October ’22 – How will the Independent Training Provider weather the coming storm?

Recently I had the pleasure of meeting with a number of training providers from the Sussex region. This is always a great privilege but on this occasion, even this normally very positive and proactive group could not hide the cloud of gloom hanging over their industry.

In a word, it’s all about inflation. 

The looming spectre of inflation brings with it a multi-pronged threat. Chatting with these ITPs, it seemed that the current – and anticipated future – high rates of inflation bring with them some very real and significant threats.

Business costs – the costs of running their businesses look set to sky rocket. Office costs, heating, vehicle fuel costs, entertaining – all of these are certain to be significantly higher than the figures they anticipated when they created their current budgets.

Staff costs – individuals’ costs of living are set to rise and this will lead to demands for higher wages. The ITP will have to make some stark choices – increase salaries and risk bankrupting the business, or resist salary increases and risk losing key staff. The employment market is currently as buoyant as it has been for years, so staff with one eye on the exit door really do have other options. On the other hand, ITPs have always been notoriously marginal businesses – they simply can’t increase their cost base and expect to carry on.

Quality – some excellent remote learning solutions were implemented during lockdown. Ofsted has made it clear that going forward they will absolutely continue to support good quality remote learning, but they will equally be on the lookout for instances where remote learning might be deployed as a cost saving solution. So ITPs need to be very careful that in delivering economically prudent solutions such as remote learning content, they are not deemed to be reducing their quality of delivery. 

Pricing – a typical commercial business – a restaurant, let’s say – when faced with challenges such as those currently faced by ITPs, will react by raising its prices. Most of its customers will understand that the business has to do this if it is still to be there next time they need it. 

But for the ITP, its ‘prices’, its income, is government funding.  The ITP cannot raise that on a whim – it takes a very long time for funding bands to shift, time that a struggling ITP simply does not have.

As far as I can see there are two strategies available to the ITP, to enable them to weather this perfect storm.

In the longer term, they must start to lobby Government immediately – probably through vehicles like trade bodies and representative groups. If the UK is serious about rebuilding its economic powerbase, it absolutely has to prevent training organisations from disappearing. The ITP sector has a voice, now is the time to hear it very loudly.

In the shorter term, perhaps we can help. Using the VQManager e-portfolio means that providers can create all manner of efficiencies and time savings within their deliver processes. They can make processes easier for everyone involved, can embed best practice standardisation and can take the fear out of inspections allowing them to really focus on running the business. 

Have a chat with Kari at SkillWise – we would love to be able to talk to you about this, and help you to thrive whilst others struggle.

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