The Apprenticeship Levy – Will Employers be Short Changed?

Look back on the Government’s announcement in 2015 to introduce the apprenticeship levy and the key justification for this was that employers weren’t investing enough in the training and development of their workforce. This longstanding lack of investment, Government argued, was a significant factor in explaining the slow growth of UK productivity. The reforms to apprenticeships, which started a few years prior to the introduction of the levy, helped position its introduction.

From April 2017 UK-wide employers, with a payroll of over £3 million were required to pay the apprenticeship levy. In return for paying the levy, employers in England were given the assurance that they were in control of not only apprenticeship development, but in determining which apprenticeships to use for their employees. Through the trailblazer process employer groups would develop the apprenticeship standards and assessment plans that described the knowledge, skills and behaviours required to be fully competent in the workplace in defined occupations and how occupational competence would be assessed.

Levy paying employers through the Apprenticeship Service could then purchase the apprenticeship provision to develop the skills of both new and existing employees to increase the productivity and performance of their organisations. Unsurprisingly, through the trailblazer process employers have moved away from the low level questionable job roles that dominated apprenticeship provision of the past, think business administration and customer service, and focused on real occupations needed by their organisations. Indeed, around 40% of apprenticeship standards developed and under development are at higher education level. New degree apprenticeships have and are being developed in some very significant occupations needed in both the public and private sectors; police constable, registered nurse, social worker, manager and in engineering and digital professions.  

So far so good, but what’s the emerging practice like?

The apprenticeship standards and assessment plan approval process is turning into an ever increasingly bureaucratic nightmare presided over by an Institute for Apprenticeship that seemingly takes pride in the number it “rejects”. Like others, I believe in the importance of having the employer leading apprenticeship development. I also thought this was part of the Government’s ‘deal’ with employers – in return for paying the levy, employers were in the driving seat in the development of an employer-responsive apprenticeship system and in deciding which apprenticeships to design and use for both new and existing employees. Unfortunately, rather than adopting a ‘light touch’ approach to the development of apprenticeship standards and assessment plans an attitude of “Whitehall knows best” seems to be emerging. Essentially the employer is in the lead – so long as they develop the apprenticeships Whitehall wants.

Trailblazers have to jump through an ever-increasing (indeed, ever changing) number of hoops to satisfy the Institute for Apprenticeships causing delays and amendments to apprenticeships which make them less effective. A process that is also incredibly fatiguing for employers and their partners. No one would deny that there is a need for some checks to ensure consistency and that an apprenticeship does what it should do. But the reforms clearly established the principle that the employer was central to the apprenticeship design. In overseeing the development of apprenticeship standards and assessment plans the Institute for Apprenticeships, rather than developing as an organisation championing the employer role, seems to be in search of an all-embracing quality assurance role that isn’t really needed.

Rather than growing its role the Institute for Apprenticeships should champion the employer role in the process of creating and developing apprenticeship opportunities worthy of the brand. As a guarantee of quality surely a properly established employer Trailblazer working with professional, statutory, regulatory bodies and training providers as appropriate is the best way to ensure an apprenticeship standard and assessment plan? The Apprenticeship Service will enable employers to purchase the high-quality apprenticeship provision they need; providing they have the choice of apprenticeship standards required by their sector.

Of course, it’s crucial the interests of the apprentice are safeguarded, but this is where Ofsted and HEFCE come in. ESFA ensures both financial probity and quality by maintaining registers of apprenticeship providers and end point assessment organisations. And there’s also an agreed approach to external quality assurance for apprenticeship end point assessment. Surely, the role of the Institute for Apprenticeships should be to ensure high quality apprenticeship provision by recognising employer leadership in the development process and introduce more urgency in getting apprenticeship standards and assessment plans approved.

Not only does the Institute for Apprenticeship want to micro manage the apprenticeship standard and assessment plan development process, but there’s increasing talk of how it might restrict the ability of employers to use certain types of apprenticeship. Suppose the argument goes, employers spend too much on apprenticeships for existing staff, on degree apprenticeships or on management programmes? Suppose employers spend too little on apprenticeships for 16 – 19 year-olds who don’t want to stay on at school or support the NEET (not in education, employment or training) cohort? Increasingly there’s talk about how the IfA may use funding levers to influence employer behaviour. Or put in plain English restrict employer choice on how to spend their levy.

Put simply, there’s a risk that the apprenticeship levy could emerge as a stealth tax on employers to fund low level skills provision for young people who’ve been let down by the schools system. Here the Institute for Apprenticeships is playing with fire – the levy is seen by many employers as a key part of their training budget. Restrict employer use of the levy and focus apprenticeships on job roles that aren’t needed and employers may reduce their existing spend on the training and development of their workforce. There is a real possibility that the Institute for Apprenticeships could, through its actions, lead employers to spend less on the training and development of their employees and reduce growth in productivity – the very opposite policy intent of the Apprenticeship levy.  

So, will employers be short-changed from the apprenticeship levy? There’s most certainly a risk. The last twenty years have shown what happens to apprenticeships when it’s led by successive Government skills agencies. Under the old system apprenticeship had little STEM focus, nearly 60% of delivery was at level 2 (GCSE equivalent) and negligible provision focused on higher level skills provision at bachelors and masters level. For once, can the bureaucrats stop meddling, and can we leave the leadership of apprenticeships to the employer as Government originally intended? Such an approach will pay dividends and the Government’s productivity agenda may well be delivered.

Adrian Anderson, Chief Executive, University Vocational Awards Council.