Provider Funding Cuts – The Story Continues

Last week I wrote an article challenging the so-called cuts in Apprenticeship funding for providers and suggesting that from next April we need to adopt a very different mindset when it comes to funding. The article was meant to stimulate a debate and I am therefore delighted that it has done just that. I would however like to take issue with some of the specific points which were made by those people who believe that these funding changes will have a devastating impact on 16-18 year olds in deprived areas. I should add that my comments refer to Levy-paying employers because as yet, we do not have sufficient information to understand how the non-Levy payers system will work.

This Is About Simplification – Not Cuts

First, let’s be quite clear – this is not about cuts, it’s about simplification, a process for which most people in the sector have been lobbying for years. Now instead of having a complex matrix which required expert decoding, we have a single rate regardless of age, location or any other factor. Obviously the laws of mathematics dictate that when you carry out such a process, some previous rates will fall, whilst others will rise.  That is exactly what has happened here although some people seem to have conveniently forgotten about the rises.

I appreciate that most of the falls impact on the 16-18 year-old age group whilst the rises are within the 19+ group but in the new world of Employer Ownership, I would argue that is irrelevant because from next April, provider funding has indeed been cut – to zero. The figure we need to focus on is the funding which is now available to an employer.

So , let’s take as an example a Level 2 in Construction. Basic funding is £6000 plus an extra £1000 for both employer and provider if the learner is under 19 and separate funding for Functional Skills (which was previously funded from within the framework), at £471 per Aim. So for a learner under 19 who requires both English and Maths, the total pot of funding available would be just under £9000 and for a similar learner over 19, it will be just under £7000.

Those are the figures which will be on the table when a Levy-paying employer sits down with a provider to negotiate a contract and the age or location of a potential learner will be completely irrelevant. Is anyone seriously suggesting that a major company is going to totally change its strategy and stop recruiting 16-18 year olds for an Apprenticeship because last year, funding (which never came anywhere near them), was higher? I can tell you from the conversations we are having with Levy-paying Employers, that the answer is emphatically no. In fact with the added financial incentives for both employer and provider, if anything more younger learners will be taken on as Apprentices.

Will Providers Stop Training The 16-18 Age Group?

The second argument that is being put forward is that many (so far nameless) providers will no longer be prepared to train 16-18 year-olds because the funding has been cut.  So does this mean that having just been invited by let’s say Vodafone to tender for their Apprenticeship programme, you tell them that unfortunately you cannot proceed because you are not prepared to train their younger learners? I just cannot believe that anyone in their right mind would adopt such a position and even if they did, there would be plenty of other providers lining up to take their place. Many of those will now be free of the extortionate 20-30% sub-contracting fees they were paying previously and will I am sure be delighted to take up the opportunities discarded by their colleagues.

The only people who will be adversely affected by these changes are training providers who were focusing almost exclusively on 16-18 year provision but if they exist, then like all of us in the sector, they will need to redefine their strategy and their business models. The only impact for potential young Apprentices is that there are likely to be far more opportunities as Levy-paying employers ramp up their programmes to maximize their Levy payments.

I do understand the concerns of training providers who are having to manage unprecedented levels of change and adapt to a totally new way of working with employers.  But I do not believe that this simplification process will have the negative impact which is being suggested. I am just as concerned about young learners in deprived areas as anyone else and that is why I have campaigned relentlessly for an increase in the Apprenticeship Minimum Wage which despite the recent improvement, still lags behind the NMW and does not provide a living wage. Let’s get these young people out of the poverty trap rather than worrying about funding (of which they never saw a penny) and its impact on providers.

Roger Francis is a Director with Creative Learning Partners Ltd, a specialist vocational training company focusing on the delivery of Functional Skills