Sector Response To The NAO Report On The Apprenticeships Programme

Today (6 Mar), the National Audit Office (NAO) has published a new report assessing whether the government’s apprenticeships programme is providing value for money. 

National Audit Office report: “The apprenticeships programme” Read Here

Responding to the NAO’s report on the Government’s apprenticeships programme:

Mark Farrar, Chief Executive of AAT (Association of Accounting Technicians), said:

“The apprenticeship picture doesn’t look particularly rosy when reading the NAO report, published to tie in with National Apprenticeship Week. It feels like it’s high time that the Government dropped this long-standing emphasis on three million apprenticeship starts by 2020, a figure that most commentators now deem to be impossible to reach, and put greater focus on where the funding should go.

“Smaller businesses, who are not responsible for paying the apprenticeship levy, need to be brought much more into the equation if there is to be any tangible rise in starts and completions of high-quality apprenticeship schemes. Just 19,150 companies are believed to have been eligible to pay the Apprenticeship Levy since its introduction in 2017 – that in a nation of 5.7 million small and medium-sized enterprises (SMEs). While this select band may be the companies with the biggest resources and who are best placed to incorporate schemes within their business, it seems ludicrous that 99% of British businesses are given far less focus when thinking about accelerating the apprenticeship drive.

“The SME community easily represents the greatest pool to tap into when considering adult education and apprenticeship needs. Funding for skills in general – not just apprenticeships – should reflect this.”

Layla Moran MP, Liberal Democrats spokesperson said: 

“Clearly there are still serious questions for the Department to answer about how they make sure the apprenticeships programme delivers the best value for money and – most importantly – how it continues to provide high quality learning and training opportunities to everyone who could benefit from them.
 
“Apprenticeships have so many advantages to offer, both to the apprentices themselves and to the businesses they train with, and I am extremely proud of the work Liberal Democrats did in Government to dramatically increase the number of people in high quality apprenticeships.

“But the worrying fall in the number of apprenticeship starts in the last year shows the Government’s attempts to reform the scheme are putting this progress at risk.

“Many more local businesses would like to offer apprenticeship places, but uncertainty over the new system means they have been let down. I call on the Government to provide the support and certainty local businesses need.”

Ian Pretty, CEO at Collab Group, said:

“The Collab Group broadly supports the perspective set out in the NAO Report on apprenticeships. The report raises valid concerns including the substantial drop in apprenticeship participation since the introduction of the levy and the misguided nature of the 3 million starts target. As the report shows, the rate of starts needs to double to meet the 3 million target within the anticipated timescales. Measures of apprenticeship success would be better focused on achievements and quality, rather than singular focus on starts.

“The report is also perceptive on the impact of higher-level apprenticeships. We are broadly supportive of the expansion of these types of apprenticeships, but as the report identified, there is a risk that higher level apprenticeships absorb too much public funding. This is an issue that we identified in our thought piece “Make apprenticeships work for all“, in which we argue that, to a certain extent, lower level apprenticeships are being jeopardised by to the raise in higher level apprenticeships.

“We found that between 2017/18 and 2016/17, there was 9% decrease in intermediate apprenticeship completions and a 49% increase in higher level completions. On top of that, 60% of people in higher-level apprentices are existing employees, which means that higher-level apprentices do not necessarily convert into new opportunities for people looking to enter into the labour market.”

Alan Woods OBE, Vocational Training Charitable Trust:

“Across the board, the measurement of success for apprenticeship reforms is the result of getting more young people into rewarding work they enjoy. Today’s NAO report is about the value of public money being spent to achieve national policy goals of increased productivity. At the individual level prospective young apprentices want as many  opportunities as possible to start their careers with local employers.

“To achieve both those aims we need to ensure that the availability of apprenticeships is a key workforce development opportunity for all employers, whether big or small. An all-out push to maximise the engagement of all employers; extensive promotion to young people whilst still at school, and an easily understandable and consistent funding programme will address many of the issues the NAO raise.”

Tom Bewick, Chief Executive of the Federation of Awarding Bodies (FAB), said:

“This welcome NAO report tells those of us working in the sector a lot of what we know already. That is the apprenticeship reforms in England, which started over 6 years ago, are still far from complete.

“The Federation of Awarding Bodies has been warning for some time that the whole quality assurance piece is a mess. We call on the DfE and the Institute to continue with its efforts of implementing a stronger, more consistent, single quality assurance framework. The new standards need to be benchmarked with leading systems of apprenticeship, so we can clearly measure the bottom line impact on productivity. And it is time for a serious debate about what the apprenticeship levy can realistically be asked to pay for.

“Worryingly, the NAO findings point to the gaming of the system by some providers and employers. In some cases, public funding has been used to substitute for the privately funded training that would have been supported anyway. The skills sector has been here before with both the wasteful Train to Gain programme and the infamous overspend of national skills academy capital bids. This latest NAO report is yet another wake up call to get the investment case for apprenticeships in order before the Comprehensive Spending Review reports later in the year.” 

Richard Marsh, Apprenticeship Partnership Director, Kaplan Financial, said:

“The NAO has updated its report on Apprenticeships in England. Overall it’s finding are not dramatic but it’s long term effects are likely to be profound. Some interesting things did emerge – and being the NAO they were mainly about money.

“The twin macro aims of Apprenticeship reform – increasing productivity and increasing employer investment are assessed in this report and have been met in part- but at the cost of higher prices per Apprenticeship. 

“The NAO calls for greater diversity in Apprenticeships and for take up to more closely represent the school leaver population but has no answers as to how to make this happen (neither does the DFE for that matter.) 

“Indeed the NAO did not look into the biggest impact on gender, ethnicity and disadvantage in Apprenticeship – which are employment sector and academic level. Failing to assess the impact of the forthcoming ‘end of Frameworks’ on both gender and ethnicity – thus overlooking the biggest change happening in the next 18 months – makes their comments on these issues seem superficial.”

Amyas Morse, the head of the NAO, said:

 “Despite making changes to the apprenticeships programme, the Department has not  enticed employers to use available funds or encouraged enough potential recruits to start an apprenticeship. It has much more to do to meet its ambitions.

“If the Department is serious about boosting the country’s productivity, it needs to set out clearly whether its efforts are on track to meet that aim.”

Apprenticeship and Skills Minister Anne Milton said:

“The apprenticeship programme gives employers the opportunity to provide new and existing staff with a range of opportunities to gain skills in the workplace and makes sure we have long term investment in apprenticeships.

“The number of people starting training on our new employer designed standards is rising year on year and we will continue to work with employers to help them develop their apprenticeship programmes. Apprenticeships enable people to get a great job and career, and give employers the skilled workforce they need.

“We have increased flexibility for levy paying employers so they can transfer 10% of their levy funds to other employers and we will increase this to 25% from April.”

Matthew Fell, CBI Chief UK Policy Director, said:

‘‘Today’s report confirms what employers already know – that the Apprenticeship Levy is not yet working as intended and is holding back the Government’s welcome efforts to modernise the skills system.

“Companies are committed to apprenticeships, so what’s needed now is a second wave of reform. The Government must use its review of the apprenticeship levy to work with business and the sector to build a system that supports, rather than frustrates, employers offering a first step to people in their career.’’

AELP CEO Mark Dawe, said:

“The disappointing aspect of today’s helpful report is that AELP was predicting two years ago that higher level apprenticeships offered by the levy payers would consume the levy to a much greater degree than the government anticipated but no notice was taken. 

“The DfE has finally recognised that changes are needed as part of the Chancellor’s ordered review of the levy and the NAO’s overspend figures confirm why a separate budget is needed for SMEs’ apprenticeships.  SMEs are desperate for more apprenticeships and we need to stop the fall in intermediate apprenticeships, so ministers must act quickly.

“We now have it in black and white that the DfE did not project that the number of apprenticeship starts would fall after April 2017 and yet the monthly falls were catastrophic.  There are nonetheless good aspects of the apprenticeship reforms that we can all build on and the government and its agencies must be more willing to engage with the frontline deliverers to secure the necessary improvements and more starts.”

Gerard Dominguez-Reig, Senior Researcher for Post-16 and Skills at the Education Policy Institute (EPI), said:

“The NAO’s assessment of the 2017 apprenticeship reform shows that the level of employer buy-in is lower than the government expected, and that the potential rebranding of existing training might be compromising the programme’s contribution to productivity growth.

“Previous EPI research has called for robust progression pathways to higher levels of apprenticeships to entice learners, and has suggested that both employers and learners would benefit from younger-age and longer apprenticeships to smooth school-to-work transition. Our research has also suggested that for the policy to succeed SMEs need additional support, as they are more likely to face barriers to hiring apprentices. 

“If the government’s ultimate objective is to fix skills gaps in England, it should give more consideration to these recommendations, and focus less on an arbitrary target of 3 million apprenticeship starts”. 

Stephen Evans, Chief Executive, Learning and Work Institute:

“The best apprenticeships are world-leading, but the National Audit Office is right to raise concerns. That includes the need to measure the long-term impact of apprenticeships on careers and productivity. Learning and Work Institute has called for all apprenticeship standards to be benchmarked against the world’s best.

“The NAO rightly flags the risk that, after a slow start, the apprenticeship budget might be overspent. We need action to ensure funding for SMEs and for young people. It was never the intention of the Levy for young people entering the jobs market to miss out, with an increasing portion of the budget spent on existing employees aged over 25, including for management training. There must be room for both young and older to undertake apprenticeships at all levels and an appropriate contribution for each from employers and the government.

“Our central focus should be quality and access. Many of the apprenticeship reforms have headed in the right direction. But we must now heed the warning signs and take further action to build a world class apprenticeship system.”

Federation of Small Businesses National Chairman, Mike Cherry, said:

“The apprenticeship system report card is in and it doesn’t make for good reading. The most alarming news is that Department for Education might consider options including cutting the number of apprenticeships available for non-levy-paying employers because of concerns about the future sustainability of the apprenticeship funding system.

“This couldn’t come at a worse time with take-up down and small businesses disengaging with the system. Costs still represent one of the biggest barriers for small firms looking to take on an apprentice. Without the vital funding that many access to overcome this barrier, we are at risk of making apprenticeships unaffordable for our small firms.

“It can’t be forgotten that small businesses provide 60% of private employment. Many of these small firms already find themselves hamstrung by persistent skills shortages that are damaging growth and productivity. This will only get worse if apprenticeships become a privilege only for those that can afford them.

“The Government must get a grip and ensure that apprenticeships remain the A grade route for smaller firms to plug skills gaps, drive growth and nurture innovation. With funding requirements predicted to rise in future years, the system must be put on a sustainable footing without cutting apprenticeships for non-levy payers.”