Plans to put businesses at the heart of future funding arrangements for apprenticeships risk driving away all but the most committed employers, warns Christine Doubleday.

In June 2012, Doug Richard was commissioned by Skills Minister Matthew Hancock to conduct a major review of the apprenticeship system.

The government received his report enthusiastically and, in the summer of 2013, opened a consultation on proposals for reforming apprenticeship funding.

A full apprenticeship reform implementation plan is set to be announced by the end of the year.

The 157 Group responded to the funding consultation, which closed on October 1, and in common with many other key stakeholders — including Association of Employment and Learning Providers, Association of Colleges and Edge — voiced serious concerns about the proposals on the table.

While group members are passionate about apprenticeships as a means of increasing productivity and the future skills base, they urged the government to pause and consider a wider range of proposals to avoid putting at risk the progress that has already been made.  Fortunately, there were signs during consultation meetings that the Department for Business Innovation and Skills is still open to other suggestions.

To improve the current system, we need to add to the options under discussion

Like the government, we are keen for employers to take greater ownership of the skills agenda and be more proactively involved in apprenticeships.

However, the current proposal rests largely on the creation of a new funding mechanism, which gives the employer much more responsibility for accessing and using government money to deliver or buy apprenticeships.

The proposed funding model is based on a core model with three options, two of which put the employer completely centre-stage and a third which involves funding being claimed by providers from the government, only after they have been paid by the employer.

We see major risks in these proposals for the national apprenticeship programme as a whole and urge caution.

In our view, the proposals are based on unrealistic expectations.

Do the great majority of employers, especially small businesses, really have the capacity, desire or skilled people to tackle the bureaucracy and audit requirements associated with apprenticeship funding?

Aren’t many smaller college and training providers likely to abandon their involvement in apprenticeships, in favour of less problematic and more economically viable provision for young people, if they risk delays in payment or reduced fees?

Is it realistic to expect a major new IT-based system to work effectively from day one?

In relation to apprenticeships, employers can be divided into three broad categories — those that are fully committed, those that do not get involved at all and employers that are only weakly committed.

The funding proposals could well lead to the disengagement of all but the most committed group, when we all want more employers to commit.

They represent a needlessly high-risk approach.

Our colleges have long-standing experience of working with small businesses, and this tells us they are looking for simplification and single points of contact rather than more control.

We believe that so fundamental a change should start with a realistic pilot phase, which would allow both mechanisms and their impact to be tested.

Also, there is time to learn from the pilots of Employer Ownership of Skills.

We are still awaiting the full results of these, and we need to learn from this experience before changing apprenticeship funding in a similar way.

Finally, more thought needs to be given to incremental reform of the current system of funding, seeking to improve for example the policing of unscrupulous providers.

We would urge everyone to get involved in the debate about a funding structure that can give apprenticeships fresh impetus.

To improve the current system, we need to add to the options under discussion.

Only in that way we can all go forward with a more robust system, which can fully achieve the potential of apprenticeships as a foundation of economic growth.

Christine Doubleday, deputy executive director of the 157 group