More flexibility needed in apprenticeship levy reforms to reverse poor start

Training leaders are calling on the government to urgently take forward the skills minister’s own acknowledgement that a more flexible approach is needed if the apprenticeship reforms are going to be the success they should be. If the government is genuinely concerned about social mobility and productivity, then action needs to be taken.

A top priority must be a response that recognises and addresses employer resistance to a new rule that requires 20% of all apprenticeship training to take place off the job. Employers in both the private and public sectors, including NHS Trusts, say that they can’t afford an apprentice to be non-productive for the equivalent of a day a week nor the cost of staff backfill to cover their absence when there are many other appropriate flexible and effective ways of delivering knowledge, skills and behaviours required.

Two large levy paying employers are expected to voice their concerns about this at today’s AELP autumn conference in Manchester. The conference, sponsored by City & Guilds, is taking place only two weeks after official government statistics revealed a 61% slump in apprenticeship starts compared with a year ago.

AELP, whose member providers train 3 out of every 4 apprentices in England, points to the collapse also being due to the way the government is now funding the apprenticeships of smaller employers who don’t pay the levy. A disastrous procurement exercise, which had to be scrapped by the incoming minister, and a requirement for small businesses to make a financial contribution towards the cost of the training have led to huge falls in starts among SMEs across the country, including in the many areas where levy payers don’t operate.

AELP CEO Mark Dawe said:

“The skills minister has said that she has heard two different stories about how the reforms are going but encouragingly she has also said that she is very willing to listen to those who are experiencing their impact on the ground. Many of these people will be at our conference today and AELP will be calling for urgent action so that providers can work with their local employers to get things moving again.”

In AELP’s view, the government needs to:

• remove disincentives for employers to recruit young apprentices
• halt the decline in apprenticeship opportunities at levels 2 and 3
• guarantee a minimum £1bn budget for the apprenticeships of non-levy paying SMEs
• allow flexibility between on and off the job training and
• review the co-investment requirement for non-levy payers.

An early open debate is needed on the design of the funding model which will be used for apprenticeships after the non-levy paying employers join the levy payers on the digital Apprenticeship Service in April 2019. Otherwise training providers are warning that we could stumble into another catastrophe in a programme which has so many positives.

Move towards full commissioning of skills programmes

After the reported £280m underspend in the grant-allocated part of the Adult Education Budget (AEB), AELP chairman Martin Dunford will say in his opening remarks at the conference that whether the AEB is devolved or not, the government, the combined authorities and the LEPs should start a transition to full commissioning of publicly funded skills programmes.

The AELP chairman will argue that commissioning leads to better outcomes that are generally more efficiently delivered for the taxpayer and that it also reduces the amount of ‘non-genuine’ subcontracting and top-slicing that ministers hate. He will add that if government is really serious about meeting the Brexit skills challenges, supporting the Industrial Strategy, improving productivity and bringing about a sea-change in social mobility, then it must be bolder about commissioning.

The AELP autumn conference will also hold debates on improving quality, the T Level reforms, overcoming barriers to social mobility and English devolution of skills programmes. City & Guilds managing director Kirstie Donnelly will chair a panel on ensuring that the reforms to apprenticeships and technical education complement each other. Delegates will be hoping that the DfE will offer some assurances that it is taking action to halt the 14.6% drop in traineeship starts.