The Association of Colleges’ governance summit this week revealed a conflict between how college governors and the AoC expect college-employer contracts to be established once the Apprenticeship Levy comes into effect.
Currently, the Skills Funding Agency (SFA) holds the contract with the college but moving forward, colleges and employers will make a legal agreement between themselves. The SFA will shift to a strictly money-collection and distribution function (as it was originally intended to be) unwilling to intervene in legal disputes or drafting new partnerships between colleges and employers.
Commercial entities
In this new world of levy funding, colleges will effectively be offering a product, and as such, will be obliged to provide a certain level of guarantee. Colleges have been told to prepare as commercial service provider to carry all the liability that you would expect from any other paid service.
The problem with this, is that many colleges are simply not equipped to take on the corporate functions required to operate as a commercial entity, and without any support, only the current course offerings and results can suffer. Unfortunately, it is also colleges and UTCs that hold the key to bridging the UK skills gap, so there is a national vested interest in the right outcome for this situation.
Think like a business
Many colleges will now have the costly process of establishing legal contracts with their ‘customers’, developing their legal functions in-house, possibly recruiting legal staff from corporate backgrounds, arranging indemnity cover for relationships which break mid-course, and marketing their brand- because they will need to both compete to attract company relationships as well as keep them.
Keith Smith, the SFA’s director of funding warned that the existing ‘safety nets’ they provide will change significantly.
However, Julian Gravatt, Assistant Chief Executive of the Association of Colleges explains that his organisation had been working for several years to prepare Further Education establishments, commenting that, “Getting the relationship between employer, apprentice and college right will be vital to make this work.”