Linnea Clarke

Employer Co-investment - Apprentices

Created

Hello

Currently we ask our Employers for the full contribution upfront, due to issues with Employers not paying later down the line or learners withdrawing early.

For 22/23, these funding rules:

P212 Throughout the financial year you should regularly: 

P212.1 Have collected the matching co-investment from employers; and 

P212.2 Report the cash value, on the ILR, of total employer contributions received (see paragraph P210.3).

 

Does this mean that for all co-investment funded apprentices we must have at least the matching co-investment payment from the Employers that is expected by the ESFA?

For example, if we have a new start that we need an Employer contribution for and the Employer has not paid the contribution, we cannot fund the start? Because if we released the start for funds we wouldn't be matching the co-investment the ESFA require from the Employer?

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Ben James

As a matter of procedure, you should aim to collect them in a timely manner. You will likely still get your OPPs, but the ESFA monitor the reports and may withhold payments. See the Technical Funding Guide;

69. To earn the completion element, you must have collected and recorded at least the amount of co-investment required for the whole programme up to the month before the completion payment is due, not counting any co-investment which might 
be required for the completion element itself. This gives some flexibility for levy paying employers whose apprentices have gone into co-investment in the final months. 

70. We will monitor to ensure that you record the final co-investment payments from employers on the ILR; this includes the co-investment of the completion element. 

71. If you have not recorded the necessary co-investment payments on the ILR we may withhold your monthly instalments until you have received these payments and you have recorded them on the ILR. For more information about recording co-investment, refer to the Funding Rules.

72. We will provide you with monthly reports to show which apprenticeships we have fully funded from the employer’s account and which apprenticeships will need co-investment. These reports will tell you how much you need to collect from each employer for co-investment and for which apprentices. We will provide information to employers through the apprenticeship service on how much they are due to pay each provider for co-investment where applicable.

(Edited)

Steveh

It is worth pointing out that there have been precisely 0 reported instances of ESFA withholding on-prog payments due to lack of co-investment being reported and this rule has been there since pretty much the beginning of the Levy.

Completion payments they DO hold back, but they haven't got the infrastructure to hold back on-progs...

Linnea Clarke

Thank you for your reply that is really helpful. 

Linnea Clarke

Yes we have had scenarios where we have struggled to get the matching co-investment payment from Employers and still continued receiving OPP's. What would be the right thing to do though? I suppose from the rules it would be to ensure we can match the co-investment payments from Employers that are expected so to minimise that risk of potential OPP's being held back (if the ESFA decide later down the line to get the infrastructure to withhold payments?).


Will we get penalised by the ESFA or by auditors if we do not have the matching co-investment at audit?

Steveh

I think in terms of audit, if you can show invoices and that you are chasing, you'll probably be OK, potentially a management letter point that you need to do better, but nothing more serious. They'd only get annoyed if you hadn't actually tried to get the money!

ESFA's main big stick for this is withholding completion payments.

Ruth Canham-James

Just administratively, it's almost impossible to keep up with co-investment due from levy payers who fall into insufficient funds. We have a really robust process of checking and invoicing quarterly, and I will defend that process confidently! If we invoiced monthly, we'd be sending out invoices for £3.27 in some cases, and that will really irritate employers.

For non-levy, this is why we charge up front. Some pay quickly, some don't. Preventing the apprentice from starting until they'd paid, or stopping their apprenticeship if the employer had agreed a payment schedule, and fell behind, would be an utter disaster for the apprentices and the employers. Just make sure you have a clear process for how long you are prepared to continue to deliver if they aren't paying. We have a cut off by which we will withdraw if the employer hasn't paid. We will always have lots of evidence we attempted to collect the co-investment that I would expect an auditor to accept.

Ben James

Agree with both Steveh and Ruth Canham-James. As with much of the policy in the funding rules, as long as you're making best efforts and can evidence that you have a robust process in place, you'll not really go far wrong.