ESFA launches new financial handbook for ITPs

the Education and Skills Funding Agency (ESFA) has launched its new Financial Handbook for Independent Training Providers (ITPs)

The handbook was developed in collaboration with the sector and reflects the diversity of the skills and training offer that ITPs provide.

The guidance will support the sector’s governance and financial management arrangements, provide a clear framework for the financial oversight of ITPs, and assist the Department for Education (DfE) and ESFA to identify and manage risks.

This handbook is part of the ESFA’s work to provide certainty to the sector, outlining requirements and recommendations in governance, financial management and oversight and assurance.

The Financial Handbook will come into effect from 1 August 2024, but is being published now to give ITPs sufficient time to prepare for any requirements that are not already being met.  

Speaking about the launch of the new Financial Handbook for Independent Training Providers, David Withey, Chief Executive of the Education and Skills Funding Agency, said:

“Independent training providers (ITPs) are key and valued partners of DfE and ESFA, delivering vital education and skills training through public funding amounting to around £1.5 billion a year. Effective governance, operational and financial management is essential for ITPs to deliver training, enable them to manage their finances, report accurately and transparently to customers and funders, and to make informed business decisions for their future. Such arrangements protect delivery for learners and, therefore, help achieve the best outcomes.

“We know that many providers have robust processes already and we want to help ensure this is the case across the sector. Financial stability and good governance are the bedrock in creating a stable and effective training environment with high educational standards where learners can realise their potential.”                                                                         

Ben Rowland, AELP Chief Executive Officer, said:        

“I’m delighted to see the ESFA publish the financial handbook which sets out good practice for Independent Training Providers.

“The requirements laid out in the new ITP financial handbook will help ITPs further strengthen their governance arrangements and very much builds on the work AELP started in 2018 with the publication of the Good Governance Code for ITPs.

“For most ITPs, the requirements laid out in the new ESFA ITP financial handbook will already be a feature of what they do already, ensuring appropriate controls, safeguards and oversight are robust and in place. For ITPs who have underdeveloped approaches to governance and appropriate financial control the requirements laid out in the handbook now give clear expectations on protecting public money and ensuring appropriate rigour and challenge about key decisions ITPs make.

“AELP has encouraged the ESFA to use this as an opportunity to tackle the unnecessary regulatory burden which distracts ITPs from focusing on delivering high quality training. We are pleased they have taken this challenge on board. As a result, this new handbook is not an arbitrary one-size fits all approach and ensures that the requirements are tapered based on ESFA income with the smallest providers being completely exempt.

“AELP looks forward to continuing to work closely with the ESFA in the future.”