Understanding employer co-investment when impacted by provider termination

Overview

This guidance explains how co‑investment works, what happens when an apprentice changes provider, and how to recover payments if training was not delivered.

Contents

1. Co-investment
2. Co-investment when your apprentice transfers to a new training provider

3. Recovering co-investment money from your previous training provider

    

1. Co-investment

If you do not pay the apprenticeship levy, (or you have insufficient funds in your Apprenticeship Service account), you will get significant government funding to support the cost of apprenticeship training and assessment. In this case, you will be required to make a financial contribution, called a ‘co-investment’, towards the agreed price of the apprenticeship. 

Your co‑investment payment:

• is a percentage of the agreed training and assessment price (up to the funding band maximum) 

• must be paid directly to the training provider 

• forms part of a commercial agreement between you and the training provider

The government contributes the remaining proportion, as set out in Apprenticeship funding rules - GOV.UK. The exact co‑investment rate is defined in the funding rules for the relevant funding year and may change as part of apprenticeship reforms. 

In some circumstances, you may not need to pay co‑investment. For example, eligible younger apprentices or priority groups may attract full government funding, depending on the rules in place at the time of the apprenticeship start.

2. Co-investment when your apprentice transfers to a new training provider

When you transfer your apprentices to a new training provider, you and the new training provider will agree a new price for the remaining training and apprenticeship assessment.

If co-investment applies, you are required to continue paying your share of the agreed price for the remaining training, in line with the funding rules for the relevant funding year.

Key points: 

• Co‑investment is based on the new agreed price for the remaining training, not the original total price 

• The applicable co‑investment rate is determined by the funding rules in place for the apprenticeship and remains consistent throughout the programme, unless rules change

• You are only expected to pay co‑investment on the outstanding training delivered by the new provider

If you have already made co‑investment payments to a previous training provider, these do not transfer automatically to the new training provider. Payments must reflect the actual training delivered by each training provider. 

There is no requirement or mechanism for training providers to request exemption from collecting co‑investment. Training providers must collect co‑investment where it is due, based on the funding rules and the delivery they undertake.

3. Recovering co-investment money from your previous training provider

If you have paid some or all of the co-investment payment to your previous training provider for training that was not delivered, you may be able to recover some or all of those payments, depending on the terms of your agreement with the training provider. Co‑investment payments are a direct contractual arrangement between the employer and the training provider. 

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

When a training provider’s funding agreements 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 training provider, you should:

• Contact the previous training provider directly to request a review of the payments made and the training delivered

• Check the terms of your agreement/contract as these should set out the arrangements for refunds

• Request a refund for any co-investment paid for training or assessment that was not delivered

If your previous training provider is no longer trading, you should:

• Contact the training providers legally appointed representative (insolvency practitioner/liquidator/administrator) to request a refund

• Submit a claim in line with the insolvency process

You can search for insolvency information, including appointed representatives, through official public records such as the Gazette (Official Public Record) website and Companies House.

Need support?

Please contact the the Apprenticeship Service if you are having issues. 

If you have a specific query about that is not covered by this information or the guidance, please contact us using the Customer Help Portal.