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Opinion: 'Is the expansion of direct SFA contracts the new Wild West?'

The FE sector must be on the lookout for 'rogue employers' who will seek to exploit funding changes for profit, warns the head of apprentices at the Babington Group

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Is the expansion of direct Skills Funding Agency (SFA) contracts the new Wild West? Last week the SFA announced that the subcontracting of advanced learner loan funding would stop from 2017-18, causing many direct contract holders to review their plans past the end of the next academic year.

After the dust has settled and providers have reviewed the recent announcement explaining the banning of subcontract payments after 31 July 2017, I believe they will have several questions. One is likely to be: "Will payments continue after 31 July for learners who were placed on a 'break in learning' which took them past the completion date specified by SFA?" Queries such as this will clearly need to be addressed by the SFA, but this is not the main point to emerge from this announcement.

"During week commencing 22 February 2016, the SFA will be contacting existing loans subcontractors whom it considers may meet its criteria to access a loans facility directly. These organisations will be invited to apply for a direct loans facility for the 2016 to 2017 funding year."

The above quote, taken directly from the SFA announcement, shows how subcontractors will be approached directly with the offer of, subject to eligibility, a direct contract with the SFA for the delivery of advanced learner loan funding. This would bring many providers who have never held a direct contract straight to the forefront of the proposed funding changes not only for advanced learner loans but also for the proposed apprenticeship funding changes.

This would allow smaller, independent training providers with a minimal track record of delivery to directly access government funding through SFA in the form of advanced learner loans. The SFA itself will be actively looking to engage with these providers and offering them support to access funding themselves and issue a direct contract; even assisting providers to achieve the "capacity and capability" section on the register of training organisations (ROTO).

Looking from the outside it wouldn't be a huge jump to view this as a precursor to funding being accessed directly by providers listed on ROTO who have been engaged by employers to deliver on their behalf.

The idea of using this announcement as a "pilot scheme" before digital vouchers is a sensible one and will allow for smaller providers to access the SFA and also the SFA to access smaller providers. It will be a learning curve for both parties, especially when you consider that the SFA is downsizing and offering voluntary redundancy to its staff.

Reducing the number of staff at the SFA and, currently, only having the requirement of ROTO approval to directly accessing government funding without any other quality assurances could set a dangerous precedent. The requirements for providers to be on ROTO means that employers will believe all providers are equal; this is clearly not the case and could lead to employers becoming disillusioned with apprenticeship delivery to the detriment of all parties in the future.

Quality assurance should be central to the discussions about accessing funding in the future and at the moment there is too little detail being provided. In my opinion, the sector as a whole should be focusing its attention on quality assurance as we seek to protect the value of training and apprenticeships against rogue employers who will seek to exploit these changes for profit.

Adam Barnes is head of apprentices at the Babington Group. He tweets at @adambarnes1983

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