We have finally seen the launch of the new non-levy Apprenticeship scheme that is a great new year’s present for many small providers in the sector. For those that want too, and not everyone will, they will now be released from the burdens of sub-contracting and be in a better place to control their own destiny. It will be an interesting few months as the scheme settles down and many more thousands of businesses start to use Apprenticeship Service with the help of their providers.
However, it isn’t all good news, especially for those providers who have been heavily reliant on sub-contracting downwards and have managed their business cash flows on holding back payments to their sub-contractors. We all know, it is not uncommon for sub-contractors to be waiting 90-120 days for payment from their contract holders. All of this will now start to unwind with many primes not being able to replace this cash with new starts.
Already we have seen postings on social media of prime providers having capacity in their contracts for sub-contracting from February onwards. It is an opportunity for those providers that do not want direct exposure to Ofsted and we think we will not see a massive reduction in sub-contracting in the market. Simply put, those sub-contractors that move away from primes will be replaced by others entering the market.
We knew the guidance would be late, we cannot blame the ESFA for that. We had an election and restrictions in place on policy making, but you would have thought they would have used that time to make the guidance clear:
- Three apprenticeships but over what period?
- How does a provider deal with withdrawals with an employer against the threshold of 3
Just two of the important practical things providers need clarity on before an audit and then being found to have failed. So it’s ‘Insufficient Progress’ verdict on the ESFA. Are there any other areas of this guidance that remain unclear?