The Committee of Public Accounts recommends today (30 Nov) that the Government must broaden the range of measures it will use to evaluate its apprenticeships programme.

Particularly around measuring the success of the Apprenticeship programme beyond just the overall 3 Million target. 

In a new Report, the Committee concludes it is unclear how the Department for Education will monitor success in important areas – among them the programme’s ability to meet the needs of employers.

The main areas of concern for the Public Accounts Committee are: 

The programme involves more than just increasing apprentice numbers, but this is the only outcome the Department is monitoring.

While apprenticeships are considered to be a key way of developing skills and improving productivity, the Department’s only measure of success is to monitor the overall number of apprenticeship starts against a target of 3 million in the five years to 2020.

The Department is reforming the programme to make it more employer-led, and it is therefore not directly involved in deciding in what sectors or at what levels apprenticeships take place to fill skills gaps in the economy. The Department has good data on which apprenticeships deliver the most impact and provide the greatest return on investment. However, the Department has not set out how it will monitor the success of the programme. In particular, it is not clear how the Department will monitor whether the programme is meeting employers’ needs and improving the opportunities for under-represented groups. The Department has announced some financial measures designed to encourage the take-up of apprenticeships among younger people and those with additional education or health needs. But it has yet to establish the fairest and most effective way to support people from all backgrounds into apprenticeships. It is also unclear how the apprenticeships programme will address the needs of emerging industries and skills shortages around Brexit and in other major programmes we have examined, such as High Speed 2 and implementing the entitlement to free early years education and childcare.

The committe recommends that the Department should publish, and regularly report on, a broader range of success measures, both at local and national level. These measures should include whether apprentices move on to higher apprenticeships, whether successful apprentices benefit from increased earnings, and whether the programme is delivering improved access to under-represented groups across all occupations.

The committee highlights that the development of new apprenticeship standards is taking longer than expected and some may not meet the needs of certain sectors and employers.

The Department originally intended to have the 1,600 new apprenticeship standards in place by 2017, but this timeframe has now been extended to 2020. As at April 2016, only around 2,600 people had started an apprenticeship under a new standard. The Department accepts that some of the new standards that have been introduced are unnecessarily narrow and overlap other standards. The Institute for Apprenticeships will be charged with setting up an appropriate system for approving and reviewing standards. The Department expects that this will involve some consolidation, which should lead to the number of standards falling over time.   

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 The committee's recommendation is that the Department should streamline the process for devising, implementing and reviewing standards. We expect the Department to report back within the year on progress against its target of having all apprenticeship starts covered by the new standards by 2020.

 The report also highlights that it is also unclear how the programme will address the needs of emerging industries, as well as skills shortages around Brexit and in other major government programmes “such as High Speed 2 and implementing the entitlement to free early years education and childcare”.

It is not clear how the Institute for Apprenticeships (IfA) will operate and whether it will have the capacity and capability to fulfil its functions.

The IfA’s broad remit will be to regulate the quality of apprenticeships including keeping standards to a manageable number and ensuring they deliver relevant, up-to-date skills. Despite the importance of these functions, the Department has yet to define: the precise roles and responsibilities of the IfA; how these roles and responsibilities will fit alongside those of the existing oversight bodies; and the resources to which the IfA will have access. It is also unclear whether the employer-led IfA will draw on the perspectives of other important stakeholders such as the trade unions.

 The committe recommends that the Department must clarify the intended role of the IfA as quickly as possible, alongside that of existing oversight bodies. This should include setting out who is responsible for the success of the programme, who has the power to intervene when value is not being delivered, and who takes the lead if the programme is not working as planned.

There are risks associated with the new method of funding apprenticeships by means of a levy on large employers.

We are not convinced that the Department has thought through the range of risks that might arise and how it will combat them.  Levy-paying employers will be allowed to use their contributions to fund a greater number of apprenticeships among their own workforce. However, the system may encourage some stakeholders to behave in ways that work against the objectives of the programme. For example, employers and training providers might collude to recover and share levy funds while offering little or no genuine training, or employers might artificially route other forms of training into apprenticeships. The Department must not repeat the sorts of mistakes that were made when Individual Learning Accounts were introduced in 2000 which suffered from a lack of checks on learners, providers, and the quality of learning; and poor contract management which led to substantial fraud and abuse.

The Committe recommend that the Department, working with the various oversight bodies, needs to systematically identify the full range of risks associated with potential abuse of the system and ensure that they are addressed from the start. It should be clear who is responsible for managing the risks, detecting problems as they arise, and taking action quickly should concerns emerge.

The Department has not done enough to engage with Small and Medium-sized Enterprises (SMEs).

Small businesses employ about half of all apprentices, but many have little awareness of, or engagement with, the changes taking place. The Department has prioritised its engagement with levy-paying, large companies despite the fact that, in many local areas, there are few or no large employers and SMEs are predominant. SMEs may also be disengaged because the Department is yet to determine whether or how levy-paying large companies may transfer levy funds to train apprentices in SMEs who form part of their supply chain. 

 The Committee recommend that the Department should engage more actively with SMEs to improve awareness of the value that apprenticeships can bring them, and to identify and address the factors that may deter engagement. The Department needs to ensure that SMEs are able to play an active role in the development of new standards.

The value of apprenticeships, in terms of improved earnings and career progression, is not sufficiently clear to prospective apprentices and their parents.

The Department tracks destination data, which can be used to demonstrate how well successful apprentices progress in the sector for which they were trained. Analysis shows that successful apprentices enjoy increased earnings compared with those who do not achieve their apprenticeship or who follow other learning routes, but the premiums vary significantly between different sectors and levels.

However, this information is not being used effectively to communicate the benefits of apprenticeships, especially to young people. It is very common for people to find out about apprenticeship opportunities through family and friends, rather than through formal careers guidance.

The Careers and Enterprise Company, the National Careers Service, and the National Apprenticeship Service all play a role in raising awareness of apprenticeships as a potential career route.  But the Department considers that the way that schools use material from these bodies is not consistent enough.   

The committee recommeds that the Department needs to make better use of the data it has to communicate the value of apprenticeships to potential apprentices, schools and careers services. 

Meg Hillier MP, Chair of the PAC, said today:

“There is a crucial distinction between quantity and quality – one the Government must not neglect as it pushes ahead with changes to the apprenticeships system.

“Businesses, apprentices and taxpayers in general will not consider this policy a success simply because the Department for Education has hit its take-up target.

 “The Government must demonstrate it is delivering real value throughout the programme and, where weaknesses are identified, address them promptly.

 “Such fundamental measures as whether apprenticeships are meeting the needs of employers and the wider economy, or enhancing the prospects and earning power of apprentices, must be properly monitored.

 “In our view the apprenticeships programme can only achieve maximum value if it raises skills levels, closes skills gaps and promotes diversity.

“It is therefore concerning that there are no specific targets for increasing gender and age diversity across occupations.

“Our Report highlights the potential risks of the new levy system being exploited and will expect the Government to show leadership in safeguarding against these.

 “It must also clarify the intended role of the new Institute for Apprenticeships, not least if and how it will consider the views of trade unions in regulating the quality of apprenticeships.

 “We are concerned to learn the timetable to have a comprehensive set of new apprenticeship standards in place has slipped three years to 2020.

 “Poor planning has been the poisoned root of many projects examined by our Committee.

 “The Government needs to get the details of this programme right now or risk failing the many people it is intended to support.”

What does the FE sector think?

Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL), said:

“The Public Accounts Committee (PAC) report provides an initial assessment of the Government’s apprenticeship reforms, which are beset by delays, uncoordinated oversight, and a lack of clear objectives.

“ATL is particularly concerned that the Committee reports that not enough has been done to ensure the reforms address skills shortages and accessibility to apprenticeships by women and black, Asian, and minority ethnic communities. Furthermore, the report states that the apprenticeships programme does not adequately respond to the skills challenges posed by Brexit, nor the opportunities that will be created by emerging industries.

“Yet again the issue of the quality of apprenticeship programmes is raised in this report. While apprentices in some sectors see increased earnings, compared with young people who follow other routes, this is certainly not the case across the board. Also worrying is the Committee’s findings that the apprenticeship levy may be open to fraud and gaming by unscrupulous employers. The Department for Education needs to do more to prepare for this risk and must prioritise ensuring that funding raised by the levy is used only for good quality apprenticeships.

“Many of these issues are expected to be addressed by the new Institute for Apprenticeships that, to be effective, must have a Board representing all stakeholders.” 

Phil Hall, Head of Public Affairs and Public Policy AAT says:

“Nearly twenty percent of AAT’s 80,000 student base are apprentices, so we took a great interest in this report.It raises concerns that the only real measure of success seems to be achieving 3 million new apprenticeship starts by 2020. AAT has always supported the Government’s commitment to that target but only if supported by a focus on timely completions and overall quality. AAT recently wrote to the Chancellor to this effect and has continued to emphasize the importance of quality and completions in various forums over the past six months.

"The report also expresses concern that the levy, 'may incentivise some employers to exploit the system' for example by artificially routing other forms of training into apprenticeships. AAT has always argued that the UK’s skills needs extend well beyond the scope of apprenticeships and it is important to ensure the introduction of the new levy next year ultimately recognises the varying requirements of different sectors and is aligned with industrial strategy. In time, we would like to see the Apprenticeship Levy renamed as the Skills Levy and for levy monies to be able to be spent on high quality traineeships and other forms of training that will benefit individuals, employers and the economy as a whole.

"The Committee urges the Department for Education to do more to communicate the value of apprenticeships to potential apprentices, schools and careers services, as well as their value to Small and Medium-sized Enterprises. AAT wholeheartedly agrees. Earlier this year we produced a report calling on employers, schools, education providers and local government to come together to showcase the diverse routes to employment that are available for young people. This would open doors for young people and would allow business to work with schools to foster and promote the skills they need. One way of doing this would be to create an integrated portal which brings together UCAS, National Apprenticeship Service (NAS) and other non-academic websites under one managed service to ensure equal coverage of all routes to employment.”

Kirstie Donnelly, Managing Director, City & Guilds said:

“We were pleased to see the Public Accounts Committee’s report today recommend that the DfE should make better use of destinations data to demonstrate the value of apprenticeships. In a world where we still struggle to convince people of the benefits of professional and technical education, this data will provide real evidence for careers organisations, parents, teachers and young people to demonstrate the great route to work that apprenticeships can provide.

"We also welcome the PACs recommendation that the DfE publish and regularly report on a broad range of success measures to ensure that employers’ needs, including the needs of emerging industries, and skills shortages are being addressed. This will be vitally important following Brexit when home-grown skills will multiply in importance in the UK. A focus on engaging with SMEs and convincing those not already employing apprentices of their benefit is also really important. SMEs make up the vast majority of the UK workforce and if the apprenticeship system is to deliver on its objectives then we need apprentices across all businesses, not just in levy-paying companies.

"If we are to meet the Chancellor’s objective set out in the recent Autumn Statement to improve the UK’s productivity, we need to ensure apprenticeships are aligned to business need in priority areas like construction, science and engineering. The £13 million investment set aside by the Treasury for management training will help, but this is a drop in the ocean compared to what is required to solve the productivity puzzle.”

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