A think tank run by a former government skills adviser has called for a new apprenticeship inspectorate to be formed to clamp down on poor quality training that is leading to half of apprentices dropping out.

In a radical report that claims tens of thousands of apprentices are not receiving their minimum entitlements to training, EDSK director Tom Richmond has called on the government to take direct action against those employers and training providers who are “letting down their apprentices”.

He also said there is a widespread “lack of genuine training” that has become so prevalent that one in ten apprentices are “not aware that they are on an apprenticeship”.

But provider chiefs say the report, called ‘no train, no gain’, paints a picture of the apprenticeship system that is “simply not true or one the sector will recognise”.

EDSK’s report aims to assess the state of the apprenticeship landscape 10 years on from the coalition-government commissioned Richard Review.

It said that while there were “many excellent apprenticeships available” it had “no choice but to conclude that the quality of apprenticeships in England remains a serious problem”.

The report, penned by Richmond and Eleanor Regan, has called for a new “national apprenticeship inspectorate” to be formed, with the role of carrying out inspections instead of Ofsted, and responsibilities to manage the register of apprenticeship training providers.

It said that a new body would enable the scope of inspections to be widened to include regulation of the on-the-job training that an apprentice may receive from their employer which is currently “not subject to any formal quality assurance”.

This new inspectorate would also be able to make more timely and frequent inspections, of at least once every three years regardless of the provider’s grade, after noting that “frequency and scale of [Ofsted] inspections for new and existing provision” can be too slow because it is essentially determined by government which sets Ofsted’s budget.

The report said this new body would, in effect, be created by “spinning out Ofsted’s current apprenticeship inspection duties and then expanding its remit and responsibilities”.

Richmond and Regan propose that the national apprenticeship inspectorate should have a budget of £60 million a year – three times what Ofsted is able to spend on all further education and skills inspections.

Elsewhere, their report said that some low-quality and low-skilled roles rebadged as apprenticeships were “just as prominent today as they were in 2012” with some apprenticeships offering training that could be learned in a few weeks.

The report continued that, while allowed in the funding rules, allowing homework tasks and online learning as training went against what the Richard Review wanted to see.

EDSK referenced IFF Research’s evaluation of apprenticeships in 2021 which said that one in five of more than 5,000 apprentices surveyed were not even aware of the 20 per cent off-the-job training requirement, and less than half (46 per cent) achieved the minimum amount of off-the-job hours.

In addition, it said that it was “concerning and regrettable” that many apprentices were only given limited information about their training programme before starting, explaining that the lack of curriculum for standards gave apprentices “no point of reference for what training they should be receiving”.

Around one in twenty apprentices were unaware they were on an apprenticeship, according to IFF research, while Department for Education data indicated that more than two thirds of those who dropped out cited quality of the course as a reason.

The report called on the government to “publicly restate its commitment to the Richard Review’s definition of what constitutes a high-quality apprenticeship” and any apprenticeship that does not meet this definition should be “immediately banned from accepting new apprenticeship starts and fully withdrawn by 2024”.

It also said employers should be required to produce a “training curriculum for each apprenticeship standard from 2024 onwards”. Every training curriculum should have to demonstrate that it meets at least 300-hours of off-the-job training each year, and a minimum 200 hours of the 300 must be delivered face-to-face.

But Jane Hickie, chief executive of the Association of Employment and Learning Providers, said the report “tried to paint a picture of the apprenticeship system which is simply not true or one the sector will recognise”.

She said Ofsted remained the correct body for regulation and said the 300,000 starts last year indicated a “strong appetite from employers” for apprenticeships.

She added: “Simply identifying a few weak vacancies posting as a proxy for quality of lower-level apprenticeships is wholly inappropriate.

“The suggestion of remote training being poor quality is totally misinformed and any sort of arbitrary cap goes against the principle of an employed-led system. This would jeopardise the bespoke and innovative programmes that are co-designed by employers and providers.”

EDSK director Tom Richmond said there were “many excellent apprenticeships available in this country” but added: “So long as the government is content for watching webinars and doing homework to be counted as ‘training’ then there is little hope of improving the experience for current and future apprentices.

“The only wat to eradicate poor provision and substandard training within the apprenticeship system is for the government to now set a much higher bar for what constitutes ‘quality’, as well as doing a better job of protecting apprentices from malpractice and exploitation.”

Minister for skills, apprenticeships and higher education, Robert Halfon, said apprenticeships “continue to deliver great outcomes”.

He added: “Our reforms have made apprenticeships more rigorous, with more training and they now properly reflect the needs of employers, with high satisfaction rates and 92 per cent of apprentices securing sustained work or further training.

“We know there is more to do to ensure all apprentices get a great experience, which is why we’re introducing a suite of reforms to boost quality. This includes refreshing our register of training providers and strengthening provider accountability, Ofsted will inspect all apprenticeship training providers by 2025, and we have launched a new feedback service for apprentices.”

England’s largest apprenticeship provider has been taken over by its “lenders” amid an investigation that could result in the government demanding over £13 million is repaid.

Lifetime Training had been owned by private equity parent Silverfleet Capital since 2016 but has now been sold to Alcentra – one of the provider’s lenders which specialises in credit management, private credit and structured credit strategies.

Jon Graham, Lifetime Training’s chief executive, claimed the sale is part of the “natural cycle of private equity and puts the business on firm, secure footing for the future”.

FE Week understands the Education and Skills Funding Agency is about to commence an audit into the provider after they raised concerns over overclaimed funding.

The provider’s newly published accounts state: “A funding partner of the company communicated its desire to further audit past trading and referenced a figure of £13.7 million.

“The amount and timing of any contingent liability is uncertain and a reasonable estimate cannot be made at this time and therefore a provision has not been included in the financial statements. The company has retained legal counsel regarding this matter.”

Graham claimed Lifetime Training is being audited as part of the ESFA’s “regular audit cycle of all independent training providers” but added that the investigation is specifically looking into the use of additional learning support funding, which is available to meet the costs of putting in place reasonable adjustments for apprentices with a learning difficulty or disability.

Lifetime Training’s accounts show there was an additional £1.46 million clawback, which has already been repaid, to the Student Loans Company after an “error” was identified which was “directly attributable to funding for apprenticeships for the years ended 31 July 2016, 2017 and 2018”.

The reason for the refund was because Lifetime Training’s systems “did not retain sufficient evidence to support their adherence to the requirements of the ESFA for these learners for the periods mentioned”, the accounts state.

Lifetime Training was founded in 1995 and currently trains around 20,000 apprentices and learners. The firm has recruited more apprentices and secured more levy funding than any other provider in the country for several years, delivering to big-name employers including the NHS, KFC, McDonalds, Wetherspoons, B&Q and David Lloyd, as well as the civil service.

The provider was recently hit with a ‘requires improvement’ report from Ofsted, in which inspectors criticised the firm’s focus on financial performance and starts over quality, as well as a lack of off-the-job training and poor achievement rates.

Lifetime Training has made several leadership changes this year, including bringing in Geoff Russell, who used to head up the Skills Funding Agency, as chair and Jon Graham as chief executive.

The firm’s accounts show that its highest paid director received a salary of £430,362.

Lifetime Training has almost 1,000 staff.

The firm’s turnover increased to £71.1 million compared to £59.9 million in 2020. But its EBITDAE (earnings before interest, tax, depreciation, amortisation and exceptional items) fell from £9.391 million in year ended July 31, 2020 to £2.249 million in the 18 month period ended January 31, 2022.

The accounts also reveal the company made a loss for the financial period of £9.2 million, compared to a profit of £6.8 million in 2020.

Graham said the change in ownership will not affect the day to day running of the business, nor will it deliver any changes in personnel.

“We will be continuing business as usual. Alcentra shares our ambitions for organic growth, and we look forward to working together,” he added.

Lifetime Training’s accounts explain that an “agreement” was entered into to restructure, which means its group parent company – MTH Midco 2 Limited – and its subsidiaries are “to be acquired by a new parent entity, a UK registered company jointly owned by certain lenders who currently provide debt financing to the group”.

Alongside the change in ownership, a new financing package is to be put in place that includes the “extension of the maturity of the existing loan facilities to 31 July 2027 and the provision of an additional working capital facility”.

In addition, the “relevant lenders have confirmed that they will support the Company to meet its financial obligations as they become due for at least the next 12 months from the date of approval of these financial statements”.

The ESFA was approached for comment.

More than 40 organisations have been removed from the government’s register to deliver final assessments for apprentices, as officials strengthen regulation around the system. 

Data released under Freedom of Information laws to Apprenticeship Data Insight – operated by FE Week publisher Lsect Ltd – found 42 end point assessment organisations (EPAOs) that had previously been on the register (and awarded 2,509 apprenticeship certificates between them) were no longer on there because of changes this year. 

The new system introduced this year requires EPAOs to gain Ofqual recognition and submit their EPA on Ofqual’s register of regulated qualifications, as well as applying to the EPAO register through the Department for Education’s apprenticeship service. 

The DfE then reviews the application submitted to its register and cross-checks that with the qualification on the Ofqual register, before approving its inclusion. 

This more robust regulation system was introduced after years of concern over the organisations that were being allowed onto the EPAO register, which FE Week previously revealed had included one-man bands and companies with no trading history.  

Federation of Awarding Bodies chief executive Tom Bewick said EPA had become a “Wild West market”. 

According to the DfE, EPAOs had until May 16 to make formal applications to Ofqual for recognition and must complete the recognition process by December 31. Its guidance however did stress that those removed from the register will be welcome to reapply for Ofqual recognition and the register later. 

Ten of the 42 EPAOs no longer on the register had not issued a certificate in the last three years, according to the data, with the other 32 having issued a combined 2,509 certificates in the last three years. The United Centre of Excellent Ltd (UCE) issued 339 in the last three years, but twice has been refused entry onto the register. 

It remains in the system attempting to iron out the issues raised by Ofqual in its application, but said it had lost customers as a result. 

Richard Bates, former chief executive of UCE, said the rejection was around UCE’s role as both a training provider and an EPAO, with Ofqual not satisfied there were no conflicts of interest around the firm assessing its own intake. 

It has also faced a 12-week window before it could re-apply. 

Bates said: “We have applied and are still waiting in that window. It was the conflicts of interest that was the problem, and we could show quite clearly that we had a system working around that and had no conflicts, but it was just the wording and the clarity.” 

Bates said the firm, which assessed standards in improvement technicians, practitioners, professionals and leaders from levels 3 to 6, would have preferred to have seen Ofqual visit and carry out an audit. 

“I know why they put Ofqual in to do that, I can appreciate that and we are happy we have got proper governance now, but the only thing is it has taken too long – it should have been done right from the start,” Bates said. 

Others, such as the Association of Taxation Technicians (ATT), opted not to apply as a commercial decision. 

The ATT, which issued 231 certificates in 2019/20 and 20/21 but none in 2021/22, said it did not apply for Ofqual recognition at all given the number of EPAs it was issuing, and was only involved in one standard – level 4 taxation technician. 

Rosalind Baxter, institute secretary and director of education at ATT, said: “We always have around 5,000 students per student qualification at any given time, but we never got over 100 per session on the EPA, and sometimes a bit lower than that. 

“If you weigh that up against the requirements of going into Ofqual, it’s hard to stack that up resource-wise as we are a charity.” Instead, ATT opted to work with NCFE for the same standard, and was able to ensure existing apprentices could transfer. 

Jeremy Hay-Campbell from Manpower Services Ltd, which issued just over 300 certificates in the last three years, said the firm opted to withdraw from delivering EPAs as a commercial decision following a review earlier this year. 

According to the data obtained by ADI, City and Guilds issued the most certificates in the last three years (37,000), followed by Innovate Awarding Ltd (25,629) and Chartered Management Institute (22,932). 

There are now 285 EPAOs left on the register.