Why the CIPD has got it Wrong on the Apprenticeship Levy, Apprenticeship Reforms and Management Apprenticeships

On 31 January 2023 the CIPD published a blog considering ‘the pros and cons’ of management apprenticeships and their effectiveness “in addressing England’s skills and productivity challenges.”  This article provides a critique of the CIPD’s arguments.

On one point the CIPD is right. Now is a good time to review how effectively management apprenticeships are addressing England’s skills and productivity challenges. Such a review MUST however, be based on a comprehensive and objective review of the evidence. While there are some interesting points in the CIPD review of the Apprenticeship Levy and use of management apprenticeships, key evidence is missed and there are some fundamental flaws in the CIPD’s analysis and conclusions.

The first bold claim the CIPD makes is that “the (Apprenticeship) Levy is failing to deliver on its objectives.”

The evidence cited to backup this claim is highly questionable. The CIPD notes that the number of apprenticeships is falling, especially those taken by young people. This is certainly true, but does this really mean that the policy is failing? Since the introduction of the Apprenticeship Levy, spend on Apprenticeships has actually increased from £1.5bn to £2.7bn. 

Numbers have declined, but this has been part of a shift from a focus on quantity, to a focus on quality and a shift upwards in the level of apprenticeship. On the eve of the introduction of the Apprenticeship Levy in 2016/17, 7% of Apprenticeship starts were at levels 4 and above (higher education equivalent) and 53% at level 2 (GCSE equivalent). In 2019/20 the respective figures were 25% of starts at levels 4 and above and 31% at level 2.[1] 

Prior to the introduction of the levy, apprenticeship was dominated by low level provision, often in questionable job roles – customer service and some in the retail sector being good examples. Through the levy and associated apprenticeship reforms, employers have been enabled to develop the apprenticeships that different sectors require and to choose and use the apprenticeships their organisations need.  Apprenticeship delivery has accordingly, in recent years, increasingly focused on the occupations the economy and society need – highly skilled engineers, digital specialists and, in the public sector, nurses and healthcare professionals and police constables etc.   

As a productivity focused initiative, surely a change in focus to the jobs needed by the economy means that the Apprenticeship Levy and associated reforms have been a success. While there has been a decline in apprenticeship starts for young people, Government is clear that apprenticeship is an all age programme.

If we are serious about raising productivity, then supporting adults through apprenticeships to train for the new jobs the economy needs, to support net zero, in digital/AI, the NHS, for example, is just as important as training young people leaving school or college. The statistics the CIPD highlight shows that 41% of Apprenticeship starts were under 19, 30% 19 – 24 and 28% 25 and over. For an ALL AGE programme this does not seem to be an unbalanced pattern of provision.

In criticising the Apprenticeship Levy, the CIPD bizarrely highlights its own research that “finds a growing proportion of graduates end up in low-skilled jobs, and a need for more and better vocational routes into employment to provide an alternative to the university route.” One of the most significant developments supported and propelled by the Apprenticeship Levy and apprenticeship reforms has been the rapid growth of higher and degree apprenticeships. 

Higher and degree apprenticeships provide work-based routes into higher technical and graduate level occupations and offer a different route and experience to traditional campus based university programmes. Higher and degree apprenticeships have now been developed by employers working with regulators and professional bodies for over 350 occupations (IfATE, 2022). The substantial growth of higher and degree apprenticeships in recent years is evidence, and demonstration, of the success of the Apprenticeship Levy and associated reforms. 

The CIPD’s contention that the “introduction of the levy, alongside other reforms to the apprenticeship system, has undermined apprenticeship as a vehicle for supporting social mobility and levelling up” is also open to challenge. There is certainly some evidence highlighted by the CIPD that supports this contention, but there is also evidence not referenced by the CIPD that demonstrates that the levy and reforms have supported social mobility. 

The recent Move on Up report by Middlesex University on degree apprenticeship support for progression, questions the appropriateness of existing equality of opportunity measures.  In respect of degree apprenticeships:

“The report makes it very clear that the IMD and POLAR methods are not reliable or valid measures of social mobility, and they are not designed for this purpose.”

“We instead used the Cabinet Office’s questions which are employer-facing and more relevant for apprentices and applied the government’s own method to a sample of Middlesex University students in order to obtain a much more informed view of the social mobility impact of the apprenticeship programme.”

“The results are hugely significant because they clearly show 66% per cent of students have come from lower Higher Education participation backgrounds – compared to 28% in the POLAR data which is a stark difference.”

The CIPD also misses the point that apprenticeships can now support employers to widen the diversity of their workforce.  One police force (Sussex), for example reported that the Police Constable Degree Apprenticeship resulted in a 114% increase in applications from females and 118% increase from those identifying as BAME. 

If we are serious about social mobility, we must ensure that individuals from deprived backgrounds of all ages have the ability to progress to a technical, higher technical or professional occupation. The CIPD’s continual emphasis on young people misses this biggest point. Apprenticeship makes the most positive impact on social mobility when it is supported and used as an ALL AGE programme.

Apprenticeship is not the same as a traditional academic programme, where progression is typically linear. With the traditional academic pathway, individuals are typically seen as completing GCSEs, progressing to A levels and then starting a fulltime higher education (HE) course at the age of 18 or 19. Vocational and technical programmes are different. An individual may leave school or college with an Applied General qualification, work for a number of years and then start a family. 

In their late 20s, they may have the opportunity to study and train for a profession through for example, a degree apprenticeship. Opportunities for social mobility can occur throughout life. Government understands this and the importance of flexible learning throughout life, as demonstrated by the forthcoming introduction of the Lifelong Loan Entitlement (LLE).

Prior to the Apprenticeship Levy, apprenticeship was dominated by level 2 provision, with a limited amount of provision at Higher Technical and Professional level.  Are we really saying that our ambitions for social mobility with apprenticeship should be focused on supporting individuals enter level 2 (GCSE equivalent) occupations?

Key to social mobility is the availability and use of apprenticeships at higher technical and professional level. Certainly, more needs to be done to ensure that individuals from ALL backgrounds can benefit from such opportunities. But we now have an apprenticeship system in England to support individuals from ALL backgrounds progress to such occupations.

There is a Need to Raise Management Performance

The CIPD rightly acknowledges that: “the UK’s lacklustre productivity growth could be boosted by improvements to management capability across the economy.” The CIPD, however, then goes on to make the sweeping statement that “Management apprenticeships are not the answer to the UK’s management capability deficit.” The evidence that the CIPD provides to support this claim is limited and selective.

The first argument the CIPD makes to justify its contention is that the “the proportion of managers developed via a management apprenticeship will only ever represent a tiny fraction of the overall management population.” Management apprenticeships are certainly only part of the training and development solution to England’s deficit in management skills and a range of other programmes will also be needed. Management apprenticeships are, however, part of the solution providing a pathway to develop occupationally competent new managers.

The CIPD’s second argument is that “Management apprenticeships are much more likely to be adopted by larger firms, yet evidence suggests that the biggest productivity deficit in the UK is among smaller firms.” Small businesses certainly need to be supported to make use of management apprenticeships, but this does not mean their use by large businesses is not to be welcomed. Take the NHS for example.

Quite bizarrely the CIPD does not consider the employer that is making the most use of the Chartered Manager and Senior Leader Apprenticeships. This is the NHS, which as an employer, makes by far the largest Apprenticeship Levy payment. Post pandemic, with extensive waiting lists and a multitude of other challenges, the NHS needs to train the most effective managers. Does the CIPD really think it knows better than NHS Trusts on how to develop their managerial capability? Indeed, does the CIPD want to prevent the NHS from using its levy payments on management apprenticeships that the NHS believes are having a positive impact on patient care?  

Low Completion Rates for Management Apprenticeships?

The CIPD point to low completion rates for management apprenticeships, 62% for the CMDA and 56% for the Senior Leader Apprenticeship (2019/20 figures). No one would disagree that more needs to be done to improve completion rates. When compared with apprenticeship completion rates as a whole, however, the CMDA and Senior Leader Apprenticeships compare favourably. In 2019/20 the overall completion rate for apprenticeship standards was 45%.

Is there Better Value Management Training Available?

The CIPD claims that there is better value management training available. Management apprenticeships are based on employer developed occupational standards that define the knowledge, skills and behaviours needed to be occupationally competent. They are developed under the auspices of the Institute for Apprenticeship and Technical Education (IfATE) and its employer route panels. Funding bands are determined by IfATE using a tested and rigorous process. Training providers delivering provision are required, by the Education and Skills Funding Agency (ESFA) and Ofsted to customise the apprenticeship for individual need, through the use of initial assessment. The system ensures that good value is delivered. 

Of course, management apprenticeships, are a specific type of training programme designed to develop the occupational competence of a new entrant to an occupation. A range of other programmes are also needed to increase management capability including CPD programmes, full-time courses, part-times courses etc.   

In its final argument, the CIPD floats the idea of a more flexible skills/training levy

TheCIPD is not alone in arguing that the Apprenticeship Levy should be reintroduced as a more flexible skills/training levy. There are strong arguments for the introduction of a more flexible levy. Low UK productivity remains a massive economic problem. Quoting recent Office for National Statistics (ONS) statistics The Sunday Times, on 15 January 2023, reported that “On the output per hour measure highlighted by ONS, French labour productivity is 18% higher than the UK, Germany 19% and America 25%.” In a 2022 report, the Learning and Work Institute reported that the amount employers invest in training per employee had fallen by 28% since 2005 and that UK employers only invest half the EU average per worker.

Those arguing for the introduction of a more flexible skills and training levy often, however, miss a key point. The Apprenticeship Levy currently raises approximately £2.7bn per annum to covers the cost of the apprenticeship budget of approximately £2.7bn per annum. Therefore, if Government extended the scope of the levy significantly, more funding would be needed to encompass and fund other relevant training programmes.

This would mean that Government would need to raise additional funds. An obvious way of doing this would be to increase an Apprenticeship/skills levy from 0.5% of payroll to 1.0% of payroll and/or by including smaller employers in the scope of the levy. I doubt, however, that many of those arguing for the introduction of an Apprenticeship and Skills Levy would support such a proposal.

The education, training and development community should collectively promote learning and development. We would have expected the CIPD to have championed the excellent work of their fellow professional body, the Chartered Management Institute (CMI), in successfully growing management apprenticeships. Late last year CMI and UVAC published a joint position statement on preserving the purpose of the Apprenticeship Levey.

Undoubtedly, the Apprenticeship system is not perfect and the CIPD raises some important issues e.g., the comparatively low use of management apprenticeships by smaller businesses, but a limited use of available evidence has led to flawed conclusions. The education and training community should celebrate the overall success of apprenticeships including management apprenticeships.

[1] Figures calculated from Data (p. 1) in Niamh Foley, Briefing Paper Apprenticeship Statistics House of Commons Library, March 2021