With the sector reeling from proposed rate cuts to 16-18 apprenticeships, the government needs to heed the findings of the consultation, says Mark Dawe
All the signals under Theresa May’s new administration are that the government is sticking with its 3 million manifesto target for apprenticeships and that it is determined the levy will start next April. AELP is comfortable with this position although we are aware that other organisations are not.
At one time, our view was that the 3 million target was achievable without the levy or any of the proposed reforms to the apprenticeship programme at all. After all, 2.7 million starts happened in the last Parliament so – providing the SFA was prepared to fund our members’ growth requests – it would not have been a tall order to deliver an extra 300,000.
The situation has changed though, with the government saying that the programme will soon become funded entirely by the levy. This means we can’t afford any delay on the levy’s start if the target is going to be reached by 2020.
The totally unviable funding rates for many apprenticeship choices came as a big surprise
The other change under Mrs May is the new emphasis on the social mobility agenda. AELP and others, including new skills minister Robert Halfon, have always argued that apprenticeships can play a major role in advancing this. It came as a big surprise, therefore, when we opened the latest apprenticeship consultation documents on 12 August to find that a large cohort of 16 to 18-year-olds potentially faced a block on their career prospects because of a proposed set of totally unviable funding rates for many of their apprenticeship choices. Almost equally alarming was that the picture for 19 to 23-year-olds didn’t look much better.
Messages from training providers immediately poured into my inbox, which prompted AELP to commission an expert analysis of the proposed rate changes. It was very clear that we were not just talking about private providers’ margins or charitable providers’ surpluses taking a hit. Having crunched the numbers, we were looking at the real possibility of providers and their employers withdrawing from 16-18 apprenticeships altogether.
The independent analysis of FE Week supported our conclusions by identifying rate cuts in many key sectors, of around 30 per cent to over 50 per cent. These are in sectors where, unless a generous work permit scheme is in place, employers will need to replace EU migrants with home-developed talent once Brexit has taken place.
The issue is made worse by the government encouraging employers to negotiate with providers on the price of delivering the training. As AELP said in its consultation response, we are already seeing employers asking providers to pay them to have access to their levy. Not only is this wrong, but the whole practice of negotiating on funding will have a negative impact on quality, so it’s good that FE Week has picked up on this aspect of the reforms in its campaign.
The government really needs to reconsider its proposals
To be fair, the government has conducted a proper consultation and given the weight of feedback and employer and provider agreement on the key issues, we expect that the evidence will be reflected in changes to the proposals and a manageable transition. AELP is now heavily engaged in discussions with officials and the DfE’s Permanent Secretary has been among those to visit our members in London, where the proposed removal of the inner-city funding and disadvantage uplifts would be devastating for the programme.
The funding rates will hopefully be sorted soon but two major concerns remain. Firstly, why are 16-18 apprenticeships the only part of DfE 16-18 provision not to be fully state-funded? It is simply discriminatory, especially when young people are being encouraged by ministers to choose apprenticeships as a high-quality alternative to traditional academic learning.
The other big worry is whether all of the levy proceeds will be used by the levy payers themselves, leaving little or no funding for non-levy paying employers who currently account for at least half of the apprenticeships on offer. We shouldn’t lose sight of the fact that with levy funding eventually at £2.5 billion, the programme will be a billion pounds larger than now. But the social mobility agenda will be ill-served if swathes of the country are left with little apprenticeship provision because large employers are located elsewhere and the funding rates make provision unviable. The government really needs to reconsider its proposals.
Mark Dawe is chief executive of the Association of Employment and Learning Providers
This week, in response to the planned funding rate cuts, FE Week launched its first official campaign, and will host a Save our Apprenticeships event in parliament tomorrow.
The event will be hosted by Mr Marsden and chaired by Nick Linford, author of the Complete Guide to Funding Apprenticeships and FE Week editor.
A panel of MPs, including former HE minister David Lammy and the Education Select Committee chair Neil Carmichael, will hear directly from colleges and training providers about the impact these rate cuts will have on young people.
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