Many of us still remember with little fondness the last procurement rounds for non-levy apprenticeship funding. Put aside the debacle of the first round, this process saw established providers and colleges left out in the cold despite having empirical evidence of delivering high-quality apprenticeships.

It highlighted the futility of a system that rewards good bid writing over tried and tested delivery experience.

A Herculean task

The recent decision to delay the universal rollout of the digital apprenticeship service came as no surprise to me.

It is a Herculean task aimed at thousands of employers, some of whom engage with apprenticeships but who haven’t the infrastructure to cope with the change.

We can see the shock to the system that accompanied the rollout to the 1.3 per cent of big businesses who pay the levy. Even with their skill, resource and motivation, it took them many months to get used to the system - and many still aren’t there.

So what are the options for funding and administrating the funding of non-levy apprenticeships?

The three options

1. The status quo. Leave contracts as they are and allow those colleges and providers with allocations to continue doing what they do. It may be necessary to revisit the subcontracting rules so that the rest of the sector has an easier route to market. The upside is that this provides stability and continuity. The downside is that it goes against the market philosophy of allowing more entrants to directly engage with employers.

2. Ensure digital accounts are rolled out by April 2020. The IT system has worked for levy-paying employers so there is no reason to assume that it won’t work for everyone else. However, the scale is immense. Providers would worry that current demand could be hit as employers perceive another obstacle in their way. Even with the best will in the world, employers will have to do some things for themselves under a digital system and that requirement could stymie demand.

3. Have a long transition period. Allow employers to opt into the digital system as they are ready. There could be an incentive placed for moving from being a “contract funded employer” to an “apprenticeship service funded employer”. Those who don’t feel ready can continue to operate as they do now. Accompany this with an operational plan that educates employers so that they are ready for a switchover by 2021.

Procuring the funding

If options one or three are chosen then the Education and Skills Funding Agency (ESFA) should think very carefully about procurement.

In my view, a 100 per cent procurement process could have a very destabilising effect on an already-weak employer demand.

There is little point in a process that rewards brilliant bids if, at the same time, it disqualifies brilliant providers. I would, therefore, suggest a split approach to procurement.

£1.3bn apprenticeship levy underspend

Existing colleges and providers have contract extensions and continue to be managed in line with the funding rules. This will provide stability not just for their existing employers and apprentices but also their complex supply chains, too.

At the same time, the ESFA launches a procurement process exclusively for providers/colleges without contracts. They can compete for contracts knowing that they aren’t up against existing contracted providers.

This approach would provide stability and the route for new entrants to the market. Given the underspend sitting in levy accounts - £1.3 billion at the last count - money is hardly an obstacle this time around, is it? 

Let us learn from our mistakes

There has been a catalogue of errors made in the implementation of these reforms. Whether it was colleges being omitted from the register of apprenticeship training providers while bedroom start-ups succeeded or procurements being abandoned, let us learn from the mistakes and make better decisions.

I hope the ESFA genuinely listens this time to people on the front line who have the real expertise. Take this opportunity to approach non-levy funding in a more considered and constructive way.

After all, doing the same thing over and over again and expecting different results, well… we all know where that leads.

Matt Garvey is the managing director of the West Berkshire Training Consortium