'Without support, training providers won't survive'

Government must urgently provide funding for training providers or many will go under due to coronavirus, says leader
6th April 2020, 2:15pm


'Without support, training providers won't survive'

Coronavirus: 'without Government Support, Many Training Providers Will Not Survive'

"We want to be there when all of this is over. But if the government doesn't buy us a bit of time over the next 12 weeks, lots and lots of providers will not make that journey," says Sue Pittock, chief executive of Remit.

Remit is an independent national training provider - one, like many others in the FE sector - that is feeling the harsh knock-on effects of the coronavirus pandemic. It offers apprenticeships in the automotive, IT, hospitality, retail, business, food and care sectors to more than 6,000 learners, along with employability programmes to the unemployed. 

How much longer it will be able to do so is, its leaders believe, up in the air. 

Background: DfE 'happy for apprentice providers to go bust'

News: 1 in 6 training providers warn they may go bust

More: 'It would take years to rebuild apprenticeships'

As Covid-19 continues to make huge dents to businesses, many are cutting back on spending. Including, it seems, government supporting independent training providers to deliver apprenticeship programmes. 

According to Pittock, the government has told levy-paying businesses that they should consider pressing a "stop or pause button" on payments for apprenticeship programmes. 

"I do not believe the government's intention was to make things more challenging for ITP's during this crisis, but unintentionally the ESFA [Education and Skills Funding Agency] has not helped at this point, as there is constant messaging to employers regarding considering 'hitting the stop or pause button for payment'.  

"All of our levy clients have been contacting us to say: do I press the stop or pause button? Is that what I have to do? Is that advice from the government? We're saying no, don't do that, we can work with your learners while they're furloughed. But even that wasn't clear for a number of days. 

"The employers have got control right now: 85 per cent of our client base are levy clients, and they can press stop or pause on our income at any time, and we won't be able to even pay the wages. The job retention scheme means we have to pay employees first and then claim this back off the government. If they cut our revenue off, we can't pay the wages, and we would have to exit everybody. 

"My biggest fear is knowing the government has empowered businesses to be able to hit this stop or pause button. If they do, we could end up not being able to pay people, not being able to service the learners and then, quite quickly, most providers, if that was to happen, would go bust quite quickly."

The impact of coronavirus on apprenticeships

Pittock says she has one plea to the government: to look at the average funding rate the companies had in 2019 and give them one-twelfth of that funding in April, May and June. That, she says, will be the difference between many surviving and going bust.

She argues that Cabinet Office guidance says that if the provider is at risk, they should be supported until the end of June. So far, no funding support has been announced by the Department for Education or the Education and SkillsFunding Agency. 

"ITPs are an important part of the ecosystem for education and need to be there when this is all over," says Pittock. "But if the government doesn't buy themselves and us some breathing space over the next 12 weeks, many providers will not make that journey. It would take years to rebuild the capacity and service that we offer at a vital time the economy and British business would need us. 

"Our plea to the government is to honour the Cabinet Office guidelines and inform the suppliers they believe are at risk, that they will continue to be paid as normal, even if service delivery is disrupted.  This could be done by paying an average profile based on the last seven months' results. Wales and Scotland have been really supportive. The devolved areas like GLA, West Midlands, Liverpool, Manchester have also been really supportive. 

"The only ones that have not come out and said anything yet is the ESFA. Most of our funding comes from the agency, we're reliant on them. The ESFA doesn't need a cash bailout for this money. The money's there, it's in the pot and needs to be used in this time of national crisis if we do not want to see such a vital part of our education provision go. We are a vital part of this ecosystem.

"The Cabinet Office guidelines are there to support suppliers. If government are worried some do not need help, this support could be means-tested for the small minority who do not need urgent support," Pittock says.

"You read that guidance and think, why? Why won't you do this? I can't understand the logic in this unprecedented time during a national crisis."

The future for training providers

Last week, the Association of Employment and Learning Providers surveyed its members about their future. The research showed more than half (55 per cent) believe that they would have to downsize, almost 30 per cent said they will mothball operations, and 18 per cent said they might close altogether. AELP said that only a few were confident about their survival.

Remit, Pittock says, will "definitely have to downsize without a doubt if nothing changes". A plan for how this will work - however painful to put together - is underway. 

"We're going through the thought process now. Do we exit some colleagues or furlough them? Which ones do we keep? Can we get some colleagues to try and take reduced hours? As a provider that has not made anyone redundant in 11 years, it's not a decision you want to make lightly," she says.

"It would take years to rebuild the loss of capacity for the sector without some interim financial support. If we are forced to consolidate too quickly, we absolutely know that apprentices will not be working with the same tutor or the same development coach. They'll at best get somebody different or no support at all. We know that when learners see a change, that's a big wrench for them because they've built up a relationship with somebody, so that's not ideal either."

Leading from the front

Training provider leaders face serious decisions: ones that just three months ago, would have seemed unthinkable. But Covid-19 has changed so much of our world and many businesses are struggling to survive. Pittock is determined to lead Remit to the other side of this. 

"There is no time for emotion during a national crisis. As a leader, my role is to work with government to try to find the best solutions to see this vital part of our education ecosystem survive," she says.

"Things are very fast-paced at present and very uncertain.We need some breathing space to do this. We have a duty of care to our learners, colleagues and to ensure the wider economy will have this service after Covid-19. After all, we have one of the best education systems in the world - we should fight hard to retain it."

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