It’s not wrong to use the apprenticeship levy to fund MBAs

27 May 2018, 5:00

Apprenticeships at the top end are a legitimate and vital use of levy funds, argues Kirstie Donnelly

Much has been made of claims that universities are set to make millions from the new MBA courses paid for by the apprenticeship levy, especially as many are launching programmes in partnership with businesses around the country.

Some have decried this practice as a misuse of the new apprenticeship system. However, I don’t believe this to be the case – the introduction of apprenticeships for professional managers is not a loophole. It’s policy working exactly as intended – and to the benefit of the UK.

The apprenticeship reforms were designed to facilitate workforce development across all professions, including leadership and management. Indeed, the government’s ‘English apprenticeships: Our 2020 vision’ explains that employer-designed standards will “focus on exactly the skills, knowledge and behaviours that are required of the workforce of the future”.

Employers have a responsibility to spend their levy funds where there are key skills gaps. So, while some organisations may decide to use part of their levy to develop more senior members of staff, providing them with higher-level training and an MBA qualification, most employers are using apprenticeships to recruit and retrain at all levels in line with their most critical business needs.

The scale of this issue has been significantly overstated. The amount of levy funds set aside for delivering MBA apprenticeships is a drop in the ocean compared to what’s available; the latest research estimates suggest that less than one per cent of levy funds will be spent on such apprenticeships, leaving more than £2.3 billion per year for other types of training. And it’s important that this is the employers’ decision to make: in giving them control to invest in talent, we shouldn’t immediately be trying to critique their efforts.

The scale of this issue has been significantly overstated

Another myth has risen around the so-called “rebadging” of existing management programmes – whereby previous career development courses are being relabelled as apprenticeships in order to take advantage of the levy funding. This is a misconception. In fact, a range of robust quality-assurance measures are in place to prevent this “lift-and-shift” approach.

If an employer or training provider tried to do this, they would quickly find themselves in trouble. Each apprenticeship standard has an employer-designed curriculum that is assessed by an independent, government-approved body before any apprentice can be certificated.

Trying to deliver a training programme which does not align to this curriculum will ultimately end in failure and can lead to heavy penalties for employers and training providers alike.

Universities have a duty to innovate programmes with employers that create a workforce fit for the future. Since the introduction of the levy we have witnessed unprecedented levels of cooperation and collaboration between employers and higher education institutions. This is something we have aspired to for many years, and to stifle it now would be alarmingly retrospective.

Government data consistently points to poor leadership and management as the main cause of our worsening productivity crisis. The latest employer skills survey shows that management skills are routinely cited as the main skills gaps across every type of organisation. People management, teamwork and complex analytical skills, for example, are all vital to employers but – due to a lack of investment in training – are also the skills most frequently in need.

The senior leader master’s degree apprenticeship, the standard for which MBA pathways are being created, covers these areas in great detail. And this is because they have been designed by the very employers who desperately need these skills in their businesses in order to succeed. Investing in the right apprenticeship programmes to deliver on this is a good outcome all round.

The apprenticeship reforms were designed to transform the traditional model. It’s important that we recognise MBA programmes as a natural part of this shift towards an apprenticeship system that engages with employers, encourages businesses to value skills development, and allows them to build a stronger and more productive workforce.

Kirstie Donnelly is managing director of City & Guilds, ILM and digitalme

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  1. Nonsense. MBA’s are workforce development and should not count as an apprenticeship or towards targets. We should be investing in young people using apprenticeship models and for those in young provide a workforce development fund and exclude them from inflated numbers to pretend we have millions of apprenticeships for young people.

    • Neil Bates

      You are a great sector leader Kirstie but your argument really stretches the meaning of an apprenticeship. An MBA is an apprenticeship – really ? Last year the total number of young people aged 16-18 who studied a level 3 or above in a STEM subject was 2.5% of all starts. Calling everything that moves an ‘apprenticeship’ is only good for government targets – it won’t help the nations skills and productivity crises.