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Opinion: 'Welcome to the rollercoaster of applying for FE funding'

The managing director of West Berkshire Training Consortium explains the 'nerve-wracking' process of applying for cash from the Skills Funding Agency

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Now that the growth requests are all done for Period 1 (which should have been concluded in January), it's time to reflect on another rollercoaster of a ride when it comes to funding rounds. For us at West Berkshire Training Consortium (WBTC), it has literally been a white knuckle ride and I don't mean on one of those state-of-the-art Disney World attractions. I mean more like on your rundown seaside rollercoaster where bits fall off the carriage and a 16-year-old is the health and safety manager.

Perhaps unbeknown to many, particularly grant-funded providers, being an independent provider is a nerve-wracking business.

Stage 1 – The Allocation

This is the first part of the terrifying ride. It's the part where your rickety rollercoaster carriage is dragged up a 70-degree angle. You notice that the seatbelt is frayed and the locking bar...doesn't lock. Meanwhile, you're rising slowly but surely to a death-defying drop.

It's April. You read your allocation and you realise that there isn't enough to cover the carry over, never mind any new starts! You make calls, you write emails, you lobby your MP (this actually works, and all credit to our local MP, Richard Benyon, for supporting us). How can we be expected to run a business if the allocation doesn't bear any relation to actual performance? Eventually, you get a response from the Skills Funding Agency (SFA) in September: "There is an issue affecting a very small number of providers which we recognise and we are working on it."

Stage 2 – The Waiting Game

You've reached the top of the rollercoaster. The clanking of the machinery is replaced by the eerie silence as you coast to the stomach-churning drop. You look around and think, "This is a bit higher than I expected" as a cold wind whistles past your ears.

It's October now and the silence from the SFA is deafening. Your recruitment has gone well, but now you'll have your contract capped by the end of February. You're faced with the prospect of not being able to pay for On Programme Payments (OPPs) and completions.

Stage 3 – Aaaarrgghh!

With a scream, you tear down the drop and feel your bottom come off your seat. You grab the person next to you, as a wheel flies off your carriage and crashes below on to the hook-a-duck stall.

It's November, and now the number of new starts you have signed up means that you run out of money before receiving the outcome of your growth requests. You and your subcontractors start to ponder the unthinkable. How will you pay for existing learners, never mind new starts? It's a horrible position to be in, and you keep reassuring your colleagues and yourself, "We will get through this."

Stage 4 – A Sigh of Relief

Amazingly, you're alive! You've been up, down and looped the loop. There are almost no casualties as the rickety rollercoaster shunts to a halt. Everyone looks shell-shocked, and some need their fingers prying from the so-called safety bar.

It's January, and the growth request response finally arrives (at least for the adult skills budget). The notifying email sits unread in your inbox, like a letter from the tax man. Is this going to spell disaster? No, it's good news and in the nick of time the money turns up and, for the first time since the allocation was posted, you can sleep easy – for now.

This is the reality of being an independent provider. Over the past three years, we have bank-rolled apprenticeships with our funds while we waited for growth. We have literally gambled on the funding being awarded. Naturally, it is our own choice. We could halt recruitment and work within the allocation. However, if the allocation only covers existing learners and allows for no new starts, then halting recruitment is a closedown by another name.

Incidentally during this period, to protect our supply chain, here at WBTC we actually guaranteed our subcontractors' income. Yes, we, the prime, underwrote our subcontractors' OPPs and completions even in the light of capping.

The start of levy funding and the reform of apprenticeships naturally changes the landscape. However, could it replace one nightmarish ride with another? The terror of SFA funding rounds focuses on total allocation. The terror of levy funding and mandatory cash contributions will be cash flow. Providers will need to find a way to account for late payments by employers. If the funding regime follows a 2:1 ratio, then providers will not be able to access the government contribution until the employer pays up. The rollercoaster becomes more of a ghost train with all sorts of nasties waiting to frighten us providers.

As a charity we're required to keep a substantial cash reserve, and from time to time, this has been a buffer for us. Providers without this reserve, and who will be dependent on employer cash payments, may need to build up their line of credit or their bank balance to cushion them under the new regime. Otherwise, like us, they'll be bank-rolling apprenticeships for months at a time.

So now we are waiting for the 2016-17 allocations. I'm in the queue and I have got my tokens for the latest nail-biting experience. I'm a bit dismayed to see that one of the cars has scorch marks along the side and the health and safety manager has been replaced with someone younger. I should stick to the giant teacups but hey, I work in apprenticeships; I've got no choice but to ride the SFA funding rollercoaster once again.

Matt Garvey is managing director of West Berkshire Training Consortium. He tweets at @WBTCNewbury

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