Simon Ashworth, AELP Director of Policy.
Last week I gave evidence to the London Assembly Economic Committee on how to improve apprenticeship opportunities. Although the session was focused on London and Londoners, the same ‘big ticket’ challenges generally exist across the rest of the country. Given National Apprenticeship Week 2022 is now upon us, perhaps this is an apt moment to explain what can be done to build on the successes of the apprenticeship programme.
A key point I made to the Economic Committee, was that we should not lose sight of how the apprenticeship levy has helped galvanise the apprenticeship programme throughout England. Too often this is forgotten about. . The investment in the apprenticeship programme, driven by the levy, has nearly doubled and it was positive to see another £170m committed in last year’s Spending Review.
Frustratingly we regularly see confusion between the levy itself and the ‘levy-system’. It is not the apprenticeship levy, which is holding us back, but a system that is in need of evolution.
So how do we take our fantastic apprenticeship programme and make it even better through evolution rather than revolution? In this blog I wanted to highlight and explore three current issues for employers, apprentices, and providers – the three crucial pillars to making a high-quality apprenticeship work.
Engagement with the apprenticeship programme from non-levy employers remains stubbornly low. More support is needed for non-levy paying employers so they can engage more effectively with the apprenticeship programme and the apprenticeship service.
For the previous academic year, just 62,000 non-levy paying employers made a reservation for apprenticeship funding. Yet non-levy paying employers equate to 98% of all employers in this country and before the apprenticeship reforms were the backbone of the apprenticeship programme’s previous strong growth.
Smaller employers have also historically recruited younger apprentices on lower-level apprenticeships, both of which have declined significantly in recent years. Non-levy paying employer participation, young people and lower-level entry points are all interlinked.
The Chancellor’s new hire incentive scheme for employers was effective in driving demand, with over 161,000 new jobs supported. This included an increase in new jobs within non-levy paying firms which undoubtedly helped see a welcome upturn in quarter one 16-18 starts. However, with these incentives coming to an end last month, a long-term targeted incentive is needed.
Incentives offer excellent value to the taxpayer too. While Kickstart was budgeted at over £2bn, the apprenticeship incentive programme just £200m - and not only did the incentives work, they also comparably offered better value for the public purse. More government intervention is needed if they are serious about helping non-levy paying employers engage with the apprenticeship programme and access the apprenticeship service. Many employers still find the apprenticeship service too challenging to use. It either needs streamlining or we need a new system that allows providers and other intermediaries to support non-levy payer onboarding of apprentices.
The government’s policy on maths and English qualifications is quite frankly a mess. Apprentices need - and deserve - much better support.
Historically the government decided that it was more cost-effective to deliver functional skills qualifications alongside a work-based apprenticeship and discounted the funding rate to just a meagre £471 per functional skill. This makes it incredibly challenging for a provider to cover the actual cost of delivery. The fact that maths and English isn’t part of the off-the-job time also means apprentices without these key core skills are seen as less attractive by some employers – as they are considered less productive than their peers who do not need this training.
Last month the ESFA reintroduced the arbitrary testing of level 2 apprentices to take, but not pass, their level 2 exams. That follows on from last year’s decision to remove maths and English as a formal exit requirement from the ‘gold-standard’ T Level programme. Maths and English skills are vital for everyday life and key for helping level-up. However, apprentices on the apprenticeship programme deserve parity with their peers on T Levels and A-Levels when it comes to maths and English requirements. Where functional skills are required, funding needs to cover the cost. Furthermore, maths and English should count in off-the-job measures so there is no disadvantage to apprentices who need to improve their levels of literacy and numeracy to match their peers.
Providers need a fairer and more transparent approach to apprenticeship funding.
There are daily reminders on the news about increases in the cost of goods and services. Training providers are not immune to this. Despite a much-welcomed recent increase in the 16-19 base rate, there is no such support for apprenticeships where rising costs - for items like consumables and salaries - are making it harder for providers to deliver high quality provision. Rising costs also mean it's becoming harder to attract and retain occupational specialists to deliver training. If we want a programme that features truly world-leading training, then funding needs to support this ambition.
The solution? For fairness and transparency all government-mandated activity should be fully claimable as “eligible” apprenticeship costs. Additionally, inflationary uplifts are required, and all apprenticeship funding bands should reflect this to ensure providers can meet the needs of employers and aspirations of apprentices to ensure high quality of provision for all.
There is much to celebrate but there is still more we could be doing to make apprenticeships open to all levels and all ages. Let’s hope by the time we next mark National Apprenticeship Week 2023 we’ve made more progress in meeting this ambition.