Employers lost access to £11 million of their apprenticeship levy funds in May – the first sun-setting period for the policy, the government has revealed.

The amount is 8 per cent of the £135 million they paid in May 2017, which is slightly lower than what officials had previously predicted.

As per the levy rules, big businesses with a payroll of £3 million or more who pay into the pot have a 24-month limit to spend their funds.

Once that time is up, the funds will expire on a month-by-month basis.

Keith Smith, the Education and Skills Funding Agency’s director of apprenticeships, told the Public Accounts Committee in March that “estimates suggest in May this year, the first month [in which] we get to the two years, we’re looking at a loss of potentially £12 million, or 9 per cent of what they paid in May 2017 – a fairly small amount”.

Answering a parliamentary question from Catherine McKinnell, the MP for Newcastle upon Tyne North, skills minister Anne Milton said yesterday: “The amount of funds entering employers’ digital apprenticeship service accounts in May 2017 was £135 million, of which £11 million in unspent funds expired in May 2019. This was the first month of expiry of funds.”

McKinnell also asked what plans the government has for those funds.

“As well as funding apprenticeships in levy-paying employers, levy contributions are also used to fund training for existing apprenticeship learners and new apprenticeships in non-levy paying employers,” Milton replied.

“We do not anticipate that all employers who pay the levy will need or want to use all the funds in their accounts, however they are able to.”

Academies minister Lord Agnew revealed in response to a parliamentary question in March that the Department for Education spent £1.6 billion in 2017/18 to fulfil employers’ demand for apprenticeships, but “lower than anticipated demand” led to an underspend of £400 million.

In a subsequent webinar with FE Week, Smith admitted the vast majority of the underspend, “just over £300 million”, was taken back by the Treasury.

The first organisations to be added to the government’s refreshed apprenticeship provider register have been revealed.

An update to the register of apprenticeship training providers was published today and showed 23 new firms have been enlisted.

The number isn’t as high as was expected, and strangely, all of them are only “supporting providers”. FE Week has asked the Education and Skills Funding Agency when successful “main” applicants will be added.

The 23 are the first providers to be added to RoATP since October 2018.

The register finally reopened on 12 December, following a year-long review, with more “stringent and challenging entry requirements”.

FE Week reported last month that new applicants trying to get onto the strengthened register had been left hanging by the government six months after its launch.

The ESFA had planned to let providers know if they were successful 12 weeks after their bid. An agency spokesperson said last week that all providers that applied to be on the register in December, January and February have now “been notified of the result”.

The new register is expected to bring greater scrutiny, following various FE Week investigations that discovered, for example, one-man bands with no delivery experience being given access to millions of pounds of apprenticeships funding.

While all providers will be asked to apply to the register even if they were already on there, subcontractors delivering less than £100,000 of provision a year have also been told they need to register.

The ESFA will also throw providers off the register if they go 12 months with no delivery after joining the register. FE Week has asked the agency when this action will be implemented following today’s update.

Organisations applying to the register can either be a main, employer or supporting provider.

The ESFA’s description of a supporting provider is: “This is for organisations who will enter into subcontracts with main providers and employer providers to deliver apprenticeship training. This can be up to a maximum value of £500,000 per year in total.

“For organisations with no history of apprenticeship delivery according to recent records we hold, this is limited to £100,000 in their first year on the register.”

The 23 providers added to RoATP:

Every college leader in England has joined forces and written to the chancellor and the education secretary, demanding the implementation of the recommendations of the Augar Review.

The lobbying effort by 203 principals, representing two million learners annually and 180,000 staff, has been spearheaded by Oldham College principal Alun Francis.

He told FE Week the idea for the letter was conceived at a roundtable three weeks ago, involving principals, policy experts, and Department for Education staff, when one of the panellists for the review, Professor Alison Wolf, pointed out FE leaders had been less active than university vice chancellors in their response to the review; after the HE leaders had written to newspapers and made much more noise than their FE counterparts.

“It was kind of a lightbulb moment I suppose,” Francis said.

The principals went away, decided to write the letter, and took ten days to contact all the colleges, then received that “amazing” response.

On the success of getting every principal on board, Francis said timing was everything, and the review had given people a broader analysis of the whole skills system.

While he admitted that not everyone will agree with the review’s 78 recommendations, he thought the broad gist of the review is what people feel is a “potential breakthrough moment” that has brought people together.

“A whole range of people put their shoulders to help, publicise it, and promote it.

“Too many people to mention; and probably other six or seven people helped drafting it.

“People collaborated really well to be honest.”

The letter to chancellor Philip Hammond and education secretary Damian Hinds states: “In many respects the Augar (pictured) Review represents a wider emerging consensus across England.

“We are sure that you will agree with us and other key stakeholders that further education colleges have been neglected, and that there is now a growing appreciation of their unique role, value and potential.

“What we now need are decisions and commitments: with your political leadership, support and resolve, colleges will be able to build on what they already do to reach more employers and more adults and make the differences our economy and society need.”

The letter won the support of one of the co-authors of the Augar Review, Bev Robinson, who said the government’s response to it was “arguably a watershed moment for the British government”.

“Choosing to enact the recommendations would demonstrate the government’s commitment to the much-needed skills revolution which our country needs, which the industry is crying out for, and which will promote social equity for all adults”.

The review’s recommendations included an end to the 17.5 per cent cut in education funding for 18-year-olds, a £1 billion capital investment injection, and investment in the FE workforce among.

The review was published in May, after it was announced by Prime Minister Theresa May in February of last year.

May made a speech the day after the report was published, where she praised Augar, and said colleges have the “potential to transform lives and grow the economy”, but had been left “overlooked, undervalued and underfunded”.

Hinds has said the review “acknowledges fully the key truth that our further education colleges also play a vital role in performing these functions” and “too often we have had in our country a bias towards higher education”.

However, the government’s initial response to the recommendations was to hand responsibility for inspecting level 6 and 7 apprenticeships to the Office for Students – instead of Ofsted, as proposed by the review.

Education secretary Damian Hinds has admitted the government will miss its target of 3 million apprenticeship starts by next year.

The target was set in the Conservatives’ 2015 election manifesto, and also included in the party’s 2017 manifesto.

While appearing before the Commons Education Select Committee, its chair Robert Halfon repeatedly pressed Hinds on whether the government would hit the target.

Halfon asked: “Is the 3 million target still on for 2020? Yes or no?”

Hinds replied that Halfon was a “mathematically adept person”, and that two important things had changed since the target was set: lower unemployment, meaning there are fewer jobs going around, and the changing nature of apprenticeships, which he had said are becoming longer and involving more off-the-job training.

Asked again by Halfon to “give an answer”, Hinds admitted: “If you look only at the number of people starting an apprenticeship, then that target is not going to be reached.”

The minister did not give a fresh timetable for reaching the 3 million starts target, and instead said the focus ought to be on the quality of apprenticeships.

The Conservatives, under former Prime Minister David Cameron, promised to “support three million new apprenticeships, so young people acquire the skills to succeed” in 2015.

The pledge survived the transition to Theresa May’s leadership, and the 2017 manifesto promised to “deliver our commitment to create 3 million apprenticeships for young people by 2020 and in doing so we will drive up the quality of apprenticeships to ensure they deliver the skills employers need.”

However, last August, a Downing Street spokesperson allegedly refused to back the target after being asked to three times.

Hinds also told the committee it was “perfectly legitimate” to have a debate about the apprenticeship levy being spent on higher level courses.

The Public Accounts Committee and the National Audit Office have both warned about how apprenticeships at level 4 mean the government is failing to meet its vocational education objectives.

Apprenticeship end-point assessment organisations are to be graded by quality assurance providers and given a “risk rating” – but the results won’t be published or made available to them.

The move was revealed in the Institute for Apprenticeships and Technical Education’s new framework published today that “sets the standard” for external quality assurance (EQA).

While the framework, which is mandatory and must be adhered to by all EQA providers, has been mostly welcomed by the likes of the Federation of Awarding Bodies and the Association of Employment and Learning Providers for providing greater “consistency and coherence”, questions have been asked as to why EPAO ratings will be kept secret.

It is disappointing the IfA wants to make the risk assessment process less transparent, more secretive

Supporting documents for the framework state that EQA “should, in part, be targeted and focused on the aspects of EPA which pose the greatest risk: we expect ‘riskier’ EPA to be subject to greater scrutiny and more frequent monitoring than lower-risk EPA”.

It adds: “Risk ratings will not be published or made available to EPAOs, but will be stored on the institute’s digital system.”

The risk ratings will be 1 (low), 2 (medium) and 3 (high).

FE Week spoke to one managing director of an end point assessment organisation that is overseen by several different EQA providers.

They claimed to have successfully overturned previous EQA risk assessments and were therefore very concerned that in future these grades would be secret.

“I have no problem being graded, but like our apprentices, surely we should know what grade we’ve been given and for there then to be a process to challenge the grade if we believe it is incorrect?” they said.

“It is disappointing that the IfA wants to make the risk assessment process less transparent, more secretive.”

The risk rating of the EPAO will be determined by various factors, including data on their performance by apprentices and feedback (including complaints) from apprentices, employers and training providers.

Established EPAOs will also be graded on a four-point scale – 1 (outstanding), 2 (good), 3 (requires improvement), and 4 (inadequate) – similar to Ofsted.

Grades 1 to 3 will feed into the calculation of overall risk but any EPAO graded as ‘inadequate’ will “automatically be assumed to be high-risk”.

The decision to not publish or make the risk ratings available comes off the back of the IfATE promising to become more transparent in its processes with its customers.

Mark Dawe, chief execuitve of the AELP, said: “Given the costs involved in the whole EPA/EQA process, employers and providers have a right to know whether they are placing their custom with the right EPAO.

“Many EPAOs have made serious investments in minimising the risk of capacity and consistency issues that could undermine the hard work that an apprentice has done to complete an apprenticeship.

“But for those that haven’t, an ‘inadequate’ outcome should definitely lead to action being taken and if improvements are not evidenced quickly, then the outcome should be published.”

A spokesperson for the IfATE pointed out that the framework says that the institute “can share the outcomes of reviews with relevant bodies and plans to publish reports or elements of them at some point in the future”.

Employer groups who develop each apprenticeship standard select an appropriate EQA provider, to monitor the work of EPAOs.

The new framework sets out five principles that underpin “EQA functions”: relevant, reliable, efficient, positive and learning.

Commenting on its launch, Nikki Christie, the institute’s deputy director for apprenticeship assessment and quality, said: “This new framework will ensure that rigorous standards are maintained with EQA for years to come.

“EPA is one of the key aspects of today’s apprenticeships – as it provides a robust and independent test that an apprentice who completes their apprenticeship can do their job to the high standards required. It is therefore vitally important that quality assurance around EPA is consistent and highly effective.”

 

 

The Institute for Apprenticeships and Technical Education will start charging £40 for every apprenticeship external quality assurance check it does from September.

Robert Nitsch, the quangos chief operating officer, told the Association of Employment and Learning Provider’s conference this afternoon that charging for their work, which is currently free, is the “right thing to do”.

In the same session, Ofqual’s director for vocational and technical qualifications Phil Beach, confirmed his organisation would continue not charging for the service and called for an extension of its duties in this space.

There are currently 18 approved external quality assurance (EQA) bodies that monitor end-point assessment organisations, to ensure the process is “fair, consistent and robust”.

The EQA bodies are allowed to apply a charge as long as it is on a “cost-recovery basis” – the amount of which is taken directly from the government funding given to training providers to deliver the apprenticeship.

FE Week revealed the “ridiculous variability” in these charges in February, which were criticised by sector leaders for ranging from a free service to £179 per apprentice.

The IfA recently re-tendered for an organisation to conduct EQA on its behalf, which was once again won by Open Awards.

Tender documents for the new contract, seen by FE Week, stated that “legislation allows the institute to charge end point assessment organisations (EPAOs) a fee per apprentice that undertakes an end-point assessment and it is these fees that will pay for the EQA service”.

They added: “The institute’s budget is limited and we are seeking to work with a supplier who will deliver a high-quality service at a price that offers strong value for money.”

The IfA is currently the EQA provider for over 200 apprenticeship standards.

Addressing delegates today, Nitsch said: “The institute has been introducing a charging mechanism for end-point quality assurance where the institute has been nominated as the EQA provider.

“We currently aim and expect that charging will commence for EPAs from the 1 September this year at the agreed rate of £40 per EQA.”

AELP chief executive Mark Dawe challenged Nitsch on this decision, and insisted it seemed “unfair” especially where an apprentice has already started their training.

Nitsch replied: “There is a real challenge when you start charging – what time do you turn it on remembering that some standards take some time to deliver? But we think it’s the right thing to do is to move into this paradigm.

“I will also say that we always said we were going to charge, it’s not a new phenomenon, it has always been there. but it has taken us more time to get to this stage because we needed to assure ourselves the data accuracy was there.”

Beach used his speech to call for Ofqual to have bigger role in EQA.

The exams regulator is currently the external quality assurance provider for over 65 approved apprenticeship standards. Many in the FE sector have called for Ofqual to be the only EQA provider.

When he came off stage Dawe asked: “Are you charging £40 for EQA from September?”

Beach said: “Ofqual does not charge for EQA. If we needed to we would take that from our current budget and we would go back to the DfE to secure additional funding extra.”

Dawe added: “So if you extended your role and became all EQA provider from 1 September we wouldn’t have to pay this fee?” to which Beach simply replied: “No.”

One of most “palatable” decisions the government could make to constrain the apprenticeship budget is introducing a pre-apprenticeship salary cap, the skills minister has said.

Anne Milton was quizzed on the future affordability of the programme after what is likely to be her last speech in post, at the Association of Employment and Learning Providers conference today.

Asked if the Treasury does not invest more money into the apprenticeships system, what “hard choices” the Department for Education could make to ensure the budget doesn’t go bust, she said there are “lots of things government could do”.

But a “pre-apprenticeship salary limit” was “one of the most palatable”.

She said she was “very uncomfortable” with the idea of “limiting by age because I meet an awful lot of people in their 40s and 50s who are returning to work and training up and changing careers – I would find that extremely difficult”.

“As I say, pre-apprenticeship pay is probably one of the most palatable things that I’ve seen,” Milton added, “but ask Keith Smith, I don’t like any of them”.

It comes after the Institute for Apprenticeships and Technical Education estimated that the budget could be overspent by £0.5 billion this year, rising to £1.5 billion during 2021/22.

Following a National Audit Office report that said “something is going to have to give” in the upcoming spending review, the DfE’s permanent secretary Jonathan Slater told the education select committee that “hard choices” may need to be made.

It led to the AELP making the radical proposal that all level 6 and 7 apprenticeships, including those with integrated degrees, should be removed from the scope of levy funding to relieve mounting pressure on the budget.