur costs to government, for example, administrative costs in resourcing learner transfers or writing off advanced learner loans”.
FE Week has reported on various cases of loans providers going bust in recent years, leaving learners in the lurch and in some cases, left with high levels of debt and no opportunity to complete their course.
Following an FE Week campaign, the DfE changed the law in 2019 to give the education secretary the power to clear student debt in those cases. Almost 600 victims of the scandal had £1.5 million worth of debt written off as of January 2022.
To combat the costs and delays, the DfE wants providers to take out a new type of insurance to cover the costs of transfer of learners to a new provider. The impact assessment warns this could incur significant additional costs on the sector.
“Professional indemnity insurance” is anticipated to be required by the DfE, which is typically set up to cover: breach of duty, civil liability, breach of contractual liability that is not caused by negligence, contractual liability and legal costs.
Aside from insurance, the new list of ITPs will require a registration fee, “provisions” of student exit plans and access to learner and financial records.
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