MPs’ sobering review of the apprenticeship reforms

As the levy collection begins, a cross-party committee of MPs have just done a great job in reviewing the government’s apprenticeship reforms and ministers would be wise to implement the resulting report’s recommendations in full. Often when AELP has made similar observations, the tendency has been to dismiss them as provider vested interest, so it is encouraging that others share our views.

The Commons Sub-Committee on Education, Skills and the Economy described the levy and the 3 million starts target as blunt instruments that risk being unduly focused on simply raising participation levels. In response the government would say that the reforms embrace measures to improve the programme’s quality as much as securing an increase in participation. So what’s the truth?

The first thing to say is that neither the reforms nor the levy were needed to achieve the 3m target which, to be fair, was set long after the reform process was initiated. You only need to look at the number of starts since the 2015 general election (1,039,100 until end-January 2017) to see that we were on track to hit the target without a levy. But if there is lag in starts from April while employers adjust to the new system, the government has levers to pick the rate up again to ensure that the 3m is hit by 2020.

The truth about the levy is that if it becomes the only source of funding for apprenticeships, it will save the Treasury approximately the £1.5bn that it has been allocating yearly to the programme up until now. However it will also eventually raise £1bn more and at the same time bring large corporates into the programme for the first time. We also welcome the fact that the levy will fund many more higher and degree level apprenticeships.

The trailblazer standards and assessment reforms which are designed to raise quality have been underway for some time. But we still arrive at the levy’s start with the MPs having to point out that apprentices should not be allowed to begin training without an assessment organisation in place.  We would add that an approved assessment process itself should also be in place with an agreement on its price.  Such practice wouldn’t be tolerated in academic education and it is double standards to allow it in a vocational programme.  We also agree with the MPs that Ofqual should be given responsibility for the external quality assurance of all end point assessments.

In a new document last week on the various regulatory responsibilities of the statutory bodies involved, the government has fudged the issue of quality assurance surrounding higher level and degree apprenticeships. It should have confirmed Ofsted as being responsible for inspection of apprenticeships at all levels, but at the high end Ofsted, HEFCE and QAA will share responsibility. In our view, consistency and transparency could be undermined by what is now being implemented.

Still on the issue of quality, the Sub-Committee rightly identifies the need for guidance on the definition of off-the-job training.  AELP has been in close discussion with Ofsted and DfE on this matter and provided them with many practical examples.  Some new guidance is expected and we urge that the government publishes it before 1 May.

Like the MPs, we welcome the creation of the Institute for Apprenticeships and we also agree that the new body must be given sufficient capacity and independence if it is to succeed.  The report also calls for more support for apprentices themselves, which could include changes to the benefits system. AELP member providers regularly report for example that fear of a family losing child benefit can result in a young person not taking up an apprenticeship offer and it was good to see peers pass an amendment to the Technical and Further Education Bill addressing this.

Making the necessary changes would be entirely consistent with ministers championing social mobility and apprenticeships as a ladder of opportunity. The Sub-Committee has been critical that last August’s funding proposals for 16 to 18 year old apprentices were not consistent with this agenda and we remain concerned that the subsequent changes to funding are still not adequately in tune with it.

We are pleased that the MPs highlighted the ‘lack of clarity’ about the long-term funding arrangements for smaller non-levy paying employers.  In AELP’s view, a guaranteed minimum budget of £1bn a year is needed to maintain the apprenticeship opportunities that SMEs offer. Otherwise we could be looking at ‘apprenticeship deserts’ in areas of the country where there are few or no large levy-paying employers.

The new system is meant to put employers in the driving seat – something close perhaps to what the Leitch review of skills envisaged over 10 years ago in terms of demand led – but the temptation for government to keep pulling the levers still available to it will never go away, whether it’s changing the funding rate for each standard or the co-investment ratio required from employers. We accept this as the reality but if the government chooses to do this, it would be helpful in line with the Industrial Strategy if we could have an agreed strategic approach over the next two to three years.

Mark Dawe, Chief Executive, Association of Employment and Learning Providers (AELP)