The government has set up a Skills Funding Agency-led review to look into the issue of potential conflicts of interest where awarding organisations also deliver education, FE Week can reveal.
Ofqual, the National Apprenticeship Service (NAS) and the Department for Business, Innovation and Skills (BIS) are also on board in a task and finish group set up to look at joint ownership.
It was set up following a BIS Select Committee report on apprenticeships in November that said the government should look “critically upon this serious issue [joint ownership].”
“We accept that the practice of joint ownership is not unusual but learner experience is key and should not be put in jeopardy by conflicts of interest,” said the committee report.
Ofqual was already investigating the issue and a spokesperson said last year it would be “saying more about our thinking in due course”.
If necessary, sanctions can be put in place to ensure provision and the brand is not compromised”
However, the government’s response to the report said the agency would also be investigating.
“A task and finish group is being convened which is being led by the SFA and will include Ofqual, NAS and BIS,” said the government response, issued on Friday, January 25.
“The work will start with a review of those awarding organisations, predominantly, where there are instances of vertical integration with a training arm in order to understand what protocols and, if necessary, sanctions can be put in place to ensure provision and the brand is not compromised.”
The 11-month select committee review of apprenticeships recommended a host of changes, including “closer scrutiny, careful monitoring or even complete reform”.
It called for an “overarching government strategy and clear purpose for the apprenticeship programme,” along with a “formal” definition of apprenticeship.
It recommended a simplified funding system and a review of profit levels among training providers.
“The apprenticeship programme needs clarity, oversight and, in these straightened times, to demonstrate that it is providing value for money,” said committee chairman Adrian Bailey MP.
“There are many areas that require closer scrutiny, careful monitoring or even complete reform.”
The government said it agreed with many of the committee’s recommendations and had taken action, including asking entrepreneur and former Dragons’ Den investor Doug Richard to look into apprenticeships.
His findings, published in November, would be looked at, said a government spokesperson, and a consultation on implementing his recommendations would launch in the spring.
The spokesperson further said government strategy on apprenticeships was clarified in the 2010 Skills Strategy — Skills for Sustainable Growth and 2011 New Challenges New Chances.
“With a small number of specific exceptions, all apprentices must be employed, and working towards the completion of a recognised apprenticeship framework,” they said.
The apprenticeship system had also been made clearer, they added, with an apprenticeships website (www.apprenticeships.org.uk).
“The system helps individuals to understand apprenticeships better and search through vacancies,” said the spokesperson.
“It also enables employers and learning providers to advertise vacancies to a wide range of applicants.”
They added: “The agency and NAS monitors all aspects of the take-up and quality of apprenticeships and will continue to take action to ensure the apprenticeships offer meets the needs of employers and learners.”
Meanwhile, the committee’s call for government to take a more “active approach” to reviewing profit levels among providers elicited a positive response.
“The agency collects the annual financial statement of training providers as part of its risk management processes,” said the government spokesperson.
“Training providers may derive their income from different sources, however, where those financial statements imply that profits derive from agency programmes are unusually high, the agency will review delivery with the training provider to establish whether there is any risk to the efficient use of funding.”
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