The Government’s much-lauded “Productivity Plan” has been criticised by a committee of cross-party MPs today – with concerns raised over the three million apprenticeship target and new levy.

The Business, Innovation and Skills (BIS) committee in a report published this morning has claimed the government’s plan – heralded as a “blueprint for creating a more prosperous nation” – lacked clear, measurable objectives.

MPs took aim at the government’s “ambitious” target of three million apprenticeships by 2020, saying there was a lack of consultation with industry on the policy.

The report said this raises concerns the decision was made “with no consideration for what type of training businesses actually require”.

The government’s apprenticeship levy was also criticised, with MPs calling out the Chancellor George Osborne for not providing enough detail about how it will protect sectors that do not use apprentices.

The Productivity Plan is a vague collection of existing policies

Iain Wright MP, chair of the BIS Committee, said “productivity is the pressing economic challenge of this Parliament”.

But he added: “As a committee we welcome the Government’s focus on tackling this crucial issue for the UK economy. However, rather than being a clear and distinctive roadmap as to how Britain will close our productivity gap, the Productivity Plan is a vague collection of existing policies.”

He said while analysis in the government’s plan is good, “milestones for implementing improvements are virtually non-existent.”

“If the Productivity Plan is going to avoid collecting dust on Whitehall bookshelves and having a legacy of being seen as worthy but useless, then the Government needs to back it up by setting out how these policies are going to be implemented and how their success will be measured.”

The committee has made a number of recommendations, including calling on the government to set out its rationale and evidence base for the three million target.

MPs also want the government to consult with industry to ensure the apprenticeship levy allows the sector to invest in skills through different qualifications and training.

Harvey Young, chairman of the National Consortium of Colleges and Providers (NCCP), said this report shows it is time for the government to turn “rhetoric into practice”.

But he added: “The FE sector and employer trade bodies, with government support, need to do more to promote the positive outcomes that can arise from effective basic skills training in the workplace to small and large businesses alike.”

A spokesperson for BIS said while successive governments have struggled to keep productivity on track, “we are now seeing a return to productivity growth”.

The spokesperson added: “The reforms set out in our productivity plan are delivering a step change that will secure long term investment in people, capital and ideas.

“As the select committee notes, boosting productivity is not as quick and simple as pulling a lever.

“That is why we have taken steps to protect the £6 billion science budget and innovation, maintained funding for further education and are driving forward our plan to deliver three million high quality apprenticeships, putting businesses in the driving seat supported by the new apprenticeship levy.”

The department will consider the recommendations before producing a formal response “in due course”.

FE Week approached the Treasury for comment, but was told the department had nothing to add to the BIS response.

Read our exclusive Q & A with committee chair Iain Wright MP here.

 

THE REPORT’S RECOMMENDATIONS:

 

–   We recommend that the BIS department works across the Government to enhance the employability skills that are acquired by school pupils, college and university students by looking to give work experience greater prominence in schools as part of a proper policy on information, advice and guidance.

 

–   We recommend that the Government, in its response to this report, sets out the rationale—and publishes the evidence base—for it setting a target of three million apprentice starts when that may run against what businesses actually require.

 

–   There could be a policy trade-off between the Government achieving the three million apprenticeships target and the maintenance of apprenticeship quality. We believe that the Government is right to resist this temptation and will continue to keep a close eye on this part of skills policy.

 

–  We recommend that the Government works with businesses and individual sectors to make a preliminary assessment of how the three million apprenticeships will be broken down by level and publishes the result of this work.

 

–   We recommend that the Government consults with industry to ensure that the apprenticeship levy is implemented in such a way as to allow sectors to invest in skills through different qualifications and training methods applicable to their specific needs.

 

–    We recommend that the Government does more to balance the perception of the benefits of college and vocational education against those of higher education, and should do more to promote both as attractive career paths and as good drivers of productivity.

The Business, Innovation and Skills committee released the findings of its investigation into the government’s productivity plan today.

Senior reporter Alix Robertson put the big questions to committee chair Iain Wright MP in an exclusive interview.

 

Q. Do you feel Nick Boles is doing enough at present to reassure providers and employers about apprenticeship reforms?

A. Seven months after the plan when the apprenticeship levy is mentioned, businesses, colleges and students have no idea how the apprenticeship system is going to work in the future … there’s an awful lot of questions there.

He is looking at this and saying bear with us. Throughout the productivity plan there is no real attention given to implementation.

I want the government to succeed in making sure there are 3 million more apprentices. But in terms of what is the means of us actually getting there, and tell us in details so people can plan, then it’s very, very little.

 

Q. Do you think these reforms are threatening the quality of provision?

A. There’s a big risk in order to say at end of parliament we have reached the target the government might want to rebadge training schemes and water down what apprenticeships are. That’s a concern.

In the government’s favour, the enterprise bill defines what an apprentice is. But we have to make sure the government doesn’t quietly abandon those in hitting those targets.

 

Q. What would help to drive an increase in higher apprenticeships?

A. I don’t think anyone is suggesting we do some soviet-style five-year plan. What we found businesses telling us is that this should be driven by business and their needs.

We found a worrying lack of real consultation with businesses, particularly with regards to apprenticeships.

There is a fog of uncertainty. Given it should be businesses in driving seat, they don’t know how the levy and whole system will work. I don’t know how they are going to achieve it given the uncertainty.

 

Q. Should target setting for apprenticeships be completed in collaboration with employers, with staggered targets for different sized employers?

A. The short answer is yes. We applaud what the government is going, by ensuring there is a target that should focus minds. But where did this 3 million target come from?

It does look – and we make a recommendation that the government had to tell us what their rationale is – it was a finger in the air job.

It’s more than 2 million, less stretching than 4 million, why don’t we call it 3 million. And there was no consultation with business on what business and sectoral needs where whatsoever.

 

Q. Are we running out of time here for employers to be able to prepare and make necessary changes to be in control of this situation?

A. There isn’t long. Time is running out. For this to be up and running [the levy] by April 2017 seems an astonishingly short time period, given the degree of uncertainty we’ve got at the moment.

I do worry that seven months on from when the Productivity Plan was published were still no further forward really in terms of how the levy will be implemented. There’s too much uncertainty for everyone involved.

It is running ominously late for all these details at it does demonstrate a worrying lack of consultation with the real interested parties.

 

Q. What action would you like to see from ministers in getting more involved in the delivery of the productivity plan?

A. Everybody has an interest in raising productivity. In general, the productivity plan is quite a worthy document … where we do have a problem is that it lacks focus, there’s an element of it being just a collection of government policies, collated in a very useful way in one document.

But nothing big, nothing substantial that demonstrates that there is going to be a step change in the way that we address our productivity problem, and there’s no implementation.

It’s worthy, but it runs the risk of being useless and just sitting on the shelf.

MPs will probe the financial management at the Department for Education (DfE) after it used legislation to delay the publication of its accounts.

The DfE has used a statutory instrument, a minor piece of legislation which can be passed without debate among MPs, to extend the deadline for laying its financial accounts before Parliament to April 29.

Government departments are supposed to file their accounts by January 31, so the DfE’s move comes just two days before the deadline and on the last possible day for such a delay.

The move has led to criticism from education select committee chair Neil Carmichael, pictured, who said his committee would consider it as “further evidence” that a financial probe was needed.

He said: “Government departments have ten months to get their accounts in order and laid before Parliament for proper public scrutiny, and most manage with far less.

“Slipping out a statutory instrument to extend the deadline on the last possible day is further evidence of DfE’s struggle to get its act together on financial matters.”

He said his committee had agreed in December to invite DfE permanent secretary Chris Wormald to explain the department’s plans for academy accounts, and said today’s news left them with “no alternative but to consider the wider question of financial management at the DfE”.

It comes after the DfE came under pressure to get its accounts in order following criticism from the National Audit Office (NAO).

Officials have been trying to find a solution for recording academy finances since the NAO last year issued a rare “adverse opinion” on the DfE’s 2013/14 accounts.

The watchdog discovered an £166 million overspend and branded the department’s financial statements “both material and pervasive”, meaning that they did not meet the requirements of parliament.

The issues stemmed from the department having to combine the accounts of more than 2,500 organisations – most of them academy trusts with a different accounting period.

A spokesperson for the DfE said: “The consolidation of thousands of academies’ accounts is one of the largest procedures of its kind carried out in the UK. Throughout this process the NAO has found no material inaccuracies in the accounts.

“As part of the audit of the 2014-15 accounts, the NAO has requested some additional work. This will mean that the accounts will be laid later this year. We continue to work with the NAO the Treasury and Parliament to find a sustainable approach to reporting on the finances of academies.”

The founder of a scandal-hit apprenticeship provider has been disqualified from acting as a director for six years after investigators found he paid himself nearly £1 million while his firm slid into administration.

Elmfield Training – one of the country’s largest providers of apprenticeships that received more than £100m in public money – was wound up in 2013 owing 180 companies more than £11m.

It followed extensive investigations from FE Week that revealed alleged malpractices at the firm – founded by Gerard Syddall – leading to a Skills Funding Agency (SFA) investigation.

But Mr Syddall finds himself embroiled in a fresh controversy this week after insolvency investigators found he personally benefited from the company to the tune of nearly £1 million – just months before it went into administration.

Mr Syddall clearly put his own interests ahead of those of the company

The Insolvency Service found the firm was experiencing cashflow difficulties at the time in March 2013 and Mr Syddall had given an undertaking to the board of directors he would not use company funds for his own benefit.

But investigators found that Mr Syddall, and people and companies connected to him, went on to receive nearly £954,000 from Elmfield.

By the time it went into administration in October that year, Mr Syddall owed the company £2.6 million.

In a scathing investigation report, released yesterday, investigator Robert Clarke said: “Mr Syddall clearly put his own interests ahead of those of the company.

“To make matters worse, this was after he had vowed to the company’s board that he would not do this.

“Directors of companies should know that this type of conduct is not acceptable and, in such circumstances, the Insolvency Service will take action against them.”

Mr Syddall has been disqualified from acting as a director until February 2022. He was adjudged as bankrupt in April 2015.

Mr Syddall was hauled infront of a Business, Innovation and Skills (BIS) select committee in 2012 and accused of a “rip off” over high profits.

He was questioned about the £12m profit made by his company in 2010, all from government funding – first revealed by FE Week. A total of £3m of that went directly to Mr Syddall as a dividend.

After FE Week revealed the firm’s “appalling” pass rate, it was given a grade four rating from Ofsted leading to Mr Syddall’s resignation as chief executive.

A BBC investigation – supported by information from FE Week – then revealed employees were “routinely asked to alter forms to claim funding for staff who never wanted to do an apprenticeship”.

The firm went into liquidation. A later SFA investigation cleared the company of falsely claiming for learners, but found “weakness in their controls that were not good practice”.

 

 

HOW FE WEEK EXPOSED IT ALL – A FULL TIMELINE OF THE SAGA:

 

June 2011: FE Week’s first pilot edition reveals Elmfield’s “eye-watering” pre-tax profit of £12.3 million.

June 2011: Our newspaper’s second pilot edition reveals details of Elmfield’s 18,000 six-month adult apprenticeships in level 2 retail with Morrisons.

March 2012: Ged Sydall faces select committee grilling – where he is accused by an MP of a “rip off” over the firm’s high profit margins generated from the public purse.

April 2012: Elmfield features as part of a Panorama investigation titled “The Great Apprentice Scandal”.

November 2012: Interim FE Week editor Nick Linford – editor of FE Week at the time – spoke about Elmfield’s profits as a witness to the BIS Select Committee. (Par 210 here.)

February 2013: Morrisons announces its three-year contract with Elmfield will end this year. It had an overall success rate of 58.5 per cent for the previous year.

May 2013: FE Week reveals Elmfield’s “appalling” pass rate – with just 47.5 per cent of leavers in 2011/12 walking away with an apprenticeship certificate.

July 2013: Mr Syddall resigns after 10 years as chief executive after Ofsted inspectors gave Elmfield a grade four inspection result having come across “unacceptably low” results.

Ofsted found the number of learners who completed their qualification in the expected time “continues to decline” and reached an “unacceptable low” 23 per cent in retail apprenticeships, which make up the majority of Elmfield’s provision.

Skills Minister Matt Hancock promised to take “tough and urgent action on failings providers”.

October 2013: Former chief executive Ged Syddall quits as director during Newsnight probe into alleged malpractice – supported with information uncovered by FE Week. However he still remained the majority shareholder.

The investigation found staff were “routinely asked to alter forms to claim funding for staff who never wanted to do an apprenticeship”.

October 2013: Elmfield bosses confirms they are taking steps to put the company into administration owing £11m to more than 180 firms.

November, 2013: 300 jobs are saved after EQL Solutions agreed a £1.5m to buy the majority of Elmfield’s assets.

April, 2014: A Skills Funding Agency clears Elmfield of falsely claiming for learners on the Morrisons apprentice scheme after a six-month investigation.

However it did find “some of the actions taken by Elmfield indicate weaknesses in their controls and were not good practice”.

Former government apprenticeship adviser Doug Richard has today been cleared of child sex charges after a week-long trial at the Old Bailey in London.

The 57-year-old American multimillionaire, whose 2012 Richard Review of Apprenticeships led to ongoing reforms, had been accused of having sex with a 13-year-old girl after meeting her via a ‘sugar daddy’ website, as reported by FE Week earlier this week.

Mr Richard told jurors that at the time he believed she was an experienced 17-year-old and insisted he would never “knowingly” have sex with a child.

“I feel terrible. I feel terrible for her and I feel terrible about myself. I feel terrible for my wife and children,” he said in court.

A jury of eight women and four men deliberated for four hours and 15 minutes before finding Mr Richard, of Islington, north London, not guilty of three counts of sexual activity with a child, one of causing or inciting a child to engage in sexual activity and a charge of paying for sexual services.

The Richard Review of Apprenticeships, which recommended giving employers control over apprenticeship funding, has continued to impact on the FE sector since its publication in 2012.

As well as apprenticeships, he worked closely with the government as a member of the Small Business Task Force, which advised Chancellor George Osborne and Prime Minister David Cameron.

Copy and image credit: Press Association

Questions remain over the future of the UK’s largest employer skills survey, with indications that responsibility for labour market information could fall to local enterprise partnerships (LEPs) in the future.

The Employer Skills Survey (ESS), published every two years by the UK Commission for Employment and Skills, examines the skills challenges facing employers and is based on interviews with around 90,000 UK businesses.

Its future has been in question since the government’s spending review in November, when it was announced that the UKCES would have its budget cut. Earlier this month the Skills Minister, Nick Boles confirmed that the government would be withdrawing funding during 2016-17.

No announcement about the future of the survey has been made. When asked by FE Week if this year’s UK-wide survey would be the last one, a UKCES spokesperson said discussions were still ongoing.

Speaking at a parliamentary evidence session on Monday, Mr Boles said it was the “obvious role” for LEPs to have responsibility for labour market information.

“Who should take responsibility for knowing more about the labour market at which level?” he was asked by Neil Carmichael, joint chair of the sub-committee on education, skills and the economy.

“It always seemed to me at least that it’s the absolutely obvious role for a local economic partnership to be gathering the data and then translating it into various conclusions,” Mr Boles replied.

“I would have thought it was a good use of their time and their budget,” he added.

David Hughes, chief executive of Learning and Work Institute, warned that it would be a “backward step” if the ESS did not continue to be UK-wide.

“As devolution quickens, the need for a single, consistent, comparable set of data about the labour market heightens,” he said.

Jo Lappin, chief executive of the Northamptonshire Enterprise Partnership, agreed with Mr Boles.

“Having a really good handle on both growth and replacement demand will mean that LEPs, working with their education and training providers, will be able to collectively deliver properly planned provision,” she said.

Ann Limb, chair of the South East Midlands LEP, agreed that it would “make sense” for LEPs to take over responsibility for gathering data on the local labour market.

“All LEPs base their strategic economic plans on evidence drawn from local labour market intelligence and so it would make sense for us to continue and develop this practise in the future,” she said.

The ESS 2015, published on Thursday, said vacancies that go unfilled because employers can’t find workers with the right skills are a “growing challenge” to UK businesses.

It found that 23 per cent of vacancies went unfilled because of skills shortages – a proportion that has not changed since 2013, despite 42 per cent growth in the number of vacancies in the UK overall.

Companies in the electricity, gas and water sector had the biggest shortage of skilled workers, the survey found, with 36 per cent vacancies last year, up from 23 per cent in 2013 (see table, right).

The 243-page report, made up of interviews with businesses across all sectors of the UK, revealed that jobs in skilled trades, machine operating and professional roles were most affected. Reading, writing and numeracy were among the skills the employers said prospective employees were lacking, with around 25 per cent of applicants falling short in those areas.

The skills gap within employment has fallen since 2013, but 14 per cent of employers still report that they have employees who don’t have all the skills they need to do their job. The survey also revealed “over two-thirds of employers that had difficulty filling their vacancies solely as a result of skill shortages had experienced a direct financial impact through either loss of business to competitors, or increased operating costs.”

A spokesperson for the Department for Business, Innovation and Skills (BIS) said: “We are discussing the future of the valued Employer Skills Survey with UKCES and other stakeholders, including other government departments, devolved administrations and LEPs.”

Should LEPs be responsible for the ESS in future?

YES

“The availability of a skilled workforce is essential to the economy, with almost every employer seeing skills as one of the most important issues for the continued growth of their business.

“LEPs therefore really need to understand what is happening in their labour market and make sure that the education and training system is delivering the skills needed by businesses and the wider economy.

“Having a really good handle on both growth and replacement demand will mean that LEPs, working with their education and training providers, will be able to collectively deliver properly planned provision. This takes on an even greater importance as skills funding is increasingly devolved.”

NO

“The Employer Skills Survey provides a rich set of data which is invaluable to all sorts of organisations and people across the UK. It provides good evidence to policy makers and commissioners about what’s needed from public investment to support employer and individual investment.

“We are keen that this research continues in the future, whatever that future holds for UKCES. A national survey, carried out once every two years and accessed by hundreds of organisations is a very efficient way to gather this intelligence and it would be a backward step if it did not continue in some form.

“As devolution quickens, the need for a single, consistent, comparable set of data about the labour market heightens.”