Prior learning funding reduction

The reduction applies to your total price (combined TNP1 and TNP2), you'd just reflect it only on TNP1 on the ILR. TNP2 would remain, as you've suggested, the same. 

E.g., 

In the above, the reduction reflects 10% of the whole cost (£10,000) rather than just the training cost (£9,500). 

Thanks Ben, that's helpful. Where did you get the example from? Is it something official from the ESFA?

So where the agreed price is above the max funding band, we would still only apply our price reduction to the max funding band? Then add on the surplus after?

e.g.

Agreed price = £12,000

Max funding band = £10,000

10% reduction. So 10,000 - 1,000 = 9,000

Then add the £2,000 extra agreed to the £9,000 = £11,000

Is that right?

It's not an official example, but it's based on the principles within the funding rules. The ESFA also confirmed at their recent 'How to practically implement the new 2022-23 Apprenticeship Funding Rules' webinar that the reduction should be applied to the total price, rather than just the training price. 

Regarding prices above the funding band, your example seems correct, however for starts on/after 01/08/2022 the ESFA no longer require the actual delivery cost to be recorded on the ILR and the apprenticeship service where the cost is above the funding band. See below;

P104 When you agree a price with the employer, your starting point must be no more than the maximum of the funding band for the standard.

P104.1 If the price you agree with the employer exceeds the maximum of the funding band, then you must agree off-line (outside of the ILR and apprenticeship service) how the employer will pay you any difference. We do not need to know about the amount of this difference. You may charge VAT on the difference.

P104.2 The price you enter into the ILR and the apprenticeship service must be the same.

P104.3 The price you enter into both the ILR and apprenticeship service (for TNP1) is the maximum of the funding band, minus the costs of any relevant prior learning that you have agreed with the employer (see paragraphs P25 to P26). This new maximum funding amount becomes the starting point for any further negotiation on price with the employer. Additional discounts could be applied, for example, where the apprentice is part of a large cohort.

P104.4 If either the TNP1 or the TNP2 price changes during the apprenticeship, the reason for this change must be documented in the evidence pack. All price changes must be agreed with the employer

Ah, thank you. I need to catch up on the webinar.

Yes, we shouldn't record anything above the max on the ILR but should have the actual on the funding agreement with the employer. Not sure why the decided to complicate that!

Thanks for all your help.