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New “controversial” contracts issued to employers

Published on February 19th, 2017

The Skills Funding Agency has announced that employers will have to sign controversial new contracts as part of the new Apprenticeship standards. An important change will be the strict liability placed upon employers for the appropriate use of funding:

“The SFA reserves the right to recover from the employer any funding paid to a training provider from the employer’s digital account, where the payment of funding or any arrangement between the employer and the training provider does not comply with the funding rules’’.

Whilst the underlying principles of the contracts are relatively straightforward, it does signify a significant shift in responsibility for employers from simply recipients of SFA funding streams via training providers, to active participants in the management and administration of public money.
The new contracts will also add additional complexity to the already multi-layered contracting process which could see a number of contracts as follows:

  • Employer – Learner
  • Employer – SFA
  • Employer – Training Provider
  • Training Provider – SFA
  • Training Provider – Prime contractor
  • Employer/TP – End Point Assessment

So, possibly 6 contracts required to deliver a single Apprenticeship! Further details about the contracts can be found on the feweek website.

This is a significant development and employers will need to be mindful of their legal responsibilities under the new contracts. It’s especially important that they ensure all of their training, whether in-house or external, accredited or non-accredited is fit for purpose and therefore fully compliant otherwise they risk financial clawback under the terms of the contract.

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