Employer Co-Investment non-payment

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This topic contains 3 replies, has 3 voices, and was last updated by  Sue Bishop 6 months ago.

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  • Ruth CJ
    Participant

    Hello,

    Not sure if many providers are having this problem, but we have one employer who just won’t pay us their 10% co-investment. My understanding, based on the funding rules, is that the ESFA can withhold their 90% (of the 80%) in such a case.

    I’ve been asking the Service Desk at what point they will do this, as we’re currently still receiving everything. They’ve explained that they can’t withhold anything until they’ve fixed their reports. Fair enough. They have also replied that they “cannot say for certain” if the funding will be clawed back at all when we haven’t received the employer co-investment, simply that they reserve the right to. I know it’s a fact that they won’t give us the 20% completion payment, but I’d have thought the withholding of the 90% of the rest was clear cut. It will be a challenge to manage our budgets if we don’t know whether we’re going to get a claw back or not. I think I’ll just have to flag some funding risk to Finance, and hope it doesn’t get clawed back. What criteria are they going to use to determine claw back? I’m guessing that thy’re waiting to see the scale of the issue, and will contact us if we seem to have a big problem. If we can show that we’ve done everything we can to chase an employer, perhaps they won’t claw back?

    The Service Desk have clarified that they will not claw back incentive payments in these cases. However, I don’t feel inclined to pay an incentive to an employer when they won’t pay us the 10%. If they’d engaged with us and said that they’d like to wait for the incentive before paying the 10%, we could manage that, but the one employer is just ignoring us completely. Obviously we can’t bargain with them and only release the incentive once they’ve paid us. The only way to not pay them would be to code the apprenticeship as unfunded, which would also then lose us our provider incentive too, which seems like cutting your nose off to spite your face.

    We had another apprentice withdraw at 4 months, without the employer paying anything, but they have triggered the incentive.

    Anyone got any further experience, advice or thoughts on this? I’m aware that this sort of thing should be in our contract. Would anyone go as far as sending an employer to a debt collector? Could we record any funds collected that way as PMR? Would you withdraw the apprentice (and after how long), even though it would be bad for them, or would you just leave it and hope you won’t get the 90% clawed back?

     
    #249949

    sophie
    Participant

    We’ve have been in this situation and told the employer that we couldn’t pay the incentive until we received the co-investment first. We could have paid, if it had come to that, the difference between the incentive and the contribution, but I much prefer to see two flows of money coming in and out from an audit point of view.

     
    #249951

    Ruth CJ
    Participant

    Hi Sophie,

    My reading of the rules is that you’re not allowed to do that. We just have to pay out the incentive within a month of receiving it, as it’s not our money to bargain with.

    P101. You will also receive the additional payments due to the employer and you must pass these on in full to the employer within 30 working days of receiving this funding from us.

    Like you, we wouldn’t ask them to pay the difference, as an auditor would want to see the separate payments. It’s upsetting our Finance team, as they say that their policy is never to pay any money to an organisation that owes us money! The thing is, it’s not our money to withhold.

     
    #249953

    Sue Bishop
    Participant

    Hi All

    We don’t put any learners on programme until the 10% is paid – maybe we should have a change of heart, but wanted to be in control of clawbacks – ie none! I didn’t want to get to the end of the programme still with no contribution and all the problems that will cause not only to finances but success rates!

    Nightmare…….

     
    #249999
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