2.22 is the number that could change vocational training forever

Government publications rarely contain information of any great significance but the latest Apprenticeship Plan “English Apprenticeships: Our 2020 Vision” is an exception and one particular clause, 2.22, is likely to trigger the biggest upheaval in vocational training in the last 50 years. Here is the clause in full:

To help employers make an informed decision about where their money is spent, the Skills Funding Agency maintains the Register of Training Organisations and the Register of Apprenticeship Assessment Organisations. Training providers and assessment organisations must provide information about their organisational viability and how they quality assure the products and services they offer. Employers are free to select any organisation from these registers to deliver the training and assessment they need for their apprentices.

The key part of this clause is the final sentence. For the very first time, as far as I am aware, the government has signaled that there will no longer be a distinction between “Prime” contractors (who have previously held a direct SFA contract) and “Sub-contractors” and that any training provider who meets the necessary due diligence standards and is accepted on to The Register of Training Organisations (ROTO), will now be eligible to become a “Lead Provider” and negotiate directly with employers to agree commercial terms to deliver Apprenticeship training.

So finally we will be operating on a level playing field and providers will be judged on the quality of their work and the outcomes they achieve. The term “Disruption” is now widely used to describe mega-trends and influences which impact on specific sectors and industries and I anticipate that this single paragraph in a government publication will cause disruption on a huge scale within the vocational training arena.

Challenges and opportunities for providers

Firstly I suspect that many new high-quality providers will be attracted into the sector. Previously they would have been put off by their inability to gain a direct contract from the SFA and their unwillingness to sub-contract and effectively put a key revenue stream at the mercy of a Prime Contractor charging extortionate “management fees”. However in the new world, Apprenticeship delivery becomes a much more attractive commercial proposition. With both mandatory employer monetary contributions and increased funding levels from the government, the overall size of the market has suddenly increased dramatically. So look out for some big new players entering the market.

Existing providers will need to tear up their current business models and start afresh. They must manage the transition from “frameworks” to “standards” and prepare for the implementation of end-point assessments whilst at the same time operating for the first time in a truly competitive marketplace. Those colleges and independent providers who have relied on sub-contracting as a useful revenue stream, will need to think again. There will be casualties but at the same time, many providers will rise to the challenge and use this opportunity to rejuvenate their operations and rethink their strategies. Is this an opportunity for new partnerships and a genuine collaborative approach to Apprenticeship training?

How will employers respond?

Finally, the huge unknown remains the response of employers to the Levy and the new funding arrangements. The current proposals favour larger employers; smaller businesses, who have been led to believe that Apprenticeship training is “free” and managed by an external provider, will struggle in the short-term to cope with the concept of contributing to the training of their own people.

Whilst we need to change that mindset in order to build a genuine world-class Apprenticeship programme, it won’t happen overnight and paradoxically by excluding 98% of businesses from the Apprenticeship Levy, the government may not have helped its own cause. The danger is that these companies will simply ignore the whole employer ownership process whereas the imposition of a levy might have encouraged them to join the programme and seek a return on their investment. SMEs have a huge role to play in the economic success of our country and I feel the government may need to look again at how to best bring them on board.

For both employers and training providers, the coming months are going to be hugely challenging as all the stakeholders consider the implications of these changes. To successfully navigate this transitional period, it is vital that we adopt a positive mindset and look to the future rather than yearning for the past. I know that many people have serious reservations about these changes and I respect their views. But equally, I think we now have a one-off opportunity to transform the vocational training landscape and we should grasp that with both hands.

Roger Francis is a director with Creative Learning Partners, a specialist vocational training company focusing on the delivery of Functional Skills