Last month’s announcement that the Education and Skills Funding Agency is cutting apprenticeship provision funding allocations for non-levy paying employers was unsurprisingly met with widespread dismay within the industry. Many worried about redundancies caused by inevitable provider closures, whilst others raised the risk posed to the Government target of 3 million new apprenticeship starts by 2020. But what about the risk posed to employers - 98% of whom do not pay the Apprenticeship Levy - and more importantly, to apprentices themselves? The introduction of these funding cuts will undoubtedly affect the quality of the UK’s apprenticeship provision. It’s one thing having an aspirational target figure, but quite another if said apprenticeships are of sub-standard quality.
Currently, 74% of apprenticeships are delivered through private apprenticeship providers. We are now faced with a landscape in which many of these experienced providers no longer possess the money to deliver, and as such, employers will have no choice but to find an alternative. This could mean replacing a tried and tested, successful relationship with an unfamiliar one – introducing an element of risk to a huge proportion of apprenticeships in terms of quality assurance.
This will certainly affect some types of apprenticeships more than others. For example, apprenticeships in some sectors - such as hair and beauty, horticulture and animal care - are predominantly served through non-levy paying employers, who now face uncertain provision. Other sectors, such as STEM and banking, are not quite as reliant on small employers, having additional apprenticeship opportunities in big businesses where provision will remain unaffected. Access to a greater overall range of provision offers more protection in ensuring apprenticeship quality, by providing stability and guaranteeing that entire sets of providers aren’t drawn away. Whilst we hear so much about skills gaps, there is a real possibility here that we could see a gap in the quality of apprenticeship provision between different industries.
To illustrate this point further, in many instances employers may want to work with a smaller provider because they feel that they deliver a more bespoke programme. To take the hairdressing, barbering and beauty industry as an example, 93% of these businesses in the UK employ less than ten people, according to the National Hairdressers Federation. This is reflected nationally: in 2016, 96% of UK businesses were micro-businesses, employing 0-9 people. For the small number of apprentices these employers might take on, they may just as likely seek a provider who can guarantee the same personal experience, and dedicate the same attention to the apprentice that they can. It is this type of assurance that generates an employer-provider relationship that really works well.
For the same reasons, the learner may also choose a smaller provider that can offer individual support and contact at every stage in order to thrive. One size certainly does not fit all when it comes to apprenticeships. In 2016, hairdressing was the 10th most popular apprenticeship in the UK, a statistic that could well change if young people feel that a programme simply will not work for them, or if they hear reports of negative experiences. Echoing the CBI and Federation of Small Businesses, what is clear is that we need to create a stable market of provision for all these apprenticeship changes, which are being conducted under a very fast timetable of implementation.
We need the ability to offer all types of provision for every apprenticeship in every sector, in order to protect quality. In 2016, SMEs had a combined annual turnover of £1.8 trillion, and employed 15.7 million people. Sustaining these rates and continuing to feed the economy begins with ensuring that we can deliver quality apprenticeship programmes, and this should be prioritised over abstract starter targets.
So what can we do? Quite simply, we need to continue the current level of engagement we have witnessed from all those involved in the apprenticeship arena, in order to create the stability that is needed whilst the levy takes hold. At the same time, we also need to turn to employers who may never have employed an apprentice before, with an exciting and dynamic offer which perfectly fits with their ambitions as a business. It is reassuring to see that so many prominent figures and organisations have expressed surprise and concern at the impact of the reduced funding allocations, and do see the importance of maintaining a wide range of SME apprenticeship providers. We now need to associate this more closely with preserving a guarantor of quality. Generating a more positive national narrative surrounding the tangible, economic value of delivering high-standard apprenticeships to SMEs, in all sectors, would be a good start.
Alan Woods OBE is the CEO of VTCT, an awarding organisation providing technical and vocational qualifications