The ESFA’s approach to the allocation of apprenticeship funding for non-levy employers undermines the apprenticeship reforms and specifically, degree apprenticeships, says Adrian Anderson

The apprenticeship reforms put the employer in the driving seat. Employers develop apprenticeship standards that define the knowledge, skills and behaviours required for an occupation, and they decide which to use to develop the performance of their workforce.

A key feature of this approach has been the development of standards for higher-level occupations, in particular the new degree apprenticeships. This is hardly a surprise: to be competitive, employers and the UK economy need to invest in developing higher-level skills.

Degree apprenticeships have been encouraged by government, LEPs and professional, statutory and regulatory bodies. For individuals it’s good news: they offer a debt-free route to and through higher education to the professions, and appeal to individuals who may in the past have been put off by the debt associated with HE. It ticks the social mobility box, and demonstrates to any parent, young person or teacher that apprenticeships aren’t just about low-level skills or for those who don’t go to university.

ESFA has put the non-levy paying employer back in the passenger seat

Unfortunately there’s a problem: the Education, Skills and Funding Agency. It has based its recently announced allocations for funding for non-levy paying employers on historic patterns of apprenticeship delivery rather than patterns of future employer demand and the apprenticeship standards developed by trailblazers. Yet degree apprenticeship is a new type of provision, requiring new providers – specifically higher education institutions.

Regardless of future demand and the effort involved in applying to the register of apprenticeship training providers and tendering, HEIs without a prior SFA apprenticeship contract have not received funding to deliver degree apprenticeships to non-levy paying employers.

For HEIs on RoATP with a prior SFA apprenticeship allocation, the new allocation has been negligible because degree apprenticeships are a new programme and the ESFA is basing allocations on historic provider patterns of delivery. Any ESFA claim that apprenticeship budgets follow employer demand is untenable. Existing providers with extended contracts cannot simply step in to deliver degree apprenticeships. There will be gaps in the provider base and substantial occupational and geographic gaps in provision.

The situation is made even more bizarre when the Degree Apprenticeship Development Fund is considered. DADF funding was allocated, through a competitive tender process, to support the development of degree apprenticeship provision. The ESFA allocation process means some HEIs that have developed degree-level provision may not be able to deliver starts from September. Non-levy paying employers that have worked with such funded institutions could be denied access to the higher-level skills provision their business needs.

It’s also interesting to contrast the apprenticeship offer for levy-payers with non-levy paying employers. Levy-payers will be able to use apprenticeships that are of maximum benefit to them and degree apprenticeships could boom. In contrast, non-levy paying employers’ use of degree apprenticeships will be severely restricted.

Big business and the public sector can invest in and use any apprenticeship it wants, but a non-levy paying organisation will have its choice contained and skewed towards the apprenticeships delivered by the ESFA’s existing provider base. The ESFA has put the non-levy paying employer back in the passenger seat.

The University Vocational Awards Council has raised these concerns with both the ESFA and IfA, and outlined options that would ensure non-levy paying employers can use degree apprenticeships.

We await a response. The ESFA must demonstrate its commitment to the higher-level skills agenda in general and degree apprenticeship in particular. It must also ensure SMEs have access to the degree apprenticeships they have been promised, which are critical to the future success of their organisations and in turn, to the productivity of the UK economy.


Adrian Anderson is chief executive of University Vocational Awards Council

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  1. Is there a hidden political agenda? Unintended consequences or just basic incompetency with insufficient knowledge and understanding of good apprenticeship provision?

    Another thought, if employers are paying fees and students as employees are working, why is there a problem? Or is it only with Higher and other apprenticeships where non university providers are involved?