From education to employment

The first year of the apprenticeship levy – a balanced and constructive assessment

Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial

Richard Marsh gives his balanced and constructive response to the recent report from think tank Reform, “The Great Training Robbery: assessing the first year of the apprenticeship levy“.

The impact of the levy on apprenticeship quantity

The Levy itself has not caused a reduction in Apprenticeships. How could it as each extra pound that it allocates to apprenticeships this year is new? 

It has reduced the amount of money spent on Learning & Development (L&D) outside of Apprenticeships though as levy payers reduce other budgets to compensate (and this has had a knock-on impact). 

The levy has also moved money around – away from the North East and North West for example and into the South East, as it is based on earnings not on government spending priorities. 

It has also caused a major headache for employers with staff across the UK and different funding agencies refuse to offer a joined-up UK wide solution. 

The biggest drivers of reduced volumes have been:

  1. Slashing of funding rates for Frameworks (making them uneconomical to deliver), whilst
  2. Asking each provider to individually invest in setting up for new standard delivery which is stretching the resources of businesses that have been crippled by years of falling prices 

It will take up to 3 years before the volume of starts on new standards matches that of frameworks, and the new distribution will undoubtedly be different to the old.

Should the target for 3 million apprenticeship starts by 2020 be abandoned?

Why? it is only a symbolic number. Removing the target does not affect:

  • How the levy works
  • Transition from Frameworks to Standards etc
  • The 20% rule
  • Subcontracting

The target is only political, and we must remember it predates the levy.

The 3m was based on the amount of funding the Government was prepared to spend on apprenticeships between 2015-2020 before it thought of the Levy. Thus, the levy is now the key lever for controlling volumes. 

Given the choice, it is likely that employers will continue to choose to invest most in training their existing employees and to spend what they see as their money on the qualifications and skills that they valued before the levy began. 

The impact of the levy on apprenticeship quality

The Levy has introduced an increased sense of employer ownership generally and it has increased levels scrutiny from employers on the service and quality they receive from providers.

The move to Standards and their EPAs has meant a stronger focus on Teaching & Learning (as opposed to Assessing) and we all hope this will improve the learning experience, but it is surely too early to tell.

Should the Government introduce a new internationally benchmarked definition of an ‘apprenticeship’, and any apprenticeship standard that does not meet this definition withdrawn?

Perhaps – but this is not compatible with an all age, all level programme which is what we have implemented. 

The dual-system is the only long-term successful and sustainable model (and so the international benchmark) and it relies on a VET classroom curriculum that is wider than any of our apprenticeships (i.e. it includes study of foreign languages. politics etc).

This type of study won’t work for busy adult workers, so we can either have:

  • An all age programme that is ‘light’ enough curriculum to suit all
  • A classroom-based 16-19 WBL programme
  • Two apprenticeship systems. 

How the levy has affected employers

With 60% of Levy paying employers having already opened an account, it is clear that only those companies with a very healthy profit margin – or a very small levy payment – have ignored its introduction. 

The Levy has changed how larger organisation manage L&D spend. It has often acted as a catalyst for centralising L&D budgets at large employers. With ‘head office’ HR staff being appointed as ‘Levy managers’ for whole companies and a new wave of corporate L&D reviews and strategies. 

What has not yet happened is the creation of lots of new school to work programmes – traditional apprenticeships – and of course, this is a cause for criticism and concern. 

However, these places will come with time as employers find that all of their most obvious in-house / existing employee training needs have been served and the demographic timebomb combined with Brexit means that we need to train more job entrants. 

Should the requirement for 10 percent employer co-investment towards the cost of training apprentices be removed with immediate effect, to avoid employers disengaging from apprenticeships?

This is a good idea, as the to and fro of cash between businesses and providers is just a frustration for most. 

The separation of funding for the Functional skills required by Apprenticeships from other Apprenticeship funding is also an unnecessary complication. 

Should the Government replace the existing HMRC digital payment system with a simpler ‘apprenticeship voucher’ model, to give employers control of government funding while reducing their administrative burdens?

I think it’s too early to give up on ‘DAS’, but it would be good to have more investment in the system and more employer help before it goes live with 2 million business in April 2019….

How the levy has affected providers

It has been a huge cost for providers, but with the potential of huge rewards. And we are almost free of the subcontracting tax and the tyranny of contract allocations. 

I believe that we now have the opportunity to become mature partners with employers and to be seen as less of the state apparatus. And with the increased blurring of the lines between commercial L&D / Apprenticeships and HE there is the opportunity for providers to be defined by their expertise rather than their funding category. 

Should all apprenticeship standards and end-point assessments for apprentices should be assigned a fixed cost by the Education and Skills Funding Agency, to remove the need for complicated price and contract negotiations between employers and both training and assessment providers?

This cannot work with the funding band system. The bigger crime is that we have decided some people (i.e. the young and low skilled in the main) are only worth a £2,500 apprenticeship (including EPA) – where is the parity of esteem there? There should be a minimum of £5,000 spent per person.

Should the exam regulator Ofqual be made the only option for quality assuring the end-point assessments for apprentices, to ensure that standards are maintained over time and poor practice is quickly identified and eradicated?

Yes! This is a no brainer.

Why not also solve the level 5+ non-prescribed Apprenticeship quality assurance riddle too: is it Oftsed, is it QAA?

Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial

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