Engineers warn apprenticeship funding reforms could deter SMEs

One of the world’s largest organisations for engineers and technicians has warned that proposed reforms to government funding could lead to a reduction in UK apprenticeships. The Institution of Engineering and Technology (IET) claims that the reforms are likely to reduce quality and deter SMEs from taking part in apprenticeship schemes.

In July, the Department for Education and the Department for Business, Innovation and Skills released a report entitled ‘A Consultation on Funding Reform for Apprenticeships in England‘ outlining the proposed reforms. The report sets out three proposed models for funding: Direct Payment, whereby Government funding is paid into businesses’ bank accounts through an online system; PAYE Payment, in which businesses receive funding through their PAYE return, also using the online system; and Provider Payment, which would require training providers to make claims for government funding once they have received the employer’s financial contribution.

IET is among a number of organisations who have criticised the reforms, saying that the changes would incur higher costs that may prevent smaller businesses from taking on apprentices.

Paul Davies, IET Head of Policy, said: “Apprenticeships are more popular than they have ever been and provide a valued and recognised route into engineering.

“We are very concerned that these proposals may negatively affect the number of apprenticeship places as additional costs and red tape will be incurred by employers, many of which are SMEs, who cannot easily absorb this burden. If SMEs are negotiating alongside larger employers, they may need to form a consortium to have their voice heard and negotiate what training should be given to apprentices.”

Davies also warned that the proposed reforms have failed to take into account the impact on learners.

“Any reform of apprenticeship funding by the Government must consider the effect it will have on apprentices themselves,” he said.

“Ultimately they need the skills and a high quality training experience that is going to enable them to meet the demand required by businesses today but also to meet the needs of the industry tomorrow.”

The proposed changes to apprenticeship funding are part of the government’s plan to improve the quality of further education and training. Speaking at the Tory Party Conference on Wednesday, Prime Minister David Cameron reiterated his plans to make apprenticeships the “new norm” for school leavers who choose not to go to university, saying “We’ve had a million apprenticeships start with this Government.

“Now we want a new expectation: as you leave school you have a choice – go to university or do an apprenticeship.”

Beckie Smith