Business secretary Vince Cable has announced 4,239 new higher apprenticeships in sectors such as aviation, low carbon engineering, legal services and space engineering.

Providers have been allocated almost £6.5 million to develop the places as part of the second round of the higher apprenticeship fund, which is worth £25 million.

Doing an apprenticeship should be one of the best gateways to university-level study.”

Mr Cable said the new apprenticeships would allow the government to target industries in which skills shortages “are threatening to choke off growth. Higher apprenticeships are an essential step in rebalancing our economy and building a fairer country where growth is spread evenly and opportunities are not limited to the privileged,” he said.

Skills minister John Hayes added: “By radically increasing the number of degree-level apprenticeships we are putting practical learning on a level footing with academic study.

“Doing an apprenticeship should be one of the best gateways to university-level study. Through the higher apprenticeship fund we are creating (a total of) 23,000 places for young people to take degree-equivalent higher apprenticeships.”

The City and Islington College received just over  £1.39 million, the largest allocation in the second round, to develop level 4 apprenticeships in engineering and environmental technologies.

David Way, chief executive of the National Apprenticeship Service, said the expansion of the scheme underpinned the service’s commitment to raising the quality of apprenticeships.

“Major employers are opening up recruitment and training to young apprentices.

“Young people and their parents can see clear opportunities to climb the jobs ladder right to the top through taking up apprenticeships.”

PricewaterhouseCoopers (PWC) was
allocated £960,000 to develop some of the first higher apprenticeships in accounting and professional services at level 6 and 7.

Meanwhile, Loughborough College received £500,000 in the second round to develop level 4 apprenticeships in space engineering.

Neil Carberry, director for employment and skills at the Confederation of British Industry (CBI), said developing more high-level skills was “essential” for long-term economic growth.

“Businesses know that building our higher-level skills base has to be an essential part of a successful plan for growth in the long-term,” he said. Future skills shortages in key sectors could hold back our economic performance, so boosting higher-level apprenticeships now is the right thing to do.”

Mr Carberry said that he supported the government’s decision to focus on sectors such as advanced manufacturing and IT.

“Young people need to know that higher apprenticeships are a great route to a
successful career, as they can build higher level skills while learning on-the-job with an employer,” he said.

Adult learners may have to pay VAT if they study with an independent training provider next year.

The 20 per cent charge, which will be applied as part of the “24+ advanced learning loan” scheme, will not affect “eligible bodies”, including FE colleges and not-for-profit organisations.

A spokesperson for HM Revenue & Customs (HMRC) said: “A provider of further education that is not an eligible body must charge VAT on its supplies of FE.”

Graham Hoyle, chief executive of the Association of Employment and Learning Providers (AELP), said the ruling was “nonsense”.

“As I have made clear to the minister and senior officials for the Department for Business, Innovation and Skills (BIS), the current position is simply unacceptable for two reasons.”

He told FE Week that it was not in the government’s interests for the take-up of adult apprenticeships to be adversely affected by the VAT requirement, especially when skills minister John Hayes had reiterated  its commitment to them.  It was also “blatantly anti-competitive” for the adult skills market.

“This requires an urgent resolution for my members to plan their business development strategies accordingly and for the government’s own skills strategy to be safeguarded,”  he said.

It could have a huge impact on whether providers are in the game or out of the game”

Mr Hayes, speaking at the AELP National Conference last week, said he had “no doubt” he would be making “a recommendation” to Chancellor George Osborne.

A spokesperson for BIS told FE Week:  “BIS are not in a position to offer advice or views on matters relating to VAT and the position of training organisations.

“The position on VAT will differ depending on the individual circumstances of different training organisations and therefore it is important that organisations seek their own independent advice.

“BIS have been in discussions with HMRC regarding the treatment of VAT for the fees charged to individuals in respect of education and training.

“This work has focused particularly on the position of private universities but we are also looking at how this applies to the fees charged in respect of provision funded by 24+ advanced learning loans.”

A spokesperson for AELP said the issue had “come out of the blue” and would affect how many providers delivered level 3 and 4 qualifications for adult learners.

“It could have a huge impact on whether providers are in the game or out of the game, because it’s already giving the not-for-profit organisations a huge advantage in price fixing,” the spokesperson said.

Gordon Marsden, shadow minister for further education, skills and regional growth, told FE Week the problem was because of the different legal statuses held by colleges and independent training  providers.

“If that is going to disadvantage independent learning providers, then I certainly think it’s something the government should be looking at,” he said. However, he later admitted there was “nothing immediately that can be done”.

The shadow FE minister, an independent charity and two trade unions have criticised the FE loans policy following the publication of the final Equality Impact Assessment (EIA) and Regulatory Impact Assessment (RIA) reports.

Gordon Marsden, shadow minister for further education, skills and regional growth, told FE Week: “The EIA adds relatively little to the research that was published previously.

“In fact most of it appears to be derived
from it, and on that basis all the substantial concerns and misgivings that we have about the implications of the research also apply to the assessment.

“It remains the case that neither the research nor the assessment justifies the claims that this is going to be widely accepted by a broad range of learners.”

The scheme – now called “24+ advanced learning loans” – will be introduced next year and will affect all learners aged 24 and above and studying at level 3 or higher.

NIACE’s outstanding concerns about the introduction of loans include not only equality issues around age, disability and gender, but the impact they will have on the learning offer”

Mr Marsden said the Department for Business, Innovation and Skills (BIS) was trying to spin the findings to show that the policy “will not be such a big deal” next year.

“Well, I’m sorry, but all the evidence suggests that it will be a big deal,” he said.

Learners aged 40 and above would be least likely to take out a loan, according to the final EIA report.

“Most people felt that they would not be put off taking out a 24+ advanced learning loan once they understood the full details,” it said.

“However those aged 40 and over seeking a route back into the labour market were still negative.”

The report also showed that women were marginally less likely to take out a loan, although it later said the difference was “not large enough to be statistically significant”.

The National Institute of Adult Continuing Education (NIACE) said that it was “concerned” about the impact of the policy both on female and older learners.

Alastair Thomson, principal advocacy officer at NIACE, said: “NIACE’s outstanding concerns about the introduction of loans include not only equality issues around age, disability and gender, but the impact they will have on the learning offer – especially access to HE – the quality of the learning experience and what subjects might be available.”

The National Union of Students (NUS) has also criticised the reports.

Toni Pearce, the union’s vice president (further education), said: “This poorly researched, poorly analysed and much delayed report is yet further proof that the government has not properly prepared themselves or the sector for the introduction of FE fees.

“The report clearly shows that the worst hit by the changes will be women – who make up two-thirds of the affected group – and the over-40s. Yet the report says all is fine with the former and that they’ll merely keep an eye on the latter.”

She described the reports as inadequate and a “box-ticking exercise”.

The RIA, which modelled the impact of the scheme against four other policy decisions, showed that the number of adult learners studying at level 3 and 4 could drop from 359,000 to about 247,000 once the loans were introduced.

It follows market research, carried out by TNS-BMRB, which revealed that one in ten learners would “definitely” take out a loan.

Sally Hunt, general secretary of the University and College Union, said: “The new loans system will be profoundly unfair and make it harder for people to get the qualifications they need to progress in life.

“The government’s own research shows that the number of learners ‘definitely’ willing to take courses is low – and it has only canvassed the views of people currently in the system.

“Their own budgets have been planned with 20 per cent fewer learners expected under the new system.”

A BIS spokesperson said government funding was being focused on young people without basic skills or taking their first qualifications.

“Access to a loan will ensure no upfront costs for tuition for those aged 24 and over taking qualifications worth an A-Level or higher.”

Ofsted is to reduce inspection notice periods from three weeks to two days.

The change, which will be implemented from September, is set down in an amended Common Inspection Framework, released last week as part of the handbook for the inspection of further education and skills.

Ofsted has already piloted “no notice” inspections, but Matthew Coffey, its national director for learning and skills, said that many providers “raised genuine concerns about logistics”.

Joy Mercer, director of policy at the Association of Colleges (AoC), said that the organisation was pleased there would be two days rather than “no notice”, but concerns remained.

“This is still a tight time-frame and will continue to cause logistical problems for colleges and Ofsted inspectors, particularly in ensuring that they see the fullest range of provision, including the more complicated areas such as work-based, off campus, employment-driven courses.

“That’s why we think it’s even more important that Ofsted is clear about what data it will be using and what evidence requirements it would expect colleges to have to hand.”

There is no parity and it is unfair for a college’s provision to be at risk when a neighbouring school or academy sixth form may well offer poorer quality provision”

The framework has also replaced the “satisfactory” judgment with “requires improvement”, which Mr Coffey said “makes clear that only a good level of education is acceptable”.

Ms Mercer said that colleges accepted that complacency “should have no place in a sector committed to continuous self-improvement”, but that the AoC remained “uncomfortable” with “requires improvement”.

“The implications for colleges are stark,” she said. “A simplistic application of the term ‘requires improvement’ does not capture the wide range of circumstances encompassed by the existing ‘satisfactory’ grade, which range from a so-called ‘coasting’ institution to one that is making solid progress towards improvement.

“However, we’re pleased that Ofsted has moved away from its ‘three strikes’ policy and, if a college has made demonstrable improvements, this will be taken into consideration and the college will not necessarily be graded inadequate on its third inspection.”

The framework says that there will normally be a full inspection of providers judged to “require improvement” within 12 to 18 months.  Those judged to require improvement twice in a row from September this year may be judged inadequate on their third inspection if they failed to improve.

“This will drive up improvement and discourage coasting providers,” Mr Coffey said.

In February this year Sir Michael Wilshaw, chief schools inspector, launched Good Education for All, a 12-week consultation with the further education and skills sector on the proposals for the amended framework.

Mr Coffey said that Ofsted “received hundreds of valuable responses. Often learners were more positive about the proposals than many of the providers,” he said.

In response to the framework, Ms Mercer said that the AoC “remains extremely concerned” about the huge differences between the way that school and academy sixth forms were inspected compared with FE colleges and sixth-form colleges.

“There is no parity and it is unfair for a college’s provision to be at risk when a neighbouring school or academy sixth form may well offer poorer quality provision,” she said.

“There needs to be a common set of data used and a similar methodology, including a grade for school and academy sixth forms, so that students and parents can make a real comparison.”

The government says they are “looking” at introducing apprenticeships at level 6 and 7.

A source from Number 10 said the new levels would widen access routes into specific trades such as construction, advanced engineering and financial services.

“Economic flexibility and social progress depends on there being a choice of excellent academic courses and strong vocational education, which is why we are　creating proper pathways for both,” a source at Number 10 said.

“These new apprenticeships will help more young people to receive on the job training at top companies ensuring that the vocational route is a highway to success, not a cul-de-sac.”

Higher apprenticeships currently support learners up to level 5.

The Department for Business, Innovation and Skills (BIS) will be announcing the second round of approved higher apprenticeships later this week.

“For every £1 we spend on apprenticeships it’s estimated that the economy gains £18,” a source at Number 10 said.

“That’s why businesses have told us we need to go further in encouraging apprenticeships to the highest level.

“We’re listening to those concerns and acting upon them.”

The National Apprenticeship Service will consult with key stakeholders and draw up specifications for qualifications which could available from the next academic year.

A spokesperson for the Association of Employment and Learning Providers (AELP) said: “This sends a strong signal that the government is serious about building alternative progressions routes other than academic which follow a mostly vocational path.

“The indications are that ministers have been encouraged by the response from some big name employers to the higher apprenticeship initiative and they want to build on it.”