GMLPF and ESFA meet to discuss local impact of non-levy allocation cuts

GMLPF chair Debbie Tagoe and Paul Johnson, Head of Provider Management at ESFA met on Friday to discuss the impact of cuts in Apprenticeships allocations for non-levy paying employers.

Impact

The board, staff and members of GMLPF are concerned that the reduced Apprenticeships allocations announced recently will have an adverse impact on:

  • Training providers: financial insecurity; redundancies; business closure with subcontractors especially at risk
  • Employers: Less funding available for Apprenticeships; fewer providers to choose from; limited niche provision; ultimately less involvement by SMEs
  • Young People: fewer providers/SMEs offering Apprenticeship opportunities; increased NEET
  • Apprenticeships: credibility of brand undermined; achievement of Gov’t targets unlikely

Business As Usual

Debbie put these concerns to Paul Johnson who made it clear that the ESFA are urging providers to proceed with business as usual.

He emphasised that providers should:

  1. Ensure you have read the document New non-levy apprenticeship starts for the period May 2017 to December 2017 sent out by the ESFA earlier this month thoroughly. You will see that some of the concerns that have been raised by GMLPF members are in fact addressed in this document
  2. Check your levy/non-levy allocation is correct by applying the method laid out on page 5 of New non-levy apprenticeship starts for the period May 2017 to December 2017. If you believe that there are discrepancies in the data used to calculate your allocation, you must contact your business manager immediately to discuss putting a business case forward by 31st May

Any GMLPF members who have already contacted their business manager regarding discrepancies and not heard back are asked to inform Debbie Tagoe. Paul Johnson has offered to chase up responses for GMLPF members.

Reassurances

He offered the following reassurances:

  • Allocations DO NOT include carry-in funding. Carry-in allocations will be issued in July (for learners starting before 1 May) and December (for new starts between May-Dec 2017) Providers should be reassured by the fact that current and future carry-in allocations will be based on assumption of 100% achievement rate.
  • ESFA are fully committed to funding high quality apprenticeships and will continue to do so as indicated on page 7 of New non-levy apprenticeship starts for the period May 2017 to December 2017
  • Providers who have a sensible approach to recruitment ie focussing on high quality apprenticeships in quantities which are demonstrably manageable in relation to their organisational resources, will be in prime position for growth allocations.

Calculated risk likely to be best approach
GMLPF concludes that the message coming from the ESFA is that providers who will be successful under the new funding arrangements are those who continue business as they have always done, taking a sensible, realistic approach to recruitment.

Whilst it may be an understandable kneejerk reaction in response to perceived cuts in funding, it seems likely that providers who reduce their operations or who step back from subcontracting will find themselves saddled with a restrictive delivery model that will not allow for growth when the opportunities come along shortly ie July and December  

As with any industry sector, it is the businesses that take calculated risks in periods of uncertainty that are most likely to succeed

Raising awareness of impact of funding cuts

GMLPF remains committed to raising awareness of the negative impact of any funding cuts on providers, businesses, young people and the apprenticeships brand. This is outlined in our infographic cuts to non levy funding May 2017 which we encourage members to share with MPs and via social media.

Foundation for ongoing relations with ESFA

We are greatly encouraged that following Debbie Tagoe’s meeting with Paul Johnson, he is keen to further develop relations with GMLPF. He congratulated GMLPF on our evidence-based approach to outlining impact of cuts on providers, informed by the statistics gathered from our recent online member survey. He has indicated he would like to start a piece of work with GMLPF post-election on benefit realisation of apprentices, looking at local case studies.

Adult Education Budget

In addition, Paul Johnson confirmed that announcements about procurement results for the Adult Education Budget will be made after the election.

 

 

 

 

FE Week – Festival of Skills Apprenticeship Summit

Last Friday I attended the first FE Week Festival of Skills which was held at Capel Manor College just outside of London.

Pre-referendum, it was expected that by the time this event took place, further funding reform information would be available for discussion. Brexit delayed this but nevertheless, it was an excellent event. Keith Smith, Director of Apprenticeship Levy Implementation at BIS, spoke at several sessions.

Smith confirmed further reform information would be released in the “next few days”. So we should expect to receive this before parliament recess on 21st July.

Key summaries from event:

1. Apprenticeship Funding Reforms – levy paying employers

– New simpler funding model
– Model based on financial year for all employers
– New register of training providers
– New contracting model for providers covering levy and non-levy employers

The contract for services for Apprenticeships training will be agreed between employer and provider – a commercial arrangement in other words. SFA will not have any input or jurisdiction over contractual issues between employer and provider.

Every provider who is on the new Register of Training Providers will have an Auxiliary Agreement, allowing funding to flow between SFA and the provider.

The Digital Apprenticeship Service (DAS) will be the key marketing tool for providers. Providers must start thinking about what information they will provide for DAS as this will be their first link with many employers.

Payments still linked to ILR submission by providers

2. Apprenticeship Funding Reforms – non levy employers

– Smith suggests there won’t be much difference from the current system for next year or two until all employers start to use DAS.

– To note: ALL providers to compete for money through a procurement exercise this year. If successful they will get an allocation for Apprenticeship training to market to employers. The procurement process will start when the register of training providers opens later this year.

– As with Levy paying employers, the ILR is still the key to ensure payments are made between employer/provider/government. Monthly data returns and payments will continue to be made to providers

3. Transition to the new system

– All funding agreements will be replaced by April 2017 by SFA

– Interested organisations must make a new application to the Register of Training Providers, there will be no automatic transfer from ROTO

4. Register of Training Providers

A Register of Training Providers consultation is to be launched shortly. This includes consideration of the criteria for joining the register. There will be a strong focus on capacity to deliver high quality Apprenticeships and suitability for receiving public funds

3 application routes under considered:
Main: for those wishing to procure funding to deliver apprenticeships direct to employers
Specialist: for those who don’t wish to procure funding ie those wishing to subcontract provision from a prime
Employer-provider: for employers wishing to deliver their own training

There will be four areas tested by the new register: Financial Health, Due Diligence, Quality and Readiness to Deliver

1. Financial Health
– Proposing differential financial health assessment from ROTO based on risk
– Looking at guarantees rule eg ROTO currently permits the use of supporting information like directors’ guarantee, forecasts, provider turnover thresholds. This may stop.
– Colleges with Financial Notices of Concerns issued by the SFA might not make it onto the register

2. Due Diligence: will continue to follow the Crown Commercial Service

3. Quality: to include delivery model; internal management arrangements; knowledge and experience of staff; prior experience

Colleges with Grade 4 provision might not make it onto the register

4. Readiness to Deliver
– MI and data management arrangements including data security
– Arrangements for safeguarding, etc

Register of Training Providers timeline

July: publish consultation (will close before end of August)
Sept: register opens – launch procurement
Oct: register closes
Oct-Dec: evaluation
Jan: publish v1
Jan: re-open
April: publish v2
April: contracting starts, levy collection starts

As more information emerges in the coming two weeks, GMLPF will provide members with updates.

It’s important that prime and sub-contracting providers consider their likely position in terms of the Register of Training Providers if they wish to deliver Apprenticeship provision post-April 2017.

Gareth Jones
Apprenticeships Strategy Manager
GMLPF
gareth@gmlpf.net

Apprenticeship Reforms Update 3/5/16

Latest update on Apprenticeship Reforms from Gareth Jones, Apprenticeships Strategy Manager at GMLPF

Areas of focus: Coinvestment; Register of Apprenticeship Providers

On Friday, I attended the webinar held by Nick Linford with input from Keith Smith, Director of Levy Implementation at BIS. So following on from my post last week on the Levy, here are some additional points picked up from the webinar that I feel are worth sharing with GMLPF members. Some of you may have also attended the webinar, so if you have any additional comments, please feel free to add them below

Co-investment
  • All starts from the 6th April 2017 will be subject to co-investment. This means that even when employers recruit 16-18 year olds (who are currently fully funded) employers will have to pay a cash contribution to a provider to enable training to start (and for co-investment funds to be paid from the SFA to providers).
  • According to Keith Smith, like in the Trailblazer funding pilot, incentives may well offset the cash contributions but these are unknown. Provisional figures will be confirmed in June 2016.
  • From April 2017 to July 2017, providers will be given an electronic facility for Apprenticeship funding. This will replace allocations that providers have traditionally received. After July 2017 there will be no further funding allocated to providers. They will instead have access to the electronic facility to use as co-investment for Apprenticeship starts paid by non-levy paying employers
Register of Apprenticeship providers

There will be a new register introduced for those interested in delivering Apprenticeship provision. A consultation on this is due out in the next few weeks.

The current register (ROTO) is geared to SFA’s own contracting requirements. The new register will be different: more employer-centric, based on criteria that are relevant to employers when selecting a skills provider. BIS are currently consulting with employers on this but it may well include things like providers’ track records on Apprenticeship delivery, or the ability to demonstrate delivery of high quality provision elsewhere, if they don’t currently deliver Apprenticeships.

BIS want to keep the range of high quality provision available to employers as broad as possible, however there is a risk that some existing providers might not make it onto the new register. So far there has been no indication of what the criteria for inclusion on the register might be.

Food for thought

Providers and employers will be experiencing rapid change over the next 11 months.

Significant funding changes means that from 6th April 2017, all employers will have to contribute to the cost of Apprenticeship training regardless of the age of the apprentice they recruit.

Whilst incentives might be in place to offset this contribution, the sector is still set to face continued uncertainty. A new register for training providers also brings more complexity to the mix. I look forward to seeing the consultation on this in the coming weeks and responding to it on behalf of members.

Today I am attending another event on the Levy in London where Shadow Skills Minister, Gordon Marsden will be speaking. I will be providing further updates for GMLPF members after this.

Gareth Jones
GMLPF Apprenticeships Strategy Manager
@GMLPFApps

 

GMLPF Appoints Apprenticeships Strategy Manager to Support Members

Greater Merseyside Learning Providers Federation is pleased to announce the appointment of Gareth Jones as apprenticeships strategy manager. Gareth moves from The Skills Funding Agency where he had responsibility for employer engagement and working with stakeholders to promote Apprenticeships across Liverpool City Region. With a career spanning more than 15 years in the skills sector, Gareth’s Apprenticeships expertise is set to bring benefits to GMLPF’s 80-strong membership, and will underpin GMLPF’s position as player in the region’s economic strategy.

Dedicated Information Service

The new role sees him spearheading the development of a dedicated information service to steer GMLPF members through the new Apprenticeships Standards Framework, the introduction of the Apprenticeship Levy and other changes set to be introduced by the Government in the coming months.  Critically, Gareth will reframe the information provided nationally in a way that highlights the potential impact on the regional skills provider market, allowing GMLPF members to plan more effectively for the changes. He says:

‘The challenge of continuing to provide the right Apprenticeships for young people and local businesses is amplified by the latest government directives. We want our members to have access to all the latest information about the reforms, but interpreted in a way that relates directly to them. This will help them in the process of examining their individual operations in the context of the changes.’

Gareth also sits on the board of Liverpool City Region Apprenticeships Hub. Earlier in his career he worked on establishing The National Apprenticeship Service, where he worked for seven years.  Prior to this he was Operations Manager with Touchstone Learning & Skills for six years.