Around £1.2 billion has been “wasted” on “fake apprenticeships” that have taken up half of all starts since the apprenticeship levy was introduced in May 2017, according to new research. 

The study by think tank EDSK goes on to recommend that apprenticeships should be for level 3 only, while standards at level 2 and degree-equivalent courses should be defunded. 

This is the third report into the apprenticeship system by EDSK director Tom Richmond (pictured), a former senior adviser to previous skills ministers Nick Boles and Matt Hancock, who told FE Week with this latest publication: “We have the full two years of data on the levy and we can now see exactly what is happening. 

The apprenticeship levy is now descending into farce

“In the past, I have looked at the foundations of the reform and the history and what might have happened.  

“Now we can see, and I don’t think anyone has done this analysis before, who is being supported, what is being supported and why it’s being supported.” 

What he has found is that the levy is “descending into farce” because employers and higher education providers are “abusing” it by “rebadging existing courses and degrees for their own financial gain”. 

He said employers have used up over £550 million of levy funding on rebadged management training and professional development courses for more experienced employees. As a result, the most popular apprenticeship in the country is now becoming a ‘team leader / supervisor’ – accounting for almost 1 in 10 apprentices. 

This will be of no surprise to FE Week readers, as this newspaper has warned about the unstoppable rise of management apprenticeships since 2016.

A further £235 million of levy funding has been used to deliver various “low-skill and generic jobs” that are now counted as an apprenticeship, including working on a shop checkout and serving drinks in a bar. 

The most “surreal” example of a rebadged apprenticeship Richmond could find was the level 3 sporting excellence professional, which challenges learners to “competently perform the professional sport in which they train”. 

“In other words, the apprentice will be playing sport,” Richmond writes. 

He also highlighted a new cabin crew standard that has a minimum duration of 12 months for training, whereas airlines are currently advertising cabin crew training – not through the apprenticeship route – that lasts just three-weeks. 

Meanwhile, he says, universities rebadging bachelor’s and master’s degrees as apprenticeships have used up £450 million of the levy to date, even though these degrees can already be funded through the student loan system.

Richmond said they’re allowing employers to draw on huge amounts of levy funding to use courses like the level 7 ‘accountancy/taxation professional’, which spent £174 million since 2017 by claiming to cover a number of different accountancy and auditing roles.

A member of the Commons Public Accounts Committee, Layla Moran, said she had “serious concerns” about the government allocating one provider up to £40 million in nine months to teach this controversial management consultancy apprenticeship, following FE Week analysis in March 2019.

Richmond isn’t the first person to flag these issues: Ofsted chief inspector Amanda Spielman warned in 2018 that existing graduate schemes were being “rebadged as apprenticeships,” and the National Audit Office reported last year “some employers use apprenticeships as a substitute for training and development that they would offer without public funding”. 

Richmond’s report, entitled Runaway Training, recommends rebranding the apprenticeship levy as the technical and professional education levy to incorporate all work-based learning from level 4 to level 7.

The term “apprenticeship” should be newly defined and restricted to training at level 3 only, which should be fully-funded by government like A-levels. 

It adds that Ofsted should be made the sole regulator for any apprenticeships and technical and professional education, including provision in universities. 

Currently, Ofsted and the Office for Students (OfS) share responsibilities for inspecting apprenticeships, with the latter monitoring higher levels, a decision Richmond says is “hugely problematic” as the OfS has “no expertise” in the area and does not have the power to enter premises to conduct on-site inspections. 

An OfS spokesperson said the watchdog’s “quality assessment process” includes “on the ground quality and standards reviews”. 

“We also have clear powers to require information, set specific conditions and impose sanctions if providers fail to meet rigorous standards,” she added. 

The report is being released ahead of an expected budget from the Treasury next month and the later spending review, which will set the apprenticeship budget for the next five years. 

It also comes at a time of increasing pressure for the levy: after the Institute for Apprenticeships and Technical Education predicted the levy would be overspent this year and the National Audit Office expressed concern about the financial sustainability of the apprenticeship system, the DfE’s top civil servant warned of “hard choices” that needed to be made. 

A Department for Education spokesperson said their reforms “mean apprenticeships are better quality”, lasting for a minimum of 12 months with at least 20 per cent off the job training. 

She added that legislation introduced in 2017 meant an apprenticeship had to meet set criteria and the minimum quality requirements. 

A spokesperson for the IfATE said it works “closely with thousands of employers as well as many other stakeholders to make high quality apprenticeship standards available across the whole economy”.

“This has led to a broader variety of apprenticeships up to degree-level being available to employers, a far better reflection of the nation’s skills requirements than if apprenticeships were limited to level 3,” he added.

Sector reaction

Sector organisations have reacted strongly to the report, with Association of Employment and Learning Providers chief executive Mark Dawe stating that Richmond “sounds like a scratched record”. 

He said apprenticeships “should be available to employers of all sizes to access to the full range of apprenticeship programmes from level 2 through to level 7”. 

“AELP totally rejects his claim that the new level 2 standards in England fall short of the International Labour Office definition of a ‘proper apprenticeship’ and the caricatures used bear no resemblance to the reality of what is actually being learnt by the apprentice,” Dawe added. 

University Vocational Awards Council chief executive Adrian Anderson believes EDSK has “got the wrong end of the stick,” as the apprenticeship system is about “enabling employers to invest in their staff to increase productivity”. 

David Hughes, the chief executive of the Association of Colleges, warned that “simply stopping level 2 apprentices will not solve the problem; in fact it would risk shutting some of the most vulnerable people out of education and training”. 

“Problems also exist at the highest levels – MBAs and other high-level training being rebadged as ‘apprenticeships’ need to be examined,” he added. “Their growth has been at the expense of chances for younger people looking for their first opportunity in the workplace.”