SFA relaxes traineeship subcontractor rules while DWP ‘increases access’ for young JSA claimants

The Skills Funding Agency has relaxed its rules on new traineeship subcontracting to allow all grade three-rated and non-inspected providers to work with a grade one or two lead to deliver the programme.

Thanks to the changes, brought in this month, grade three-rated (‘requires improvement’) providers and those not inspected by Ofsted can draw up traineeship agreements with grade one (‘outstanding’) and two (‘good’) lead providers they have no previous contractual relationship with.

Previously, new traineeship agreements could only be established if the provider already had a relationship with a grade one or two lead provider dating back to before the 2013 introduction of the youth employability scheme. To set up a new traineeship agreement between unconnected providers, both the lead and the subcontractor used to have to be either grade one or two.

Grade three subcontractors also had to have been on the SFA subcontractors’ list before June 2013. But, as providers are only registered on the subcontractors’ list once they are delivering more than £100,000 of provision, smaller subcontractors were excluded from offering the programme. This restriction has now been lifted.

Funding rules for 2015/16, published by the Education Funding Agency (EFA) said: “If you want to enter into a new sub-contracting arrangement with a new sub-contractor for traineeships then as of April 1, 2015, the original requirement that traineeship sub-contractors have to be graded Ofsted one or two has been removed on the basis that the lead provider has to be (and remain) at these grades. The sub-contractor can be Ofsted three or no grade.”

The move comes as the government also said all 16 to 19-year-olds would be able to continue receiving job seekers allowance (JSA) while participating in a traineeship.

A separate announcement in the SFA’s update newsletter said 16 to 19-year-olds, who had previously been prevented from claiming JSA if they were on a traineeship programme for more than 12 hours a week, would now be allowed the benefit.

The SFA said the change, which came in on Friday, would “increase access” to traineeships and “enable all young people to benefit from full-time participation while maintaining entitlement to their benefits”.

A spokesperson for the Department for Work and Pensions (DWP), which oversaw the benefit change, said: “Traineeships are important in giving young people the skills they need to move into work which is why we are ensuring that all young people continue to receive their JSA while in full-time training.

“This will also give providers and employers greater flexibility when they are designing their traineeships.”

The Association of Employment and Learning Providers (AELP), which has campaigned against the restrictions on grade three providers since there were introduced in May 2013, welcomed the news.

An AELP spokesperson said: “This is a big step forward but the initial restriction of only allowing Ofsted grade one and two-rated lead contractors to deliver traineeships should also be reviewed.

“A provider that has evidence it can deliver a high quality traineeship programme should be allowed to deliver.

“Many of these providers have existing relationships with employers currently not involved in traineeships and have established apprenticeship programmes.

“They can make those links and ensure the programme can be expanded leading to more employers seeing the benefit of providing these important first work opportunities.”

AELP has previously argued Ofsted grades were “too blunt a tool” by which to measure providers.

Teresa Frith, senior skills policy manager for the Association of Colleges (AoC), said: “It’s clear that the Coalition Government listened to the concerns raised by ourselves and others that the restrictions around Jobseeker’s Allowance for 16 to 19-year-olds and Ofsted grades for sub-contractors reduced access to traineeships.

“It is far more important for the college to have an Ofsted grade one or two and to monitor the quality of the traineeship, rather than expecting a sub-contractor to have that grade. Traineeships are supposed to increase a young person’s ability to get a job, but preventing 16 to 19-year-olds undertaking traineeships from claiming JSA made it more difficult.

“We would, however, like to see even more flexibility in the pre-apprenticeship offer to help prepare young people for a job with training.”

157 Group exectutive director Lynne Sedgmore said: “Anything which widens access to traineeships is to be welcomed so these announcements are both very positive.

“We remain concerned, though, that the same rules regarding Ofsted grades are not applied to all types of provision and continue to press for an equitable approach which enables young people to access traineeships wherever they are in the country”.

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