One of the largest providers of apprenticeships has asked the Skills Funding Agency for permission to give cashback to employers, prompting the agency to say it would have “grave concerns” about any such arrangement.
In an email about Trailblazer funding, dated 22 December and released to FE Week following an FoI request, JTL Training asked the funding agency if it could offer “free training vouchers, tools or bank credit” to certain employers.
The payments from the provider, which has an SFA allocation of £17.3m for 2015/16, would be “completion grants from its charitable reserves” to employers that it said would be “treated adversely under the new funding arrangements”, the email from JTL chief executive Jon Graham said.
In a reply dated 14 January, the SFA said: “It is a core principle of the apprenticeship programme that it is co-funded between government and employers.
“We would have grave concerns about any grants not going with the grain of government policy.”
However, the email suggested that the agency’s powers to enforce this principle were limited. The information given was intended to “clarify the position on the funding rules”, it said. “We will not offer advice on what are clearly your commercial decisions,” it continued.
Under funding rules for the new Trailblazer apprenticeships, each standard is allocated one of five government funding caps (six from 2016/17).
The government will pay two thirds of the cost of delivering the standard up to the cap, with employers expected to contribute the remaining third. Employers can claim one or more incentive payments on offer from the government: a 16 to 18 apprentice payment, a small employer incentive and a completion incentive.
JTL Training, which was rated good across the board at its last Ofsted inspection in December 2012, runs apprenticeships and traineeships in the electrical, plumbing, heating and ventilating, and electrical maintenance sectors.
Its SFA allocation of £13.7m for 16-18 apprenticeships and traineeships in 2015/16 is the largest such allocation of any training provider. According to its most recent accounts, the provider had 4,764 apprentices in training at the end of July 2014.
Mr Graham told FE Week that they had been exploring ways to make the transition from apprenticeship frameworks to new Trailblazer standards “as a simple as possible” for their employers, many of whom are “very small, micro-businesses”.
For most of these employers the SFA’s incentive payments would cover their contributions, Mr Graham said, but for “about 10 or 15 per cent” of their employers “when we did the calculations, depending on the size, of the age, of an employer, that wasn’t always the case”.
The SFA has confirmed that JTL has not finalised any Trailblazer funding arrangements with employers, and does not have any apprentices on Trailblazer standards.
A spokesperson for JTL described the email exchange as a “purely conceptual discussion”.
“The SFA provided guidance and direction to JTL in the absence of current practice, and of course as soon as they advised of concerns, we immediately discontinued this idea,” the spokesperson said.
A spokesperson for the SFA said: “If providers are found to have broken the co-funding principles set out in the funding rules we will issue them with a notice of breach.”
Penalties for a breach include contract termination, in the case of a serious breach.
“We are currently reviewing the impact of other funding sources on the co-funding model, and will update the 2016 to 2017 funding rules if we consider that further clarification is needed,” the spokesperson added.