Levy employer changes provider

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This topic contains 8 replies, has 3 voices, and was last updated by  Ruth CJ 3 months, 2 weeks ago.

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  • Alan Taws
    Participant

    We’re looking at taking on some apprentices from a provider that has gone bust. The employer is levy funded. With regards to negotiating a price with the employer we’ve had some conflicting advice about the funding cap – the issue is as follows:
    Simple example
    The Framework or standard has a funding cap of £5000 – the previous provider had drawn down £4000- which suggests that the Apprentice is not too far from completion but having reviewed what work has actually been completed they are clearly further way from completion than their planned end date suggests. So we agree with the employer that our fee is £2000 – which if added to the £4000 drawn by the previous employer, would exceed the cap by £1000. I’m quite clear that the cap wouldn’t be applied to the aggregate, I think we would be OK to negotiate £2000 without the employer having to stump up £1000 of that. I think the funds drawn by the previous provider are ignored as far as the cap is concerned – we simply determine what prior learning exists, reduce our fee accordingly, and as long as our fee is less than £5000 the employer won’t have to provide any additional funds. Correct?

     
    • This topic was modified 3 months, 2 weeks ago by  Alan Taws.
    #314454

    Martin West
    Participant

    Hi Alan,
    The Cap applies:
    See the following from the Technical funding guidance (V4):
    167. If the employer or provider changes, we will include any previous earnings for the apprenticeship at a previous employer or provider (based on the ULN) and will only fund up to the band maximum that applied at the start of the programme across all instances of that apprenticeship for that apprentice.
    168. If the provider changes, the total contributions from an employer’s account for a single apprenticeship across two or more providers will not be more than the funding band maximum. If the employer does not have an employer account, the same funding band maximum applies to the total earnings before the 90% co-investment is calculated.

     
    #314462

    Alan Taws
    Participant

    Very disappointing. Why would any provider pick up Apprentices from a failed provider if you can’t negotiate a fair price? The employer is unlikely to want to pay more money if they’ve already been let down by the previous provider.

     
    #314464

    Ruth CJ
    Participant

    We had a somewhat similar conversation on this thread.

    The Service Desk confirmed that you can’t drawn down from the DAS more than band maximum (£5,000) minus what the first provider had (£4,000). You’ll need to be precisely clear what the first provider had in funding, which is sometimes easier said than done.

    Specifically with reference to 3aaa, this was the ESFAs response the the issue of funding;

    In such circumstances, it is important to note that employers are responsible for ensuring that the training being delivered, throughout the apprenticeship, is in line with the arrangements set out in the Commitment Statement. This Statement, drawn up at the start of the programme, details how the employer, the provider and apprentice will support the successful achievement of the apprenticeship.

    If a provider believes that access to additional funding is required, and there is insufficient funding available in the funding band to complete an apprenticeship, then they will need to establish with the employer why their apprentices made insufficient progress compared to the funding claimed to date and agree how the employer will pay for the required amount.

    Basically, it’s the employer’s fault for not checking up on progress.

    Lets assume you do manage to negotiate a price (£2,000) that is higher than the remaining amount in the funding band (£1,000), what do you put as the TNP?. What the Service Desk said was the full negotiated price (£2,000), but they didn’t put it in writing. I am yet to discover whether that will draw down the whole amount you entered as TNP, or whether it will get capped at the aggregate band maximum, taking into account the first providers claims (£4,000). If it does cap it, you definitely need to get the other £1,000 from the employer. If it doesn’t cap it, do you either just take the money and run, or do you record a TNP value which was not the true TNP? This is what I asked the Service Desk three times, and still didn’t get a definitive answer. He said he thinks it will show in our apprenticeship reports, if we try and charge more. Until we try it, I still don’t know.

    He did say to speak to our account manager if this was a problem. If enough people complain about the aggregate band maximum cap, they may look into it.

     
    #314501

    Martin West
    Participant

    Hi Ruth,
    The Technical funding guidance does document and confirm that you enter in the ILR the negotiated price to the Employer in (TNP 1 + TNP 2) and that the Cap will be applied to this to calculate the funding paid to the Provider.
    See: Annex 1 – An example of calculating payments
    HTH

     
    #314630

    Alan Taws
    Participant

    Really helpful. We had vague and conflicting statements from the Service Desk, non-committal – I thought I’d come on here as there’s far more chance of Martin knowing the answer…
    Anyway, so we do have to take into account the previous providers draw down, and as you say Ruth, that really isn’t straightforward, you really need to see the detail of what has been claimed, and take into account whether or not provider incentives have been triggered, and then there’s the end point assessment costs that you have to pay for… on top of that the amount of time (and cost) in establishing where the learner is at, writing up all the contractual paperwork… it’s difficult to see it as anything but a loss to the provider unless the employer is willing to pay out more.

     
    #314664

    Ruth CJ
    Participant

    I think you’re right Alan. In many cases, the second provider will only be able to take on apprentices where the employer is prepared to pay some extra money. I can see why the ESFA don’t want to pay out extra because of the first provider’s poor delivery, but obviously the second provider and the employer don’t want to either. The first provider needs holding accountable really. It’s pretty awful if nobody will take on these abandoned apprentices because they can’t afford to.

    What would happen if the employer backdated the stop on their DAS? Would it claw back money from the first provider?

     
    #314756

    Alan Taws
    Participant

    When a provider goes bust there’s typically a period of several months where closure is managed and within that period a lot of staff will leave early rather than hang on for redundancy. It becomes very difficult to ensure adequate staffing is in place right up to the very end but you can guarantee that the provider will continue to draw down funding for as long as they can hope to – they have nothing to lose. The quality of delivery and progress is going to suffer and it just seems unreasonable to disregard the impact of that poor delivery on both the employer and any future provider attempting to pick up the pieces.

     
    #314771

    Ruth CJ
    Participant

    Service Desk said speak to your provider manager to complain. If we all do, we might make a difference.

     
    #314780
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