The announcement of the Apprenticeship Levy in George Osborne’s budget statement in November 2015 caught many businesses by surprise. The upcoming launch is generating a huge number of column inches, arguing whether it has the potential to re-generate a flagging skills system or will have little or no impact.

Whatever your opinion, and despite many forecasting that it wouldn’t happen in 2017, the launch of the Apprenticeship Levy is now just around the corner. The Digital Apprenticeship Service is in full testing and looking strong, the Registers of Apprenticeship Providers and Assessment Organisations are being created and the threads of the government’s creation are coming together.

So what will the final garment look like when we hold it up to the light? Will it be a beautiful silk shirt or a string vest? The reality is that we just don’t know but we can make some fairly educated predictions for what 2017 holds.

Prediction 1 - More tortoise than hare

In all likelihood, we will see a slow but steady start. Conversations with my peers in other sectors suggest that the schemes will probably not be fully operational by May, and we will need to continue to rely on existing frameworks for some time to come, due in part to the length approval process for new standards. Many sectors have also struggled to work together to develop common standards and will therefore approach the May deadline with insufficient “product” on the shelf.

Prediction 2 – Growing numbers

In spite of the slow progress being made in creating new standards, businesses will grow the number of apprenticeships they offer. The government’s three million start target looks fairly safe based on the conversations I have had with peers over the past number of months. Few have said they will take a hit and treat it as a tax and most have said they will develop existing or new programmes to invest in their workforces. Whether this translates to more apprenticeship hires remains questionable, with many likely to focus on existing staff development. This may lead to displacement of existing L&D spend but in my view this is likely to be a positive displacement with short term training being replaced with more sustained development leading to recognised qualifications.

Prediction 3 – Focus on higher end skills

For me, the single biggest positive of recent governmental reform is the introduction of the Degree Apprenticeship. It allows businesses to invest in higher level skills with a wide range of great HE institutions. The old system was tarnished by too many low quality, low level qualifications with very few higher apprenticeship progression pathways. This is slowly being addressed although the number of degree apprenticeship standards remains too low; this is something businesses need to address through their Trailblazer groups with support from HE Institutions.

Prediction 4 – Shake out in provision

The move to end assessment and the introduction of Higher Apprenticeship standards will lead to a fundamental shift in both who provides apprenticeships and what they will provide. I hope the days of very limited training delivery with a heavy focus on ongoing assessment are behind us, as employers looking to maximise the quantity and quality of training in their programmes. The new requirement for 20 per cent “off the job” training time certainly demonstrates this.

Prediction 5 – Under capacity in delivery

The scale of providers in the market has been historically controlled by the size of budgets allocated by SFA to providers. This has led to many small and medium size providers in the market and a fragmentation in the system. As a result, existing providers may well struggle to cope with the increased demand the Levy will generate (50 per cent of FTSE 100 do not have a programme at present but will be introducing one post Levy). New alliances will need to be formed particularly by those in both FE and HE to provide a more scalable delivery model and more consistent provision. The good news is that this is happening in pockets already with many colleges and HEIs considering developing local and even national offerings.

Prediction 6 – Parity of esteem but not just yet

There is a growing trend for recruitment through apprenticeship schemes rather than graduate programmes ,and this is likely to continue as university tuition fees rise and savvy young people look to gain a degree in a more cost effective way. However, his will take time for two reasons. Firstly, a huge cultural change is needed in schools and with parents who have seen university as the gold standard route to the best careers, raising awareness of alternative options like apprenticeships. Secondly and perhaps more importantly, there is a lack of degree standards available. This is a big inhibitor to creating parity and the creation of more standards at this level needs to continue to be the focus of DfE for some time to come. There are green shoots though, not least the recent approval of a degree standard in nursing.

Overall I am cautiously optimistic about what 2017 holds. I genuinely believe that we are heading in a positive direction but also predict that progress will be steady rather than spectacular and that there will be a few bumps in the road along the way. In answer to my earlier question, I foresee neither a silk shirt or a string vest – rather, more of a sensible jumper.

Mike Thompson, Head of Apprenticeships at Barclays

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