From education to employment

What is happening to the apprenticeship sector?

Lindsay McCurdy, Chief Executive, Apprenticeships 4 England

Over the past few months the apprenticeship sector has been turned upside down and inside out!

The long awaited RoATP list was published and included over 400+ new training providers, some without websites and companies that have only been set up for months. Already we are starting to see some on the market with RoAPT approved as a selling point.

26% (Some 451, out of 1,708) of the organisations approved to deliver apprenticeship training to levy payers have no previous apprenticeship delivery experience.

We also have on RoATP, organisations who have been graded as ‘INADEQUATE’ for Apprenticeships by Ofsted and many require improvement overall. On this list there are organisations who are also listed on The Register of Concerns and Serious breaches. How on earth can these be deemed ‘Top Quality Training Providers’ by the ESFA?

What has caused surprise and upset is the number of organisations who were not included, who have a record of long established good apprenticeship training provision. Since the publication we have started to see Training Providers close up shop. Birmingham was left without a single college on RoATP, this was changed a short time later when South & City College Birmingham was quietly added to RoATP.

Hartlepool College isn’t on RoATP, yet their Apprenticeship provision is Outstanding. An explanation of how one college can quietly be added, while another is not, would be of interest and give a greater understanding of why the Register Works for some but not others.

Of the 1,708 organisations that were approved, 170 are employer providers (levy-paying businesses that will now be able to train their own staff), 235 are supporting providers (organisations that can only deliver training as subcontractors) and 1,303 are main providers. More than 2,300 organisations applied to the RoATP, which means that around a quarter of these missed out on the chance to deliver apprenticeship provision. It would seem there are about 600 providers, including approximately 30 FE colleges which either have not been successful or did not apply for RoATP. They will have to rely on subcontracting to stay in business.

Skills Minister Robert Halfon announced in March:

We are giving employers the confidence to do business with high-quality training providers.

To ensure that this statement by Robert Halfon is met, the ESFA must step in quickly if it becomes clear that any new provider is unable to deliver on its levy-paying or non-levy-paying commitments. Or if it emerges that the company was purely set up with the intention of being sold with RoATP approval.

The question I would like to see answered is this:

Is the ESFA best qualified to make any judgements regarding quality of training providers, or is this the job of Ofsted?

There does seem to be a need for joined-up thinking between the two organisations.

Ofsted’s new boss, Amanda Spielman, has expressed concern about the impact the register will have on her resources, it’s already nearly doubled the number of providers now in line for inspection.

We also have established Training Providers that have not had an inspection in years with some going back 10 years since last inspected.

55% of RoATP main providers have never been inspected by Ofsted, and have never delivered apprenticeship training before.

How have so many companies with such little experience found their way onto the register?

Funding Allocations

On the 25th April Colleges and Training Providers were sent the long-awaited funding allocations for non-levy employers for May to 31st December 2017.

Allocations for individual providers are down by as much as 89% compared with the same period last year, with many quality and specialist training providers and subcontractors now fearing that they will go out of business.

The latest allocations will hit training providers who are subcontractors and rely on contracts from Primes. Primes have had allocations reduced themselves and they cannot afford to pass on any business to subcontractors, ending long-standing and trustworthy relationships. Over the past week, many sub-contractors have started to report they are receiving notifications that their relations with their primes will end, which for many subs means they will have to close down.

This has been echoed by comments from training providers in the Apprenticeships 4 England Group stating they only had weeks left to operate:

£1m in starts for periods 1-6, all SME, and got £180k allocation.

They are now doing what the ESFA wants them to do, and considering walking away from the industry. The problem is, we can’t afford to lose providers with 90% plus timely success rates. Apprenticeships for SME’s are turning into a dog’s dinner!

It’s even worse for us small subcontractors! After 33 years in this business and 85%+ success rates, we were looking forward to finally having our own contract again. We’re now looking at no starts at all as both of our primes have allocations that are not sufficient to support their subcontractors!

Training organisations starting apprentices for non-levy payers make up 98% of the employer market, and a great majority of England’s 900,000 apprentices are employed by SMEs.

The ESFA has to be completely transparent about how it arrived at the latest allocations and to revisit them as quickly as possible before it is too late for many quality Training Providers. Only emergency additional allocations can save them, so the ESFA need to address this ASAP.

An insightful article by Paul Irving, published last week by FE News, could explain why we are in the situation the sector finds itself in, as many have commented:

Trudi Stevens:

I haven’t posted on this group for many months. My last post was explaining that, after 17 years of running Apprenticeships first as a small direct contractor and then as a small sub contractor, I was pulling out because I saw what was coming. My prediction was that the Govt (ie the DofE and Treasury) had wanted to force the Primes to engage directly with employers and stop using the subbies as an expensive crutch; that a system would be created to get rid of subcontractors. The discussion that followed this can be summarised as ‘that is a conspiracy theory’, ‘if not it would be the most almighty cock up’ and ‘what would you predict would be the outcome?’ – my answer – annihilation. I am sat typing this in Saudi Arabia where I am working, and watching the inevitable train crash unfolding. I take not one ounce of satisfaction from this debacle and I think the excellent article above is a very accurate description of what has been happening behind closed doors.

Matt Garvey:

This article has hit upon the flaw in the system. There is a 2-year lag until unspent Levy funds become available. Everyone told the gvt this from the outset hence the AELP campaign for a £1bn underwriting of non levy funding. The ESFA Has , for three years, acted like a know-it-all and cast a withering glance when providers pointed out flaws in their masterplan. Those flaws are now evident for all to see. Undermining 98% of employers demand for apprentices will not mean that more of them pay more. It will mean a fall in capacity and, I believe a blow to the social impact of apprenticeships. One can argue that many Levy payers will focus their spend (because they have to) on older and established staff. It is the small to medium enterprises who recruit new and younger apprentices and have done so for years.

Daniel Hardy:

Can’t really say more, Matt Garvey has hit the nail on the head… Worrying thing is, everything will go ahead regardless of any fundamental flaws that has been put in the spot light. There’s no turning back.. We’ll be up **** creek without a paddle as the saying goes!

Simon Crowther:

One of the best analysis I have read on the situation. Bang on the money.

Due to the upcoming General Election, Officials will not speak, fingers crossed the ESFA are using this period to come up with solutions for The Apprenticeships Sector.

At the request of our members, Apprenticeships 4 England is looking to host an event on 13th June, shortly after the General Election, to discuss the Future of The Apprenticeship Sector.

Let’s just hope someone is brave enough to come out to answer all these questions and queries.

Lindsay McCurdy, Chief Executive, Apprenticeships 4 England

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