Sector leaders have called for clarity on whether the government will still press ahead with apprenticeship levy plans following the British public’s decision to leave the European Union.

The referendum result was confirmed this morning, provoking the resignation of Prime Minister David Cameron.

It will throw into doubt the viablilty of plans for the levy due to be launched next April.

This is particularly resonant because Skills Minister Nick Boles warned recently that Brexit could kill-off the plans.

He entered the Brexit debate during an event on June 13 in Westminster, organised by Policy Exchange, warning: “As skills minister I am responsible for the introduction next April of a new apprenticeship levy on large employers.

“But do you think the chancellor will feel it is prudent to introduce a new payroll tax in the middle of a recession, when business confidence has been shattered by a decision to leave the single market and unemployment is rising?”

Confirmation that Britain will indeed be leaving the European Union prompted calls for swift decisions on how it will affect the sector.

When asked if he now feared for the levy, Mark Dawe, chief executive of the Association of Employment and Learning Providers, told FE Week: “We need clarity on what we’re meant to be doing.

“I can understand they’ll pause for a moment and think, but if we don’t know what’s going to happen it’s going to by default not happen in April. So really this week we need some clarity.”

Martin Doel, chief executive of the Association of Colleges, said: “Specific areas of concern relate to the money pledged for training via the European Social Fund (ESF) and the Skills Minister Nick Boles’ comments that the apprenticeship levy may need to be postponed.”

He added: “The government must make it clear as soon as possible how it will continue to fund education and training for the good of everyone.”

Current Learning and Work Institute boss David Hughes, who will start as chief executive of the Association of Colleges at the start of 2016/17, added: “Prior to the vote there was already some unease about the lack of details about apprenticeship reforms.

“Now we need decisive action from BIS to provide certainty about the reforms. More delays will lead to more caution by colleges, providers and employers.”

It is believed that there will now be a two-year negotiating period over the terms of Britain’s departure from the European Union.

This has raised questions, reported on by FE Week in February and still unresolved, over what would happen to ESF contracts— with the current round running from 2014 to 2020 worth about €3bn (£2.3bn) across England.

The ESF is cash that the UK receives, as a member state of the EU, to increase job opportunities and help people to improve their skill levels, particularly those who find it difficult to get work.

It is partly administered through the Skills Funding Agency (SFA) and its allocations in 2014/15 showed that 107 different providers received a combined total of £305,267,633 in ESF cash.

There will also be wider concern about education and skills funding, with the future of Chancellor George Osborne also thrown into doubt.

He published a draft budget before the referendum reflecting on what would happen with public finances in the event of Brexit, which indicated education funding could be drastically cut by £1.15bn.

A Department for Work and Pensions spokesperson said: “It is too early to tell what will happen with ESF. For the time being it will be business as usual.”

The Department for Business, Innovation and Skills was unable to comment ahead of publication on how leaving the European Union would affect the levy and wider education and skills funding.

The government plans to slash the amount smaller firms will have to pay towards the cost of apprenticeships training after the levy launch.

Employers of all sizes currently have to pay a third of training costs with the Skills Funding Agency agrees to covering the rest, under the pilot for new apprenticeships.

That means a £1 employer cash contribution returns £2 funding – up to a cap – for the relevant standard.

But FE Week has learned the government is looking at a making a much bigger contribution after April 2017 for employers not using their apprenticeship levy pot — either because their wage bill is too small to pay into it, or because it has run out.

For every £1 invested by such employers, we understand that the SFA will paying up to £9, according to plans set to be announced later this month.

This would mean providers are to be paid as much as 90 per cent from SFA coffers — although employers not paying the levy would still have to contribute around 10 per cent in cash first.

The news was welcomed by Mark Dawe, chief executive of Association of Employment and Learning Providers.

He said: “This sound like good news, as we believe smaller employers should pay as little as possible.

“We have been lobbying ministers about the need for a high-level of coinvestment by the government in respect of non-levy paying employers.

“These small- and medium-sized enterprises are needed to provide apprenticeship opportunities to young people in the big cities and smaller towns, or rural areas where the levy-paying employers are not always present.”

But he also cautioned: “For many small organisations, any contribution will be prohibitive and we hope the government will consider how it might support these smaller employers.”

The apprenticeship levy, first announced by the government last July, is due to be introduced in April 2017, and will be set at 0.5 per cent of an employer’s payroll.

Only businesses with a payroll of more than £3m – about two per cent of employers – will actually pay the levy.

But there has been widespread concern that non-levy-payers would be put off apprenticeships altogether, if they still had pay large sums towards training.

John Hyde, executive chairman of independent training provider HIT Training Ltd, who was given a CBE in the Queen’s birthday honours list, said: “If the 10 per cent contribution is confirmed, this is excellent news for smaller companies who already contribute substantially to the apprentices’ wages, lost opportunity costs, trading costs and more.

“The growth in the economy is through small- and medium-sized enterprises and the growth in apprenticeship numbers will follow.”

Teresa Frith, senior skills policy manager at the Association of Colleges, said the plan “could encourage employers, previously put off apprenticeships by the cost, to take on a young person and provide them with the skills to begin a career”.

“Small businesses are the lifeblood of our economy and the government must ensure they, and their staff, can also benefit from the funding created by the levy,” she added.

A BIS spokesperson would only say: “We set out earlier this year that more information would be available in June 2016. There is nothing further to add at this time.”

Ofsted’s chief inspector is set to call on the government to insist that every major multi-academy trust (MAT) includes a university technical college (UTC).

Sir Michael Wilshaw will speak out on the issue during his speech, starting at 1:30pm today, at the Festival of Education.

He will say: “The government should insist that every major multi-academy trust should have a UTC.

“Every multi-academy trust should be inspected to ensure that the UTC does not become a dumping ground for the difficult or disaffected and that it delivers high quality pre-apprenticeship programmes to the age of 19.”

Sir Michael Wilshaw previously told MPs on the education select committee in March that school and UTC clusters provided a “really great opportunity” to ensure high quality vocational education.

He said at the time: “If I was running one of those I’d have primary schools, I’d have secondary schools and I’d have a couple of UTCs [university technical colleges] as well.”

But this latest call for the 14-to-19 vocational institutions to be part of the furniture in all MATs will be seen as further indication of his support for UTCs becoming integral to the delivery nationwide of skills training.

Nick Boles, the Skills Minister, also said in March that “UTCs are stronger inside MATs”, during a speech to the House of Commons.

The chief inspector’s speech at the festival in Wellington College, Berkshire, will also reflect on school leavers’ general lack of vocational skills.

Sir Michael will ask: “What about those youngsters who would benefit from a technical education?

“What about those employers who, year after year, say that school leavers are not equipped with the technical skills that they are crying out for?”

He will refer to the latest figures as “shocking”, saying: “In the UK as a whole there are now 210,000 vacancies as a consequence of skills shortages across the economy – an increase of 43 per cent from 2013.

“I have taught in disadvantaged communities for most of my professional life. And I can tell you that there will always be some children who will respond better to a technical curriculum than others.”

Sir Michael’s support for UTCs comes after FE Week reported in May that UTC Lancashire would be the fourth of its kind to close, since they launched in 2010.

Central Bedfordshire UTC 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 last summer after a “disappointing” Ofsted inspection and, again, low student numbers.

FE Week also reported that, shortly before Central Bedfordshire UTC announced that it would close, Mr Boles informed UTC chairs and principals of a “new centrally funded package of educational and financial support”, which will be accessible to UTCs in their early years.

It will be available to those that have not yet been judged ‘good’ or better by Ofsted, but not to those that are subject to intervention.

But in February, FE Week revealed ongoing problems for UTCs, finding that 40 per cent of those that opened between 2010 and 2013 saw student numbers fall for the current academic year.

Exclusive research through Freedom of Information requests found that six of the 15 UTCs opened between 2010 and 2013 saw their learner numbers decrease for 2015/16.

The Association of Colleges is looking forward to “a new era for Ofsted” — after Education Secretary Nicky Morgan confirmed the government’s approval of Ofqual chair Amanda Spielman as the next chief inspector.

Ms Morgan made the announcement on Friday (June 10), and ministers will now wait on agreement from the Commons education select committee for final approval.

The Department for Education (DfE) also told FE Week that it had started recruiting for three new Ofsted board members and “the advert for the roles listed FE experience as one of the desirable criteria”.

Martin Doel, chief executive of the Association of Colleges welcomed the news, and said: “We offer our congratulations to Amanda Spielman.
“This will be a new era for Ofsted and we look forward to working with her in the future and helping her to gain an understanding of colleges and a sector that she has not worked closely with in the past.

“We are also interested in how the Ofsted board, that supports the new chief inspector, might be refreshed in order to ensure that it has more substantive further education expertise than is currently the case.”

Mr Doel has been scathing of the current chief inspector Sir Michael Wilshaw, who told MPs in March that he believed 16- to 19-year-olds should be taught in schools rather than colleges, and that the FE sector was “in a mess”.

Sir Michael’s comments, made during an appearance before the Commons Education Select Committee, provoked widespread anger across the FE sector.

The education secretary said: “From helping to set up one of the country’s top academy chains, to acting as a council member for the Institute of Education, to overseeing our ambitious qualification reform programme, Amanda has extensive experience
at the frontline of the education system.

I know she is the right person to deliver.”

Current Learning and Work Institute boss David Hughes, who will start as chief executive of the Association of Colleges at the
start of 2016/17, also welcomed Ms Spielman’s appointment.

He said: “Ofsted needs someone who can lead a large organisation and be independent on policy issues – which I think Amanda has shown well as chair of Ofqual.”

Mark Dawe, the chief exec of the Association of Employment and Learning Providers, added: “I found it easy to have very constructive discussions with Amanda when she chaired Ofqual, so I look forward to working with her in her new role.

“There is a good and honest dialogue between Ofsted and AELP on how the delivery of work-based learning is inspected, and we hope that this will continue under Amanda’s leadership.”

The Commons education select committee will now hold a “pre-appointment hearing” with Ms Spielman, on June 29 June.

Its chair Neil Carmichael MP said: “The chief inspector has an important duty in raising standards in education and skills.

We want to make sure that the government’s preferred candidate has the necessary independence, skills and experience to be effective.”