From education to employment

Apprenticeship funding might well be in need of reform – but let’s not make access harder

Mark Farrar, Chief Executive, AAT

With the target of three million #apprenticeship starts by April 2020 having long been discredited, government attention this year is set to focus on how to improve the working of the Apprenticeship #Levy.

The Levy was originally devised as a key means of boosting apprenticeship starts, but the outcome of its introduction three years ago has been precisely the opposite.

In 2017/18, for example, there was a 24 per cent drop in overall apprenticeship starts across all sectors, despite pockets of success in individual sectors, including accounting. While there has been a recovery of late, pre-Levy apprenticeship starting figures have generally not been realised.

With the Levy set to remain in place, independent think tank EDSK published a review of the apprenticeship system in England last week, in its report ‘Runaway Training: Why the apprenticeship levy is broken and how to fix it’. The report claims that the Levy is not being used appropriately, often funding ‘low-skilled’ jobs rather than training apprentices, or indeed training experienced staff as opposed to helping new recruits.

A Levy expansion would be welcomed

In regard to using existing Levy monies to train existing staff, clearly this isn’t in the spirit that the Levy was introduced. However, this isn’t a new tactic that some companies have deployed – it’s one that significantly predates the Apprenticeship Levy.

While I agree that Levy funding shouldn’t be funding the likes of MBAs, AAT isn’t alone in recommending that some of the monies raised could be redirected towards upskilling existing staff and reducing the UK’s skills gap as a result.

The UK spends just two-thirds of the European average on adult training at present and, as a result, labour force productivity was lower in the past decade than at any time in the 20th Century.

There is a growing clamour for a rebadging of the Levy as the Apprenticeship and Skills Levy – meaning that funds can be directed towards high quality traineeships and other training that will benefit existing workers, employers and the economy as a whole. So while, as the report claims, some Levy monies may be used inappropriately for existing staff at present, perhaps it’s the Levy rules that need the most focus this year.

Don’t discourage potential apprentices

For me, the EDSK report’s recommendation for the Department for Education to restrict the use of the term ‘apprenticeship’ to training at Level 3 only is far more concerning. Many apprentices past and present have started their journey at Level 2, which offers those who are new to the sector a strong grounding in their chosen profession before hopefully progressing through to Level 3. Furthermore, introducing apprenticeships at Level 2 is a strong social mobility enabler.

Each year thousands of mainly young adults from disadvantaged backgrounds are able to access apprenticeship schemes for the very reason that they start at Level 2 – meaning they are far more accessible regardless of prior qualifications.

The AELP’s Mark Dawe rightly pointed out that there is a need for a wide range of apprenticeships at all levels, not just at Level 3. Young people looking to start out in their career will be further put off an apprenticeship if they are somewhat forced to aim towards the middle rungs of the ladder, having not taken the first step up.

Therefore, while there’s certainly plenty that can be done to reposition the Levy, change should not be about restricting the Levy’s usage even more than at present. There are ways in which the Levy can be expanded to help upskill the nation and be better used by small businesses – and we hope therefore that its use will be promoted during 2020, not stifled.

Mark Farrar, Chief Executive, AAT

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