Scrap the new and ‘controversial’ £200,000 non-levy tender minimum, says AELP

A request to scrap the “controversial” £200,000 threshold in the new non-levy procurement process is going to be put forward by the Association of Employment and Learning Providers.

Mark Dawe, the association’s chief executive, described the minimum contract value for the tender, which was launched by the Education and Skills Funding Agency last week, as a “pro rata risk” during a webinar with members today.

Under the rule, the ESFA has said that in all cases, the lowest contract value that will be awarded for the “initial contact period” is £200,000.

The agency will “not make an award to the potential provider” if this amount is not met. The agency said the rule has been introduced so that providers can “have greater confidence that bids and subsequent awards are set at a realistic level”.

But small providers are fearing they will not be able to meet the threshold and as such, Mr Dawe is calling for it to be scrapped.

“This is going to be our main area where we need to continue the conversation with the ESFA to ask is this really right,” he said.

“There are different ways of looking at this. We are going to put forward a number of scenarios and options and one of them is to scrap the threshold.”

The AELP boss said that if the ESFA does not agree to bin the threshold, he will suggest halving it to £100,000, the same as what it is for the Register of Apprenticeship Training Providers.

He added that another alternative “might be to allow people to come in and bid as consortium and put their smaller amounts together” or to “allow small providers to find a prime and allow their allocation to be added to the prime”.

Mr Dawe said the “most unfair” part of this proposal will be if there is a provider that is able to bid over £200,000 but “for whatever reason the agency pro rata’s that bid down because of too many bids or whatever and then the amount allocated then drops below £200,000”.

“As things stand that would then exclude the provider even though they are capable of delivering more than £200,000. We will be working on this with the agency.”

Also in today’s webinar, Mr Dawe revealed it is looking very likely that new subcontracting rules, which mean lead providers need to “directly deliver” at least some of the training or assessment of each apprenticeship programme, will start for non-levy provision in January 2018.

The rule states that “the volume of training and/or on-programme assessment that you directly deliver for each employer must have some substance and must not be a token amount to satisfy this rule” – and the government stresses that this must “not be a token amount”.

It was meant to come into play in May this year but as revealed by FE Week in April, the ESFA said it would apply the old subcontracting rules to the delivery of new starts to non-levy-paying employers until the end of December to “maintain stability through the transitional period” following the pause of the first tender.

Mr Dawe said today he has “been pushing” for the existing subcontracting rules to continue until all employers are put onto the digital apprenticeships system in April 2019, but “at the moment we are finding very strong resistance to that so I wouldn’t rely on that happening”.

“It would mean that the new subcontracting rules would be coming in from January 1 unless there is a change of heart there.

“These details of subcontracting are going to be a vital part of the process going forward.”

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