Commercial Contracts for Apprenticeship Training Providers

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From May 2017 the way apprenticeships in England are funded and structured will change. Government reforms mean that employers will be able to access funding from the Skills Funding Agency (SFA) to place their apprentices with training providers such as Further Education Colleges. This is a reversal of the current system where the training providers are funded directly to offer courses which employers tap into. 

The Government believes that this change will mean providers are more responsive to the needs of businesses. It also raises a number of contractual considerations for providers to take into account to ensure they are ready to thrive in the new apprenticeship market place.

The new structure will be based on three contracts as follows:

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While the Levy Agreement and the Funding Agreement will be standard documents produced by the SFA, the Contract for Services will be a commercial document that will need to be agreed between each Provider and Employer. There are a number of structural reasons why Contract for Services is needed? The principal ones are:

  • SFA Funding Agreement (with Providers) requires one;
  • SFA Levy Agreement (with Employers) requires one; and
  • It flows down requirements of each party’s contract with SFA. For example:
    • The Funding Agreement states that there must be a contractual requirement for training to be paid for by the Employer
    • Information is required to confirm the Employer’s identity
    • Employers must select a relevant assessment organisation which the Provider must sign up to
    • Protections that each party will comply with Funding Rules

In addition whenever Further Education Colleges provide services to an external body, it is a good idea for the commercial arrangements of these deals to be captured in a binding contract. The key areas which should be covered are:

  • Details of services to be provided and standards
  • Location of delivery and use of assets/equipment
  • Duration
  • Payment
  • Indemnities and limits of liability
  • Dispute resolution
  • Termination
  • Confidentiality

For more information on getting your contracts lined up for the new apprenticeship regime, contact Louis Sebastian.

 A Combined Authority 

On 8 November 2016 North West Leicestershire District Council (NWL) approved the Constitution and Operating Agreement which will underpin the Leicester and Leicestershire Combined Authority. This followed in the footsteps of Melton and Charnwood Borough Councils who have also approved the documents in recent weeks with the other constituent councils scheduled to vote on them in the coming months.

This is an important step for the establishment of the Combined Authority and a ratification of the work done by the City, County and District councils (the latter group represented by NWL), as well as the local enterprise partnership, in working together across geographical and political divides for the benefit of the region. The Combined Authority focuses on the areas of long term economic investment/development through closer working in relation to the following key areas:

  • Planning: councils to work together to agree a clearer, long-term framework to meet future housing and employment needs for the whole area and identify future growth locations
  • Transport: focusing on long-term investment in road, rail and other public transport infrastructure
  • Skills: driving and delivering skills and training, to give local people the chance to get better qualifications and employment

Closer working through the Combined Authority is a first step towards greater devolution of powers from central government – bringing decision making closer to the people affected by those decisions. It is also evidence of the growing trend in the public sector for collaboration between bodies to realise economies of scale and improved outcomes for citizens.

There is still a long way to go in establishing the Combined Authority – with the Department for Communities and Local Government yet to lay the confirming Order before parliament – but NWL is pleased to be taking a lead in seizing this opportunity bring power closer to the people. Once set up, the hard graft of ensuring it delivers successful outcomes for the region’s residents really begins.