Disadvantaged young people left again without apprenticeship opportunities after re-run of controversial government procurement

High quality training providers and colleges including charities have been denied the opportunity by the government to continue offering apprenticeship training to disadvantaged young people.

The government’s decision has been described as an affront to ministers’ own social mobility agenda by the Association of Employment and Learning Providers (AELP), the body that represents apprenticeship training providers.

This latest development has nothing to do with the quality of the training provision, which in many cases has been judged by Ofsted to be good or outstanding.  Instead another procurement exercise undertaken by the DfE’s Education and Skills Funding Agency (ESFA) to fund the apprenticeships of non-levy paying SME employers has left many specialist training providers without a contract to support the training of these employers.  These smaller providers got enough marks to ‘pass’ the tender but nonetheless were pro-rated down below the £200,000 minimum threshold for a contract award that would have enabled them to carry on training apprentices for SMEs until April 2019 when the next tranche of apprenticeship funding reforms will be introduced.

Leading children’s charity Barnardo’s is one of the providers left without an ESFA contract.  Barnardo’s places young people with barriers to work and often from vulnerable backgrounds with smaller employers and then trains them as apprentices.  For many of these young people, the opportunity to do an apprenticeship is a progression from being NEET or doing another government programme such as a study programme or traineeship.  Last year Barnardo’s support helped secure an 82% progression success rate for young people on its study programmes while 74% of its apprentices successfully completed their programmes.  The positive impact of this training was felt in places such as Bradford, North Tyneside and Birmingham.

Chief Executive of Barnardo’s, Javed Khan said:

Barnardo’s has been delivering apprenticeships for more than 30 years. We have extensive and very successful experience of working with vulnerable young people often with multiple and complex barriers to work.  However, we have been penalised for bidding for funding to deliver an apprenticeship training contract that we felt we could realistically provide, rather than overbidding for something that we could not deliver. 

Barnardo’s is not only the UK’s leading children’s charity but also an important specialist provider of apprenticeship training for vulnerable young people. By denying a contract due to pro-rata rules, rather than the quality of the tender, means the Education and Skills Funding Agency, (ESFA) will be losing a great opportunity to deliver high quality and successful apprenticeships to more young people in need. We urge the Agency to reconsider and award a £200,000 allocation so we can continue to provide apprenticeships next year.

The only option available now to providers like Barnardo’s to stay in apprenticeships is to seek to become a subcontractor of another large provider or college, but they could potentially lose 20% or more of the funding in management fees.  This would reduce the amount of funding available to deliver apprenticeships to the most vulnerable.

The controversial ESFA procurement exercise is the second of 2017 after incoming skills minister Anne Milton scrapped the first.  It has led to good and outstanding training providers and colleges to complain to their MPs that areas of the country will be left without apprenticeship opportunities in sectors key to local economies.  Some very experienced providers will almost certainly go into administration as a result. 

At the same time, the ESFA has awarded 250 contracts to new providers with no experience in apprenticeships and is expecting them to help deliver the government’s target of 3 million apprenticeship starts by 2020.

AELP has called for an urgent review of the non-levy procurement outcome which requires new contracts to be issued for the start of January. 

It has written to DfE ministers, saying that:

All providers that passed the scoring criteria and bid for over £200k should get a minimum contract of £200k. 

This is possible and appropriate because:

1. the wording of the tender documentation would allow this approach as it doesn’t define available budget and determine precisely the pro-rata approach
2. if this additional allocation was made, it is very unlikely anyone will complain
3. government procurement rules set out clearly that they should encourage more SME engagement, not put hundreds of them out of business, and
4. ultimately we thought the government wanted more apprenticeships, productivity improvement and social mobility – ignoring the consequences of this tender process will lead to a negative impact on all three objectives.

AELP CEO Mark Dawe said:

“It is great there are new providers involved, great that employers are more involved, and the investment in apprenticeships is amazing.  However the current implementation is damaging so many providers and it will set back progress in improving productivity and social mobility.  Ministers have to think again.”