New DfE Skills Index shows significant decline since 2012

The overall added-value of the FE and skills system in England has fallen from a baseline of 100 in 2012 to just 73, new government data shows.

The Department for Education today published for the first time a ‘Skills Index’, which shows how the aggregate value of the skills supplied by apprenticeships and classroom-based learning each year has changed over time, following pressure from the National Audit Office to release it.

It shows that the overall FE skills index has declined every year since 2012 until 2016/17, flattening out in 2017/18 at 73.

In making up the drop from 100 to 73, classroom-based provision fell to 48 and apprenticeships increased to 118.

The classroom Skills Index collapse was driven mostly by a reduction in learners achieving classroom-based qualifications and due to a large decrease in the number of achievements at full level 2 and 3 programmes, the department explained, which has “stabilised” in the most recent years.

The apprenticeships Skills Index rise came in part as the “number of apprenticeship achievements increased by 10 per cent between 2012/13 and 2016/17, with an additional slow but steady shift towards advanced and higher level apprenticeships and higher value sectors since 2014/15.”

There is also a “value-added” measure, which is calculated by “multiplying together the number of funded learners that achieved qualifications” with “the proportion of learners that were employed” with “the percentage earnings returns” and with “the average real earnings for employed achievers”.

For classroom-based training value added decreased by 2 per cent in 2017/18, followed by a sharp decline of 11 per cent one year earlier.

For apprenticeships, the added-value has increased year-on-year since 2012/13, rising 2 per cent in 2017/18.

The department said this was a “conservative” estimate since it does not estimate the added-value of the switch from frameworks to standards because it is not yet available.

The index has been published for the first time after The National Audit Office criticised the DfE for not being transparent about how it demonstrates the impact of the programme on economic productivity in its apprenticeships progress report published in March.

Permanent secretary Jonathan Slater told a subsequent Public Accounts Committee hearing the index would be published this month, which he expected to show, “in line with the significant reduction in the number of starts, that you would see a dip and then a rise and continued rise to where it has been in the past”.

In the document made public today, the department said apprenticeships accounted for 36 per cent of the total value-added in 2012/13, increasing to 58 per cent in 2017/18, while classroom-based accounts for 42 per cent. Contribution of level 2 training to the value added measure decreased from 37 per cent of the total to 22 per cent from 2012/13 to 2017/18.

Moreover, added-value per learner fell by 2 per cent driven by a 4 per cent decline in classroom-based qualifications.

The DfE explained apprenticeships typically have higher employment rates and higher wage returns than classroom-based qualifications.

Apprenticeship pay and satisfaction surveys delayed and incur more costs

Two flagship apprenticeship surveys have had their publication date delayed by six months and will incur additional costs to the Department for Education.

The Apprenticeship Evaluation and Pay Surveys 2018, comprising the Apprenticeship Evaluation Survey (AEvS) and Apprenticeship Pay Survey (APS), will not be released to the public until mid-October.

This is because the supplier, IFF Research Ltd, had the deadline to finalise its research extended to July 15, 2019, despite being given an original publication date of the end of  March 2019.

Government protocol mandates that once research is finalised, it has to be published within 12 weeks.

Asked if its name should be the Apprenticeship Evaluation and Pay Surveys 2019 instead of 2018, the DfE said the titles for the surveys will be decided once the work is finalised.

IFF Research was contracted to design and question current and graduated apprentices, as well as employers, about satisfaction, motivation, benefits, retention and post-apprenticeship progression for the AEvS.

Meanwhile, the APS includes surveying current apprentices in England, Scotland and Wales about their pay, hours and training.

There were also delays to the  publication of the full report on the 2016 APS, which was finalised by suppliers in January 2017, but not released until July of that year.

When it was eventually published, it revealed that nearly one-fifth of apprentices at levels 2 and 3 were illegally paid less than the minimum wage.

An FE Week report published the same week found that it was likely that no one had been fined or prosecuted for illegally underpaying apprentices.

Following the revelations from the 2016 APS, the government’s director of labour market enforcement Sir David Metcalf gave warning that government enforcement agencies and industry bodies would work to better identify employers who underpay workers and punish them with severe jail sentences.

In addition to the delays to the 2018 surveys, the DfE will also incur additional costs from the APS, on top of the £535,535 plus VAT research costs, though the exact amount was redacted in the contract variation document.

The extra cash is needed, according to the document, because the survey interviews with 2,500 current learners were overrunning by two minutes so the DfE has agreed to pay to extend the interview length, rather than stick with the original budget by reducing the sample size by 320.

The costs will be published on Contracts Finder when the research is complete, a DfE spokesperson said, but until then they will remain commercially sensitive”.

Delaying the publication of the APS means that its final findings will not be initially included when the Low Pay Commission (LPC) makes its recommendations on minimum wage levels (which will take effect from April 2020) as the commission will stop taking evidence in June.

The LPC says it will make a recommendation to the government on the April 2020 level of the apprentice rate of the National Minimum Wage in autumn.

“We do not expect the delay in the Apprentice Pay Survey to affect this, and we will have early access to the data ahead of publication,” a spokesperson added.

The DfE said the Department for Business, Energy and Industrial Strategy, which is responsible for the pay survey, has handed the vast majority of APS data from the survey to the LPC for use in its report.

Careers and Enterprise Company will continue to rely on public cash, admits DfE

The Careers and Enterprise Company will continue to be reliant on government handouts after ministers dropped their ambition for the quango to become self-sustaining.

Announcing the creation of the company in 2014, former education secretary Nicky Morgan, said that “in the longer term the company will sustain itself”.

But CEC’s new sustainability plan, seen by FE Week, revealed the government has ditched this ambition.

Ongoing government support will ensure continued rapid progress in line with its careers strategy

We can also reveal government grants handed to the firm, which runs mentoring programmes in schools and a network of “enterprise advisers” to boost careers education, rocketed by nearly two-thirds, up from £18.8 million in 2017-18, to £30.2 million in 2018-19.

Although the grant funding dropped to £24.3 million this year, the company has now received more than £95 million from the public purse.

The company’s original sustainability plan, published in 2016, said the CEC was “on track to achieve 50 per cent of alternative sources of income by 2017-2018”. The idea was to sell the company’s products to employers and make use of other funding sources.

However the new plan, obtained by FE Week under the freedom of information act, shows CEC and the government “no longer envisage replacing government funding with alternative sources of income in the way that was originally intended when government set up the CEC”.

This is because the nature of the CEC’s work has “expanded significantly” to deliver the government’s careers strategy.

The plan added there was “significant value to DfE continuing to fund the CEC”. However, the DfE expects the company to “continue to leverage additional funding to deliver its objectives”, including through match funding.

Since the CEC was launched, the company claims to have also “leveraged” £16.5 million from “other sources”. This includes £6.5 million from Local Enterprise Partnerships, which are themselves part-publicly funded, and £6.5 million came from investment funds.

The disclosure comes amid increasing pressure in recent years for CEC to prove its value for money.

In May last year, CEC chief executive Claudia Harris (pictured) and chair Christine Hodgson were quizzed by MPs about the company’s £2 million research budget, its staffing structure and a lack of evidence that the organisation is making a difference.

Supporters of the company were subsequently urged to tweet their backing for the under-fire organisation after MPs raised questions about its impact and transparency.

The organisation was further criticised in November, when the House of Commons youth select committee urged the government to commission an independent review into whether the CEC is doing a good job helping poorer students get work experience.

And later that month, the company was blasted for spending more than £200,000 on two conferences, with MPs demanding to know why private sponsorship was not sought.

In January FE Week revealed the Department for Education had been criticised for spending tens of thousands of pounds on apprenticeship advisers, as the CEC said its own consultants were not “experts” on the subject.

Reacting to the decision about the CEC’s future funding, Harris said: “That the government is continuing to invest in careers support for young people is enormously welcome.

“Ongoing government support will ensure continued rapid progress in line with its careers strategy and make sure all young people receive the vital opportunities and inspiration they need.”

How to make sure apprentices finish before the Gateway closes

Many apprentices are missing their end-point assessments because they have not done their 20 per cent off-the-job training. The solution is to spend time at the planning stage, says Jake Tween

We are reaching a pivotal moment with the new standards. The first large cohorts of apprentices are coming to the end of their programmes and approaching Gateway, a critical milestone in their journey. This is the point at which the employer, training provider and apprentice all agree that the on-programme requirements have been met and the apprentice is ready to undertake their end-point assessment.

What many of us are finding, however, is that many are not reaching Gateway on the anticipated dates. Typically, they are completing three to four months later than planned – and in some cases they appear to be stuck and not progressing at all.

Such slippages are not necessarily a cause for concern; indeed, they are a sign that policy is working as intended. One of the key criticisms of apprenticeship frameworks was that successful apprentices were lacking the ability to effectively apply their skills and knowledge in the workplace. It stands to reason that a rigorous, independent end-point assessment (EPA) should require a longer period of training, preparation and mastery. However, communication with EPA assessors is essential to avoid bottlenecks and conflicting priorities further down the line.

There is one common factor: 20 per cent OTJ training

So, what is causing this issue of “Gateway slippage”? I have spoken to a number of clients and the truth is there are a multitude of factors at play. But there is one common factor: 20 per cent off-the-job (OTJ) training.

The 20 per cent conundrum…
Many providers are finding that apprentices who reach Gateway have not yet been able to meet the 20 per cent OTJ training requirement. This may be caused by sickness, etc, but is more commonly due to employers not releasing the apprentice for the agreed amount of time.

This is not intended to denigrate employers but is merely acknowledging the reality of running a business: priorities shift, staff call in sick and, ultimately, business always comes first. The problem is compounded once the planned Gateway date has been missed. For every day that passes without training, the apprentice moves further away from his or her 20 per cent target. It becomes increasingly difficult for the employer to justify releasing the apprentice, and the apprentice becomes disengaged with the whole process.

Training providers cannot then claim their completion payment – and EPA organisations don’t get paid at all.

Solutions?
The planning stage is critical. Training providers and employers need to be open, honest and realistic about when the apprentice is available for training. It is an absolute given that things will change, but this can be managed and mitigated through regular reviews and revisions to the schedule.

Many employers still mistakenly equate 20 per cent OTJ training as a day a week out of the office. Most of us know by now that there are plenty of naturally-occurring activities that take place in the workplace. It’s important that we give employers and apprentices the tools to understand and record this.

There are other things to consider, such as planning OTJ training around quieter periods. For example, avoid scheduling in classroom-based training for a retailer during Christmas, or for an airline during the summer holidays. Make use of online and distance learning to create a blended approach towards training delivery. Encourage apprentices to play a part and to log activities that they think may contribute.

Last, consider front-loading OTJ training. There is a school of thought that considers this good practice – deliver the bulk of the knowledge up front and allow apprentices time to apply it in the workplace, practising and refining their skills as they go. It also means that if business needs do take over later down the line, then the OTJ training is already in the bag.

The key message? Plan for the worst, but strive for the best!

Plans for PhD-level apprenticeships thrown into doubt

Plans for PhD-level apprenticeships have been thrown into doubt after the Institute for Apprenticeships raised concerns they were not in the “spirit” of the programme.

In December the IfA’s approval funding committee had deferred approving the first PhD-level apprenticeship “in order to seek further guidance from the board and the Department for Education on whether level 8 apprenticeships were compatible with the aims of the apprenticeship reform programme”.

The committee was concerned “whether it [the level 8 clinical academic professional standard] could be approved under current rules and whether it was in the spirit of apprenticeship policy”.

Discussions are ongoing regarding these new proposals

Minutes from the IfA board meeting in January, published this week, reveal a discussion concluding with an action for “the DfE to explore the concept of level 8 apprenticeships further and agree a policy position”. 

FE Week asked the department this week if they had now agreed a way forward, to which a spokesperson said: “We are continuing to keep the programme under review and discussions are ongoing regarding these new proposals.

“We are looking carefully at what the priorities of the programme should be from 2020 onwards.”

The chair of the trailblazer group for the clinical academic professional standard in the health and care sector was unavailable for comment.

However, the employers behind the development of the “technical specialist in nuclear engineering, science or technology” apprenticeship were expecting a speedy resolution.

The Nuclear Skills Strategy Group oversees apprenticeship developments in the nuclear sector and has been developing the level 8 standard since the middle of last year.

A spokesperson told FE Week the plans for the PhD-level standard were “included in our Nuclear Sector Deal, agreed with industry and government last June, so we are already in close contact with government about the policy issues, and we look forward to their being resolved so that we can complete this development and have the standard ready for use this year”.

In the context of introducing the first level 8 apprenticeships, the IfA committee members “also noted concerns that the increasing number of degree apprenticeships, particularly at level 7, may put pressure on funding for delivery of apprenticeships at the lower levels, while cross-subsidising higher education from the apprenticeship budget”.

Despite the minutes listing an “action” to “prepare a paper for the board setting out the issues/concerns” an IfA spokesperson said the board did not discuss it the following month but it would be considered, looking ahead.

The IfA approvals committee includes four of the ten board members.

When asked if the board shared the committee’s concerns, a spokesperson said: “The board has not formed a view as the issue was not discussed at the meeting.”

In December, the IfA estimated that the apprenticeships budget for England could be overspent by £0.5 billion this year, rising to £1.5 billion during 2021-22.

READ MORE: Top DfE official tells PAC of difficult decisions to avoid apprenticeship levy overspend

Subsequently, a report by the National Audit Office, published in March, warned there is “clear risk” that the apprenticeship programme is not financially sustainable after the average cost of training an apprentice hit £9,000 – double what the government had predicted.

The NAO suggested the government should think about reducing the level of public funding for certain types of apprenticeships after finding levy-payers are “developing and choosing more expensive standards at higher levels than was expected”.

Following this, the Association of Employment and Learning Providers called for all level 6 and 7 apprenticeships, including those with integrated degrees, to be removed from the scope of levy funding in order to relieve mounting pressure on the budget.

A week later the DfE’s permanent secretary Jonathan Slater admitted during a Public Accounts Committee hearing that “hard choices” would need to be made if the treasury cannot find extra funding for the programme in the upcoming spending review.

“It will be self-evident to the committee that if the amount of money were to be constrained at its current level, that would require choices to be made between level 2 and level 6, the balance between one sector and another,” he said.

England’s highly centralised skills system is a problem

Policy-making conducted in a bunker is a poor way to do business, says Ewart Keep. Instead it should be shared to include all stakeholders

As the pages of FE Week repeatedly demonstrate, policy finds itself in a bit of a mess. Why did we get to this point? There are a host of reasons, but this column will focus on some glaring deficiencies in national policy machinery.

Most developed countries support employers to engage with skills issues collectively at national, local and sectoral levels. We, on the whole, no longer bother. The sector skill councils were deemed imperfect, but rather than try to improve them, the government opted for the perfection of a vacuum and stopped funding and encouraging collective capacity.

Having tired of formalised sectoral bodies, it replaced them with a patchwork quilt of one-off clubs (eg, trailblazer groups) and with attempts to deal with employers on an individual basis. This means that we now lack a coherent, authoritative employer voice, and are further away than ever from encouraging and enabling firms to act as partners and co-producers rather than a set of fragmented, semi-detached and grumpy customers of the skills system.

Policy is made in ignorance of how it is likely to play out

Most countries’ skills delivery systems are far more devolved than ours. The power of central government to act unilaterally is circumscribed by the need to secure the support of regional and local administrations (who deliver much of the skills activity), and that of the social partners – employers and trade unions.

Policy-making is shared across levels and with a range of partners, not least learning providers of various sorts, rather than being massively centralised as in England. Abroad, consensus rather than random ministerial fiat tends to be the dominant modus operandi. Here, with almost every education and training reform over the past 35 years the secretary of state has acquired new powers. It is now an open question whether there is any more centralised skills system in the developed world.

English centralisation, particularly in the context of what is a relatively large (in population and economic activity terms) country, brings with it major problems of communication and trust. For instance, most nations build in, not least through the institutional arrangements described above, mechanisms that allow bottom-up feedback from frontline staff back to policy-makers so that both parties can arrive at a shared understanding of how policies and programmes will play out in the real world.

We tend to avoid doing this at all cost. Ministers and senior officials often have a very limited comprehension of how the education and training system actually works – although they do know how they think it should operate according to their plans – and, as a result, there is often a fatal distance between intention and reality, design and implementation. Policy is effectively being made in ignorance of how it is likely to play out when actually delivered – see apprenticeships as a prime example.

Unless and until we start to learn to devolve and share power and responsibility, for both delivery and policy formation; unless we learn to find ways to work with employers and other stakeholders in a more structured and concerted fashion; and unless we learn to trust the voice of the practitioner and of those who have to actually make policy work, lasting progress will elude us. The key point is that this is not a call for policy-makers to embrace warm fuzzy feelings about other stakeholders. It is a call for institutional change and for a new architecture of relationships and representation within skills policy formation and delivery.

The current model is a mess and is delivering highly sub-optimal outcomes. It is also creating tensions and conflicts of interest that will be hard to resolve – for example, between level 2 and 3 apprenticeships for young people, and level 6 and 7 “apprenticeships” for adult (and usually experienced) managers. Policy-making conducted in a bunker is a very, very poor way to try to do business.

Does government really care about level 2 and 3 apprenticeships?

Lower-value programmes, which support the youngest and often most vulnerable apprentices, are at risk of becoming unattractive to deliver, says Sue Pittock

After Halfords’ announcement that it plans to scrap its level 2 provision because of a desire “to continue delivering highest quality training”, it didn’t take long for a staff email to reach FE Week revealing that the 20 per cent funding cut was a key reason for stopping the programme.

Rated ‘good’ by Ofsted in March, Halfords knows what makes a great programme, and what it costs to deliver quality teaching and learning. Its description of the challenge it faces is very clear. Delivering quality programmes is not possible without the right funding.

The decline of level 2 apprenticeship starts since the introduction of the levy in May 2017 has been widely reported. Compare the first six months of 2016-17 with the first six months of 2018-19 and the change is significant: starts at level 2 are down by more than 42 per cent (which equates to 63,000).

At the same time higher apprenticeship starts have more than doubled, from 18,000 to 43,000, an increase of 138 per cent.

Starts at level 2 are down by more than 42 per cent

With the increase in starts at higher levels, and the associated high funding bands, you would expect these standards to be under early review. However, to date, of the 61 reviews that have taken place or are underway, only seven are at level 5 or above, with 44 at levels 2 and 3.

The Institute for Apprenticeships and Technical Education (IfATE) describes its process of reviewing funding bands as “open, consistent and collaborative”, considering evidence from employers, training providers, end-point assessment (EPA) bodies and trailblazer groups.

Working across a wide range of sectors, including automotive, IT, management, hospitality, food manufacturing and craft, Remit has been engaged with many trailblazer groups and funding band reviews.

The experiences of trailblazer chairs are very different. New funding bands are proposed with little explanation or justification by the IfATE, with employers unclear about how the decision was reached, and why the new band selected. These experiences seem contrary to the openness, consistency and collaboration the IfATE describes.

Funding band reviews present a real risk to ensuring there are providers in the marketplace who can support employers to deliver the standards they need. Where funding is reduced to the point that quality is compromised, providers of all types will have to consider whether a standard remains viable to deliver.

If this were to happen, the lower-value programmes at levels 2 and 3, supporting the youngest and often most vulnerable apprentices, are at risk of becoming unattractive to deliver.

The health and social care market is an example of reduced employer appetite for level 2 and 3 programmes and demonstrates the impact of low funding bands. There has been a decline from 90,290 starts in 2016-17, to 44,380 in 2017-18, and just 15,440 starts during the first half of 2018-19. If this continues the market will have shrunk by two thirds in the past two years against a backdrop of increasing demand for health and social care workers.

If government is concerned about affordability, it needs to think about what it wants to fund. Is a reduction in funding for high-volume level 2 and 3 programmes required to fund the unexpected uptake at higher levels? And if so, is that right? Or should government consider regulating who can undertake a funded apprenticeship, and what they can study?

Trailblazer chairs are industry professionals, not experts in apprenticeship policy and funding. They need clear templates and guidance from the IfATE on how to lead the gathering of evidence submissions from their chosen providers and EPA bodies, and how to review these for completeness and accuracy before submission. This will prevent variations in how evidence is displayed, what is included and how this is calculated.

At a time of uncertainty, employers need to be confident the skills system supports them to build the workforce they need to be successful. Apprenticeships could and should be an essential part of this approach, providing the system is funded appropriately.

Troubled Hull College Group to de-merge one of three colleges

The cash-strapped Hull College Group is to offload one of its three colleges later this year.

Harrogate College, which currently makes up the group along with Goole and Hull College, will join the Leeds City College Group on August 1, after plans were signed off by the FE Commissioner and ESFA.

The move is part of Hull College Group’s five year “restructuring plan”.

The troubled institution is in a dire financial position, and recieved the biggest amount in restructuring grants – a total of £34,187,000 – from the ESFA last year to support its ‘fresh start’ arrangement and to help its “significant financial and operational turnaround”.

The college said in its 2016/17 accounts, which were published almost 18 months late, that it had overspent £10 million that year.

Its 2017/18 accounts show a surplus in the year of £22 million, which was “in respect of restructuring costs”.

Leeds City College Group is to now be called Luminate Education Group, which currently comprises of Leeds City College, Keighley College, Leeds College of Music and the White Rose Academies Trust.

Michelle Swithenbank, chief executive at Hull College Group, said: “We are handing over a strong local college which is in good health, to Luminate [Leeds City College Group]. We wish Harrogate College every future success.

“We’re focused on growing Hull College and Goole College and continuing to provide the best education and to serve our local communities.”

Colin Booth, current chief executive of Leeds City College and future chief executive of the Luminate Education Group, said: “Welcoming Harrogate College to the group is another step forward and will mean benefits for both students and staff. This news will mean that Luminate Education Group has responsibility for 30,000 students in total, further proving our role in nurturing the skills for the future in Yorkshire, and beyond.”

And Kevin Williams, principal at Harrogate College, added: “The college has benefited from the expertise of Hull College Group over a number of years. There is a great opportunity for us in the Luminate Education Group arising from geographic proximity and the opportunity to share best practice.

“Our recent campus redevelopment, alongside this news, puts us in great shape for the future.”

MOVERS AND SHAKERS: EDITION 278

Your weekly guide to who’s new and who’s leaving.

Yiannis Koursis, Principal and chief executive, Barnsley College

Start date: April 2019

Previous job: Interim principal, Barnsley College

Interesting fact: He was a yachtmaster at the age of 17.

Darrell DeSouza, Group Principal and chief executive, Harrow College Uxbridge College

Start date: August 2019

Previous job: Vice principal, Harrow College Uxbridge College

Interesting fact: He enjoys sports, photography and music.

Andrew Kaye, Principal and chief executive, Fareham College

Start date: April 2019

Previous job: Deputy principal, Fareham College

Interesting fact: He gets up at 5am every morning to swim.

Martin McGuire, Director for Scotland, WorldSkills UK

Start date: September 2019

Previous job: Principal, New College Lanarkshire

Interesting fact: As a penniless student in Glasgow in the 80s, he busked outside the famous Rogano restaurant.