With the government looking at new funding models for apprenticeships, Suzy Gunn explains why questions of practicality and accessibility must be considered.

While most people agree solving the UK’s growing professional skills gap should be a major priority in the country’s return to healthy economic growth, exactly how this should be done is less clear.

In response to growing numbers of young people taking non-vocational degrees and finding that they do not have the skills employers need, the government has wisely placed greater emphasis upon more specific routes into employment — primarily through apprenticeships.

However, in order to truly make apprenticeships attractive and accessible to young people, it’s crucial that the practical and grass root operational foundations — the ‘nitty-gritty’ — are fully in place.

Last year, the government tasked Doug Richard with reviewing the funding structure of apprenticeships. In light of his conclusions, the Department for Business, Innovation and Skills proposed three new funding models.

As the director of a company that offers a range of apprenticeship packages to employers, training providers and learners, my experience in this area is that these can be dense and complex issues — and that the devil is often very much in the detail.

While I fully agree with Mr Richard that apprenticeships can play a vital role in meeting the needs of the economy, and that more needs to be done to incentivise employers, realistically, out of the three proposed models, I can only see one being practically and effectively implemented.

Model 1 puts the emphasis firmly on the employer, requiring it to register apprentices through an online system and then take responsibility for provider payments, expenditure and assessment reporting. It then receives direct funding from the government into its accounts. The problem is this is so heavily reliant on employers — they are busy trying to run a business and may not have the resource to be able to do full justice to the scheme. Should this prove to be the case, the potential dangers could range from providers not being paid on time, to the learners having their actual qualifications delayed due to a lack of sufficient achievement recording.

Employers clearly require well-trained staff, but in my experience they are hesitant to become overly involved in the educational/operational side of the training and would prefer to leave these aspects to the experts.

The second model utilises the PAYE system, and is also one that I have reservations about, but this time for more economic reasons.

Without knowing exact figures, one can only assume that implementing a national software infrastructure would be extremely expensive. While I do agree with investing in vocational education in principle, spending so much here, and further stretching HMRC as a means to ultimately assist the country’s financial and economic recovery, does seem slightly counter-intuitive. Indeed, even putting aside the likely cost on the public purse, there is no doubt a software infrastructure of this magnitude will inevitably present “teething issues”, that run the risk of disengaging employers completely from apprenticeships, and forcing them to find alternative solutions.

But that is the last of my pessimism, because model 3 is a one I envisage being successful. It proposes that providers should be at the centre of the funding process and allows providers to maximise their experience and expertise, and, crucially, helps develop links and relationships between employers and providers.

But even with ‘Model 3’ there will still be administrative and financial issues to determine. For example, if it is up to employers to determine their own financial contribution, will the scale of that contribution be considered to reflect the employer’s attitude towards having better-skilled employees? As such this could mean that employees could lose out on training.

Ultimately, the fact there is a serious government focus on apprenticeships is a really positive step, but if new funding structures are to be introduced, it’s absolutely crucial that they are practically robust enough to meet the needs of not just learners and employers, but our economy too.

Suzy Gunn, operations director at Active IQ

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  1. This is an excellent analysis of how each option will play out ‘on the ground’. Suzy Gunn makes a very important point – whatever ends up being implemented it HAS to work first time. There must be no more fiddling around with funding criteria, changing parameters and endless tweaking to try and make up for the originally poor design.

    The stock of the Government, their agencies and the training/eduation industry is not high with many employers – their credibility with these employers will be holed below the waterline if the Government gets this wrong.