Cost of living

Cost of living: 8 in 10 providers warn of soaring salary and facility costs

Survey outlines stark picture trainers are facing amid the economic gloom

Survey outlines stark picture trainers are facing amid the economic gloom

31 Oct 2022, 15:56

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Eight in 10 private training providers have warned that they are being seriously impacted by rising salary and building costs, with two thirds fearing staff turnover could hit their business hard, a new survey has found.

More than 200 providers responded to a September survey by the Association of Employment and Learning Providers (AELP) around the biggest cost of living impacts.

Some of the findings, published today ahead of AELP’s autumn conference in Manchester tomorrow, outlined the stark picture trainers were facing amid the economic gloom.

Survey respondents have asked the organisation’s future recommendations to government to include an increase in funding bands and review of overall delivery costs, assessing wage inflation and staff shortages, measures to address increasing bureaucracy, and increasing employer incentives to take on more apprenticeships.

Here are the key findings…

Salaries and facilities costs top providers’ pressures…

Rising salary costs topped the list of biggest cost pressures, with 86 per cent saying they would be seriously impacted.

More than eight in 10 also cited the rising costs of facilities and premises as a big issue.

AELP said its findings indicated that higher level apprenticeship standards were suffering because of “increased wage expectations of appropriately qualified tutors and trainers”.

One respondent said that “in the past year the market salary rates for good quality tutors at these standards have increased by almost a third”.

…prompting fears for staff turnover

Two thirds of survey respondents (67 per cent) said increased staff turnover was a fear, while training consumables and travel and subsistence costs were also raised by more than two thirds.

The AELP findings said: “It is becoming difficult to retain and recruit staff on a trainer’s salary for a lot of higher-level qualifications and financial standards, as individuals can attract much more by staying in the industry.”

Assessment costs have crept up

More than half – 53 per cent – of respondents said they had noticed the costs of assessments, which included apprenticeship end point assessments (EPAs), had gone up while their own funding had remained static.

Providers have asked for AELP to consider assessments in their future recommendations to government.

Some providers said that prices had changed notably when it was confirmed that end point assessment organisations could charge up to 20 per cent of the standard for the cost of an EPA.

Some sectors impacted more than others

Catering and hospitality, transport and logistics, care, construction, and engineering and manufacturing were the sectors most impacted, according to the findings.

AELP said that these were the “sectors with high capital or resource outlays that were in general being very badly affected”.

In addition, it found that standards relying on practical skills and higher proportions of training materials, like construction, were particularly vulnerable.

In the case of areas like care and early years provision, many respondents said that they were already badly funded and inflation movements had made that situation worse.

‘Rising costs are really starting to bite’

Jane Hickie, AELP chief executive, said: “Our research backs up what AELP members tell me on a daily basis – that rising costs are really starting to bite. Many training providers are extremely concerned about what the future holds, and, despite unprecedented inflation rates, some funding bands have not been reviewed for many years.

“The current situation is simply not sustainable and – alongside continued long-term investment in skills – we need urgent intervention from government to ensure funding matches the true cost of delivery.”

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One comment

  1. Dickens

    I think it’s also worth remembering that even though salary increases are the top reason for cost pressures by providers, for staff I don’t remember seeing a single pay award that is higher than inflation (aside from the 15% for barristers).

    Staff in the sector are still experiencing real terms pay cuts and it’s particularly acute for those at the lower end of salary scales as they are impacted more by inflation (i.e. they don’t have luxuries to trim & food energy and housing costs take up a much greater proportion of their income).

    I’d like to see a bit more openness and honesty about that as without frontline workers, the sector is nothing.