Important information if you are a company planning to use apprenticeship levy money to run a level 3 5 or 7 Certificate or Diploma course, or if you are a training provider thinking of running these for your customers…
At first I thought it was viable – you claim back 9k per learner from the Levy, and so with 10 people you can run a Diploma programme, easily covered by the 90k, which would be great.
So why not??
1
There is a surprisingly small profit margin. Although the customer is paying ÂŁ9,000 per learner out of the apprenticeship levy pot, (money they have been forced to pay in), so that’s ÂŁ90,000 for a group of 10, it costs very nearly that much to run the program because there is so much bureaucracy and inspection involved on top of just the normal teaching. For example about ÂŁ18,000 goes to ESFA for the final inspection (End Point Assessment). Â A normal diploma would cost about 30k, but with all the levy hassle it takes the cost up to just under 90k! Â It really isn’t profitable to run one of these programmes.
2
If one of the delegates drops out their ÂŁ9,000 is taken away, so all you need is one person to drop out and that’s more than all the profit gone. And we know from experience that somebody always drops out. Somebody’s cat is ill, or they leave the company or they become very busy in their job, or it’s harder then they expected, or something like that and then the whole thing is non-viable – and that is quite a likely problem, and is out of my control, and nothing to do with the quality of teaching.
3
The people inspecting the quality of the program are the ones who have to pay out the money ~ and they don’t want to pay out the money so they will be looking for any tiny excuse not to pay. Even with the best will in the world we won’t be perfect and they will find reasons to not pay and then the whole programme, which has been partly delivered by then, is not going to be funded at all. They can even claw back some or all of the money paid so far. And if we are trying to be a little bit lenient on the “one day per week” rule they will find that out and they will then not pay us.
4
The Inspectors will be talking to the course delegates, so all you need is one person to tell them that the admin isn’t perfect, or one person to tell them that they are not really spending a whole day a week on the course, and then the funding is gone. And we know from experience that a small proportion of learners are always bitter about their inability to manage their time or write the assignments properly however much help you give them  So this is bound to happen
It is all very risky and for such a small profit margin it’s just not worth the hassle. I suspect that all of the other training providers are going to gradually realise this, either before they start or halfway through their first program (nightmare!).
So the result is that the money that companies have paid into the levy is going to be very difficult to get back out. Perhaps this was the government’s intention originally, perhaps the levy is really just a half a percent tax on large companies. Either that or it’s a very badly designed scheme because many companies won’t get some or all of the money back out of the scheme, and even the few companies who manage to get a levy scheme up and running are not getting good value for the money that they have paid into the levy. They are only getting a small amount of training and a large amount of expensive bureaucracy for their money. Just ask why a diploma programme for 15 people normally costs ÂŁ20-ÂŁ30,000 but under the levy it costs ÂŁ90,000….??
To be honest I feel bitter for my customers who have had this money taken off them and then they can’t use it for anything that they want , Â And frustrated that there could well be less proper training done, because the levy is soaking up money which could be spent on straightforward training ~ which is what companies actually need and also what they want.
I hope this article helps people who want to know more about the subject, even though it’s not very good news.
CC
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