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Update on Non-Levy procurement

Update on Non-Levy procurement from Teresa Frith, Policy Manager, AoC

Subcontracting: ESFA should take a ‘sympathetic view’ where an unsuccessful college is seeking to access funds for non-levy apprenticeship delivery through a growth bid by a third party Lead Provider. That ‘sympathy’ would only apply to the amount of growth funding a Lead Provider might seek and they would need to be clear as to the ‘extenuating circumstances’ surrounding what would likely be an unexpectedly large bid that would include provision for a previously undeclared subcontractor. It was clear that there was no flex to be found within the subcontracting rules – but if you revisit the rules (V4) you will discover some ‘watering down’ of the wording regarding the level of delivery that the Lead Provider must undertake. The Lead Provider would need to hold the contract with the employer AND would need to be involved in the delivery in some way, so not a simple hand off of funds, but definitely an option.

The first growth bidding opportunity for non-levy funding is about to open and the Lead provider will need a monthly breakdown for your financial requirement split by 16 – 18 and Adult and by region. The spreadsheet is not entirely different from the one within the non-levy tender. Growth bids will need to be in by 5.00 pm, 6 March, so there is not much time to get the details settled. This will not be the last window.

Buying a successful ITP: No issues with this route were aired and again colleges following this route would need to make the change in circumstances clear when it came to requesting growth through that new entity.

10% Transfer funding: No problem with using the College’s 10% (as far as can be seen within the existing rules that we know). The issue with the College seeking out/using existing large levy payers and asking them for all/some of their 10% for the college to support non-levy employers is less simple. ESFA don’t like brokers making profit from things other than delivery and a model that would allow Colleges to effectively act as a Broker between large levy payers and non-levy employers might well have the unintended consequence of allowing such practice. We would need to ensure that if this model is used there are sufficient ways in which ESFA can isolate this type of activity from the less reputable version. Also within the rules that we know of, neither the donating employer, nor the College can insist that the non-levy employer uses the college as the provider and this would need to be evidenced. I don’t think either of these issues is insurmountable (unless some DfE official decides to shift the rules in some way and there has been talk of not allowing employer providers such an option). This option is unlikely to be available before June 2018.

Using the Colleges direct levy to employ the apprentices on behalf of the non-levy employers: ESFA had not considered this option and wanted to think about it. ESFA did pick up the similarities with an ATA, but I was careful to point out that in this instance they are similarities only. For example within this version there is a ‘strong likelihood’ of continued employment with the non-levy employer on completion of the apprenticeship. They have promised to come back to us, but we are still waiting. I have been through both the Training provider and Employer Provider rules and can find nothing that clearly disallows the model (nothing that allows it either, hence ESFA reticence).