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Employer-responsive (ER) funding (Apprenticeships and Train to Gain). Nick Linford. WBL Residential 10-11am Thursday 17 September. 16-18 Apprenticeships (DCSF). Provider landscape Funding for 2009/10 16-18 Apprenticeship future. 19+ Apprenticeships and Train to Gain (BIS).

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Employer-responsive (ER) funding

(Apprenticeships and Train to Gain)

Nick Linford

WBL Residential10-11am Thursday 17 September


16-18 Apprenticeships (DCSF)

  • Provider landscape

  • Funding for 2009/10

  • 16-18 Apprenticeship future

19+ Apprenticeships and Train to Gain (BIS)

  • Provider landscape

  • 19+ Apprenticeship funding

  • 19+ Apprenticeship future

  • TtG funding history

  • TtG funding pressures

  • TtG funding for 2009/10

  • TtG cash-flow issues

  • TtG future

Contents



Local Authority £18m (3%)

FE £210m (32%)

Other public £30m (4%)

Charities £90m (14%)

Private £316m (47%)

Provider landscape

2008/09 Maximum Contract Values (MCVs)Academic year (Aug 08 – Jul 09)

  • Number of MCVs: 1161

  • Total MCV value: £664m

  • Average MCV value: £572k

  • Largest MCV value by provider type:

  • Charities: £41m (CITB)

  • Other public: £15m (MoD)

  • Private: £9m (Carillion Construction)

  • FE: £6m (City of Bristol College)

  • LA: £2m (Kingston Upon Hull City Council)

Source: LSC provider Allocations Spreadsheet (Feb 2009), 16-18 ER Total


Funding for 2009/10

Source: Statement of Priorities, LSC (November 2008)

It should come as no surprise that 16-18 Apprenticeships remain a high priority and a significant growth market


16-18 Apprenticeship future

Raising the Participation Age (RPA) and the Apprenticeship Entitlement

“The ambition is that, by 2019/20, one in five young people will have started an Apprenticeship before the end of the academic year in which they reach their 18th birthday [from one in 15 at present]”

Source: Statement of Priorities, LSC (November 2008)

Role of the DCSF, YPLA, RPG, SRG, LAs, NAS and SFA in the planning, commissioning and payment processes from April 2010…..


Train to Gain and 19+ Apprenticeships


FE £494m (46%)

Local Authority £21m (2%)

Other public £28m (3%)

Charities £44m (4%)

Private £479m (45%)

Provider landscape

2008/09 Maximum Contract Values (MCVs)Academic year (Aug 08 – Jul 09)

  • Number of MCVs: 2073

  • Total MCV value: £1bn

  • Average MCV value: £515k

  • Largest MCV value by provider type:

  • Charities: £16m (CITB)

  • FE: £11m (West Nott College)

  • Other public: £11m (MoD)

  • Private: £6m (Economic Solutions Ltd)

  • LA: £1m (Lancashire County Council)

Source: LSC provider Allocations Spreadsheet (Feb 2009), 19+ ER Total


19+ Apprenticeship funding

Source: Statement of Priorities, LSC (November 2008)

  • Nearly 50% rate reduction for ‘employer contribution’

  • 25+ Apprenticeship rate reduced a further 10%

  • All 25+ budgets being squeezed


19+ Apprenticeship future

  • Employer contribution (rate reduction) will rise further

  • Questions will be asked about whether providers are delivering 25+ Apprenticeships instead of TtG, as they tend to generate more funding

  • Questions will be asked about whether employers are making a financial contribution

  • TtG and Apprenticeship funding rules, rates and contracts likely to be more closely aligned

  • Pressure will be on to find savings and prioritise the younger apprenticeships (particularly 16-24 year olds)

  • 25+ Apprenticeship may simply prove too expensive


TtG funding history

National roll-out from Aug 2007, and byAugust 2008 £100m under-spend went to HE

FE Focus 08/08/08 and 29/08/08

TtG ‘flexibilities’ introduced from August 2008and before long demand outstripped supply

FE Focus 03/07/09 and 04/09/09


Theflexibilities

Paymentprofile

More providers

TtG funding pressures

“it is unlikely that there will be sufficient funding to meet the high level of demand from employers and learners for new starts, particularly in the August-March period of the 2009/10 academic year”

Source: Geoff Russell’s LSC letter to providers (11/06/09)


Pressures > flexibilities

For 2008/09 ‘flexibilities’ were introduced to stimulate both demand and supply. These included:

  • Skills for Life at Entry Level

  • Non-first full level 2s fully-funded (free)

  • Level 3 (incl.19-24 ‘first’ fully-funded)

  • Selection of thin and unitised QCF quals

The policy worked > perhaps too well!

and 3% TtG premium has already been scrapped


07/08

07/08

£500

Example for 1 NVQ in Construction

09/10

09/10

£400

08/09

08/09

£300

£200

£100

£0

Jan

Feb

Mar

Apr

May

Jun

Jul

£2,000

£1,600

£1,200

£800

£400

£0

Jan

Feb

Mar

Apr

May

Jun

Jul

Pressures > payment profile

The payment profile for TtG changed in 2008/09

Consequences

Monthly instalments

  • Instalments quickly ramp up

  • Funding for achievement is now starting to be claimed in big numbers

  • Big ‘carry-in’ funding commitments

Also

Cumulative instalments

  • Qualification rates simplified for 09/10, which will be expensive for LSC

  • LSC and providers really struggle to forecast monthly instalment profile


2006/07

2007/08

2008/09

Pressures > more providers

Number of 19+ ER contracts (TtG and Apprenticeship)

2073

1212

920

Nearly all the additional contracts have been for new providers of TtG

Source: LSC provider Allocations Spreadsheet (Feb 2009)


TtG funding for 2009/10

£925m 09-10 TtG budget in Grant Letter (more than last financial year but less than last academic year)

Financial year Grant Letter (government budgets)

Academic year provider contracts (MCVs)

About half of 09-10 financial year spent on last four months of 08/09 academic year. The eight months (67%) left of 09-10 financial year only covers 47% of 09/10 academic year commitments


ILR W01 04/09/09

OLDC portaland AMPS

Provider paid 14/09/09

Submit monthly on 4th working day

LSC data collection and payment systems

BACS payment on10th working day

TtG cash-flow issues

Providers are paid after monthly data submissions

Example for the first month (period one) payment for August

47% cap for first 8 months will cause cash-flow problems and lead to stop-start enrolment patterns

Carry-in funding commitments may alsoresult in few new starts until April 2010


TtG future is uncertain

  • Providers waiting for confirmed 09/10 contracts (MCVs)

  • Lack of funding and cash-flow issues mean many likely to go out of business

  • Government likely to scrap some flexibilities (possibly in-year for 2009/10)

  • Uncertain impact of QCF and interim ‘fullness’ definitions

  • NAO report said poor value for money (21/07/09)

  • Conservatives say they would scrap TtG

  • Skills Funding Agency (SFA) will take it over from LSC from April 2010


Any questions?

These slides will be sent to you and are a free resource on www.planningandfunding.co.uk


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