Chief Executive of The Association of Employment and Learning Providers (AELP), Mark Dawe details the crucial role of apprenticeships in the UK today
For all the political turmoil since the general election of 2015, the one thing that hasn’t changed is the UK government’s commitment to advancing social mobility even if the recent report on the Social Mobility Commission by the Education Committee in the House of Commons exposed divisions about how the issue was being addressed.
Apprenticeships are rightly considered a key driver for social mobility and the introduction of the apprenticeship levy on large employers last year was meant to generate a big increase in apprenticeship opportunities for young people – to put them on the road to a successful career. This may still happen which is why the Association of Employment and Learning Providers (AELP) is an unequivocal supporter of the levy and believes that for the foreseeable future, the levy’s proceeds should remain ringfenced to fund only apprenticeships rather than other forms of training.
But there is no escaping the fact that the latest official apprenticeship statistics do not make for happy reading. Starts on the programme in England were just 27,000 last November, a staggering 40% decrease on the number 12 months before. In respect of social mobility, the biggest concern should be the falling number of new apprenticeship opportunities for 16 to 24-year olds and at intermediate and advanced levels (levels 2 and 3). In fact, since the levy reforms were introduced, the number of apprenticeship starts at level 2 have halved while starts for 16 to 18-year olds have fallen by 38%. The Education Committee chair Robert Halfon MP agrees with our concerns about this and now Ofsted’s Chief Inspector Amanda Spielman has added her influential voice to those who believe that the government needs to take action.
Our proposal to ministers is that until April 2019, SME employers outside the levy’s scope should not be required to make a financial contribution towards the cost of training new apprentices aged between 16 and 24. The waiver should also apply to the levy paying employers who hire additional apprentices beyond their levy entitlement. We would also like to see a new incentive to encourage more progression from intermediate to advanced levels, again involving the waiving of the financial contribution when an apprentice moves on from level 2 to a level 3 programme.
Traditionally the majority of apprentices have been employed by SMEs, but for the 15-month period of January 2018 until April 2019, the government has allocated an initial £450 million for the apprenticeships of non-levy payers which is less than half of the 12-month budget allocated to them a year ago. The levy payers also get the first claim on taking back money from the levy pot and therefore, smaller businesses are now wrongly a secondary priority in driving forward employer engagement with the apprenticeship programme. To rectify this, a guaranteed £1 billion annual budget for non-levy employers is required to ensure that there are apprenticeship opportunities available across the whole of the country and in all sectors.
Delivering apprenticeship training for non-levy paying SMEs is still undertaken via a contracting process between the Education and Skills Funding Agency and training providers. Last autumn, after a previous disastrous attempt was scrapped by skills minister Anne Milton, a government procurement exercise took place to decide which providers would deliver the training for SMEs until April 2019. Unfortunately, it was another botched exercise with a controversial marking system that left many good and outstanding specialist training providers without contracts.
Many areas of the country and particular sectors are, therefore, about to experience a shortage of specialist provision which will impact negatively on employers and the young people wanting to do an apprenticeship. In our view, all government registered providers should immediately be given access to funding apprenticeships for all employers. The government also needs to address other barriers to employment engagement in the programme, such as more flexibility in the rules that govern off-the-job training. The disappointing outcome to the non-levy contract procurement is leading to more subcontracting in the supply market and the rules surrounding this practice need to recognise the new realities while ensuring that money is not being taken away from frontline training.
In yielding a billion pounds more for the programme’s budget, the apprenticeship levy is potentially a gamechanger in the efforts to boost Britain’s productivity, as a vehicle for improving social mobility and for ‘growing our own people’ to fill post-Brexit skills shortages. The introduction of new standards has given us an opportunity to improve the quality of apprenticeship training, while the increase in the number of apprenticeships at higher and degree level is now giving young people a genuine choice over whether or not to go to university, knowing that apprenticeships mean no student debt and that the apprentices are earning while learning. But we cannot deny that damage is being inflicted on the social mobility agenda because of the way the levy is being implemented and this is why ministers need to act now.
The Association of Employment and Learning Providers (AELP)
Tel: +44 (0)117 986 5389