Guidance

Termination of funding agreements: guidance for providers

Updated 12 May 2026

Applies to England

Who this guidance is for

This guidance is for training providers affected when Department for Education (DfE) funding agreements and contracts, or provider agreements for apprenticeships, are terminated. In this document, these are all referred to as ‘funding agreements’.

The guidance applies only to the following DfE-funded provision:

• apprenticeships
• non-devolved adult skills funding (ASF)
• 16 to 19 study programme
• advanced learner loans

Termination of funding agreements with DfE

Funding agreements can be terminated by either party. For example, training providers may wish to stop delivering the provision and ask to terminate their funding agreements. If so, the provider must notify DfE in writing, giving the required notice period as set out in each agreement.

In turn, circumstances may arise that require DfE to terminate some or all of the agreements with a training provider.

Funding agreements set out the circumstances under which termination may occur. These include but are not limited to:

• training provider request
• an insolvency event
• the outcome of an Ofsted inspection or monitoring visit
• removal from the apprenticeship provider and assessment register (APAR)
• a serious breach of contract
• financial health or control
• a change of control or ownership

Funding agreements, along with funding rules, take precedence over this guidance, which is intended simply to set out the overall approach in one place.

What training providers can expect from DfE if their funding agreements are terminated

DfE recognises that the termination of a funding agreement can cause a period of uncertainty for the organisation, employers, learners and apprentices alike. Training providers have contractual obligations and responsibilities to fulfil when a funding agreement is terminated, and we will provide you with support in managing this potentially difficult period.

DfE’s responsibilities include but are not limited to the following.

We will:

• issue you with a formal written notice of termination, setting out the reasons and confirming the notice period that applies, if relevant
• provide a live learner list template for you to complete and return to DfE
• email you exit communications, which may include an invitation to complete an exit survey – the survey and live learner list will help us gather vital information to ensure effective support can be provided to affected learners, employers and apprentices
• send you an information document
• inform you whether funds your organisation has claimed have been identified and used as European Social Fund (ESF) or ESF match-funding , if applicable
• notify relevant stakeholders of the termination, including, but not limited to the assessment organisation, Ofsted, the Student Loans Company (SLC), local authorities and any other third parties with a legitimate interest, as appropriate
• write to the employers, apprentices on a break in learning, and learners affected, as required, advising them of the implications, and setting out the next steps and available support
• instruct SLC to write to advanced learner loan students setting out available support when a training provider has become insolvent or an immediate termination notice has been issued, if applicable
• provide support to employers – in exceptional circumstances only – to help identify alternative apprenticeship training providers
• provide support to 16 to 19 learners to help them transfer to an alternative training provider, where required
• handle queries from customers and stakeholders affected by the termination
• remove your organisation from APAR, if applicable, which means it will no longer be able to deliver apprenticeships either direct or as a subcontractor
• revoke your access to DfE’s systems, including but not limited to the learning records service, find apprenticeship training service and apprenticeship service – access to the submit learner data service will continue for an agreed period to allow you to submit final individualised learner record (ILR) data and download contracts and funding reports
• usually place payments on hold until your organisation’s account can be reconciled against the final funding data return – we will notify you if payments are scheduled to be withheld
• release the final payment to your organisation, if any is owed, on completion of the final funding reconciliation
• send an invoice and reconciliation statement to recover funds, if an overpayment is identified – there is no fixed timeframe for reconciling and releasing any final payment, but we aim to complete this process within 3 months of receiving the final ILR submission, unless anomalies in the data or other issues we identify cause delays

What DfE expects of training providers if their funding agreements are terminated

You must fulfil the contractual obligations and responsibilities outlined in the relevant clauses in your funding agreements, especially clauses relevant to termination and exit arrangements.

DfE requires your full co-operation. We expect you to continue to work with us to minimise any disruption to learners, apprentices and employers affected by the termination.

The following section sets out your obligations and responsibilities. It is essential that you understand all of your contractual duties.

General responsibilities

If any funding agreements with DfE are terminated, your general obligations and responsibilities include but are not limited to the following.

You will:

• provide a contact in your organisation with whom DfE can liaise about the termination of the funding agreements
• keep us informed of your organisation’s progress in meeting their contractual obligations and responsibilities
• immediately stop recruiting learners or apprentices onto programmes on or after the date the notice of termination is issued – we will not fund or make payments for any new learners or apprentices recruited on or after that date
• not deliver any training once the termination date has passed – we will not fund or make payments for any training delivered after that date, as confirmed in the formal notice of termination issued for each funding agreement
• not share any personal information about learners, apprentices or employers with any other organisation – you must remind any staff members who might transfer employment to another provider, under the Transfer of Undertaking (Protection of Employment) Regulations 2006 or otherwise, that they must not attempt to take learner, employer or apprentice details with them, as that would be deemed a data breach under UK GDPR
• complete the live learner list template and return it to DfE within 7 working days of the date it was sent – this will give us an updated summary of the progress of all affected learners and apprentices, confirming various details, including but not limited to:
  • which will complete within any applicable notice period or prior to the termination date
  • which will need to transfer to other alternative provision to continue with their training
  • any issues we may need to be aware of regarding specific learners or apprentices
• respond to the exit survey, if applicable, within 7 working days  – if you need additional time to do so, contact your account manager
• continue to support learners and apprentices with their learning during any applicable notice period, either until they have secured suitable alternative provision or the termination date is reached
• ensure learners or apprentices have full and complete copies of all their learning evidence to date and allow them immediate access to their portfolios – if portfolios are in hard copy, you must make arrangements to return these without delay, and if electronic, you must ensure learners or apprentices are informed about the platform used and provide them with access and instructions on how to download their work, especially if access is being revoked
• ensure any certificates an awarding organisation has sent to you are issued to learners or apprentices
• notify relevant stakeholders, including but not limited to subcontractors, awarding organisations, assessment organisations and third-party software suppliers, that some or all of your funding agreements have been terminated and on what date, reminding them that they must not share any personal details of learners, employers or apprentices with any other organisation
• remove any advertisements and references to DfE, including logos currently featured on your website and in any marketing material
• support DfE in addressing queries from learners, employers, apprentices and other stakeholders, such as subcontractors, awarding organisations, assessment organisations and, third-party software suppliers
• co-operate with all of DfE’s requests for information

Document retention responsibilities

If any of your organisation’s funding agreements with DfE are terminated, your document retention obligations and responsibilities include but are not limited to the following.

If your organisation continues to trade, you must retain all documents that evidence delivery, in line with the retention of document clauses in the funding agreements and the record-keeping and retention information for training providers guidance.

You must ensure you make any learner or apprentice files or records available for audit or investigation purposes, both before and after the termination date.

Following termination, if your organisation ceases to operate or becomes insolvent, before you destroy any files that you agreed to retain under the applicable retention schedule, you must notify us immediately and await further instructions. We may assume the role of data controller and arrange for the transfer of the relevant files, whether held electronically or in paper form.

If your organisation ceases to trade, you must promptly co-operate with us and any relevant partner organisations. If DfE becomes the data controller, you must supply all learner and apprentice files and evidence packs on request. This may include but is not limited to:

• learning and apprenticeship agreements
• e‑portfolios
• initial assessment documentation
• personal learner information
• copies of identity documents
• any additional records, correspondence or documents required under the document retention provisions of the applicable funding agreements and the record‑keeping and retention guidance

If requested, you must work with DfE and any relevant partner organisations to ensure all required information is transferred in an orderly and secure manner. You must logically order or index and clearly name any files transferred to us, including with the full learner or apprentice name, their unique learner number and, where possible, the relevant funding provision and year.

If your organisation becomes insolvent and is unable to assist, your legally appointed representatives must act on your behalf.

DfE may arrange for the collection of hard-copy files and, if so, you must supply the relevant contact details to allow us to make the necessary arrangements. You must prepare and pay for all files to be collected, securely boxing them and organising them in an indexed format, accompanied by a catalogued list that includes learner or apprentice information. You must share this list with us using a secure method.

For electronic files such as learner or apprentice portfolios or training provider administration files stored either on your internal server or with a third-party software supplier, you must:

• confirm the name of the third-party software provider, where applicable, and the relevant contact and applicable contract terms (for example, annual, monthly or lifetime), so we can assess any potential risks or concerns
• confirm the digital footprint of the files you hold
• transfer the files to DfE via Galaxkey’s secure delivery service, instructions for which we will provide – we cannot accept external data drives due to the security risk to our devices

Data responsibilities

If your funding agreements are terminated, your data-related obligations and responsibilities include but are not limited to the following.

You must:

• continue to review and submit accurate monthly ILR data returns throughout any applicable notice period, ensuring full compliance with the funding rules
• agree with DfE the planned final data return period and submission date
• cleanse the final data return, including but not limited to reviewing the:
  • post-16 monitoring dashboard (accessed through view your education data) and correcting any errors highlighted
  • rule violation report (generated after each ILR submission on submit learner data), addressing and correcting all errors or warnings highlighted
  • funding model 36 learner-level summary on submit learner data, if applicable
• ensure you close all ILRs in the final data return
• ensure all learners or apprentices are recorded as either ‘withdrawn’ or ‘completed’ in the final data return
• where learners or apprentices are continuing and transferring to an alternative training provider, record them as ‘withdrawn’ in the final data return, using withdrawal reason 7, ‘Learner has transferred between providers due to intervention by or with the written agreement of DfE. This code is required for national monitoring purposes’ – for further information, refer to the provider support manual
• ensure that the last-evidenced date a learner or apprentice received a learning intervention is recorded as the ‘learning actual end date’ and the actual end does not exceed the termination date – as explained in the apprenticeship technical funding guide, if the apprentice or learner leaves early, the monthly on-programme instalments will stop and we will not calculate an instalment for the final month if they withdraw before the last day of the month in which the learning or apprenticeship stops
• inform DfE when you have submitted the final data return
• if applicable, ensure data on SLC’s learning provider portal is accurate and up to date for all learners funded by advanced learner loans

If you have not corrected issues before the final data return, payments for relevant learners or apprentices will not be generated to be included in the final funding reconciliation. Once you have submitted the return, we will remove your access to submit learner data, preventing any subsequent corrections that could affect payments.

Further assistance is available in the individualised learner record technical documents, guidance and requirements or by contacting the customer help portal.

Apprenticeship-specific responsibilities  

If your apprenticeship agreement is terminated, your responsibilities include but are not limited to the following.

You must:

• immediately remove any apprenticeship vacancies advertised on the find apprenticeship training service that are managed on behalf of employers – these vacancies must be removed via the apprenticeship service for training providers
• immediately remove any apprenticeship vacancies advertised on your organisation’s website or in any other location
• ensure that all co-investment payments collected from employers to date are accurately recorded on the ILR
• confirm the schedule used for collecting employer co-investment contributions (for example, whether contributions are collected monthly, quarterly or in full at the start of the apprenticeship)
• review employer co-investment contributions to determine whether any reimbursements are required where payments have been collected, but the apprenticeship has not been delivered in accordance with the funding rules
• ensure that any additional employer payments you received were immediately passed on to employers – any payments should be transferred within 30 days of receipt from DfE, in line with the funding rules)

We will retain any additional payments included in the final payment  and it will either be made direct to the employer or transferred to the employer’s new training provider for onward payment.

Apprenticeship assessment

The cost of the apprenticeship assessment is paid as part of the monthly on-programme payment funding that training providers claim from DfE. It is important to understand that the completion payment does not cover the cost of the apprenticeship assessment.

If any apprentices have reached gateway to completion on or before the termination date of the agreement, it is possible for your organisation to continue supporting them through the assessment, provided it can be completed within the same academic year in which the agreement with DfE was terminated.

You will only be eligible to claim the apprenticeship completion payment if:

• the assessment is completed within the same academic year the agreement was ended
• you commit to paying all outstanding assessment costs to the assessment organisation

You must:

• confirm whether apprentices who have reached gateway to completion before the termination date will be supported with their assessment, record this in the live learner list template and submit it to DfE
• ensure that all apprentices who have reached gateway to completion by the termination date have been registered with the assessment organisation
• provide the assessment organisation with the necessary evidence to confirm which apprentices are at gateway to completion, enabling it to proceed with the assessment without your involvement, where applicable
• pay the assessment organisation the assessment costs – this will already have been paid to you in the on-programme funding you claimed
• update each ILR with an accurate achievement date (the date on which the apprentice completes their assessment) to generate the completion payment, where applicable – this can only be claimed if your organisation continued to support them through the assessment, in which instance the achievement date may fall after the termination date

Advanced learner loan-specific responsibilities

If the DfE funding contract for services – which includes advanced learner loans funding provision – is terminated, your responsibilities related to advanced learner loans include but are not limited to the following.

You must:

• notify all affected learners in writing that the contract is being terminated and confirm the termination date
• discuss with learners the possibility of continuing their training during the notice period, up to the termination date and in line with the advanced learner loans funding and performance management rules, where appropriate
• inform learners with end dates beyond the termination date that the training can no longer be delivered, direct them to the National Careers Service for help in finding an alternative training provider and explain that they will need to take out a new loan to complete their qualification
• update DfE’s ILR data and the SLC portal, ensuring that you withdraw any learners unable to complete their training before the termination date
• cease all training on or before the termination date

Contractually, you are responsible to the learners for the direct delivery of the advanced learner loans provision and will be liable to make any repayment of fees incurred by the learner to SLC if: 

• you fail to fully deliver the provision agreed with the learner
• there is evidence that learners have not been either registered for the qualification or registered according to awarding organisation guidelines
• there is evidence you have not followed an awarding organisation’s policies and procedures

Learner and apprentice transfers to alternative training providers

Where learners and apprentices are not able to complete their training in any applicable termination notice period, we expect you to co-operate in managing their transfer to a new provider, even if this is prior to the actual termination date of the funding agreements.

DfE will issue communications to affected stakeholders to advise on the next steps, which are that:

• apprenticeship employers will be signposted to available support to enable them to independently identify a suitable alternative training provider for apprentices who are continuing with their apprenticeship
• apprentices on a break in learning will be advised to contact their employer if they wish to return to learning
• learners who wish to continue their 16 to 19 programme and ASF-funded training will be supported to identify an alternative provider, either by DfE or another specialist agency such as the National Careers Service
• when an immediate termination notice has been issued for services related to advanced learner loans funding provision, SLC will write to learners on a break in learning, signposting them to the National Careers Service for help in finding an alternative provider

The National Careers Service offers free and impartial information, advice and guidance to help learners identify alternative provision and continue with their training.

You must not source alternative provision for learners, apprentices or employers affected when funding agreements are terminated. Any training provider approached to take on learners from another provider should check whether that provider is subject to a termination notice. Taking on learners in these circumstances could result in a breach of contract for any new provider appointed.

Funding agreements state that you must not share information about learners, apprentices or employers with any other organisation unless DfE provides written permission.

Training providers wishing to support learners or apprentices and employers affected by the termination of another provider’s funding agreements

When learners, apprentices or employers seek support from alternative training providers due to the termination of their previous provider’s funding agreements, it is possible for you to accept the transfer of learners or apprentices without needing permission from DfE.

Before agreeing to any transfers, you must:

• ensure that the appropriate funding agreements between DfE and your organisation as the new provider are in place and not subject to any restrictions, such as a pause on starts or serving a notice period to terminate any funding agreements
• confirm there is sufficient capacity in your allocation to accommodate additional learners, if applicable
• carry out a robust initial assessment
• ensure that recognition of prior learning (RPL) has been accurately identified, evidenced and recorded
• confirm that learners or apprentices have been encouraged to supply complete evidence of their learning to date to inform the initial assessment and RPL process
• seek approval from the same or another suitable awarding organisation to deliver the qualifications originally undertaken by the learner or apprentice
• collect all personal information required for enrolment and programme commencement  from the learner or apprentice

Training providers that have had their funding agreements terminated must not share any information about learners,  apprentices or employers with any other organisation without written permission from DfE.

Staff joining from another provider must not transfer or share any learner, apprentice or employer information. Receiving this information from any other organisation may constitute a breach of the provider’s funding agreements with DfE and may be referred to the Information Commissioner’s Office.

DfE will closely monitor the destinations of learners and apprentices who transfer following the termination of funding agreements and will investigate any concerning behaviour.

For apprenticeships, in addition to the considerations above, you must comply with all applicable apprenticeship funding rules. This includes but is not limited to the following.

You must:

• agree a new total negotiated price with the employer for the balance of delivery remaining, including the cost of apprenticeship assessment, where applicable
• put in place a new contract for service with the employer and agree a new commitment statement
• record the learner in the ILR as a re-start, not a new start – for further information, refer to the provider support manual
• ensure that the minimum-duration requirements are met – for example, take into account the time already spent on the programme with the previous provider
• satisfy the standard specific minimum off-the-job training requirements for the proportion of the apprenticeship being delivered by the new provider
• aim to continue delivering the same programme that the apprentice started
• work with the employer to review the amount of funding remaining to fund the rest of each apprentice’s training
• only claim from DfE the balance of funds remaining within the funding band maximum (FBM), accounting for funds already paid to the previous training provider – the FBM applies across all instances of the same programme and DfE will not provide additional funding above the FBM

If additional funding is required, and there is insufficient funding available in the FBM to complete an apprentice’s training, you will need to establish with the employer why the apprentice has made insufficient progress compared to the funding claimed to date and agree how the employer will pay for the required amount. The employer cannot fund this from their apprenticeship service account. Refer to the apprenticeship funding rules for further information.

It is also important to consider the following points.

A training provider cannot enrol apprentices who have reached gateway to completion because only the assessment element of the apprenticeship remains to be delivered, meaning no further training is required.

An apprentice cannot be included in the ILR if no learning has been delivered, as this would make the provider ineligible to claim any on‑programme funding or achievement or completion payments.

If an employer has already paid all the co-investment payments to the previous provider, DfE does not expect an employer to make those payments again to the new provider.

An employer’s eligibility for additional payments is not affected by the termination of their previous provider’s funding agreement. If an additional payment was not earned by the previous provider, any subsequent additional payments for which the employer is eligible may still be earned by the new provider.

Further guidance on understanding employer co-investment when impacted by provider termination is available.

Subcontractors of lead training providers that have had their funding agreements with DfE terminated

When a subcontractor delivers training on behalf of a lead training provider, delivery will be affected if the lead provider’s funding agreements with DfE have been terminated.

The provider must write to all affected subcontractors, learners, apprentices and employers to outline the implications and any required actions.

DfE will work with the lead provider, and their subcontractors where appropriate, to ensure that learners or apprentices affected can continue with their programme.

Learners, apprentices and employers retain the right to independently choose an alternative training provider. Subject to that choice, the options available for consideration by DfE include but are not limited to allowing:

• existing delivery arrangements to continue if a learner or apprentice can complete their programme during the termination notice period given (subject to agreement between all existing parties, as well as review and approval by DfE)
• the subcontractor to deliver the remainder of the programme direct (subject to the subcontractor having the appropriate DfE funding agreements already in place, as well as review and approval by DfE)
• the transfer of affected learners to another lead provider with which the subcontractor has an existing arrangement in place, and for the subcontractor to continue delivery to the new lead provider (subject to the agreement of all parties concerned, assurance of compliance with funding rules, and DfE review and approval)

Subcontractors must not:

• implement any of these options without first discussing them with DfE
• seek to source alternative provision for affected learners or apprentices

Subcontractors affected by a lead training provider’s termination should contact us through the customer help portal.

Any subcontracting arrangement between a subcontractor and a lead provider is a commercial relationship. DfE is not responsible for ensuring that subcontractors receive payment for delivery they carry out on behalf of a lead provider. Direct any queries relating to outstanding payments to the lead provider or, where applicable, to their legally appointed representatives.

If a lead training provider has subcontracted delivery and that subcontracted provider subsequently has its funding agreements terminated, responsibility remains with the lead provider to ensure continuation of delivery, either direct or through the appointment of another subcontracting provider, subject to continued compliance with the relevant funding rules.  

Get help with enquiries

We regularly publish articles on our help centre page to answer commonly asked questions from learners, apprentices and employers.

If an answer cannot be found in the published guidance and articles, submit an enquiry through the customer help portal.

When asked ‘Is this enquiry about a specific organisation?’, select ‘Yes’ and provide of the name of your organisation.

When asked ‘What is your enquiry about?’, select ‘Provider closure’.

If you need additional support regarding apprenticeships or using the apprenticeship service, contact apprenticeship support.

Further sources of information

Apprenticeship funding: legal agreement for training providers

Funding higher-risk organisations and subcontractors

How DfE maintains oversight of independent training providers

Financial handbook for independent training providers

Employment and redundancy in apprenticeships