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#Apprenticeships – Spring data sets, retiring funds and simple solutions

Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial

A plethora of Apprenticeship information – but is the way ahead any clearer?

This past few weeks there has been a raft of Apprenticeship publications.

The regular Spring Apprenticeship Data set the exciting new Skills index, and an updated Technical funding guide alongside some juicy FOIs (but no sign of any 19/20 funding rules as yet though!)

And contained within them there is some really positive news:

  1. 10 % year on year growth in Apprenticeship starts (to ‘March 2019)
  2. 17,000 out of 21,000 levy payers have now activated their levy accounts
  3. The first month’s ‘retired’ Levy fund recall by HMRC is only £12m (of £200m paid in April ‘17)
  4. 36% of End Point Assessments (EPAs) have resulted in Distinctions or Merits
  5. Apprenticeships have a greater impact on productivity than ‘classroom courses’
  6. Apprenticeships are longer than ever and the overall academic-mean of the programme continues to rise

Of course you could also look at these same figures another way:

  1. At the current level of take up it will be 2021 before we hit pre-levy participation levels
  2. If it has taken 2 years for 17k large employers to open their levy accounts – how long would it take 1m SMEs?
  3. Employers have had 2 years to spend the first month’s Levy (before tapping into month 2) and have not been able to do so – meaning future reclaim amounts will be larger
  4. The EPA results in the Data pack are great but they don’t show how many people have failed their EPA (unless it’s the of results labelled as ‘other’?). There definitely seems to be an EPA delay as learners make absolutely sure they will pass before attempting their EPA
  5. Apprenticeships are not always being prioritised over ‘classroom courses’ – by funding or delivery bodies even though the evidence is that they result in greater returns
  6. Longer durations are a direct consequence of ‘Higher’ but not necessarily of better. Reporting on total hours per year rather than total hours would be a more useful measure here…

Apprenticeship spend by academic level

A recent question in the House resulted in this fascinating table being published:

PQ 243419: Table attachment showing total spend on apprenticeships

Richard Marsh May19

Nb. it’s not dated but assumed to be cover the period May ’17-Feb ’19

Key observations

  • Total Apprenticeship spend since the introduction of the levy is £1.67bn
  • Of which 83% was spent on level 2 and 3 (combined) and 6% on level 6 & 7 (although this element is increasing)
  • For levy payers specifically, the profile is only slightly different with 77% of their levy being spent on L2 & 3 and 9% on Level 6 & 7

It is not clear if the difference between Levy and the overall spend pattern is because larger levy paying employers want higher level qualifications than non-levy SMEs – or because the annual ‘roll over’ nature of non-levy funding allocations mean that money is sat disproportionally with providers who have a history of delivering lower level Frameworks?

Although the amount being spent on Higher Apprenticeship has risen and is rising – it is still relatively small as a proportion of the total and if we ever get standards like level 2 Business Admin approved then that will rebalance the spend.

Remember the 2020 vision?

The published Government vision is still that, by 2020:

  • “Apprenticeships will be available across all sectors of the economy and at all levels”

Indeed there is no doubt that Level 2s entry-points are vitally important and must be preserved for as wide a range of careers as possible, especially when the old Frameworks end.

Without them many job roles are cut off for our young and not so young – intolerable at all times – but especially so post Brexit.

Currently entry level Apprenticeships are being strangled by a combination of ridiculously low funding bands and a lack of new standard approvals.

There is a desperate need for the DfE, who ultimately own the policy, to say publicly what it wants and to reaffirm what Apprenticeships are for, and then to put its money where its mouth is.

As with level 2 – there is no reason to deny Level 8 Apprenticeships if employers need them and they are truly in the ‘driving seat’.

Not so long ago very senior civil servants were being lauded for undertaking Degree apprenticeships themselves – completely in line with the 2020 vision and policy.

Some simple solutions

Why not encourage Apprenticeship standards to have level 2 entry points, but to then progress learners to a level 3 completion point.

This would allow those with little or no experience to enter careers via an Apprenticeship – but to then progress to an end point that is at based on job competence plus the acquisition of core skills that will be of long term benefit.

There are no learners for whom ‘level 3’ Digital, People, and Technical skills would not be a useful platform for successful careers. Even if these skills aren’t required for immediate use in their job roles it would help them to be progression ready and to adapt to changes in their industry / job area.

Instead of designing a system to provide people with just enough training to carry out a role – and no more – we should be aiming to equip people with a broad range of skills that will help them to progress and be of long term value.

A more permissive set of design and delivery parameters backed by a minimum funding rate of £3k per person per annum (and a maximum of £8k) would ensure that it can all be delivered to a high quality threshold.

SME funding and affordability

It still seems to be the Government ambition that SMEs are put onto the levy ‘system’.

Anne milton100x100Rt Hon Anne Milton said (2 Apr 19):

“I am very aware that there are non-levy employers who are not yet on the apprenticeship service, and I want them to be on it as soon as possible. We are currently at the mercy of procurements and training providers. With procurements it never feels as if we are getting the right answer.”

Ignoring the prerogative statement about training providers! the Minister seems to be expressing her desire to use the levy system to allow all employers to choose the provider they want – and to end provider contracts and allocations.

This makes absolute sense, but would mean the end of funding control for the ESFA as the levy system has no limits or macro spending controls.

So how do we ensure there is enough money in the system to allow SMEs to buy what they want when and where they want it?

I think the answer is already here – let the ‘retired’ pay

Now that we are our 2 years into the levy, each and every month there will be an amount of money ‘retired’ from employer’s levy accounts as initial payments hit 24 months unspent.

Why not use those unused funds to top up Government funding for SMEs?

As confirmed by the Minister (below) the levy is far from unspent and retired levy funds might only be £10m in May, but they will c£30m+ in June and £100m PCM by the end of the year – more than enough for all SME demand.

Rt Hon Anne Milton, said (15 April 19):

“In the 12 months from February 2018 to January 2019, the most recent month for which data are available, £2.36 billion in levy funds were received into employers’ apprenticeship service accounts… In the same time period, a total of £523 million of payments were made from apprenticeship service accounts to cover training costs for learning.”

And if in future years the levy does become fully utilised (and currently 78% isn’t being used) then increasing the Levy from 0.5 to 0.6% (of payroll) for example would add £40m PCM to the pot and ensure that there is enough for all SME demand.

Surely this is more effective than the Levy transfer process which asks large employers to move money to little employers to move it to the ESFA who then move it to training providers? (so far only 300 apprentices have had their programme funded this way). This has been an interesting and useful stop gap measure but it is not a viable large scale solution,

I think we have to find the solution to the current funding log jam from within the current system – I do not believe that starting to ask individuals to pay for their own training will work, remember the funding car crash that was Apprenticeship loans in 2013 ….

Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial

Richard Marsh Newsroom Strap

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