The government’s ambitious expansion of the apprenticeship programme could be damaged by funding delays, it has been warned.
The Skills Funding Agency (SFA) has written to training providers informing them it cannot meet any skills programme growth requests until after the Budget on 8 July.
SFA rules allow providers to over-deliver on their contracts at their own risk. They can then apply for extra funding up to three times a year to cover the costs of extra training.
But future levels of funding could be hit by any savings announced in the Budget, which could deter providers from delivering training for which they could end up out of pocket.
The freeze on providers’ contract values includes 16-18 apprenticeships, as well as traineeships and post-18 apprenticeships.
No growth caps are usually applied on these contracts if the provider can show evidence of demand from young people, but the Association of Employment and Learning Providers (AELP) said that many providers will not be able to deliver the growth they predicted because of the delay.
The SFA’s letter states that when growth requests are eventually granted, apprenticeships and traineeships will remain the priority.
In the Queen’s Speech last month, the government announced new legislation that will require ministers to report annually on progress towards meeting its key pledge to create three million more apprenticeships in this Parliament.
Stewart Segal, chief executive of the AELP, said it was disappointed at the news and the late notice for providers.
“The delay will cause problems for prospective apprentices and employers who have made the commitment to the programme but will now not be funded,” he said.
He said training providers have to make commitments to employers before contracts are confirmed and take “calculated risks” based on experience.
“Short notice changes like this will cause major issues,” he added. “Even if notification is given soon after the Budget, there will not be time to deliver the growth by the end of the year.
“This is the first time for many years where funding for 16 to 19 apprentices has been restricted.”
He said the delay also came at a time when many providers were planning to increase the numbers of traineeships, and said many young people and employers would not be able to delay the start of their programmes.
“This decision is a good example of the AELP view that constant changes to contracts with little or no notice are the major barrier to expanding the apprenticeship programme.
“Attempts to engage more employers will be affected by these short-term decisions. If training providers were given a more secure contracting process, we would be able to engage more employers and deliver the growth we need.”
An SFA spokesperson said it was "awaiting the outcome of the Chancellor’s July budget before communicating the outcome to providers who have submitted in-year growth requests to ensure that in-year funding is considered in line with government’s wider financial position".
"We are still committed to funding high-quality apprenticeships; so far, in the 2014 to 2015 funding year, we have fully funded credible growth requests at performance points 1 and 2, recycling £50 million funds into apprenticeships and traineeships," the spokesperson added.
“Colleges and providers are responsible for managing their funding allocation or contract value as set out in the Operational Performance Management Rules 2014 to 2015 and funding agreements.”