Apprenticeships threatened by uncertain funding, providers warn

Trade body claims schemes are ‘on the brink of collapse’ due to the government not guaranteeing funding for private suppliers during the coronavirus pandemic

Private apprenticeship providers are being forced to either close or mothball their operations because of a lack of secure funding during the coronavirus pandemic, an industry body has said.

The Association of Employment and Learning Providers (AELP), which represents private providers, accused the Department for Education (DfE) of a “refusal to comply” with guidance that states government departments should continue to pay suppliers during the outbreak. It said that as such the government was not financially supporting providers, who have had to pause teaching because of the outbreak.

Mark Dawe, chief executive of the AELP, said that failing to support private providers could lead to a shortage of apprenticeship programmes. The AELP claimed seven in 10 apprentices in England were trained by private providers, meaning a lack of funding put apprenticeship schemes on “the brink of collapse”.

“Action on funding apprenticeships and other important skills programmes is needed right now if the government seriously wants this year’s school leavers and unemployed adults who need retraining after the crisis to have apprenticeships available to them,” Dawe said.

“I have asked the current DfE ministers if they want to be the ones remembered for throwing hundreds of training providers... on to the scrapheap. All they have to do is follow the Cabinet Office guidelines and use the money already sitting in the DfE,” he added.

Last month the DfE issued guidance for private apprenticeship providers which made it easier for both trainers and apprentices to initiate breaks of a month or more to help maintain social distancing rules during the coronavirus outbreak.

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However, the rules stipulated that providers would only be paid “retrospectively for the training they have delivered and can evidence”, meaning many private providers whose training was disrupted due to Covid-19 were not eligible for financial support.

Private providers seeking funding support have been directed to more general coronavirus financial aid programmes for businesses offered by the Treasury.

This is in contrast to the support provided to schools and further education (FE) colleges, where the government has guaranteed the continuation of full funding during the outbreak.

A member survey by the AELP after this guidance was issued found that, out of 279 private providers polled, 18 per cent might close because of lack of funding. A further 28 per cent would mothball operations, while the majority (55 per cent) would be likely to downsize.

“In the absence of any further action from the DfE since then, the situation in terms of mothballing and potential shutdowns has worsened,” Dawe said. He called on the government to guarantee April’s funding for apprenticeships and other work-based programmes to “allow time for us all to sort through the details of how a sustainable funding model might work”.

But Jill Whittaker, managing director of provider HIT Training, said it was right that college funding was protected while training providers were treated the same as other kinds of businesses. She told People Management, however, that the best thing the government could do was support apprentices “in any way they can”.

“Apprenticeship training providers are running an essential social service during these challenging times; in some cases we can be the only professional contact that furloughed staff receive,” she said.

“Let's not forget that while Brexit seems a distant memory, we still have to get the workforce ready for when employers can no longer bring in skills from overseas for the lower-paid roles. This is particularly important in hospitality and care where there are already significant staffing issues,” Whittaker said.

Richard Marsh, apprenticeship partnerships director at provider Kaplan, described the guidance as “disappointing”. 

"There is a lot of detail about how training providers will have to justify being paid for four weeks’ training in March if a learner has only completed three weeks, but nothing on the major issues at all,” he said.

Anthony Impey, chair of the Skills and Apprenticeships National Policy Group at the Federation of Small Business (FSB), also expressed disappointment. “[The government must] provide much-needed assurance for independent training providers, many of whom are small businesses, who will be wiped out as a result,” he told FE News.

“We now risk a sector that can’t bounce back when this crisis is over, which would be bad for our economy and our young people."

A DfE spokesperson said: “We recognise this is a difficult time for the sector. We are continuing to work closely with key stakeholders and the Treasury to monitor how our support packages are benefitting organisations and to consider any further action which may be required.”