Latest news from FE Week

Traineeships are to be exempted from a benefits rule that was “compromising” the programme.

The Department for Work and Pensions’ (DWP) 16-hour rule, which limits the amount of time Job Seeker’s Allowance (JSA) claimants can train every week, will no longer apply to traineeships — the government’s flagship youth unemployment policy.

The move came as part of the Autumn Statement, which read: “The government will ensure that the benefit rules do not impede the take-up and effectiveness of traineeships by exempting those undertaking a traineeship from the rule which prevents JSA claimants from doing more than 16 hours of study per week.”

However, it remained unclear when the exemption would come into force with, FE Week understands, the DWP and the Department for Business, Innovation and Skills (BIS) still locked in talks about the move.

It follows concerns (as reported in the last edition of FE Week) from Skills Funding Agency boss Keith Smith and Ofsted FE and skills director Matthew Coffey about the popularity of traineeships.

It also follows criticism in August from the Association of Employment and Learning Providers (AELP) that the 16-hour rule could adversely affect traineeships.

An AELP spokesperson said: “Now the announcement has been made, we would expect to see early implementation and will be urging that to happen.

“We will want to explore with the government whether the rule changes affect work experience as well, but there is no doubt this announcement is a major step forward.”

Association of Colleges chief executive Martin Doel said: “This change will enable colleges to more effectively meet the needs of young people at a time of stubbornly high youth unemployment.”

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Editorial – A step in the right direction

Traineeships are part of the ‘apprenticeship family’, overseen by the National Apprenticeship Service, and considered by many to be a pre-apprenticeship programme in all but name.

Their exemption from the DWP’s 16-hour rule will come as a welcome surprise. Albeit a long overdue one.

However, it is worth noting that questions remain about when it will actually come into effect and whether other types of work experience programs will also be exempt.

Once in place, it should make the scheme significantly more attractive and affordable to many young people, so hopefully more will benefit.

This will increase participation, but is that enough for traineeships to be successful?

Without successful progression into meaningful paid employment we will have failed, like many of the youth employment programmes long since consigned to the history books.

So, as I’ve highlighted in this column before, the next logical step should be a financial incentive for a positive outcome.

If providers continue to be simply paid based on the duration of the traineeship then won’t some keep them out of paid work and on JSA for as long as possible?

With youth unemployment so high, now is not the time to be introducing perverse incentives.

Nick Linford, editor

The number of apprenticeship starts in England has fallen for the first time in seven years, according to new figures published by the government.

The final (rather than provisional) figures in latest statistical first release show that in the 2012/13 academic year, there were 10,400 fewer apprenticeship starts than in 2011/12 — a fall of 2 per cent.

The drop, to 510,200, was the first fall in all-age apprenticeships since 2005/06 when the figure of 175,000 was down 7.5 per cent from the previous year.

The fall in the number of 16 to 18-year-olds starting an apprenticeship last year was behind the all-age drop, with starts among the 19 to 24s and 25+ age groups both rising on the previous year.

And it was the second consecutive fall in the number of under-19 apprenticeship starts with 114,500 last year, 129,900 the year before and 131,700 in 2010/11, versus the figure of 116,800 for 2009/10.

A spokesperson for the Department for Business, Innovation and Skills (BIS) said: “For the first time, all apprenticeships now involve a job and as such some low quality provision was ended. This particularly affected the 16 to 18 apprenticeships, as programme-led apprenticeships were concentrated in that age range.”

According to the Office for National Statistics, 1.07 million young people in the UK were not in education, employment or training between July and September, down 28,000 (1.6 per cent) from the same time last year.

Nevertheless, the figures also showed that a record 868,700 people were in apprenticeships last year — up 77 per cent on 2009/10.

“All apprenticeships now routinely last a minimum of a year. That means that while more people than ever are in apprenticeships, the number of starts has not grown. However, removing very short six-month apprenticeships is a vital part of driving up quality,” said the BIS spokesperson.

Teresa Frith, senior skills Policy Manager for the Association of Colleges, said there could be many factors contributing to the decline and warned against “unsupported speculation” over the cause.

She added: “We are concerned about the decline in 16 to 19-year-olds doing apprenticeships and this is why our Careers Advice: Guaranteed campaign is so important because we need to make sure young people are aware of all their options post-16.”

Stewart Segal, Association of Employment and Learning Providers chief executive, agreed the minimum duration could have had an impact on 16 to 18 starts, but also pointed out that many young people lacked employability skills, and so were not securing places on apprenticeship programmes.

“The traineeship programme, which is taking longer to get established than we had hoped, should in time help support the apprenticeship programme for young people as well as provide an entry point for other jobs with training,” he said.

“The introduction of traineeships as a stepping stone should make a positive difference in halting the decline for the younger age group, while we hope possible changes to the loans scheme will help to sustain demand for adult apprenticeships.

“It is important to maintain the momentum of the all age all levels apprenticeship programme.”

Chancellor George Osborne confirmed the government will introduce an HMRC-based funding system alongside a mandatory employer cash contribution for apprenticeships through his Autumn Statement.

He said the government will develop a model which uses HMRC systems to route apprenticeship funding direct to employers.

The Treasury subsequently announced it will launch a consultation on the technical details of the system in early 2014. It is unclear whether the PAYE tax system will be used, as suggested in the government consultation.

The government will also be looking at the option of an “alternative funding route for the smallest businesses”.

A compulsory employer cash contribution for a significant proportion of the external training costs of an apprentice (excluding English and maths) will also be introduced.

During his speech in the House of Commons, Mr Osborne said: “The government will put business at the centre of the apprenticeship system by enabling employers to receive funding for the training costs of apprentices directly through an HMRC-led system and ensuring that employers contribute.”

The Treasury also confirmed it will provide £40m to deliver an additional 20,000 higher apprenticeships starts in the 2013/14 and 2014/15 academic years.

It will provide an extra contribution to the costs of training for 16 to 17-year-olds and consider the approach for 18-year-olds.

Several caps will be introduced on the maximum government contribution per apprentice.

A proportion of apprenticeship funding will be withheld for a “payment by results” approach.

Read more about the Autumn Statement in the next edition of FE Week.

The National Skills Academy Logistics (NSAL) has been put into liquidation after its financial support was pulled by the Skills Funding Agency (SFA).

The NSAL’s National Employer Board was critical of the SFA’s role in the demise of the organisation, which helped employers meet legislative requirements and develop training courses.

A statement released on behalf of the board claimed the SFA did not like how NSAL’s executive team ran the academy.

However, it alleged the SFA still invited the board to resubmit a business plan in March this year, in the hope that funding could be continued.

The board said it subsequently attempted to reform NSAL to deal with the SFA’s concerns.

However, it added: “While knowing that time was of the essence, the SFA has continually missed deadlines in terms of decisions and response, which has elongated the process, despite continued expressions of support and substantial new business prospects.

“When they finally turned down the resubmission, the SFA did say that it would support the development work that had taken place during the re-submission period.

“The SFA then changed its mind, twice, before finally confirming this week [beginning November 25, 2013], that there were no further funds available.

“There is no other alternative but to put the academy into liquidation.

“The board, as a group of unpaid volunteers, has been let down by the SFA.

“We strongly believe that the NSAL experience should be taken as a lesson to other employers who give their time to government-based initiatives on a free and voluntary basis.”

It is understood the SFA funded NSAL between August 2011 and August 2013, but not for the last three months it was in operation. It was unclear how much money was paid to NSAL.

An SFA spokesperson said: “We have been working with NSAL over the past two years, to ensure delivery against their their year start-up plan remained on target.

“As a result, we asked NSAL to review and submit a revised delivery plan, to address concerns we had raised against them achieving their their year delivery plan targets.

“Following assessment of the revised plan, the agency’s decision was to not support and we understand NSAL will now cease operations.

“The agency’s priority is to work with NSAL and the Sector Skills Council over the next few months, to ensure that any learners and apprentices are supported by their current providers and employers so that they can continue their learning and apprenticeships.”

The government is to allow job seeker’s allowance (JSA) claimants to do more than 16 hours’ study a-week as part of traineeships and keep their benefits.

The ‘16-hour rule’ is being dropped as part of today’s Autumn Statement.

“The government will ensure that the benefit rules do not impede the take-up and effectiveness of traineeships by exempting those undertaking a traineeship from the rule which prevents JSA claimants from doing more than 16 hours of study per week,” it said.

The Association of Employment and Learning Providers (AELP) called on ministers in August to review how the government’s flagship youth unemployment scheme would affect JSA claimants.

It was concerned that working around the Department for Work and Pensions’ 16-hour rule — which limits the number of hours’ skills provision claimants can do in a week — would be more important than considerations surrounding the needs of learners when courses were designed.

“The rule has long been a source of contention for skills providers and in this instance means that skills elements, including maths and English provision within traineeships, will adversely impact on JSA payments if they exceed this amount per week,” said an AELP spokesperson at the time.

Read more about the Autumn Statement in the next edition of FE Week.