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Training providers call for change to Train to Gain funding

Learning providers and colleges in talks with LSC to extend Train to Gain profitability as research reveals how slim margins are.

Training providers and colleges have been in talks with the Learning and Skills Council (LSC) about profit margins on Train to Gain contracts. With evidence that almost no organisation is operating their contract at a profit, discussions are underway to see if some upfront costs can be removed.
The Association of Learning Providers (ALP) has been researching its 450 members and of the third who have thus far responded, only two are making any money from Train to Gain – the rest are breaking even or making a loss. ALP’s chief executive Graham Hoyle said: “Many Train to Gain providers are only now assessing in detail the actual costs of running Train to Gain, separating out the financial details from other funded programmes. Many have admitted to entering the programme because of
its longer term strategic importance, in a belief that funding levels will have to better reflect the true costs of this new programme. It is also clear that if this does not happen providers will be forced to withdraw from a loss making programme. This would be disastrous, not only for providers and the potential learners in clear need of upskilling, but would also render the Government s Train to Gain targets and expansion impossible to realise.”
Maggie Scott, the Association of Colleges director of learning and quality backed up the ALP findings, saying that colleges are finding it hard to make any kind of margin from Train to Gain contracts with a lot of them having to cross-subsidise programmes.
She said: “Colleges want to get Train to Gain contracts because they are the Government’s preferred route for commissioning skills training. But the margins are so slender, for a combination of reasons. The number of people coming forward for some of the courses is quite low; often there are not enough people who want training in the area the contract specifies. Secondly Train to Gain contracts are paid by results so colleges are not seeing the money until the end whereas most of the costs are upfront. The provider is running a risk if the learner does not complete their course.”
ALP and AoC are hopeful that talks with the LSC funding experts will, in the short term, lead to the removal of health and safety check requirements, having argued they are unnecessary for a programme targeted at employed adults whose employers are fully responsible for health and safety.
The organisations are also engaged in discussions with the LSC over how funding arrangements might be modified to better reflect the upfront costs of Train to Gain contracts – estimated to be 43% of total costs.
Graham Hoyle told FE News:“Solving the financial issues surrounding Train to Gain is equally important to independent learning providers and colleges who believe that the programme forms an excellent foundation for a demand-led skills strategy.
“When other challenges were identified within the programme’s design during its first full year of operation, the LSC was very willing to listen to providers and some important changes were made. I hope that the removal of unnecessary costs will result from ALP’s latest discussions with LSC officials, so that further progress and increased employer penetration can be made.”
Rosie Spowart

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