Apprenticeships: How will cutting rates improve quality?
Fully realising the benefits of apprenticeships
The macro benefit of apprenticeships is that they deliver the best match between the supply and demand for skills.
This is achieved by reducing the distance between the commissioning and delivery of training. And by acknowledging that employers are best placed to decide what skills they need, where and when they need them and in what quantity.
It is impossible for even the best FE providers, never mind Local or Central government to accurately forecast, at a micro level, what skills will be needed where and when, and to then train for them in advance.
By reducing the role of state intermediaries in deciding who gets trained and in what and by allowing employers to work directly with suppliers we can eliminate the uncertainty of course selection for individuals. This free choice will also reduce the risks of overtraining or irrelevant training for providers, funders and employers.
Of course, the Government has long recognised all of this and promised to be brave and to allow employers to lead and to create the standards and assign their value…
Bravehearts
However that bravery seems to be faltering. By deciding that some standards are just too popular and so should have their rates cut the state is sending a clear message – that they know best – and that they will use their blunt economic levers to reshape the apprenticeship landscape to their liking.
There is obviously a role for the state in protecting public funding and for Ofsted in protecting the learner by ensuring good quality – but surely not by determining that employers don’t know what’s best for them.
There is no way that cutting the rates employers can pay (via levy) for training can improve the quality of that training
Indeed by not locking in a mechanism to account for inflation the IFA and ESFA are already starting to nibble away at the viability of standards.
*The lack of any inflationary rises in Apprenticeship funding between 2008 and 2017 reduced real term rates per learner by c20% ( Bank of England Calculator ) which surely did nothing to enhance the success of SASE Frameworks.
What we need are fair, transparent rates that are stable and which keep up with the cost of living. And to trust that employers will not over pay and will walk away from providers who offer poor value for money.
Yes of course we might expect efficiencies to emerge with time but they should be used to create room for improvement and for the pursuit of excellence.
And what parity of esteem is achieved with HE by continually decreasing FE rates whilst allowing HE rates to increase.
Perhaps the ongoing review of degree funding should be looking at all degrees including those delivered via an apprenticeship.
Following the latest proposals by the Institute for Apprenticeships to introduce huge cuts to apprenticeship funding bands, Petra Wilton, Director of Strategy, at the CMI said:
“We simply can’t see why Government is shooting one of its most successful policies in the foot. As the overwhelming outcry from employers demonstrates, it makes so little sense.
“Especially at a time when so many employers are struggling to recruit the highly skilled managers and leaders needed to drive up business growth and employee engagement amidst the challenges of Brexit. However, we are still confident that Ministers, who have been so keen to showcase the early success of these programmes and the new management apprentices, will return from recess and reject this ridiculous decision.”
Easier quicker payments …
ESFA have however walked back from another impending cliff edge.
Like direct employer funding of EPAs it seems clear to everyone that asking all the non-levy employers to open a ‘DAS’ account is more trouble than it’s worth.
Employers can already choose providers and agree rates without opening an account – so why make them do so?
Why not just allow employers to use those on the register and pay them for training delivered, after all there is no shortage of unspent levy funding?
If there ever is (a shortage of funding) then it will have to be rationed anyway (whether via the DAS system or not). Instead of asking 100,000 small businesses to engage in mindless e-transactions this could be done by giving providers a ‘maximum monthly claim allowance’ or ‘apprentice registration limit’, etc and not by issuing contracts or forcing employers into become ‘funding admin’.
How to give apprenticeships a real boost – 2 simple ideas to reverse the decline
- Remove the 10% employer contribution altogether, as a boost to SMEs post Brexit. Making it cleaner and simpler than ever for small businesses to invest in training. I would never under estimate the number of employers who simply walk away from apprenticeships because of the paperwork, and the 10% payment is more trouble than its worth (for all parties).
- And for larger employers, post Brexit why not ‘allow’ them to utilise their UK wide levy on any of their own UK based employees and not just those working 51% or more in England (just as the Military and those employing ‘Holiday Reps’ are allowed to do.) This would also match the UK wide N.I. apprenticeship rate. In the eyes of employers rules like the 51% are an example of petty politics and bureaucracy. It is wrong that our devolved Governments (inc England) care more about protecting their own policy integrities than they do about supporting UK plc. And when employers start handing back unspent levy payments whilst paying for non-English apprenticeships this will become even more acute.
Apprenticeships have flourished in countries that have trusted employers to lead and to benefit from them – there is no reason why that should not happen here as well.
Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial
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