A training provider in the Midlands slashed its growth request by 75 per cent after local staff at the Skills Funding Agency said there was “no chance of putting forward any form of growth case for classroom-based provision for the unemployed”.

Bosses at Leicester-based Skillspoint, which has around 450 learners in sectors including construction and logistics, now hope that the agency will increase their contract from £1.25m to £1.5m.

The firm had planned to ask for £1m, but decided to pass on the provision that the increase would have funded to other prime contractors after local agency staff said the request would fall on deaf ears.

It comes despite the agency saying nationally that some growth requests might win approval.

Skillspoint managing director Nic O’Donovan said: “We received correspondence from our agency relationship team that, despite being a priority for growth, there was ‘no chance of putting forward any form of growth case for classroom-based provision for the unemployed’.

“They said this on the basis that it was highly unlikely there were sufficient funds in the system.

“So we knocked back about 75 per cent of our original growth request and brokered it out to other primes.”

Agency guidance, dated January, indicated growth requests could win approval.

“Where funding allows, we will continue to expand the offer to the unemployed and provide growth for apprenticeships where there is clear employer demand,” it said.

The situation has led to confusion in the sector about growth requests and Mr O’Donovan said new guidance “might be helpful”.

However, the agency declined to produce up-to-date information on the growth requests situation in light of the experience of providers such as Skillspoint. It reissued the guidance dated January.

Meanwhile, a spokesperson for the Association of Employment and Learning Providers (AELP), which has been in talks with the agency on growth requests, said: “We understand some providers have still recently been told by agency relationship teams that some growth requests should not be put forward and would not be funded.

“We would like to reiterate that the agency has made it clear to us that all funding requests will be considered, subject to affordability.”

An agency spokesperson said: “We will increase the funds needed to support the rate increases introduced for English and maths.

“The agency will also increase access for high quality apprenticeships where there is clear employer demand, and to support unemployed people back to work.”

However, the AELP spokesperson said: “The current growth request issue has shown that demand for apprenticeships is not being fully met – that is why we are talking to the skills minister and the agency about it.

“But if the funding is more efficiently allocated to providers who can evidence demand, then there is no reason why growth in standalone NVQs and apprenticeships should be mutually exclusive.”

The agency spokesperson added: “We continue to review performance of providers against their minimum contract value, through our published quarterly performance management arrangements.”

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