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Apprenticeship Levy: Outcome of the funding allocations for delivery to non-levy paying employers

Apprenticeship Levy: Outcome of the funding allocations for delivery to non-levy paying employers

31 May 2017

Last year the Government issued an Invitation to Tender (ITT) for training organisations who wanted to deliver Apprenticeships to non-paying employers. However, the outcome of this has been put on hold by the ESFA due to alleged oversubscription of the funding available via the ITT.

The consequences of this delay to training organisations is as follows:

  • Those providers who applied successfully to go on the Register of Apprenticeship Training Providers (RoATP) and already hold an ESFA (Education Skills Funding Agency) contract to deliver apprenticeships will receive an extension to their current contracts and allocation to continue to deliver to non-levy paying employers until the end of December 2017, while ESFA resolve the situation with the ITT.
  • Any provider that applied successfully to go on the RoATP as a main provider for the first time (i.e. they do not currently hold an ESFA contract to deliver apprenticeships), will now not receive any funds to deliver apprenticeships to non-levy paying employers and must rely on either sub-contracting or solely on their income from levy paying employers, which will increase competition in this area.
  • The old sub-contracting rules have been re-applied for non-levy paying delivery, e.g. a main/prime provider does not need to deliver a substantial amount of the apprenticeships programme with the employer and can sub-contract the full delivery of the programme to the sub. An addendum just published makes it clear that the only type of sub-contracting that a prime can offer to a subcontractor is ‘full provision’ sub-contracting, i.e. that the sub-contractor must deliver the full apprenticeship, not a part of, or specialist aspect. This means that specialist sub-contractors that only deliver a certain aspect of the apprenticeship will not be able to offer this service to non-levy paying employers.

In addition, current ESFA providers with an Apprenticeship contract have received their funding allocations for delivery to non-levy paying employers from 01 May to 31 December 2017.

It was expected that these allocations would be reduced in comparison to previous years for the following reasons:

1. A percentage of funding should now be coming to providers via their levy paying apprenticeship delivery to larger employers.

2. The reductions in the funding attached to some apprenticeship frameworks (now they are in the 15 funding bands as the new Apprenticeship standards).

3. The 10% expected to be collected from non-levy paying employers.

However, many providers are flagging that they have received much greater reductions in their allocation, in the region of a 80% reduction, which may impact the volume of Apprenticeships available for non-levy paying employers as funds have not been made available.

What’s next? We may not know more until after the election. In the meantime, you can call the IGA helpline on 0845 305 4230 for advice on apprenticeships and the levy.

If you want to know more, visit the City and Guilds website at www.cityandguilds.com/apprenticeships or join the discussion at Linkedin - Making Apprenticeships Work.