Taking on Apprentices from a Closed Provider: Guide

When an apprenticeship training provider's funding agreements are terminated by the Department for Education, hundreds of apprentices and employers can find themselves in limbo—partway through programmes with uncertain futures. For training providers willing to step in, supporting these affected learners offers an opportunity to demonstrate flexibility and partnership whilst expanding provision. However, the transfer process involves specific regulatory requirements, funding calculations, and compliance obligations that differ substantially from standard apprenticeship starts.

Whether you're approached directly by concerned employers, contacted by apprentices seeking continuity, or proactively reaching out to support affected learners, understanding the complete framework for apprentice transfers is critical. The process involves assessing prior learning, negotiating new prices within constrained funding envelopes, managing co-investment complications, and ensuring your ILR submissions accurately reflect restart scenarios rather than new starts.

This guidance applies exclusively to apprentices who began their programmes after 1 May 2017 under the reformed apprenticeship funding system. Earlier cohorts follow different frameworks and aren't covered by current transfer guidance.

Funding Fox helps training providers manage complex apprentice transfers by calculating remaining funding automatically, tracking recognition of prior learning adjustments, and ensuring compliance with restart requirements and minimum duration criteria across your entire portfolio.

Understanding Provider Termination and Your Role

When DfE terminates a provider's funding agreements, that organisation immediately loses authority to claim apprenticeship funding and must cease delivery. Apprentices mid-programme face disruption, and employers risk losing their workforce development investment unless alternative providers can step in quickly.

Your role as a receiving provider is to offer continuity—assessing what learning apprentices have already completed, determining what remains, and structuring appropriate programmes to take them through to successful completion and end-point assessment. This isn't about starting fresh—it's about picking up partway through established learning journeys and steering them to completion.

Critically, you don't need DfE permission to accept transferred apprentices. The system is designed to facilitate swift continuity for affected learners without bureaucratic delays. However, this freedom comes with responsibility—you must ensure all standard apprenticeship requirements are met and accurately account for prior learning, funding already consumed, and programme timelines that satisfy minimum duration criteria when combined with time spent with previous providers.

Essential Pre-Transfer Requirements

Before accepting any apprentice transfers, several fundamental requirements must be satisfied. These aren't optional considerations—they're regulatory prerequisites that determine whether transfers can proceed.

First, you must hold appropriate funding agreements with DfE. You cannot claim apprenticeship funding without valid agreements covering the relevant funding streams and apprenticeship levels you intend to deliver. If your agreements don't cover the apprenticeship standards involved, transfers cannot proceed until appropriate agreements are established.

Second, you need approval from the relevant awarding organisation to deliver the same qualifications apprentices started with their previous provider, or appropriate alternative qualifications that maintain programme integrity. Switching apprentices to completely different qualifications because your approval portfolio doesn't match their current standards undermines continuity and may not satisfy the requirement to continue delivering the same programme.

Third, you must be prepared to conduct thorough initial assessments for every transferring apprentice. Unlike standard starts where you assess raw capability and design programmes from scratch, transfer assessments evaluate what apprentices have already learned, what evidence exists to demonstrate that learning, and what gaps remain to be filled before they're ready for end-point assessment.

Finally, you need systems capable of recording apprentices as restarts in your ILR submissions, not new starts. This distinction is fundamental—it affects how funding is calculated, what prior learning is recognised, and how minimum duration requirements are assessed. Treating transfers as new starts creates compliance failures that will surface in audit and potentially trigger funding recovery.

Conducting Initial Assessment and Recognising Prior Learning

Initial assessment for transferred apprentices differs fundamentally from standard initial assessment. You're not determining starting competency to design a complete programme—you're establishing what's already been achieved to identify what remains.

Begin by requesting complete copies of all learning evidence apprentices accumulated with their previous provider. This might include completed assignments, workplace observations, professional discussions, reflective accounts, skills demonstrations, and any assessment materials. Whilst apprentices aren't obliged to provide this evidence, having it significantly improves assessment accuracy and helps justify prior learning recognition decisions during audit.

Your assessment must compare this evidence against the occupational competence requirements defined in the apprenticeship standard. Which knowledge, skills, and behaviours has the apprentice demonstrably developed? Which elements show no evidence or only partial achievement? This analysis forms the foundation for customising the remaining training programme.

Recognition of prior learning must be accurately recorded and costed. If an apprentice has clearly mastered specific standard elements, continuing to deliver training in those areas wastes resources and inflates programme costs inappropriately. However, you cannot simply accept claimed competency without evidence—RPL must be justified by tangible demonstration of learning that maps directly to standard requirements.

The customised training plan you develop should exclude areas where RPL is recognised whilst ensuring comprehensive coverage of remaining standard requirements. This plan directly informs the new total negotiated price you'll propose to employers—costs should reflect actual delivery requirements, not arbitrary figures copied from original agreements.

Throughout this process, remember that apprentices must still meet minimum duration and off-the-job training requirements when combining time with previous providers and planned time with you. If an apprentice spent six months with their previous provider, your programme must run at least two months to satisfy the eight-month minimum, and combined off-the-job training across both providers must meet the standard's published requirement.

Calculating Remaining Funding and Negotiating New Prices

One of the most complex aspects of apprentice transfers involves determining how much funding remains available and negotiating appropriate prices within constrained funding envelopes. Unlike standard apprenticeships where the full funding band maximum is available, transferred apprentices come with funding already consumed by previous providers.

The funding band maximum applies across all instances of the same programme—not per provider. If an apprentice's programme has a £12,000 funding band maximum and their previous provider claimed £6,000, only £6,000 government funding remains available regardless of how much training is actually needed to complete the programme.

To understand approximately how much funding previous providers claimed, request that employers download transaction histories from their apprenticeship service accounts. These reports show payments made to providers for specific apprentices, giving you visibility of funding consumption to date. Whilst not perfectly accurate until enrolment processes through the apprenticeship funding system, these figures provide reasonable estimates for price negotiation purposes.

Calculate remaining funding by subtracting claimed amounts from either the funding band maximum or the previous total negotiated price, whichever is lower. For example, if the original TNP was £10,000 and previous providers claimed £6,000, £4,000 remains even if the funding band maximum is £12,000—the lower figure governs.

Your new TNP with the employer should reflect the actual cost of delivering remaining training and assessment, informed by your RPL assessment and programme design. However, if your costs exceed remaining funding, you face a difficult conversation with employers about additional payments.

DfE will not make funding available above the funding band maximum. If insufficient funding remains to cover necessary training, you must negotiate with employers about direct payments to cover the shortfall. These payments cannot come from employer apprenticeship service accounts—they must be direct employer-to-provider transactions sitting outside the apprenticeship funding system.

This scenario requires diplomatic handling. Employers facing this situation are already frustrated by their previous provider's failure. Explaining that further investment is required to complete programmes they've already partially funded tests relationships. However, the mathematics is inescapable—if previous providers claimed substantial funding whilst delivering minimal training, the funding gap is real regardless of whose fault it is.

Managing Co-Investment Complications

Co-investment presents particular challenges for transferred apprentices, especially when employers have already paid their required contributions to previous providers.

Under standard arrangements, employers pay 5% or 10% co-investment contributions (depending on when apprentices started) on the total negotiated price. When you agree a new TNP with employers for transferred apprentices, co-investment applies to this new price at the rate applicable when apprentices originally started—the rate doesn't reset based on transfer date.

If employers have already paid full co-investment to previous providers, they should attempt to recover those funds directly from the provider. Once recovered, employers can recycle this money to pay you the co-investment due on your new TNP.

However, if the previous provider has ceased trading, entered insolvency, or simply refuses to refund co-investment payments, employers cannot recover funds. DfE's position is clear: employers should not be required to pay co-investment twice for the same apprentice.

In these circumstances, you can request approval to use Learning Delivery Monitoring code 361 on your ILR submissions. This code waives the requirement to record co-investment collection, preventing completion payment holdback that would otherwise occur if you cannot confirm collection.

To request LDM code 361 approval, submit an enquiry through the DfE Customer Help Portal providing apprentice ULN, employer details, previous provider information, and confirmation that you hold evidence of the employer's previous co-investment payment. This evidence must exist—actual financial transactions that you retain for audit purposes.

Using the co-investment waiver doesn't release additional government funding to compensate for uncollected co-investment. Your ILR will automatically subtract the applicable co-investment percentage from the new TNP when calculating government funding entitlement. Therefore, if the new TNP is £4,000 and the co-investment rate is 10%, you'll receive £3,600 from DfE even though you collected nothing from the employer—the £400 difference is simply lost unless you negotiate separate direct payment from the employer.

This creates an uncomfortable position where you deliver full training but receive reduced funding. However, it's preferable to apprentices losing access to programme completion entirely due to employers refusing to pay co-investment twice.

Additional Payments and Transfer Scenarios

Employer eligibility for additional payments—such as payments for hiring young apprentices, care leavers, or individuals with education, health and care plans—remains unchanged when apprentices transfer between providers.

If previous providers didn't earn specific additional payments before funding termination, you can claim both the provider and employer elements once apprentices transfer, provided eligibility criteria are met. Claim these through standard processes on your ILR submissions.

More complex scenarios arise when previous providers earned additional payments but ceased trading before payments were processed. In these cases, employers have satisfied eligibility requirements, payments were earned, but providers never received funds due to timing of termination or insolvency.

You may be able to claim these previously earned additional payments through the Earnings Adjustment Statement process, but only with explicit DfE approval. Contact DfE through the Customer Help Portal, provide full apprentice and employer details, explain the circumstances, and request clarification about whether EAS claims are appropriate for the specific situation.

DfE will review each case individually, considering whether the original provider legitimately earned payments, whether claiming through a successor provider creates inappropriate duplicate payments, and whether the approach serves apprentice and employer interests effectively. Don't assume approval—wait for explicit authorisation before submitting EAS claims for inherited additional payments.

Data Sharing Restrictions and Compliance Risks

Providers whose funding agreements have been terminated must not share any information about apprentices or employers with other organisations without written DfE permission. This restriction is absolute and exists to protect apprentice and employer data during disruptive termination processes.

If you employ former staff members from terminated providers, they cannot share information about apprentices or employers with you, even if they remember details from their previous employment. Receiving apprentice personal information from unauthorised sources potentially breaches your own funding agreements and could trigger enforcement action.

Collect all required personal information directly from apprentices themselves to satisfy your enrolment and audit trail requirements. This ensures clean data provenance and protects you from compliance risks associated with unauthorised information sharing.

DfE actively monitors apprentice destinations following provider terminations and will challenge any concerning behaviour suggesting inappropriate data sharing or coordination between terminated providers and receiving organisations. Maintain scrupulous independence in how you identify, contact, and enrol transferred apprentices.

ILR Requirements and Restart Recording

Recording transferred apprentices correctly in your ILR submissions is critical for funding accuracy and compliance. Apprentices must be recorded as restarts, not new starts. This distinction affects multiple data fields and calculations throughout the ILR.

Restart recording ensures that the apprenticeship funding system recognises prior activity with other providers when calculating funding entitlements, minimum duration compliance, and achievement payment eligibility. New start recording would treat apprentices as if they're beginning programmes fresh, incorrectly making the full funding band maximum available and misrepresenting programme timelines.

Consult the Provider Support Manual for specific ILR field requirements for restart scenarios. Pay particular attention to start dates (which should reflect when apprentices actually began with you, not when they started with previous providers), planned duration (which must combine with previous provider time to meet minimums), and price fields (which reflect your new TNP, not original agreements).

Your off-the-job training calculations must satisfy the 20% requirement for the proportion of the apprenticeship you deliver as the receiving provider. This doesn't mean 20% of the entire apprenticeship—it means 20% of the training period you're responsible for. However, when combined with off-the-job training delivered by previous providers, the apprentice's total off-the-job training across all providers should meet the standard's overall requirement.

Restrictions on Gateway and Evidence-Less Transfers

Two specific scenarios where you cannot accept apprentice transfers require clear understanding to avoid compliance errors.

First, you cannot enrol apprentices who are already at Gateway. Gateway represents the point where training is complete and only end-point assessment remains. If an apprentice has reached Gateway with their previous provider, no further training is required—only EPA delivery. Since you can only claim apprenticeship funding for training delivery, and no training will occur, you cannot legitimately participate in these apprentices' programmes or claim any funding.

In Gateway scenarios, apprentices should proceed directly to end-point assessment with their allocated EPA organisation. The previous provider's termination doesn't affect EPA arrangements—assessment organisations operate independently from training providers and can complete assessments regardless of provider status.

Second, you cannot include apprentices on your ILR if no learning will be delivered to them. If an apprentice transferred to you but you determine that no training is required (perhaps because they're genuinely assessment-ready despite not formally reaching Gateway), you cannot claim on-programme payments, achievement payments, or completion payments because no learning activity justifies those claims.

This scenario might arise if initial assessment reveals that an apprentice has effectively completed all training requirements and merely needs scheduling for EPA. Whilst you might legitimately coordinate assessment arrangements, you're providing administration services rather than training delivery—activities that don't qualify for apprenticeship funding.

Supporting Employers Through Transition

Employers affected by provider terminations experience significant disruption to workforce development plans, potential compliance concerns about apprentice employment requirements, and frustration about funding already invested with failed providers. Your approach to supporting employers through transition significantly affects whether transfers proceed smoothly or collapse into disputes.

Be transparent about funding constraints from the outset. If your assessment reveals that insufficient funding remains to complete necessary training, explain this clearly and early rather than allowing employers to assume all costs are covered. Provide detailed breakdowns showing funding consumed, funding remaining, training required, and any shortfall requiring direct employer contribution.

Recognise employer investment to date, even if previous providers delivered poorly. Employers have paid co-investment, potentially made additional payments, and invested time in supporting apprentices through the original programme. Dismissing or minimising that investment whilst demanding further contributions damages relationships unnecessarily.

Work collaboratively on programme design, showing how your training plan addresses identified gaps whilst avoiding redundant coverage of areas where apprentices have demonstrable competency. This demonstrates efficient resource use and justifies pricing decisions with tangible programme structure.

Finally, be realistic about timelines. Transfer processes involving initial assessment, RPL evaluation, price negotiation, new contract establishment, and commitment statement agreement take time. Apprentices cannot simply switch providers overnight—proper process must be followed to ensure compliance and quality outcomes.

---

📚 Manage Complex Apprentice Transfers with Confidence

Apprentice transfers involve intricate funding calculations, prior learning assessments, and compliance requirements that manual processes struggle to handle accurately. Funding Fox automatically tracks remaining funding across provider transitions, ensures restart compliance, and manages co-investment complications seamlessly.

Start your free trial today and simplify transfer management:

✅ Automatic funding calculation accounting for previous provider claims
✅ RPL tracking tools documenting prior learning recognition
✅ Restart compliance checks ensuring accurate ILR recording
✅ Co-investment management handling complex waiver scenarios

Start Your Free Trial → | Explore Features →