It is an add-on rather than an update – and could be an attempt to claw back funding or scare providers into discount pricing, says Simon Ashworth

Earlier this week the ESFA published guidance on the recognition of prior learning. It’s important to note this is additional guidance, rather than specifically new or updated funding rules. With apprenticeship funding now finally acknowledged as running in short supply, there may be more emphasis on how providers account for prior learning in order to claw back funding or scare providers into discount pricing.

Ten years ago the sector experienced a crackdown on providers claiming additional learning support. A few providers were made an example of and others quickly scaled back their financial claims but continued to offer the additional support while not getting paid for it. Let’s hope we don’t see a repeat of the latter.

The previous iterations of the funding rules were much more specific about tackling “embedded qualifications” with fixed rates of funding reductions that governed the apprenticeship frameworks, which were all built around qualifications.

The move from apprenticeship frameworks to standards has changed both the dynamics of the system and the tangible variables that were used previously to make adjustments for where apprentices had recognised prior attainment.

In the latest guidance the ESFA identify five areas that they want to reinforce and, arguably, the key point is having a robust initial skills assessment. An initial skills assessment doesn’t just mean an initial assessment for maths and English assessment but a wider diagnostic assessment to understand the level of competency and starting point for the individual’s skills, knowledge and behaviours in their chosen standard.

The current rules offer room for flexibility rather than taking a blunt approach

However, having conducted an initial skills assessment, a provider shouldn’t make the mistake identified in a recent Ofsted inspection where, at the start of the programme, staff assessed apprentices’ prior knowledge, skills and behaviours but they did not use this information to adjust the content and duration of an individual’s programme. This highlights that it’s not only the ESFA focusing on the recognition of prior learning from a funding perspective, but that Ofsted are also interested – a theme we will see more of in the coming years under the new education inspection framework.

A provider should have an internal policy for how staff identify, define and take into account prior learning. The current rules and guidance offer room for interpretation and flexibility rather than taking a blunt and arbitrary approach. Having a clearly defined policy not only helps staff, but gives confidence to inspectors and auditors about interpretation and subsequent approach.

Another key point is that just because someone may have the knowledge or a prior qualification, it doesn’t always mean that they have put that knowledge to the test. In fact, the individual may need more intense support in helping develop their competency as opposed to developing their knowledge.

This is why under the new standards we need to avoid an arbitrary rule where the system says no to funding or yes to forcing a discount simply based on possessing a prior qualification.

At the other extreme is the issue of stretch. The apprentice may be more competent than average with higher levels of knowledge skills and behaviour, but the provider’s stretch plan would be to get the apprentice to distinction, requiring more on- and off-the-job training compared with the average apprentice. This would still need full funding and training to take the apprentice to a higher level of achievement.

Finally, to reinforce the absolute need for having a robust initial skills assessment, the results of which are used to tailor and personalise each apprentice’s individual programme, the provider should account for current levels of skills and knowledge.

This should then be used to plan, and act as evidence of, the required off-the-job training, which should be recorded in the evidence pack.

This week the Treasury confirmed that the apprenticeship fee – known as co-investment – will halve from 10 to 5 per cent from the start of April.

Or to put it another way, the public subsidy for apprenticeships running at an average cost of £9,000 (according to the National Audit Office) will rise from 90 per cent (£8,100) to 95 per cent (£8,550).

I was quick to take to Twitter to deride this attempt at stimulating more demand from small employers as “probably the worst ever FE policy in the 15 years I’ve been in FE”.

It’s so bad because it means the public subsidy for management trainees rises from the same pot that providers tell us is already proving insufficient to fund 16 to 18 year-olds and young adults entering the job market.

Or, again, to put it another way, employers will see their contribution fall from £2,200 to £1,100 for a £22,000 management degree apprenticeship for existing staff when £22,000 of funding in the same pot would have funded seven healthcare support worker apprentices at £3,000 each.

Of course, policy makers might call this an unintended consequence of ‘employer ownership’, but I call it a scandal.

More generally, the co-investment change is bad for apprenticeships because: 

1. Before the reforms were introduced it was assumed employers would contribute 50 per cent to the costs. This fell to a mandatory third when standards were piloted and then 10 per cent from May 2017 and now 5 per cent from April. History has shown the closer the government gets to giving stuff away the lower value the product is perceived to be and the harder it is to put the price up at a later date.

2. If employers are not willing to pay as little as 10 per cent for a product they either don’t value it or their cash flow is so poor their business should not be trusted to survive long enough for the apprentice to complete their course.

3. The ESFA has confirmed to FE Week that despite the change being targeted at small employers, it will also apply to large employers when their levy pot runs out. So providers will be forced to halve their fee to large employers that are already engaged in the programme when they switch to non-levy.

4. The National Audit Office has confirmed what we suspected, that the levy pot is insufficient in the medium to long-term, so increasing the subsidy will add extra pressure and make access to funds for those that need it more, not less likely.

5. There is no time limit on this fee reduction, making it much harder to reverse. Any business will tell you that if you want to stimulate demand you offer a time limited sale.

There are still two weeks left until implementation, so like Brexit, surely more time is needed to determine if this change has been properly thought through and what the sector really wants?