The children’s charity Barnardo’s has lost its government contract to provide apprenticeships after a change in tendering rules, putting apprenticeship opportunities for up to 70 potentially vulnerable young people at risk.
As an apprenticeship provider for the past 30 years, Barnardo’s has overseen the training apprentices received from employers and offered the associated classroom learning.
But the charity will not be able to take on any new learners from April, when its current contract expires, and those who have completed apprenticeships through Barnardo’s will be unable to move on to the next level unless they find new providers.
Javed Khan, chief executive of the charity, which was rated "good" by Ofsted in the last inspection of its apprenticeships provision in 2015, said it had been penalised for being honest about the level of provision it could realistically deliver.
The introduction of the apprenticeship levy has led to a shake-up in the way contracts for apprenticeships, previously handed out by the Education and Skills Funding Agency, are allocated.
The apprenticeship levy is paid by employers with wage bills of more than £3m. Each of these employers is then able to choose an organisation to provide their apprenticeships from a register of approved providers.
But until April 2019, contracts to provide apprenticeships to smaller, non-levy-paying organisations will still be allocated by the ESFA, and changes in the requirements have meant that organisations including Barnardo’s have been stripped of their contracts.
The new rules require the bidding organisations to be seeking a minimum contract value of £200,000, but provision is considered on a pro-rata basis and is therefore weighted differently in different geographical areas.
Although Barnardo’s bid for more than £200,000 of provision, the pro-rata weighting means its bid technically fell below the minimum threshold.
Khan said: "We have extensive and very successful experience of working with vulnerable young people, often with multiple and complex barriers to taking up work.
"However, we have been penalised for bidding for funding to deliver an apprenticeship training contract that we felt we could realistically provide, rather than overbidding for something that we could not deliver."
A Barnardo’s spokesman told Third Sector that 60 to 70 learners aged between 16 and 24 were likely to be affected. The charity provides apprenticeships nationwide, but focuses on North Tyneside, Bradford and Birmingham.
Khan said: "Denying a contract due to pro-rata rules, rather than the quality of the tender, means the ESFA will be losing a great opportunity to deliver high-quality and successful apprenticeships to more young people in need.
"We urge the agency to reconsider and award a £200,000 allocation so we can continue to provide apprenticeships next year."
The Association of Employment and Learning Providers, the umbrella body for independent learning providers, said in a statement that Barnardo’s could maintain its apprenticeship programme if it became a subcontractor to another large provider or a college, but would have to pay 20 per cent or more of the funding in management fees, reducing the amount available to spend on delivery.
The AELP called for an urgent review of the procurement policy, warning that some areas of the country would be left without key apprenticeship opportunities and experienced providers would almost certainly go into administration.
It also accused the government of awarding 250 contracts to new providers with no experience of apprenticeship delivery.
Mark Dawe, chief executive of the AELP, said: "The current implementation is damaging so many providers and will set back progress in improving productivity and social mobility. Ministers have to think again."
A spokeswoman for the Department for Education said: "All contracts were awarded following a rigorous procurement process, where all providers were treated fairly and evaluated equally. The results of this procurement will allow employers across the country to access high-quality training to support their apprentices."