Understanding employer co-investment when impacted by provider termination

Further education and training providers Provider Closure Employer Apprenticeships Provider Termination Funding Co-Investment


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From: Education and Skills Funding Agency

Co-Investment overview

If your organisation does not pay the apprenticeship levy, (or does pay the apprenticeship levy but has used all its levy funds), you will get significant government funding to support your commitment to apprenticeships.

You must make a financial contribution, called a ‘co-investment’, alongside this government funding.

This cash co-investment contribution payment is made directly to the training provider as a commercial transaction.

If your apprentice started their training after 01 April 2019 the rate of co-investment is 5% of the total price of the apprentices training.

If your apprentice started their training before 01 April 2019 the rate of co-investment is 10%.

The government covers the remaining 90% or 95% of the cost.

Note: If you are a small employer with fewer than 50 people working for them you may not have needed to contribute the 5% co-investment payment if you employed an apprentice aged 16 to 18 or an apprentice aged 19 to 24 who have previously been in care or who have an education, health, and care plan.

Co-investment when your apprentice transfers to a new provider

When you transfer your apprentices to a new training provider, you and the new provider will negotiate a new price for the delivery of your apprentices remaining training and assessment.

The co-investment rate charged by the new provider will stay the same as what it was at the start of your apprentices apprenticeship programme.

You will have to pay a 5% or 10% co-investment contribution to the new provider based on the agreed new price.

If you have already paid the full co-investment to the previous provider ESFA does not expect you to pay it again to the new provider.

Instead, you will need to show your new provider evidence that you paid the co-investment payment to your previous provider.

The new provider can request permission from ESFA to be exempt from collecting the full co-investment from you.

Recovering co-investment money from your previous provider

If you have paid some or all of the co-investment payment to your previous provider before their funding agreements with the ESFA were terminated, you could potentially get a refund for the co-investment contribution you paid them for training they did not deliver.

If this situation applies to you, you should try to recover the money you might be owed.

When a providers funding agreements with ESFA are terminated, they are required to review whether they should reimburse employers for co-investment contributions paid to them for training that was not provided.

If you believe you are potentially entitled to receive a refund from your previous provider for the co-investment contribution you paid to them for training they did not provide, you should:

If your previous provider is still trading, you should get in touch with your previous provider to discuss this.

If your previous provider is no longer trading, you should contact the providers legally appointed representative (insolvency practitioner) to request a refund.

You can look up the company name of your previous provider on the Gazette (Official Public Record) website. You can then review the record to find the contact information for their legally appointed representative.

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