Prime Minister David Cameron today called on businesses to back the apprenticeship levy — only for Tesco chief executive Dave Lewis to later warn how it would “wipe out” the supermarket giant’s entire annual training budget.

Mr Lewis (pictured above) issued the warning as he called for a “balance to be struck” between allowing firms to invest and the government’s collection of taxes.

They were both speaking at the Confederation of British Industry (CBI) annual conference today, with Mr Cameron explaining how the levy was key to his hopes to achieve 3m apprenticeship starts by 2020.

“We have to share some of the burdens, and that’s, of course, what the apprenticeship levy is all about.” he told business leaders at the conference.

He added: “We are asking a lot of you, I accept that. We’ve set this target for 3m apprentices in this parliament, compared to the 2m we trained in the last parliament and were introducing the apprenticeship levy to pay for that policy.

“I think it’s in both our interests and I think it’s actually in the interest of responsible businesses who train apprentices and pay forward that money not to have other business that don’t spend the money on training but take the apprentices after they’ve been trained by their competitors. I think this is in our interest.”

The official consultation on the levy proposals ended last month amid widespread speculation that if adopted it could well be set at 0.5 per cent of payroll costs.

And for Tesco, based on its 2015 annual report and financial statements [see note 4 page 100], this would give it an apprenticeship tax bill of £41.3m.

But Mr Lewis, in an interview with Sky News Business presenter Ian King, was clear about what the levy could mean for the accounts of his company, which is an employer provider and was rated as good by Ofsted at most recent inspection, in January last year. It also has a current Skills Funding Agency allocation from the adult skills budget and 16-18 apprenticeships of just over £3m.

“I’d like us to be able to innovate together on tough employment, skills and training challenges,” said Mr Lewis.

“The opportunity for government is to enable us to continue offering personal mobility through training, development and progression. We can do the heavy lifting, from no skills to some skills.

“To continue offering crucial flexibility to enable mums and older workers to return to work in very large numbers.

“Let’s not constrain ourselves after a decade of progress, creating 5,000 long-term jobs for the unemployed in locations from Corby to Woolwich through our regeneration partnership scheme, or to choke the progress that’s created 9,500 apprenticeships between 2012 and 2014.

“Employers like us can be innovators on tough agendas, sharing the burden of government priorities. But a balance has to be struck between allowing investment for growth and collecting taxes through mechanisms like the apprenticeship levy, which wipes out the equivalent of our entire training budget.”

Pic: Dominic Lipinski/PA Wire

Dozens of lucky guests got to taste a mouthwatering menu created by apprentices at the launch of the new HIT Chef Academy.

The apprentices worked alongside 10 of HIT’s training assessors to make a four-course lunch, which included jerk belly of pork and loin of venison, and canapes on Wednesday (November 4).

The event was headed by the Academy’s executive chairman John Hyde, managing director Jill Whittaker and academy principal Paul Mannering at the Hospitality House, London.

Mr Mannering said: “I would just like to say thanks to the guys in the kitchen and what has been going on there for the past couple of days really epitomises what we really are all about.”

The academy currently has 17 apprentices, aged between 16 and 42, who are taking level one to level four professional cookery across the country.

Main image: George Field, aged 18, HIT advanced professional cookery apprentice at Calcot Manor hard at work in the kitchen for the Chef Academy launch

Prime Minister David Cameron today outlined his vision of post-16 education and training as one in which learners are either on an apprenticeship or at university — casting further doubt over the future of two-year classroom-based college courses.

Just days after FE Week revealed Department for Education plans to get 16-year-old vocational learners onto apprenticeships after a year in college, Mr Cameron told an audience at the Confederation of British Industry (CBI) annual conference that he wanted to see “either apprenticeships or universities for almost everybody”.

“We’ve got to build an economy where you don’t go either one way with apprentices or the other way with universities,” he said at the event in London’s Grosvenor House Hotel.

“The apprenticeship system needs to be flexible enough, as it is at the moment, so that many people can go on and do a degree while they are working in one of your businesses. That’s what we want to build.

“At the end of the day though, we want to see fewer and fewer 18-year-olds leaving school without taking either path. If we’re going to compete in a global economy then we need to make sure that our young people are more highly skilled, more highly trained than our competitors. So either apprenticeships or universities for almost everybody.”

Critical reaction to Mr Cameron’s comments was swift, with many taking to Twitter.

Jane Pothecary, a Labour member of Thurrock Council, for instance tweeted that it was “the end of further education and educational opportunity”. It was echoed by Lynne Taylerson, who tweeted: “The end of #FE as we know it????”

Meanwhile, education and skills adviser Mark Browne tweeted: “3m Apprenticeship target hit at what cost?” and Sue Gerrard labelled Mr Cameron’s outline “catastrophically counterproductive”.

Pic: Dominic Lipinski/PA Wire

• –  Government announces plans for colleges to deliver more apprenticeships for 17-year-olds

• –  FE leaders question whether new policy is simply ‘smoke and mirrors’ to conceal DfE cuts

The government has announced plans to end two-year study programmes for many 16 to 18 vocational learners and instead opt for progression to apprenticeships from the age of 17.

The Department for Education (DfE) said on Thursday (November 5) that a new independent panel led by former Science and Innovation Minister Lord Sainsbury would help the government create “up to 20 specific new professional and technical routes, leading up to employment or degree-level”.

A spokesperson pointed out that “currently, only 6.9 per cent of 17-year-olds are doing apprenticeships and only 33 per cent of apprenticeships are delivered by colleges”, but “by engaging colleges much more with apprenticeship training, these reforms will significantly raise this proportion”.

The drive to push more 17-year-olds into apprenticeships “as quickly as possible” will mean a reduction in two-year full-time study programmes for 16 to 18-year-olds — sparking fears of further funding cuts.

Shadow Skills Minister Gordon Marsden (pictured above right) said: “Any indication that this is a government rebadging or smoke and mirrors exercise designed to cut further 16-19 funding, or shortening the time necessary to get learners into quality apprenticeships and technical and professional education, in pursuit of crude departmental savings, will alienate providers and learners.”

Dame Asha Khemka (pictured below left), principal of West Notts College, told FE Week: “There is a risk that funding will be reduced, particularly if we lose most of our 17-year-old learners at the end of their first year.

“Employer apprenticeship places is also a limiting factor, so a further risk is the creation of a two-tier system where only the best students’ progress.

“However, there is also an opportunity here because if the policy works as it is supposed to then our students will progress directly into an apprenticeship and we will be best placed to continue to support them.”

Association of Colleges chief executive Martin Doel said: “It is important that any reform of technical and professional education does not lead to any further cuts to funding for the sector.

“All education and training whether academic, technical and professional or apprenticeships, should be funded equally.”

Brian Lightman (pictured below right), general secretary at the Association of School and College Leaders, agreed reforms should not be driven by financial considerations.

“Using the upcoming budget to undermine [16 to 18] funding any further would leave our economy in serious jeopardy,” he said.

The DfE said academic and applied study programmes would continue to be available and these reforms to technical and professional routes would build on the existing tech bacc scheme.

It comes after Skills Minister Nick Boles (main image) floated the idea, during a fringe event at last month’s Conservative Party Conference, of one-year full time courses for 16-year-olds.

Joining Lord Sainsbury on the expert panel will be Professor Lady Alison Wolf, whose landmark 2011 Review of Vocational Education sparked the introduction of the study programmes, Bev Robinson, principal of Blackpool and the Fylde College, and Simon Blagden, non-executive chairman of Fujitsu UK.

Mr Boles said he was “delighted people with huge experience” had “agreed to advise us”, but declined to comment any further on the plans to FE Week.

Further details will be announced early next year, after the panel reports to government.

---

Editor’s comment

The John Lewis College

It seems obvious when you think about it.

If colleges progressed full-time vocational learners onto an apprenticeship at John Lewis when they were 17 the government would solve five tricky challenges.

1. 1 – Make big cuts to the government’s 16-18 budget
2. 2 – Increase the number of 16-18 apprenticeships
3. 3 – Achieve 3m ‘young’ apprenticeship starts by 2020
4. 4 – Reduce the size of FE colleges’ costly estate
5. 5 – Force colleges to deliver more apprenticeships

It’s political genius. What’s not to like?

Combine this with the apprenticeship levy policy and up to £5,400 per apprentice as an employer incentive and you can see why the employers will want in on the action.

Next week the AoC has a debate at its annual conference that asks: “Will colleges survive until 2025?”

This is the wrong question.

They will survive, but the question principals might well ask is which large employer will be added to their logo?

Chris Henwood

chris.henwood@feweek.co.uk

More 200 colleges could be hit with strike action tomorrow (November 10), as members of the University and College Union (UCU) walk out in a dispute with the Association of Colleges (Aoc) over pay.

The union estimates that 20,000 members of staff at 207 colleges could take part in the strike, which was called after talks last month between the two parties over the AoC’s proposal for a pay freeze in 2015/16 failed to reach agreement.

And with the industrial action fast approaching neither side said it was planning last ditch talks to avert the strike.

“UCU members are sick of the employers’ refusal to deal with the real-terms pay cuts that have blighted the sector,” said UCU general secretary Sally Hunt.

“Members who voted gave a clear mandate for strike action and we will be taking action tomorrow. We hope the employers will now come back to the table,” she added.

The UCU announced on October 28 that it would strike after a ballot of members on the pay freeze proposal resulted in 74 per cent of those who voted (4,184) backing industrial action.

According to the UCU, the vote came after employers, represented by the AoC, rejected a request for £1 per hour extra for staff.

Marc Whitworth, the AoC’s director of employment policy and services said its pay proposal “reflects the stringent financial circumstances in the sector and the significant external pressures on college pay bills” and was based on feedback from AoC members.

“Strikes are very disruptive for colleges and more importantly for students. We would encourage UCU to consider how we might better work together to represent our respective members collectively,” he said.

“There is a willingness from the employers’ side to work together to protect the prospects of further education, its skilled workforce and the students it serves,” he added.

UCU will be holding a rally at the Emmanel Centre, Westminster, tomorrow from 1pm with speakers including Shadow Chancellor John McDonnell and Shadow Skills Minister Gordon Marsden.

A rally will also be held at the Birmingham and Midland Institute, Birmingham, from 11am, with speakers including UCU president Liz Lawrence.

The AoC said it did not have a figure for the number of colleges it expected to be affected by the strike.

Too few learners per classroom and marketing strategies that pit college against neighbouring college are among the issues preventing the sector from being “sustainable”, according to FE Commissioner Dr David Collins.

In a letter to all chairs and principals of FE institutions, dated October 30, Dr Collins said that, with the sector as a whole having posted an annual deficit “for the first time since incorporation”, there were still “major efficiencies” that institutions could make as the government’s area reviews of post-16 education and training get underway.

“More funding in the sector would of course be welcomed and the proposed new apprenticeship levy offers significant opportunities but there are still major efficiencies to be made in existing institutions as the intervention process over the last two years has clearly demonstrated,” wrote Dr Collins.

“Class sizes remain low in many colleges and well below the 16-20 average range necessary to ensure a college’s ongoing viability; there are considerable differences in the amount of time and money spent on management and support services and significant resources are used on competitive marketing – one college against another – rather than on marketing the real opportunities that colleges as a whole can offer to learners and employers.”

“The area review process is now under way with a view to addressing these issues and creating a more sustainable sector.”

The letter comes after the government announced money-saving plans for colleges to get 16-year-old vocational learners into apprenticeships after a year, as revealed by FE Week.

But while funding concerns were a “major driving factor” behind area reviews, they were “not only a way of encouraging colleges to tackle the problem of reduced funding collectively,” said Dr Collins, adding that he expected every area of the country to have undergone or be undergoing a review by March 2017.

They were also, he said, “an opportunity for the sector to take stock, refocusing colleges on the needs of the economy and ensuring they become the local and regional hubs of professional, technical and vocational education”.

To do this, said Dr Collins, more colleges should move into “higher level skills” and in some cases become “more specialised in what they offer, working closely with the LEPs and local authorities that will increasingly steer the skills system at the local level as devolution deals come into play”.

While there is “no blueprint for what might happen in a particular area”, Dr Collins outlined a number of ways in which colleges could develop a “new collaborative approach”.

These include creating larger colleges “through mergers or federations”, “greater curriculum specialisation” and “curriculum rationalisation”, more sharing of expertise, staff development and back office services across colleges, and better use of technology.

The government has so far announced seven areas involved in the first wave of its review of post-16 education and training.

The first group of area reviews to be announced on September 8 covered 22 FE colleges and 16 sixth form colleges (SFCs) in Birmingham and Solihull, Greater Manchester, and Sheffield. The second group, announced on September 25, involved 21 FE colleges and 13 SFCs in the Tees Valley, Sussex Coast and Solent regions. A review of seven general FE colleges and four SFCs in West Yorkshire was announced on October 16.

Dr Collins revealed some of his early findings from the area reviews last month at the Higher and Further Education Show at London’s Excel.

Association for Learning Technology chief executive Dr Maren Deepwell (pictured above left) will be among a number of witnesses giving evidence to MPs investigating the digital economy tomorrow.

It will come the day before Ofsted boss Sir Michael Wilshaw (pictured above right) is due before the House of Lords Social Mobility Committee.

The House of Commons Business, Innovation and Skills Select Committee inquiry was announced in September when committee chair Iain Wright told FE Week he wanted to look at government actions to ensure the availability of a workforce with the digital skills to support businesses.

And the committee’s first evidence session is due to kick off at 9.30am with Federation of Small Businesses policy director Mike Cherry, EMC Corporation cloud business director and chief technology officer Rod Lamb, and Humber LEP managing director of the Centre for Digital Innovation and John Connolly.

Dr Deepwell is expected to give evidence from an hour later along with Tech Partnership director of resources Dean Cassar and Creative Skillset chief executive officer Seetha Kumar.

Speaking to FE Week at the time the inquiry was announced, Mr Wright said: “I have a broad ambition to look at the FE and skills sector in detail in the upcoming evidence sessions.

“We will be looking into apprenticeships related to digital skills in the sessions and we will review the current apprenticeships provided, and how they could be improved.”

He added: “Apprenticeships are of key importance in the digital skills sector of FE and we want to know how traditional businesses are continuing and progressing in this new digital economy.

“Newly qualified plumbers, for instance, should be able to engage with their local FE provider and be able to expand their business on forms of social media in a flexible and fast changing way.”

Sir Michael is pencilled in to appear before Lords, whose most recent hearing came at the end of last month, on Wednesday from 10.35am and comes just weeks after his report on apprenticeships which was critical of government funding of the programme where learners were aged 25-plus and already employed.

And while apprenticeships will feature in his questioning, he is also expected to field questions covering whether he believes Ofsted should have a greater role in improving employment opportunities and social mobility for under-served groups and middle attainers, and who should have overall responsibility for guiding young people through the transition from education to employment.

A further area of investigation Sir Michael is expected to faces includes what he believes to be the features of good-quality work experience, and whether this should be assessed in inspections. The committee hearing Twitter hashtag is #HLSMC.