Getting your apprenticeship costings right is essential for ESFA compliance and for operating a financially sound apprenticeship programme
Though every apprenticeship standard has a maximum funding band, each provider may have their own composition of what the ‘training price’ is and what the price is for the ‘end-point assessment’. They are variables, so with no fixed price, compliance is a very important topic for apprenticeship providers, because if you don’t follow the rules, you could risk funding clawback.
In this blog, we set out the key funding rules you need to be aware of when recording and documenting the price of an apprenticeship.
We’d also encourage you to join our deep-dive Apprenticeship costings 2023 – 2024 Webinar Series where we’ll help you to develop robust costing models that you can use for the apprenticeships you deliver.
Checklist
The evidence requirements have a number of core rules that you need to follow. These are summarised in the apprenticeship funding rules, but below we’ve highlighted some of the key points:
Agree the training price
You must agree the training price with the employer. This is the price for the training activity that readies the apprentice for gateway and end-point assessment. This excludes the end-point assessment price. The training price will be documented in a written agreement that is signed by employer and provider. This agreement must be updated as required if there are any changes to the price or the apprenticeship.
Ensure you take account of prior learning
The training price for the individual apprentice must account for prior learning and experience of the apprentice. You must not charge for any training that the apprentice does not need or has already achieved. If delivering to your own employees this price can only be the cost price of the activities, you cannot profit from them only pay for their cost.
Ensure subcontracting arrangements are clear
The training price must also include any subcontracted training that you use to deliver the apprenticeship, and be clear about what that comprises. You must have a written agreement with any subcontractors that meets the funding rules requirements.
Agree the end-point assessment price
You must agree the assessment price with the end-point assessment organisation (EPAO) and get the employer’s agreement to this price. You must not record the assessment price in the TNP2 field of the ILR until you know what it is. You must also have a written agreement with the EPAO that meets the funding rules requirements.
VAT
You can only charge VAT on co-investment and activity that is not funded by the ESFA. You must not charge VAT on any funded activity or on the assessment price.
Provide a breakdown of the training price
At the start of the apprenticeship, you must provide the employer with a breakdown of the training price in the eligible cost categories including the values allocated to ‘off the job training’, ‘materials and consumables’, ‘peripheral costs’, ‘programme governance, management & administration’ and ‘initial assessment’.
Collect co-investment
You must record co-investment collected from the employer regularly and keep evidence of payment. You must also collect any subsidy control declarations and waiving of the employer contribution for small employers if applicable.
If price changes get new agreements
If there is any change in the training price or the assessment price during the apprenticeship, you must document the reasons for change and get the employer’s agreement to it. You must also update the ILR and the written agreements accordingly.
These are some of the main evidence requirements that you need to meet when it comes to price recording and funding rules.
Apprenticeship Costings 2023-24 Webinar Series
To understand the ‘how’, join SDN Strategic Associate and compliance expert, David Lockhart-Hawkins, on our apprenticeship costings webinar series.
Looking beyond compliance, we’ll help you develop a robust costing model that is both ESFA compliant and helps you deliver financially sound apprenticeship programmes.