Non-levy Apprenticeships delay and confusion

The sector has been exercised this month by a decision to pause over £400 million in funding allocations for non-levy paying Apprenticeship employers, to allow time for a ‘careful review’ to ensure ‘the right balance between stability of supply and promoting competition and choice for employers’. This is partly due to the oversubscribed recent procurement process and the inclusion of many new providers with no experience and/or poor records.

The former Skills Funding Agency also cancelled a meeting in March on non-levy provider allocations. The new ESFA wrote this month to providers regarding non-levy funding for Apprenticeships from 1 May, saying it would maintain stability in the meantime by extending existing contracts held by current providers until the end of December 2017, provided they are on the new RoATP. 

But Apprenticeship training providers have reacted with dismay to government cuts to the funding that helps support smaller businesses offering apprenticeships, as large areas of the country without large levy payers face having few or no Apprenticeship vacancies as a result. According to the AELP, funding allocations to training providers have been reduced by up to 89% for non-levy apprenticeships, helping to fuel fears that many providers may go out of business. Providers had been hoping that the pause on the £440m tender would mean that providers could maintain much of their current provision for employers and offer new starts to apprentices.  Instead after the new interim allocations, most are forecasting a massive drop in the number of apprentices they can start on new programmes, with the worst impact being on training providers who rely on subcontracted business. Some main providers  report that their new allocations are now so small that they themselves cannot afford to pass on any business to subcontractors.