A leading think-tank has voiced concerns that the government’s apprenticeships reforms could be hurting young people’s job prospects.
In a new report published today, the Institute for Public Policy Research said that the decision to ditch a requirement for apprenticeships to include a recognised qualification could “harm young people who will need transferable qualifications in an increasingly flexible jobs market”.
But this concern did not appear to be addressed by the Department for Education when FE Week asked for a response – despite social mobility being high up on the new prime minister’s agenda.
The move from frameworks, which do include formal qualifications, to standards, which only require an end-point assessment and don’t require a formal qualification, is a key part of the government’s apprenticeship reforms.
In today’s report, the IPPR report said that standards “work well in sectors of the labour market that consist of large employers who share a strong sense of occupational identity and are committed to training their future workforce” but less well in other sectors.
The report highlighted concerns that in sectors without larger employers or professional bodies involved in developing standards, employers could simply “rebadge as much existing and job-specific training as possible into an apprenticeship” – rather than providing apprentices with the skills they need to further their careers.
Today’s report cited an example of a level 2 retailer apprenticeship, which it said had been developed with no involvement from a professional body and was designed so that companies could tailor it to their own needs.
It said: “It is not clear how much more an apprentice in retail would learn than someone who was simply starting out in their first job in retail, and the only advantage for an apprentice is that they receive a confirmation that they have passed their apprenticeship after the independent assessment.”
Jonathan Clifton, IPPR’s Associate Director for Public Services, said: “England is in danger of introducing an apprenticeship system that would work well in the economy of the 1960s, but is not fit for a 21st-century workforce.
“We need to create an apprenticeship system that works in a jobs market that is increasingly characterised by small firms, service sector jobs and flexible working.”
When FE Week asked the Department for Education if it shared the IPPR’s concerns, a spokesperson said: “Apprenticeships give young people a real ladder of opportunity and the chance to earn a wage while learning the skills for a rewarding career.
“Our reforms are focused on driving up standards with more employer involvement, quality assurance by the new Institute for Apprenticeships and independent third party assessments at the end of the course to ensure they are high quality, and that students are learning the skills employers want.”
Mark Dawe, chief executive of the Association of Employment and Learning Providers, echoed the IPPR’s call.
He said: “The government should place a pause on standards development and conduct a full review of what the best model is.
“In the interests of the apprentice, qualifications within the standard should be mandatory and consultation on the final draft should be better.”
Nearly all employers will only have to contribute 10 per cent to the cost of an apprenticeship from April 2017, the Department for Education has announced this morning.
The news, previously reported when leaked to FE Week, comes as part of a three week consultation which details how much colleges and training providers would be paid for apprenticeships once the levy kicks in. Click here to read in full, and here for updated guidance webpage.
This means the government will pay 90 per cent of the costs for 98 per cent of employers, those with annual wage bills below £3m and thus not paying the levy.
Despite retaining plans to introduce a mandatory cash contribution for the first time it will be hoped this generous 10 per cent arrangement (it is 33 per cent in the pilot) will address fears that small employers wouldn’t engage in the reformed apprenticeship programme.
However, Mark Dawe, chief executive at the Association of Employment and Learning Providers, is very concerned about the impact of a mandatory employer fee. He told FE Week: “the insistence of a cash contribution could in our view still have a very negative impact. Therefore AELP has asked ministers to keep the matter under review. The requirement should be quickly phased out if our fears about the impact are realised.”
Other new announcements within the consultation include:
> A£2,000 incentive to help 16-to 18-year-olds, young care leavers and young people with an Education and Health Care (EHC) plan, make their first step into the world of work – split £1,000 to employers and £1,000 to training providers.
> Employers with fewer than 50 employees will not have to pay anything towards the cost of training a 16-to 18–year-old apprentice, young care leaver or young person with an EHC plan.
> Levy paying employers, those with annual payroll bills over £3m, will receive a 10 per cent monthly top-up. However, if their levy account is insufficient then like smaller employers, 90 per cent of their additional apprenticeship training costs will be subsidised.
> To help employers see how the levy and funding system would work for them, the government has launched a new online calculator, which can be seen here.
> All apprenticeship frameworks and standards starts from April 2017 will be funded from one of 15 bands, each with an upper limit ranging from £1,500 to £27,000. It will then be up to employers to negotiate prices with providers. The AELP had been calling for a lower limit to the band for fears of a deflating price war, but this appears to have been ignored. Mr Dawe added: “If there is no lower limit we could now see bidding wars for employers’ custom where the price of delivering the training is the main consideration. A very low price could have a damaging effect on quality which will certainly not be in the interests of the apprentice. AELP will monitor this and if necessary will press for the introduction of a minimum price”
With the change in ministers, short time before implementation and delay to the announcement, some powerful interest groups will be disappointed as they had hoped the levy would be put on ice.
Last month the CBI increased their opposition by shifting from demands for changes to telling FE Week they wanted an outright delay.
Robert Halfon, the newly appointed Apprenticeships and Skills Minister said today: “We need to make sure people of all ages and backgrounds have a chance to get on in life. Apprenticeships give young people – especially those from disadvantaged backgrounds – a ladder of opportunity. That’s why we continue to work tirelessly to deliver the skills our country needs. The apprenticeship levy is absolutely crucial to this.
Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly-skilled future workforce that the UK needs.”
Responses to the consultation are via a survey which must be submitted by 5 September and “final funding proposals will be confirmed in October 2016.”
A number of universities have breached the A-level results embargo and confirmed student places ahead of results day tomorrow.
One university also released grade information directly to students, triggering UCAS to launch an investigation into the universities’ automated systems, which is blamed for the error.
A-level grades can be released to students from 6am tomorrow and university place information can be tracked on UCAS from 8am, but publication ahead of the official release time is strictly forbidden.
Place confirmations from the universities, which have not been named, went to students with a conditional grade offer, meaning the students could make assumptions about their achieved grades.
A UCAS spokesperson told FE Week: “Regrettably there have been a small number of process errors, typically where universities’ automated systems have released communications to prospective students ahead of results day.
“In each case the provider concerned has informed UCAS immediately and swift action has been taken to correct the errors. The majority of these imply applicant status rather than achieved grades.
“However, in one case we believe a very small number of students may have had access to their results.
“We take these matters very seriously and, as you would expect, we have immediately alerted the Joint Council for Qualifications (JCQ) and the regulators of these errors. These cases are currently under investigation and a full report will be made to the regulators and awarding bodies in due course.”
A JCQ spokesperson said exam boards take security of results “extremely seriously” and they were “concerned” to learn of the breach.
JCQ, which represents all of the exam boards, is now in talks with UCAS to gather all of the details of the error and understand how this can be avoided in the future.
The spokesperson added: “There is, of course, a balance to be had between providing universities with results a few days early so they can prepare admissions and maintaining the security and fairness of these results.”
The man in charge of Ofqual’s vocational arm, Jeremy Benson, has decided to leave the exams regulator after nearly six years, in light of the recent skills plan.
Mr Benson, who joined Ofqual in 2010 as director of strategic management and then became executive director for vocational qualifications in 2014, said he is moving on as one phase of reform concludes and another begins.
It follows the announcement of the government’s vision for technical education in the recent skills plan, which will see a radical overhaul of the post-16 vocational qualification system by replacing 20,000 courses with “15 high-quality routes”, based on the recommendations of Lord Sainsbury’s independent panel, and the creation of the institute for apprenticeships.
Phil Beach, Ofqual’s director of strategic relationships for general qualifications, has today been appointed interim executive director and will take on Mr Benson’s responsibilities until a permanent replacement has been found.
Phil Beach
Sally Collier, who was appointed as Ofqual’s new chief regulator in March, said: “I would like to thank Jeremy for the significant contribution he has made to establishing Ofqual and the groundwork done in preparation for the important reforms being made by government to the vocational qualifications landscape and our role in regulating it.
“We all wish him well for the future.
“We have begun the process of identifying a replacement. In the interim, Phil Beach, director of strategic relationships, will lead our vocational qualifications directorate.”
Mr Benson, who previously held roles in qualifications policy at the Department for Education and City & Guilds, is now weighing up his options and taking some personal time before deciding on his next step.
The government wants the new register to work alongside the existing register of training organisations. Providers will have to meet strict criteria to be included on the register, which will then be used by employers looking for training for their apprentices.
The guidance issued by the government emphasises the desire of ministers to put employers in the driving seat, and has some big ramifications for subcontractors and other “middle men” in the contracting process, along with colleges or independent providers which have had less-than-favourable run-ins with Ofsted or the Skills Funding Agency (SFA).
Here are some of the key points from the government guidance…
Inadequate providers will escape a ban from the register if their apprenticeship provision is rated above a grade four
There are a lot of reasons why a provider could be removed from the register
The government says it will remove providers from the register is they or any of their directors, governors, senior employeers or shareholders meets any of the following criteria…
Ongoing investigation relating to suspicion of fraud or irregularity, or possible failure to comply with conditions of funding under an existing funding agreement or subcontract.
Withdrawal of funding following the failure to comply with a Notice of Withdrawal of Funding, or failure to remedy a serious breach of contract within the last three years.
Information from awarding bodies identifying significant irregularities in the award of qualifications within the last three years.
Previous activities have resulted in significant repayment of SFA or government funding within the last two years (£100,000 or 5 per cent of contract value, whichever is the higher). This also includes funding paid to a subcontractor to deliver education and training services funded by the SFA.
Failure to repay funding due to the SFA or other government body, in excess of £50,000.
Failure to repay funding due under a subcontract to deliver education and training services funded by the SFA in excess of £50,000.
Two or more instances where the SFA or its agents has audited the provision of a lead provider and identified issues of non-compliance. This is non-compliance with conditions of funding within the last two years.
Early termination of a funding agreement or a subcontract to deliver education and training services funded by the SFA within the last three years.
This also applies to providers which have key personnel who were previously a director, governor, senior employee or shareholder in “another organisation where one or more of the above criteria apply”.
New standards for quality of apprenticeship delivery could be introduced
The government is working with the Institute for Apprenticeships in looking to introduce “standards associated with the quality of a provider’s actual delivery”, which will enable the DfE to remove from the register any providers which fall below those standards.
Ministers also want to “explore the role that employer feedback can play in informing a provider’s status on the register”.
Smaller subcontractors will have to be on the register
Any organisation wanting a role in delivering apprenticeship training from next May will have to apply to be on the register.
At the moment, subcontractors which deliver less than £100,000 of SFA-funded provision each year do not need to apply.
Howerver, managing agents, intermediary bodies, consortium leads, brokerage organisations or “any other similar entity that does not itself deliver education and training to apprentices” will not be eligible to join.
The government claims this is being done to foster direct relationships between employers and training providers.
In fact, the whole subcontracting system is changing
The government claims that the current model of providers funding other providers to deliver a number of apprenticeships, often to employers that the original provider has no relationship with, is “redundant”.
The DfE is proposing that providers be able to supplement their own delivery by bringing in expertise from supporting providers to deliver parts of apprentices, but the expectation will be that the main provider delivers “significantly more than half of each apprentice’s training” and maintains the relationship with the employer “at all times”.
Employers who want to provide their own apprenticeship training to staff won’t have to prove they’re meeting some employment law
The government has said the route for would-be employer-providers would require them to meet “the same quality criteria”, but that other criteria would be “proportionate and appropriate”.
For example, the DfE would not ask employer-providers to “confirm details of legislation they will be complying with through their employment of the apprentices”.
The government hasn’t specified which specific pieces of legislation the document is referring to.
Some larger businesses wanting to become providers could be subject to a financial health test
At the moment, employers with an annual turnover of more than £100 million and whose funding from the SFA is less than 5 per cent of that turnover are exempt from the test.
But the government is considering a reduction to these thresholds because “they will exceed the turnover of many levied employers”.
The proposals have prompted a mixed reaction…
Stephen Evans
A spokesperson for the Association of Employment and Learning Providers said: “We understand that the government is on a mission to substantially reduce the amount of subcontracting within the sector but the full implications of today’s proposals need very careful consideration before they are given the green light. In particular, the idea that a provider should be responsible for at least half of the training of every apprentice on its books looks like a misguided approach to addressing the overall issue.
“We also want to see consistent criteria applied to different types of provider, such as good financial health. Good finances are a strong indicator of the quality of leadership and management which is likely to have a heavy bearing on the learner experience.”
Stephen Evans, deputy chief executive at Learning and Work Institute, said: “The clear emphasis on quality in today’s announcements is welcome. Learning and Work shares the views of many employers who believe apprenticeship quality is just as, if not more, important than quantity. However, I challenge the view that an Ofsted grade alone is the most effective measure to use for the purposes of the new Register of Apprenticeship Training Providers – measures of quality must be timely and rounded which is why we’ve called for an Apprentice Charter, designed by employers and Apprentices.”
At last. The launch of further information from the Government on the apprenticeship levy. Companies and providers – already running hard to work out what they will do from April have more certainty now, albeit a full two months later than promised.
That, at least, is something to welcome – as is support for smaller firms and movement on funding for equivalent qualifications. But you don’t have to go far into the document to realise businesses will still be concerned at the direction of travel.
Before I set out why, let me be clear on one thing. We really believe in apprenticeships and improving the quality of our vocational skills system – in the workplace and in colleges. Some have accused the CBI of wanting to “gut” the levy. Nothing could be further from the truth.
We want a system that defines success in the right terms – filling skills gaps for firms and improving outcomes for learners, all delivered by a sustainable and high quality provider base. A levy is one way to fund that – but only if you put quality and system design first, not fiscal and political targets.
Our view is that levy design is coming to these vital economic and social goals too late – the system we have is designed to work for Whitehall – but won’t work in Walsall.
Firstly, the system proposed isn’t flexible enough to meet firms’ needs. The rates and caps suggested, together with the government’s view that business investment in training beyond off the job costs has little or no value leaves firms in a bind. For them, the system incentivises either cutting back on the quality or numbers of their apprenticeships – or to reducing or rebadging other training. Many committed firms will soldier on despite this, but how can it be good to make it more expensive to train than to just pay the levy as a tax? We need a system – like so many other levies around the world – that is flexible enough to fund what firms and learners need and make those who don’t train pay the costs of those that do.
Secondly, the system needs new standards that pass the government’s big test – transferability. We agree with them that a big reason not to allow levy funds to be spent on any old training is that the courses have to be high quality and add to people’s employability. If we are honest, not all of the frameworks have done that in the past.
So why are we seeing qualifications actively purged from trailblazers? Why will the employer-led Institute for Apprenticeships have no voice over the set-up of the system, only its operation? In truth, this is still essentially the same approach cooked up by BIS officials last summer. For all the effort across the sector, we have been heard but not listened to. The radical redesign the CBI and so many others wanted is not happening yet.
But there is one thing that can’t be ignored – the ticking of the clock. The tune from inside government has changed on this over the past few months. Enough people within government know what a project timeline in trouble looks like – and the levy system is one of those. On the digital service, cross-border issues with Wales, Scotland and Northern Ireland and many more concerns. In truth, it is highly unlikely that the structures and rules necessary to make the system work on day one can be delivered effectively on the current timelines.
Perhaps this last point is the one that will finally lead the government to pause for thought. Perhaps those advocating a new approach for the levy have the best interests of our skills system at heart. Perhaps in fact, all we want – businesses, providers alike – is a system that works from day one? A system that closes skills gaps, and delivers three million opportunities – not just three million starts.
Our new minister, Robert Halfon, has made some pointed remarks on the need for apprenticeships to make a difference to young people’s lives in terms of offering opportunity. These are a welcome ray of light, as is the newly reinvigorated debate about industrial strategy. Delivering on these concerns also requires a change of approach.
And we can do this – with the right approach that rewards businesses who do the right thing, high quality business-led standards, and a system that works on launch day. This can be done – business will put its shoulder to the wheel to achieve it. But we need a delay to make it work.
A rapidly-expanding independent training provider has been praised for its work in improving the life chances of formerly NEET learners, as it is awarded the highest possible grade from Ofsted.
Inspectors from the education watchdog were full of praise for Midlands-based Nova Training, awarding it grade ones across the board following an inspection from July 11 to 14.
The training provider, which has a Skills Funding Agency allocation of £2.9m and an Education Funding Agency allocation of £6.2m for 2015/16, delivers study programmes and apprenticeships across 28 different centres in the West Midlands and East of England.
Inspectors found that learners at Nova “find a direction to their lives and careers”, with managers making a “significant contribution to improve the life chances of learners” and most progressing onto employment, further education or apprenticeships.
Their report said: “This is an outstanding achievement given the very low starting point for most learners on study programmes and the range of barriers many have faced in life, including offending, poor school attendance, exclusion, drug misuse, bullying and being in care.”
Students were able to “re-engage” in learning thanks to “skilful teaching and support from staff”.
Inspectors said: “Teaching and support staff share a strong commitment to enable their learners and apprentices to discover and achieve their full potential.”
Consequently, inspectors found that students “speak confidently about their work and make rapid progress towards achieving their qualifications”.
Apprentices “develop very good vocationally relevant skills that their employers value” while learners on study programmes – who make up the majority of Nova’s students – are “prepared exceedingly well for their employment and future careers” through tailored work experience.
Learners “develop their English and mathematics skills well” with all students progressing by at least one level in those subjects.
Despite many of them starting without a GCSE grade C, the “majority of learners pass their English and mathematics tests at the first attempt”.
“Highly individualised” learning programmes help to “inspire, engage and greatly motivate” learners with high needs, the report said.
Leaders and managers “focus strongly on the learners’ ability to achieve, and refuse to accept learners’ disabilities as a reason for non-achievement”, inspectors found.
The report also praised the provider’s “strong culture of continuous improvement” established by managers, which ensured that “those staff who are unable or unwilling to respond to the support provided and improve their practice, leave Nova’s employment”.
David Bucknall, Nova Training’s operations director, said he was “extremely proud” of the Ofsted verdict.
He said the provider had “striven to increase our success rates and the quality of our services” over the past 10 years, and had recently expanded to 10 new centres and had significantly increased its apprenticeship provision.
He said: “It is a credit to all of our staff who work tirelessly to support young people, ensuring that they have the very best opportunities to achieve and progress. Without a sustained collective and focused effort we would not have been able to achieve what we have today.”
FE Week was first to publish details of the funding arrangements for small- and medium-sized enterprises – previously reported in June, having been leaked to FE Week – after they were confirmed by the Department for Education in this morning’s hotly anticipated apprenticeship levy update.
Under the new proposals, the 98 per cent of employers with wage bills of less than £3m, and who therefore will not be paying the apprenticeship levy when it is introduced next April, will have 90 per cent of any apprenticeship training paid for by the government.
Mike Cherry, Federation of Small Businesses national chairman, said that today’s announcement “sends a clear signal that ministers are listening to our members’ concerns”.
He said a quarter of FSB members were considering employing apprentices in the future “but only if they feel apprenticeships are affordable”.
He added: “Getting apprenticeship reform right, including changes to existing funding arrangements, is key to apprenticeship growth among small businesses.”
But John Hyde, HIT Training chairman, warned that the new arrangements would be a “huge disincentive” for both levy and non-levy paying employers over the next 10 months.
Any employer taking on an apprentice under the new standards now would pay a one third employer contribution, but by waiting until next May that would drop to a 10 per cent contribution for SMEs, or through levy payments for larger employers.
The new arrangements should be introduced now, he said, “otherwise employers will delay their starts until May next year, which will not only affect the government’s 3 million starts target, but financially destabilize the provider network over the next ten months if they cannot recruit sufficient apprentices to survive”.
And the Association of Employment and Learning Providers said that, while “mass disengagement” of SMEs may be avoided, it still had concerns about how the apprenticeship reforms would affect them.
The “insistence of insistence of a cash contribution from these employers could in our view still have a very negative impact”, a spokesperson said, and urged ministers to keep the issue under review and to phase it out “if our fears about the impact are realised”.
Martin Doel, Association of Colleges chief executive said the system “does not appear to be any simpler than before, but we understand that a balance must be struck between simplicity and leaving the system open to exploitation”.
Carolyn Fairbairn, Confederation of British Industry director general, said that today’s announcement “shows some progress, including support for smaller firms, but fundamental problems remain”.
But she reiterated the CBI’s call, first made in July, to delay the implementation of the levy, which she said “in its current form risks turning the clock back on recent progress through poor design and rushed timescales”.
“Without a radical rethink it could damage not raise training quality,” she added.
This call was echoed by shadow skills minister Gordon Marsden who said “there appears to be no concession” to the calls to delay implementation.
He said: “There is no point working to an artificial deadline if it cannot be delivered.”
Mr Marsden said that, while he welcomed the news that SMEs would only have to pay a 10 per cent contribution, he warned that “it is not simply about money, it’s also about capacity and bureaucracy” which he said had been a “major disincentive” for apprentices to be taken on by small employers.
Stephen Evans, Learning and Work Institute deputy chief executive, said that today’s announcement would give employers and providers clarity to help them to plan.
He added: “I welcome today’s announcement that government will fully meet the apprenticeship training costs for young care leavers and young people with EHC Plans, alongside a further commitment to support additional costs.”
Sue Pember, HOLEX policy director, said she was pleased with funding arrangements for small employers, and the support for young people and those with a care plan.
But she added: “The proposals are silent on those who are older and who may have a disability and need extra support to access an apprenticeship. We would like to see that addressed.”
And Laurence Gates, the Education and Training Foundation director leading on apprenticeships, said that clarity on the funding issues would be welcomed by the sector.
The apprenticeship levy is a “project timeline in trouble” the Confederation of British Industry has said, as the industry body reiterates its call for the levy to be delayed.
In an exclusive article for FE Week, Neil Carberry, the CBI’s director for employment and skills, said the only way to create a system that delivers “three million opportunities – not just three million starts” was by delaying its introduction.
Mr Carberry said: “Enough people within government know what a project timeline in trouble looks like – and the levy system is one of those.
“On the digital service, cross-border issues with Wales, Scotland and Northern Ireland and many more concerns.
“In truth, it is highly unlikely that the structures and rules necessary to make the system work on day one can be delivered effectively on the current timelines,” he said.
His remarks come after the Department for Education published its hotly-anticipated apprenticeship levy update, first reported by FE Week this morning, which included details of the funding arrangements for small employers, as well as a consultation for the new register of apprenticeship training providers.
While this new information was “something to welcome” Mr Carberry said “you don’t have to go far into the document to realise businesses will still be concerned at the direction of travel”.
A levy system that helps fill skills gaps and improve outcomes for learners should put “quality and system design first, not fiscal and political targets”, he said.
He added: “Our view is that levy design is coming to these vital economic and social goals too late – the system we have is designed to work for Whitehall – but won’t work in Walsall.”
Mr Carberry said the CBI was concerned over the lack of flexibility in the system.
He said: “We need a system – like so many other levies around the world – that is flexible enough to fund what firms and learners need and make those who don’t train pay the costs of those that do.”
He also voiced fears over the lack of transferability of the new apprenticeship standards in development.
If the courses “have to be high quality and add to people’s employability”, he asked, “why are we seeing qualifications actively purged from trailblazers?”
“Why will the employer-led Institute for Apprenticeships have no voice over the set-up of the system, only its operation?”
The only way to deliver the “right approach that rewards businesses who do the right thing, high-quality business-led standards, and a system that works on launch day” is by delaying its introduction, he concluded.
Mr Carberry’s remarks build on comments made by CBI director general Carolyn Fairbairn in response to today’s update, which she said “shows some progress”.
But she warned it “risks turning the clock back on recent progress through poor design and rushed timescales”.
“Without a radical rethink it could damage not raise training quality,” she added.
