Halfon quizzed on levy funding gap, FSQ woes and 5% co-investment future

Skills minister also pressed on apprenticeship spending restriction discussions and EPA market

Skills minister also pressed on apprenticeship spending restriction discussions and EPA market

27 Feb 2024, 17:21

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As FE Week’s tenth annual apprenticeship conference draws to a close, deputy editor Billy Camden quizzes skills minister Robert Halfon on some of the big issues facing apprenticeships.

Q. The gap between how much the levy generates versus how much is distributed for spending on apprenticeships by Treasury is in the hundreds of millions, and growing. Does this disparity frustrate you and are you lobbying Treasury to increase DfE’s budget?

Well, first of all, I’m very proud of the apprenticeship budget because I do think spending £2.7 billion a year from 2024-25 is a huge whack of money to spend on apprenticeships. Of course, I’ll always champion for more funding to go to apprenticeships. The budget has always been set by the Treasury, significant chunks go to the devolved authorities and that is right they spend it how they wish.

I also think it’s worth pointing out all the extra multimillion pound packages there are for things like the bootcamp and other adult learning courses. So I think if you look at it in the round, there’s a hefty amount of money being spent on skills and a hefty amount of money being spent on apprenticeships.

Q. So do you think the budget Treasury distributes for spending on apprenticeships is fair despite the disparity between what is allocated and what is actually generated?

Look, Treasury will always set the budget. I think spending £2.7 billion on apprenticeships, and on top of that all the hundreds of millions of pounds we’re spending on adult skills offerings as well, is a good a good amount of funding. That doesn’t mean we won’t always champion for more resources.

Q. FE Week understands there are discussions between Number 10, Treasury and DfE to potentially restrict levy spending on higher-level apprenticeships, particularly in the level 7 arena. Are those discussions still ongoing?

I never discuss what private discussions have allegedly said this, or somebody has allegedly said that, but what I would say is we of course review apprenticeships all the time. For example, we took out the MBA component from the level 7 senior leader a few years ago. 

Q. You say you are determined for the apprenticeship levy to “remain the Ronseal Levy”, but we know the government is keen to address falling starts in small and medium-sized enterprises.

Is the government going to scrap the 5% co-investment for SMEs?

Firstly, I genuinely cannot fathom or understand the plans by the Labour Party to open the levy up to fund other forms of training. It would take apprenticeships back to square one and I just think they don’t understand that.

It is a fair point that you make that we want to do much better by SMEs and to increase the starts in SMEs. I’m doing a lot of work on that. We’ve removed the cap since I’ve been a minister. That is a big thing. I mean, I was amazed there even was one to be honest. We’ve cut regulation and red tape by reducing the number of steps for SMEs to set up an account or take on apprentices by a third. We’re slashing funding rules for providers and employers, we’re working with the HMRC to share government data on apprentices. So it’s the beginning of a lot of work which I call operation machete, to drive down regulation for apprenticeships and for providers.

Q. But is the government planning to scrap the current 5 per cent co-investment for SMEs?

I can’t give you an answer on that at this time.

Q. A hot topic at our conference has been functional skills, including unsustainable funding despite the recent uplift, widespread content concerns and the rigid rules that force apprentices to study the qualifications and lead to huge dropouts. Does the government understand the concerns from providers, apprentices and employers and what is it doing to address them?

I’m glad that you mentioned the 54 per cent funding rate uplift, that is a significant increase in funding.

I think that it is absolutely vital that everybody has basic qualifications in maths and English. They are the most important subjects. We’re always looking at functional skills and whether or not they can be better, that’s absolutely something that I will always look at. But the principle of it, I think is the right one.

Q. Another theme at AAC has involved the apprenticeship assessment system. Some have called for a change to the current set-up of having an independent market of EPAOs. Is this an area the DfE is considering?

I think end-point assessment is important. We’re integrating the end-point assessment with the qualifications which has been a problem. I absolutely believe in endpoint assessment. I’m happy to listen to the arguments but I think, again, the principle of it is really important.

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  1. Steve Skarratt

    The response to the question:
    Another theme at AAC has involved the apprenticeship assessment system. Some have called for a change to the current set-up of having an independent market of EPAOs. Is this an area the DfE is considering?

    I think end-point assessment is important. We’re integrating the end-point assessment with the qualifications which has been a problem. I absolutely believe in endpoint assessment. I’m happy to listen to the arguments but I think, again, the principle of it is really important.

    There was no reference to whether EPA should continue or be changed, the question was about it being carried out by independent markers and whether a change was being considered. Totally avoided the question.