Quarter of apprenticeship providers fear for their survival leaving thousands of young people without apprenticeship opportunities

Latest @AELPUK #Covid_19 impact survey shows training providers working miracles to preserve #apprenticeships and other #skills programmes but they are living on borrowed time 

Training providers are making remarkable efforts during the lockdown to keep training apprentices and other learners on government skills programmes.

An extraordinary 81% of current apprentices are still actively learning after providers executed an almost overnight switch to online learning and assessment resources, but the continued lack of Education department support in defiance of Cabinet Office Covid-19 supplier protection guidelines is threatening to destroy much of the good work being done.

Providers have responded to the second AELP Covid-19 impact survey by saying that if no guarantees of financial support from the Department for Education (DfE) are forthcoming, half of them will downsize, mothball their business or shut down completely, meaning that hundreds of thousands of young people and unemployed adults who need retaining will have no training available to them when the crisis is over.

The lockdown means that new apprenticeship programme starts with employers have in most cases ceased (there were 390,000 starts last year) and completions of existing programmes, which require an independent assessment, have also fallen sharply. 

So while current learners will still be funded by the government, a huge amount of income, which depends on ongoing starts and completions, is drying up for many apprenticeship training providers who train 7 out of every 10 apprentices in England.

150 providers, colleges and universities responded to the snapshot 24-hour AELP survey and the other key findings were:

• 43% of providers are managing to train apprentices and other learners at between 80 and 100% of their pre-pandemic capacity but 57% of them are training at less than 80% of capacity.
• In the vast majority of training organisations, more than three-quarters of learning provision is now being delivered remotely and 9 out of 10 organisations say that the switchover means that for each of them, this type of provision is at least 50% larger than before – hardly surprising in respect of what are usually ‘work based learning’ programmes but an indication of how impressive the quick changeover has been.
• 1 in 5 apprentices are on a break in learning, have been made redundant or have left their programme.  Sectors most adversely affected appear to be health & care; early years educators; hospitality & catering; and the motor trades. 

Quarter of providers put their chances of survival at less than 50% with Treasury loans scheme failing providers

With fixed costs to be met and providers’ furloughed staff not allowed to train apprentices and other learners, the survey identified the following in respect of training providers being able to maintain the high levels of capacity so far:

• If the DfE continues to refuse to comply with the Cabinet Office guidelines in terms of paying suppliers and the lockdown goes on, a quarter of providers fear that their chances of survival are less than 50%.  The largest cohort (34%) put their chances at between 50 and 75%.
• Only 2 providers had successfully obtained a loan under the Treasury’s business support package (a 2.7% success rate for those interested in taking one out).  39 were still waiting to hear back from their bank; 5 had had their applications rejected; and 25 found that they were not eligible.  DfE ministers have made clear that this is the option which independent training providers should pursue to obtain financial support. Half of the respondents haven’t applied for a loan so far.
• Virtually all providers have managed to keep some staff working full-time, but 83% are also furloughing employees who are then unable to support the delivery of training. At this stage, only small numbers of staff have been asked to accept a pay cut or face the prospect of redundancy.

No bailout money needed

 said:

“Training providers are doing their absolute best to keep apprentices and other trainees learning in extraordinary circumstances, but we are living on borrowed time. 

“The longer the Department for Education mysteriously fails to explain why it is refusing to comply with the Cabinet Office covid guidelines and to change its position on funding accordingly, the greater the damage will be when the country needs to be maximising skills training capacity for picking up the economy when the pandemic is over. 

“This is an example of where the ‘levelling up’ mantra is fast becoming a very discredited piece of rhetoric because this is not about whether a group of independent training providers survive or not, but whether thousands of young people and unemployed adults, many from disadvantaged backgrounds, are going to have access to high quality apprenticeship and other training opportunities when they really need them.

“No bailout money is needed –  the apprenticeship budget for 2020-21 is already sitting in the DfE’s coffers, so why aren’t ministers using it to produce the skills the country so desperately needs?” 

The second AELP Covid-19 impact survey took place on 9 April.  There were 150 responses, 131 of which were from independent training providers (ITPs), 6 from FE colleges and 3 from universities.

Between them, they normally have 81,000 apprentices on a programme and approximately 138,000 learners on other skills programmes.

92.5% of these respondents employed less than 250 staff while 6.5% had more than 250 staff.

81% of apprentices are still on programme in active learning; 15% are on breaks in learning (BILs) which means no funding for the provider; and 4% are redundant or otherwise not on programme anymore.

The Cabinet Office Covid-19 supplier payment guidelines for government departments and public bodies can be read here.  Across the devolved nations, other Whitehall departments and mayoral combined authorities, AELP has not been able to identify a single example of non-compliance other than the DfE’s refusal to apply the guidelines to apprenticeships and other skills programmes. However, the DfE has applied the guidelines to grant funded mainstream further education provided by colleges.  The Department has not supplied a reason so far for its non-compliance.

If no DfE financial support is forthcoming, 51% of providers will maintain their current capacity as much as possible, but 30% will downsize, 11% will mothball for the duration of the pandemic and 8% will shut down their business completely.