Why are apprenticeships singled out for special treatment? The benefits of other qualifications are enormous and can be tested, says Graham Taylor, if we let levy payers to decide where to put their money.

We’re currently obsessed with apprenticeships and the emerging minutiae, which sometimes means we can’t see the wood for the trees. So let’s just take a minute and look at what we are trying to achieve.

Essentially, the government wants higher productivity and economic growth. That much is uncontroversial. However, most economists acknowledge that both are difficult to measure – especially productivity in a modern economy; how do you cope with the likes of Facebook, Amazon and Uber, for starters?

But putting that aside for a second, if there is a causal link between qualifications gained and productivity, then surely that should hold for all qualifications? The most recent government analysis on the subject examined GCSEs, A-levels and apprenticeships, and concluded they were all associated with significantly higher lifetime productivity. But what about other qualifications?

Why are apprenticeships singled out for special treatment?

It’s the customer (not the government or me) who should decide which are most relevant and helpful to them. And business will have their own KPIs to judge return on investment in training. So why is the government so obsessed with apprenticeships? Hypothecating funding and spending millions on TV adverts to promote one training route distorts the market. Building over-complex management systems is not a good use of taxpayers’ money.

The government expects to raise £3bn from the levy, effectively a payroll tax for big organisations. However, businesses will want their money back through high-quality training that demonstrably improves productivity, as well as freedom in how to spend their money, without the apprenticeships-only restriction.

Colleges are levy-paying businesses too. When we offered our training manager an extra £45k (our net college levy) for next year’s CPD budget, she didn’t mention apprenticeships once. So we’ll have to rename our professional and technical programmes, which work best for our staff CPD, as apprenticeships. 

This is an artificial way of meeting the government’s £3m target, but everyone will do it. And here’s another way of shoehorning more in: NVQs are no longer funded, but NVQs under the apprenticeship banner are; strange but true.

And, of course, funding is stacked in favour of apprenticeships (with acknowledgements to FE Week’s campaign to get funding rates right). The learner doesn’t want to pay – witness the dire take-up of loans for apprenticeships and the swift policy reversal. But loans are now the norm for ‘other’ 19+ advanced qualifications, so why are apprenticeships singled out for separate funding and special systems? Because there’s a target, not because this is what works best for UK PLC.

Are adult learners sacrificial lambs at the altar of apprenticeships?

The tragedy is that there are millions fewer adult learners in this country compared with 10 years ago. Between 2013/14 and 2014/15 alone, adult learners in FE fell by 315,900 (11 per cent) despite a 1.3 per cent increase in the number of adult apprentices. With the 28 per cent cut in ‘other’ funding in 2015/16, the fall will be even greater. Are they sacrificial lambs at the altar of apprenticeships?

I believe lifelong learning is a good thing. But the dirigiste approach – that (funded) learning must be purely skills-related – is not only flawed, but impossible to enforce. Has anyone attempted to count the number of adult learners who come to adult classes for work reasons (“I’m taking GCSE French because I have to speak to my boss in Paris every Friday”)? 

Warwick Institute for Employment Research considers that adult education could disappear by 2020, “because adult and community learning providers continue to be ignored by the area reviews and skills devolution processes”. 

This may be an extreme prediction but what is certainly true, is that the economic and social costs of losing millions of adult learners has been overlooked. Apprenticeships are part of the solution but should not be given special treatment. Let’s not forget the millions of adult learners who study ‘other’ qualifications, who need our help and support. 

The benefits are enormous and can be tested, if you allow levy payers to decide where to put their money.

Graham Taylor is principal and chief executive at New College Swindon

With the news that the levy will effectively function as a tax, Smita Jamdar asks whether government will succeed in its aim of making it simple and attractive for employers to offer high-quality apprenticeships.

Last week, FE Week reported that employers will have to enter into contracts with the Skills Funding Agency when they access the money they are entitled to under the apprenticeship levy scheme. This seemed to take everyone, including, I must admit, me, by surprise. Having reflected further, perhaps it shouldn’t have. 

The levy was introduced as part of this year’s Finance Act, which states that “a tax called the apprenticeship levy shall be introduced”. So, the levy is just another tax which, once paid, becomes public money. As others have observed, it is, by UK standards at least, an unusual tax because it is hypothecated, with the money ring-fenced for a particular purpose. 

Hypothecation has never been a strong feature of our taxation system, largely because governments have rarely shown themselves responsible enough to be trusted to continue to spend the money in the way initially proposed. But nevertheless that is what the levy is.

There is a risk that apprenticeships will be among the most prescriptively documented forms of provision we have

The effect is that when the money is drawn down by employers, conditions will be attached on the draw-down to ensure that it is spent on the things it should be spent on and not those it wasn’t intended for. This is both a general feature of prudent custodianship of public funds and the only way for government to fulfil the hypothecation. Prudent custodianship requires broadly three things:

1. A clear set of expectations as to what the funds must be used for; 

2. mechanisms for ensuring compliance with those expectations through a combination of assurances from the recipient of the funds and audit; and 

3. the capacity to claw back funds or terminate the right to funding where there is the evidence of abuse.

In this case, the confirmation from the SFA that a contract with employers would be necessary came in response to an FE Week query about how the SFA intended to tackle misuse of the funds, specifically concerns about the prospect of employers requiring providers to ‘pay to play’. 

So in some ways, the requirement for funding conditions was so blindingly obvious that one wonders whether it was news at all. What makes it news is, I suspect, the fact that it is another example of the confused and incremental nature of announcements related to the levy, which have made it difficult for both employers and providers to take plan properly for its implementation.

Employers are in any event right to be apprehensive about the requirement. The conditions the SFA has traditionally attached to funding have been complex and onerous, and ensuring compliance with them has spawned an industry in its own right. It would be really unfortunate if an overly bureaucratic approach undermined the key rationale for the levy, which was to put employers at the heart of developing high-quality, flexible and responsive skills provision.

There is a risk that apprenticeships will be among the most prescriptively documented forms of provision we have

Already there is a risk that apprenticeships will be among the most prescriptively documented forms of provision we have. In addition to the contract between employers and the SFA, there will be the contact between the employer and the provider. 

There will also be a contract (whether formally described as such or not) between the employer and the apprentice, and between the provider and the apprentice. In relation to both the employer/apprentice and provider/apprentice relationships there will be a raft of legislation that affects the relationship that isn’t captured in the contracts. On top of all that, there is an expectation that the employer, the provider and the apprentice will enter into a threeway commitment statement summarising the responsibilities of each. 

The stated aim of the government’s reforms is to ensure that there is the swift required growth in skills by making it simple and attractive for employers to offer high-quality apprenticeships. It remains to be seen if the levy achieves these aims.

Partner and head of education, Shakespeare Martineau LLP