Employers are paying too much for their apprenticeships, according to the Department for Education.

Officials “expected” employers would negotiate prices below the relevant upper limit they set before April last year, and the Institute for Apprenticeships since then.

But instead many employers pay top whack as, apparently, “they do not feel able to negotiate with providers”.

So the DfE says it’s considering “alternative funding band structures”, along with “changes to incentivise negotiation and drive better value for money”.

My heart sinks when I hear major changes may be coming before the new apprenticeship market is properly up and running.

Having said that, where any market is failing, it is important the government steps in and regulates.

But is there enough reliable market intelligence to make changes that don’t simply create a new set of unintended consequences?

There are no easy answers for the DfE, but given we are less than 10 months into the infancy of a completely new market, no knee-jerk reactions either, please.

Nick Linford is editor of FE Week



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2 Comments

  1. Just goes to show what a complete bunch of clowns work in the civil service. Did they not learn anything from the HE tuition loan situation where every HEI charges the maximum fee amount? Which FE provider is seriously going to charge less than the maximum when they know employers have a 1,000 better things to do with their time than hunt around to save £100 on the price of an Apprenticeship.

    And which clown thought the sub-contracting rule re lead providers having to deliver content was a good idea? All it does is push up the costs for a sub to deliver to SME’s and these costs will then get passed onto the employer. At which point the employer either decides to not proceed with the training because it is too expensive, or they find a main provider who can deliver directly and the subs end up going out of business.

  2. The bandings being set are a nonsense. we run one technical Apprenticeship that brings us £342 a month, and another very similar which brings us (or could) £1200 a month. Both of these should be somewhere in the middle. Whoever is working out these prices really doesn’t know what they are doing.

    I agree Phil, the civil service are out of their depth on this. They have introduced a system that is not fit for purpose, but rather than admit this, they will tinker at the edges for the next few years, until the next upheaval (I mean review). by which time the people currently in charge will be long gone.

    How can anyone deliver a quality Apprenticeship for £1500.

    Framework prices have been sashed, starts are down 40%, and now we are looking at re-banding (Gov. code for cuts no doubt).

    Providers are already struggling, Apprenticeships may be going to “Surge” next September, but how many providers will still be around to take advantage of that?