The government has said more research was needed before it could take its apprenticeship funding reform plans any further. Lynne Sedgmore considers where this leaves the sector — and the programme.

The announcement from the Department for Business, Innovation and Skills on apprenticeship funding reform clearly illustrates a setback for government.

The statement that its commitment to ‘putting employers in control’ of apprenticeship funding is ‘non-negotiable’ seems to obfuscate with strong words the fact that neither of its two options for routing funding directly to employers are any longer on the table.

Beyond the words of the formal statement, Skills Minister Nick Boles spelt it out even more clearly at this week’s Education Select Committee — he doesn’t want to “go off half-cock” again.

It is also worth noting that what is now being described as ‘non-negotiable’ is the aim of ‘putting employers in control’ of funding and not routing funding directly through them.

In other words, not only are the preferred options ruled out, but other means to the same end may have been ditched as well.

This is good news and reflects what colleges, independent learning providers (ILPs), commentators and, most importantly, very many employers have been telling Whitehall all along — managing public funding is an unwelcome extra task for small businesses not a valuable reward.

It is good news when a policy based more on ideology than evidence is sent back to the drawing board. It gives grounds for hope that those who understand the practicalities on the ground may be listened to more carefully in the future. But this misconceived policy has led to a wider raft of unfortunate consequences.

The major casualty is the apprenticeship system itself which now remains in a further period of limbo. Apprenticeships are the centrepiece of skills policy, yet all those who have to make it work on the ground have now to go forward without any clear idea of the longer term funding arrangements for the sector.

The major casualty is the apprenticeship system itself which now remains in a further period of limbo

Uncertainty about rates, mechanisms and even vital matters like employer cash contributions would be unsettling at the best of times, let alone when apprentice numbers are falling and when the practices behind previous headline growth have been called into question.

Yet this continuing instability is not the worst problem. The most damaging aspect of this whole affair is that the focus on how to route public funding to employers has distorted the entire debate about employer ownership.

Developing apprenticeships risks being seen as a matter of chasing state subsidy rather than building a competitive business. Offering apprenticeships is now positioned as a public service rather than a business investment supported by government. This has been reinforced by the disproportionately large funding of the current trailblazer schemes.

Almost nobody disputes the idea that apprenticeships should be led by employers — an apprenticeship is a contract of employment and to be viable must meet employers’ needs. To help develop employer ownership in a true sense, therefore, the government needs to step back and let local solutions flourish. As providers work harder and harder to engage more employers in delivery, the routing of public funds has only served as a distraction.

There is a simple, if radical, solution to apprenticeship funding. Employers could be told that any apprentice (or perhaps any within an approved age range) can receive up to a maximum period of off-the-job training free at a college or approved training provider of their choice. After that it’s up to them. They won’t have to manage or account for public funding, bother about staged or outcome payments or complicate their PAYE returns.

Colleges and ILPs will be left to teach and firms will be left to run their businesses and train their staff. Mr Boles told the Education Select Committee that finding a solution to apprenticeship funding to suit everyone was possible and could be simple. Here we propose a practical solution to his problem.