John Hyde explains why he thinks the government’s drive to encourage more employers to run their own training will end in tears.
It comes as no surprise that firms running their own apprenticeship programmes, with some notable exceptions, are less successful in both completion rates and Ofsted grades than specialist training providers.
Indeed, in my sector, hospitality, most employers with their own direct contract are coming in well below a 60 per cent success rate while the major private providers achieve 70 per cent plus.
Quite rightly, commercial companies are in business to make a profit, and public sector organisations to provide value for money to the taxpayers.
Apprenticeships are not their primary business and their priority is to turn their apprentices into skilled employees.
On the other hand, apprenticeship training providers need not only to produce skilled apprentices for their employer clients, but jump through all the hoops Ofsted and the Skills Funding Agency throw at us.
It makes sense that to survive, to retain our existing clients and attract new clients, we need to strive for excellent achievement and completion rates and levels one or two Ofsted inspection rates.
What seems like common sense to the sector was sadly missing from the thinking of Doug Richards, and ministers Matthew Hancock and now Nick Boles.
Apprenticeships are not their primary business and their priority is to turn their apprentices into skilled employees
The empirical evidence shows that overall, private apprenticeship training providers substantially outperform those firms who have direct apprenticeship contracts.
This was never more clearly demonstrated than during the UK Commission for Employment and Skills’ employer-led pilots.
Those who suffer are the learners whose future careers are jeopardised by being taught by the wrong provider.
This is more worrying in the context of the current government’s mantra of putting the employers in the so-called driving seat.
Not only has this been shown to disadvantage learners, it is reducing completion rates at a time when apprenticeships are beginning to be seen by the public as a viable alternative route to university.
Many employers are expected to become providers themselves when the levy is introduced next year.
Lessons must be learned from the past to ensure that employers can deliver to the same or a higher level than private training providers.
The introduction of the levy will increase the funding for apprenticeships by two thirds in England from £1.5bn to £2.5bn in a full year.
While some of the funding will be underspent as some employers will opt out or have insufficient need to spend their whole levy, there will be a substantial increase in apprenticeship numbers.
All the messages we have received to date from the government regarding the levy is about process.
There is a dearth of strategic thinking. Where are all the additional trainers and assessors going to come from?
What work has the Education and Training Foundation and the Department for Business, Innovation and Skills done to look at the capability of the provider base to recruit and train sufficient staff to meet this growth?
Perhaps more worrying is the financial capacity of the provider base to meet the demands of the 20,000 levy payers.
The revised register of approved training providers needs to look more closely at a provider’s financial reserve or overdraft facilities rather than simply their historical financial health.
Only six providers have an adult skills budget in excess of £20m, and just 28 have a £10m-plus contract.
Whatever else the new register contains, it must show employers searching the Digital Apprenticeship Service for a provider to deliver a multimillion-pound contract, that the provider has the financial reserves or facilities and the staff capacity to undertake such a contract.
The current structure of the provider base, with thousands of small local providers, will not meet the requirements of most of the levy-payers who in the majority of cases are multi-site national or international concerns.
Let’s add this to list of levy questions that the government will need to find an answer for soon.