Rachel Dennis

Price Amount Above Funding Band Limit

Created

Can someone please explain this to me? From our R05:

Apprentice  Total price applicable to this episode Funding band upper limit Price amount above funding band limit
1 13000 11000 2000
2 16960 18000 760
3 6411 6000 3982.35714

 

No.1 - I understand, we have charged £2000 above the maximum (he was a restart and we used the price maximum applicable to the restart period, not the original period).

No.2 - haven't we charged a price (£16960) below the funding band maximum (£18000)?

No.3 - Started STO209 on 05/12/2023; the funding band maximum is £8000 as of 01/11/2023 and so the agreed price is below this. Additionally, how is the 'Price amount above funding band limit' £3982.35714 when £6000 - £6411 = £411?

If I've misunderstood the point of this data (i.e. to show where you have declared too high a price in your ILR and potentially need to invoice the employer for the difference) can someone explain it, please?

Thansk

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Martin Outlaw

Rachel Dennis 

1) You should not have recorded the additional £2000.

2) & 3) I suspect that in each of these cases the learner has already done part of the standard with another provider. This may also mean that when they started it a different capped rate applied, and you would be subject to the original rate. The ESFA will only pay what funding is left on the standard. You may need to re-negotiate with the employer regarding invoicing them for the difference.

HTH

Rachel Dennis

Thank you. If the employer does not agree to paying the difference, what is the implication other than us not receiving the amount we had planned for - would we lose our final payment - the achievement payment?

(Edited)

Martin Outlaw

Rachel Dennis

If they are levy you would get whatever funding is remaining, up to the capped limit, this would include what is left for an outcome.

If they are non-levy you would need to collect 5% of the value remaining, as you would under normal circumstances. 

Any amount shown as above the capped limit is not of interest to the ESFA, and strictly between you and the employer. If they are not willing to pay at least some of this, then you need to consider the viability of the remaining delivery. 

 

Rachel Dennis

Thank you - we are relatively new to Apprenticeship delivery and I have not come across this scenario before.

They are non levy.

The first is about to Withdraw and so I don't think there is much we can do.

The second is 16-18 so there is no 5% co-investment due on the agreed price. Should we renegotiate the price, taking into consideration the £760 (above funding band limit)? So £16960 - £760 = new price of £16200

The third is 19+and we have collected the 5% of the agreed price (£6411).  Again, should we renegotiate the agreed price using the 'Price amount above funding band limit'. So £6411 - £3982.35 (the 'Price amount above funding band limit' ) = £2428.65. We would then have to repay the difference in the 5% contributions.

Or do we leave all negotiated prices as they are and just charge the 'Price amount above funding band limit' to the employer (or at least part of it)?

 

Martin Outlaw

The main point is to consider whether or not the delivery of the standard is viable at the level of funding remaining.

2) The ESFA will pay £16200, you can agree a new rate with the employer, or you can invoice them for the £760 or any compromise value between the 2, eg invoice for £380, splitting the difference.

3) The ESFA will pay their 95% share of the  £2428.65 being £2307.21, and you already have the remaining £121.43 from the employer. You have also received  a further £199.12 from the employer (3982.36 * 0.05). The decision now becomes, with a reasonable assessment of how much delivery is still required to get this learner through their EPA, what is the smallest amount of money you are willing to do this for.

a) £2428.65 - repay the additional 5% £199.12

b) What you have received from the employer so far + everything you can get from the ESFA totalling £2,627.76 , no need to do anything else. 

c)  £6411 as per the original agreement - you would need to invoice the employer for 100% of the difference, an additional £3783.24. I would be very much surprised if they agreed to this.

d) Somewhere between b & c , an additional invoice to the employer of such a value that they can accept, and allows you to deliver the standard at no great loss to yourselves. This will depend on your relationship with the employer, whether you have any other learners with them, or whether you are willing to accept this as a loss leader to generate good will and potential for further engagement.

Rachel Dennis

Thank you Martin for such a detailed response - much appreciated.

I will take your suggestions to the team so that we can agree our next steps (quite probably option b) and to develop a plan so as to avoid this happening again (if at all reasonably possible).

Thanks again for all of your help - Rachel