Provider Funding Cuts – They Are Dead Parrots. Welcome To The New World

The headlines over the last few weeks have all been about huge cuts in Apprenticeship Funding. Of course, they could equally have read “Huge Increases in Apprenticeship Funding” but then I suppose there wouldn’t have been a story. The sector has rightly been begging different governments for years to simplify the horribly complex funding regulations.  But when for once they actually listen and take advantage of the Apprenticeship Reforms to introduce a standard rate regardless of age, area or any other factor, the news is greeted with shock and horror and wild tales of potentially devastating effects on disadvantaged learners in inner cities.

Do We All Need Some New Glasses?

So I think we all need to take a deep breath and a step back and look at what is really happening. I can’t help thinking that many of the critics of these funding changes are viewing the situation with old-world glasses. Let’s be quite clear – from April 2017 we are going to be living and working in a hugely different environment.  We therefore need to totally change our mindset and forget about what we might or might not have received in the past for delivering a Level 2 Apprenticeship in Business Admin to an 18 year-old in Tottenham. Whilst there will need to be some short-term interim arrangements put in place for non-Levy payers until they join the DAS, Apprenticeship funding for providers is the proverbial dead parrot – it has ceased to exist; it is no more! Funding at whatever new rates are finally agreed will go directly to employers and I don’t think they will give a fig about any prior cuts, or increases. They will have a figure in mind that they want to spend and they will seek out the best providers with whom to spend it.

What can Twaddle Teach Us About The New World?

Let me make my point using an imaginary Levy-paying company called Twaddle Retailers. Twaddle are a rapidly growing company with outlets all over the country. They have never run an Apprenticeship programme before and have simply relied on a solid onboarding scheme and follow-up training for their new recruits. However, Twaddle have just discovered that from next April, they will be paying an extra £400k in tax (thinly disguised as an Apprenticeship “Levy”).  They realise that the only way they can claw this back is to start an Apprenticeship programme and with £3000 per learner available for their new Standard, they seek an appropriate provider to deliver 100 Apprenticeships per annum.  Any provider who says “I’m very sorry but I can’t train your 16-18 year olds in London because the funding has been cut”, need not apply.  Having made their choice from those remaining providers who would be interested in winning a contract of this size, they then sit down around a table with said provider and thrash out a commercial deal

This may be an imaginary employer, but this scenario is now taking place for real every day amongst  Levy-paying employers and I cannot for the life of me understand how this could have a negative impact on 16-18 year old’s in inner cities. On the contrary, once Twaddle  (and 22,000 other Levy-paying employers) catch on to the fact that both they and their provider of choice will get an additional £1000 for taking on a 16-18 year old, then they may well decide to increase the number of learners in that category rather than reducing them.  Prior changes in funding are going to have absolutely no impact whatsoever on either their recruitment policy or the number of Apprenticeships they decide to run.

To Win The War, We Need To Fight The Right Battles

Before I am accused of being a lackey for the SFA or worse still the government, let me say that I have many concerns about the Apprenticeship Reform programme.  Whilst I applaud the overall concept of Employer Ownership, the consultation process has been highly flawed and should have taken place when the reforms were first mooted, not when they have almost been completed. The funding for Functional Skills is totally inadequate and let’s be honest the “Levy” itself is simply an additional tax on large companies and a way of enabling the government to meet its target on Apprenticeship numbers whilst reducing the overall funding budget.

I’m glad that this issue of “funding cuts” is being debated and that at least on this question, the Opposition is doing what it should be doing and challenging the government. However I can’t help thinking that they’ve picked the wrong fight. If I thought for one moment that Employer Ownership of funding was going to disadvantage younger learners in deprived areas, I would be up in arms myself, but I just can’t see it happening. I know that many major companies are planning huge increases in their Apprenticeship numbers in order to maximize Levy usage and believe me, these new learners are not by any means going to all be older learners from leafy suburbia.

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