The apprenticeships minister Robert Halfon has sought to play down fears in the business community that some companies will “game” the new apprenticeship levy system to subsidise their own in-house training.

Halfon told a fringe event at the Conservative Party Conference in Birmingham this morning that although it was “inevitable” that there may be some “gaming of the system”, he did not believe it would be widespread.

From next May, employers with a payroll bill of more than £3 million will have to pay the apprenticeship levy, but they will be able to potentially claw back more than they put in to fund training of their own apprentices.

But some fear that companies will take advantage of the system and “re-badge” their own training in order to make the most out of the levy.

Inevitably there may be some gaming of the system

This morning those fears were voiced by Daniel Pedley, a top adviser to the Chartered Insurance Institute, who later told FE Week that the sector was “potentially setting ourselves up for a fall” by underestimating the potential for misuse of levy funds after he pushed the minister for answers on how the government would tackle it.

Pedley told Halfon that he had spoken to “lots of employers” and had heard that firms were “not necessarily looking to bring in new talent and help with the social mobility side”, but rather “re-badging existing training and chasing as much levy as they can to claw it back”.

In response, Halfon said employers had an incentive to use the system properly because they were designing the new standards themselves and would want “the best people for their company”.

“I’m not going to lie to you, inevitably there may be some gaming of the system but I don’t actually believe it will be widespread,” he said.

“I don’t think this will be as widespread as one may think. If there is evidence of it after the levy is in operation it will come through and then we will look at it.”

He said there were “all kinds of organisations”, including the Institute of Apprenticeships and Ofqual, set up to regulate apprenticeship quality, and said that where gaming was identified, the government would aim to “stop it as much as possible”.

But Pedley warned there was “a lot being put on the Institute of Apprenticeships” and said the issue had to be taken seriously.

Speaking to FE Week, he said: “Given that [the Institute of Apprenticeships] is a new entity and that we’ve already had one chief executive come and go, my worry is that putting so much store in that, we’re potentially setting ourselves up for a fall.

“Because the whole levy’s new, there will be people trying to game the system as he said, and we’ve got to take it seriously, not assume that only a couple of people are going to do it. There are big amounts of money at stake and you’ve got to keep a good eye on behaviours.”

During the event this morning, Halfon once again dismissed calls for a delay to the implementation of the funding changes, which some fear will lead to cuts of up to 50 per cent for the most deprived 16 to 18-year-olds.

He also acknowledged that FE Week would “have his head” if he did not get the levy right in May.

Apprentices should be sent into classrooms to tell school pupils about vocational career and training options, according to two learners who chose apprenticeships despite having been discouraged by their schools.

Ellie Newton (above left) and Liberty Hobbs (above right), both business administration apprentices with Pimlico Plumbers, told a fringe event at the Conservative Party Conference this morning that they had not been told at school that apprenticeships were an option.

Their comments have sparked calls for better targeting of careers funding and for a change to allow the apprenticeship levy to be used to pay for measures to help more young people access apprenticeships.

I was told in my school that if I got an apprenticeship I would be wasting my time

The fringe event, co-hosted by FE Week, the Association of Colleges, the Learning and Work Institute and the Association of Employment and Learning Providers focused on proposed funding reforms and on whether enough was being done to promote apprenticeships.

Ellie Norton, who is currently completing her level two qualification, said she had heard about the opportunity through a friend at the company, and said she would have benefited from hearing from other apprentices when she was at school.

“Not everybody wants to go to uni,” she said, “and at the end of the day, you can come out the end of uni and not even get a job. As an apprentice I know I am guaranteed a full-time job afterwards and I can take my qualification anywhere.”

Liberty Hobbs, who is doing a level three qualification and plans to move into management, said she wasn’t enjoying sixth form and happened upon the vacancy at Pimlico because other employers had told her she needed a qualification.

“I think we should actually go into schools and actually speak, word of mouth, like we’re doing now, just to get the younger kids aware of everything,” she said. 

“I was never told about apprenticeships. It was always ‘uni is the way forward, uni is your life now’, but it just wasn’t for me. I was even told in my school that if I got an apprenticeship I would be wasting my time and I wouldn’t have a job, I wouldn’t have a career, that I would need uni behind me to actually make something of myself.”

Hobbs added that she was never even taught how to write a CV, and encouraged instead on preparing for her Ucas personal statement.

Mark Dawe, the chief executive of the AELP, said he was yet to hear a story from an apprentice which did not talk about schools discouraging them from taking a vocational pathway.

“I I think it’s an absolute disgrace that we’re hearing that yet again,” he said, and called for immediate action from the Careers and Enterprise Company (CEC), which was set up in 2014 to boost exposure to careers and training opportunities for school children.

“I don’t know what the Careers and Enterprise Company  is doing but they need to do something quick about this,” he said. If we don’t change this, we’re not going to change apprenticeships and get the prestige that [apprenticeship minister] Robert Halfon talked about.

“The advice is not getting into the schools, and maybe more money needs to be given to WorldSkills and not CEC, because actually they’re demonstrating what good apprenticeships and good work-based-learning is.”

But Dawe said careers advice also had to target parents, as they often discouraged their children from taking up an apprenticeship.

“It’s not just the schools,” he said. “I’ve heard, on a number of occasions, that dads were resistant. Us dads can be a bit stick-in-the-mud. That ‘there’s no way you’re doing an apprenticeship, you’re going to university’ type of approach.

“I do think actually parents are another key target we need, to help them understand what the opportunities, especially the new opportunities are.”

He said parents whose children had flourished in apprenticeships should be used to promote the route too.

Other ways of attracting young people to take up apprenticeships and to help them get into the sector if they were at a disadvantage were also discussed, including proposals in the government’s skills plan for a “transition year”, although David Hughes from the AoC said he had concerns.

Hughes said he was “really keen” on the idea, branding it “sensible” and “long-overdue”, but he warned it could fail without additional funding. “I’m worried they’re trying to do it on the cheap,” he said. 

He also called for changes so some of the money raised by the apprenticeship levy could be spent on access – encouraging poorer pupils and those in hard-to-reach areas to go into further education.

“In higher education, there’s about £1 billion spent on access. In apprenticeships there’s nothing. And all we’re saying here is could you use some of the levy to spend on access?”

The government was also urged to listen to learners more, as Stephen Evans, chief executive of the Learning and Work Institute, warned that although the employer voice was “important”, the apprentice voice was also key, but often got “lost”.

 

Photographs: David Lake

Plans have been unveiled to fully fund IT courses for adults, putting ‘digital literacy’ on a similar footing to English and maths.

A consultation on the final details of the plans will be undertaken in due course, which will be funded from the existing £1.5bn annual Adult Education Budget.

At present the Skills Funding Agency pays half the full funding for adult short courses in basic computing, with the learner typically paying something towards the costs. 

It is unclear when the change to bring in full funding will come in to effect, although typically these would occur from August at the start of the academic year. 

The government is currently seeing through their plans to devolve funding for the AEB to over 30 local commissioning authorities in 2018. This will empower the local bodies to decide how and where the AEB is spent. 

It is understood that the plans will be included in an amendment to the Digital Economy Bill, which is currently working its way through parliament. 

According to the government too many adults do not have the digital skills required for the modern world and should be considered as important as English and maths. At present the government fully funds English and maths at level two and below for adults.   

Announcing the plans secretary of state for culture, media and sport Karen Bradley said, “In today’s digital economy, being able to use modern technology and navigate the Internet should be considered as important as English and Maths. But too many people struggle to get by, with more than ten million adults in England lacking the basic digital skills they need.”

Skills and apprenticeships minister Robert Halfon added, “We are committed to making sure that everyone, regardless of age or background has the digital skills they need to enjoy the benefits of modern technology. Whether it’s applying for a job, accessing vital services or as consumers, our world is increasingly moving online – and we don’t want anyone left behind.

Our reforms will mean that people who lack basic digital skills will get the training they need to get on the ladder of opportunity for the jobs of the future.”

The plans come 13 years after the then prime minister and leader of the Labour Party, Tony Blair, tabled the idea of ‘basic ICT skills becoming a third area of adults basic skills’.

A financial notice to improve has been issued to The Heathrow Aviation Engineering University Technical College by the Education Funding Agency, due to an “apparent loss of financial control”.

The UTC, which opened in North London in September 2014, had failed to balance its budget and suffered with cash flow problems since 2015, according to a letter issued by the EFA on August 23 and published on the gov.uk website today.

Heathrow is the third UTC to receive a financial improvement notice this year, following Daventry UTC and Buckinghamshire UTC which were both issued with notices in May.

Mike Pettifer, director: academies and maintained schools group, highlighted in his letter to Heathrow UTC interim principal Barry Hersom that failing to set a balanced budget breached the UTC’s funding agreement, meaning that improvements in financial management, control and governance were necessary for it to stay in operation.

The EFA’s decision to issue the letter also triggered the cancellation of the UTC’s delegated authorities and meant all its transactions must go through the EFA for approval.

Delegated authorities may be returned to the UTC once the notice to improve has been satisfied.

The conditions of the notice include a revised three year financial recovery plan from 2016/17 to 2018/19; an external governance review; monthly management accounts; audited accounts for 2015/16; and proof of the qualifications held by the UTC’s accounting officer, chair of governors and chief financial officer.

Mr Pettifer wrote in the letter that the EFA “will monitor progress made towards meeting the requirements associated with this notice” and will “lift the notice when the requirements set out in the annex have been met”.

If the requirements are not met, the UTC could face having its funding agreement terminated.

According to the letter, Heathrow UTC has already engaged in “extensive discussions” with the EFA, and made some changes “to reduce expenditure”.

The challenges faced by Heathrow Aviation Engineering UTC come next in a long line of problems that have hit the 14-19 vocational institutions.

On September 7, the Department for Education confirmed that a UTC developed in partnership with Burton and South Derbyshire College would never open, despite the government spending more than £8m setting it up.

It followed FE Week research in February, which found that forty per cent of UTCs opened between 2010 and 2013 saw student numbers fall for the last academic year.

Many have since been forced to close, such as UTC Lancashire which said in a statement on May 3 that it would close for good just three years after it opened — due to difficulties in enrolling enough students “to secure future financial viability”.

Meanwhile Central Bedfordshire UTC had announced in March that it would close in August — after admitting it had not been able to attract “sufficient pupils”.

Hackney UTC closed in July 2014, also following problems attracting learners, and Black Country UTC shut in the summer of 2015 after a “disappointing” Ofsted inspection and, again, low student numbers.

Heathrow Aviation Engineering UTC was unable to comment by the time of publication.