Understanding apprenticeship funding when transferring apprentices to new providers

Further education and training providers Provider Closure Employer Apprenticeships Provider Termination Funding


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From: Education and Skills Funding Agency


This article offers information for employers to help them understand apprenticeship funding when transferring apprentices to a new training provider.

This guidance applies to apprentices who started their apprenticeship after 1st May 2017.

Funding Band Maximum (FBM) and Total Negotiated Price (TNP)

Each apprenticeship standard has a funding band maximum (FBM) applied to it.

The funding band confirms the maximum value of funds that the government will contribute to the cost of an apprenticeship, across all instances of the same apprenticeship.

The funding band maximum for each apprenticeship standard is published on the Institute for Apprenticeships and Technical Education (IfATE) website.

If your apprentice needs to transfer to a new provider to complete their apprenticeship, you will need to agree a new total negotiated price with your new provider to fund the cost of the remaining training.

The total negotiated price is the agreed cost for all the training and assessment involved in the apprentice’s apprenticeship programme. It reflects the provider's expenses for delivering the apprenticeship programme.

Apprenticeship costs are mostly funded through the apprenticeship service, up to the funding band maximum of the apprenticeship.  The exception to this is where employer co-investment funding is required.

Understanding how training providers claim apprenticeship funding

Apprenticeship training providers receive apprenticeship funding in monthly instalments to ensure that funding continues to support the apprentice throughout their apprenticeship.

A portion of the funding, equivalent to 20% of the total negotiated price (or the funding band maximum, whichever is lower), is held back until the apprentice completes their apprenticeship, including the End Point Assessment.

The ESFA then calculates the monthly instalments for providers based on the remaining 80% of the funding. These instalments are spread evenly over the planned duration of the apprenticeship program.

The planned duration is determined by the apprentice's learning start date and learning planned end date.

Employers can pause or stop the provider from receiving the monthly instalment through their apprenticeship service account. If the employer does not take action to pause or stop the payment, ESFA will automatically release the monthly instalment to the provider.

Employer responsibilities

As the employer, you have the following responsibilities:

  • Keeping track of your chosen provider's delivery of your apprentice's apprenticeship training
  • Monitoring your apprentice's progress
  • Managing the funding for your apprenticeships through the apprenticeship service.

Employers can pause or stop the provider from receiving the monthly instalment through their apprenticeship service account.

As part of the apprenticeship programme, you, as the employer, along with the apprentice and provider, should have signed a commitment statement outlining each other’s roles and responsibilities throughout the apprenticeship.

Regular reviews should have been conducted to assess the progress of the apprenticeship and to promptly address any concerns regarding delivery and/or progress. Working towards ensuring a positive outcome for your apprentice.

As the employer, you have the choice to change training providers if the quality of training provided to your apprentices falls short of your expectations.

This empowers you to protect your organisation from situations where the training received, and progress of your apprentice, does not align with the payments being claimed by the provider.

The apprenticeship service is committed to ensuring transparent funding transactions, providing employers with the opportunity to review them.

It's important to note that the apprenticeship funding policy clearly states that the government cannot invest in any apprenticeship programme above the funding band maximum.

Agreeing a new total negotiated price when your apprentice transfers

You will need to discuss and agree a new Total Negotiated Price (TNP) for the remaining training including the cost of End Point Assessment (EPA).

This process is standard for any employer who takes on an apprentice.

You will have to work closely with the new provider you have selected to agree the right price.

Initial assessment and recognition of prior learning

Your new provider will conduct an initial assessment. They will assess prior learning and experience which involves comparing the apprentice’s existing knowledge, skills, and behaviours with those needed to achieve the occupational standard. 

As the employer you should be involved in this discussion, you should:

  • help identify areas of the job role that the apprentice might already be competent in
  • challenge areas in which you believe the apprentice requires more training
  • support the apprentice with providing evidence of their competence, if applicable

The provider will also review the evidence in your apprentice's portfolio, which they should have collected during their previous instance of the apprenticeship training.

Following the initial assessment, the provider will conclude whether your apprentice has any relevant prior learning and experience.

If so, this will be recognised, and the cost of the remaining apprenticeship (and the duration) should be adjusted considering any knowledge or skills the apprentice has already gained.

The provider will then confirm how much additional training the apprentice requires to finish their training and be ready for their EPA.

Value of funding remaining review

It is probable that your previous training provider has already used up some of the government funding available for your apprentice's training. The money left to cover the remainder of your apprentice's training is called the value of funding remaining.

A provider can only claim the remaining funds within the funding band maximum from ESFA, accounting for funds already claimed by any previous providers. ESFA will not provide additional funding above the funding band maximum.

Your new provider will review how much funding is remaining to cover the rest of your apprentice's training.

They will look at the funding remaining, how much more training your apprentice needs, and how much the training costs them to deliver.

Then, they will suggest a price for you to consider. Sometimes, this price might be higher than the amount of funding remaining.

Negotiating a price

You will then need to negotiate the cost of the rest of your apprentice's training with your new training provider. You might be able to discuss lowering the price if required.

Price reductions could potentially be considered in the following example scenarios:

  • If you have several apprentices transferring some with more funding remaining than others
  • When most of the apprenticeship is delivered online (as there will likely be a lower delivery cost to the provider)
  • Providers might potentially be more inclined to lower the price to uphold a positive relationship with you, especially if you are a returning customer or intend to work with them in the future

Paying above the funding band maximum

If your new provider determines that your apprentices have not progressed enough compared to the funding claimed, and there is not enough money left in the funding band maximum to cover the proposed price then, you, as the employer, are responsible for paying the amount above the funding band maximum to your new provider. 

Any funding required above the funding band maximum cannot be funded from the apprenticeship service account or co-investment. The payment is made directly to the provider.

Approximate value of funding remaining

This guidance applies to apprentices who receive funding through your apprenticeship service account. It is important to understand that apprentices who have been enrolled on an apprenticeship programme for several years may have been funded differently.

Calculating the remaining value of apprenticeship funding can be complicated because there are many factors that influence how much funding is left.

This guidance aims to help you understand roughly how much funding is left so you can negotiate with your new provider.

However, keep in mind that the funding amount may change when the apprentice's enrolment is processed through the apprenticeship funding system. For example, when you add a new commitment to the apprenticeship service or when your new training provider submits data to the ESFA to claim funding for your apprentice.

Understanding approximately how much funding has been claimed by other providers

To understand the approximate value of funding claimed by previous providers, follow this short guide:

  1. Log in to your account
  2. Go to the "Finances" tab
  3. Select the option to download transactions
  4. Enter a start and end date to download transactions covering the entire duration of your apprentice's enrolment on the apprenticeship
  5. Choose the CSV format for download
  6. Once the CSV file is downloaded, open it
  7. The file will display all transactions, including monthly payments claimed by providers
  8. Locate the apprentice's Unique Learner Number (ULN) and name in the report
  9. Filter the report to view transactions relevant to the specific apprentice you are reviewing
  10. Navigate to the total column and calculate the sum of all transactions

You can use this report to review the approximate funding claimed for multiple apprentices across multiple instances of the apprenticeship claimed by multiple providers.

If all apprentices are transferring to the same new provider, you can also filter the report by the name of the previous provider to review the approximate funding claimed for the entire cohort.

Note: If any instance of the apprentice’s apprenticeship training was funded outside of your apprenticeship service account the transactions will not be included in this breakdown.

You can share the approximate value of funding claimed to date with your new provider to inform the value of funding remaining review.

Calculating the approximate value of funding remaining

To estimate the remaining funding, follow these steps:

Subtract the approximate value of funding claimed by other providers from either the Funding Band Maximum or the previous Total Negotiated Price.

You can find the Funding Band Maximum for each relevant apprenticeship standard by searching on the Institute for Apprenticeships and Technical Education (IfATE) website.

Alternatively, if you know the total negotiated price you agreed with the previous training provider, use this value instead of the Funding Band Maximum (use which ever value is the lowest).

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