Universities are butting heads with the Institute for Apprenticeships over funding-rate reductions – and many may even stop offering degree-level standards if they go ahead.

The body that polices apprenticeships announced a funding-band review of 31 standards this week.

This included some of the most popular, including the chartered manager degree apprenticeship.

This particular standard is already at the maximum band of £27,000, and any change will mean universities receive less cash to deliver training – a prospect at which they are furious.

I worry the degree apprenticeship will become unaffordable for universities to deliver

“I worry the degree apprenticeship will become unaffordable for universities to deliver,” said Sarah Tudor from the University of Staffordshire, one which offers the chartered manager course.

She claimed the IfA does not yet understand the higher education market, particularly that “our staff cost more”.

“Is this the thin end of the wedge in relation to pushing funding bands down without a real understanding of the cost of delivery?” she asked.

Adrian Anderson, the chief executive of the University Vocational Awards Council, thought it “strange” to review the rate while the chartered manager degree standard is “working well”.

He said that universities had invested “substantially” in apprenticeships, and would prefer the IfA to review its overall methodology on funding bands.

It currently uses “historic data predominantly concerning apprenticeships at lower levels”.

“I fear this rocks the boat and could undermine apprenticeships’ role in raising management skills,” Mr Anderson continued.

The IfA is carrying out the review on behalf the Department for Education, which revealed last week that 30 funding bands are now available – up from the current 15.

Both bodies argue that a reduction in bands will be welcomed by employers, who have felt unable to negotiate with providers on the price of standards, and will provide greater value for money.

John Lanham, from the University of the West of England, “understands the need for value for money” but said the IfA must realise that £27,000 is the cost of a degree apprenticeship.

At a recent education select committee, the chair Robert Halfon said it was a “tragedy” that universities are coming up against road blocks.

The IfA’s boss Sir Gerry Berragan took a combative stance with universities, and insisted that the apprenticeship reforms should be led by employers.

Mr Lanham claimed that Sir Gerry is “choosing not to listen”.

“Employers want a quality product; they want the skills, and the expertise that a degree brings and are prepared to invest in it,” he said. “Employers are telling him this but he’s choosing not to listen.”

He insisted that if the IfA does lower the cost of the standard, then the number of universities offering the chartered manager apprenticeship will tumble.

“The last thing that anyone needs is a reduction in resource, which is exactly what a cut in the fee cap will provide,” added a spokesperson for De Montfort University.

“A cut to our costing model will only damage the brand of apprenticeships and drive down quality, which cannot be what the government wants.”

Employers are far from happy either.

“This appears to be a counterintuitive approach by threatening to destabilise what’s working well,” said Petra Wilton, the director of strategy at the Chartered Management Institute, the lead employer trailblazer for three of the standards being reviewed.

“Focusing on the most successful apprenticeships which have seen the highest number of starts, including three management and leadership apprenticeships, is puzzling when the government is already struggling to meet its three million target.”

The review isn’t all doom and gloom, however, and some groups have welcomed it.

“We support the government’s review on funding bands to ensure there is consistency and alignment across levels and within sectors,” said Charles Beddington, a stores finance manager at retailer Boots – the lead trailblazer for the professional accounting taxation technician standard.

People 1st, an employment and learning consultancy, said the hospitality and retail trailblazers “welcome opportunities to ensure apprenticeship standards stay fit for purpose”.

And Teresa Frith, the senior policy manager at the Association of Colleges, claimed it is “right and proper” that the IfA reviews the bands.

“We would hope they will listen carefully to provider concerns about the actual cost of delivery,” she added.

The IfA said it will work “collaboratively with trailblazers to carry out the review in an open and fair way”.

AELP comment: The IfA must ‘go the whole way’

The Institute for Apprenticeships’ funding rate review has proved that its experiment with negotiated apprenticeship prices has failed, according to the boss of the Association of Employment and Learning Providers.

Mark Dawe believes that the announcement looks like a “first step” towards moving to a “fixed rate” and is urging the institute to “go the whole way”.

Ever since the apprenticeship reforms kicked in last year, employers have been expected to negotiate with providers on the price of every apprenticeship standard and framework, which are now allocated a funding band of between £1,500 and £27,000.

This represents the maximum funding, either from the government or the apprenticeship levy, that an apprenticeship can attract.

Providers have been kicking against the bands, and it emerged two months ago that almost every single negotiation (95 per cent) is currently being agreed at full cost.

Despite this, the government revealed this month that the negotiation rule will stay in place for 2018/19.

“We expect employers to negotiate a price for their apprentices’ training and assessment, in the knowledge that the funding band sets the maximum that government is prepared to contribute towards off-the-job training and assessment for each apprenticeship,” it said in a document called ‘apprenticeship funding in England from August 2018’.

Mr Dawe hopes that in its review the IfA will “take notice of Ofsted’s recent observation that lowering the price too far will inevitably have an adverse impact on the quality of provision”.

“Most importantly, AELP wants to see real transparency in how the IfA arrives at its conclusions and, in cases where the bands have been lowered, we should see the reasons why the Institute believed that the previous ones had been set too high,” he added.

Ofsted will have its powers and budget for FE inspections boosted after the government was embarrassed over apprenticeship accountability, FE Week can reveal.

The watchdog will now be given potentially as much as £7 million to visit every new apprenticeship provider. Critically, it will also have the final say over quality.

The decision been dubbed “a victory for common sense, but more importantly it’s a victory for apprenticeships,” by education select committee chair Robert Halfon.

The number of apprenticeship providers which are in scope for inspection has shot up since last year’s reforms, even while Ofsted’s FE and skills budget has fallen, despite many requests for more money [see below].

If Ofsted decides that a provider is not fit for purpose then they should be thrown off the register pretty quickly

As a result, it has only been able to carry out early monitoring visits at a handful of these new providers.

And skills minister Anne Milton admitted last week to the education select committee that it wasn’t clear who was accountable for quality at these new providers.

There has lately been considerable dismay at mixed messages from the Education and Skills Funding Agency, which recently permitted a provider to recruit apprentices once more – just two months after Ofsted branded its provision “not fit for purpose”.

The final word will now rest with Ofsted: if a monitoring visit results in an ‘insufficient progress’ verdict, a provider will be taken off the ESFA’s register of apprenticeship training providers.

Neither the Department for Education nor Ofsted would comment on the new policy, which is understood to have come directly from the education secretary Damian Hinds. No one would say how much extra cash is involved.

Mr Halfon wants Ofsted to “do the inspections and decide whether providers are good quality or are failing their apprentices”, while the ESFA should focus on “procurement and audit and looking at the finances of the providers”.

“If Ofsted decides that a provider is not fit for purpose then they should be thrown off the register pretty quickly, and they shouldn’t then be allowed to continue by the ESFA,” he continued.

Mark Dawe, boss of the Association of Employment and Learning Providers, described it as “an extremely positive development, especially if a judgement of ‘insufficient progress’ means an automatic ban on new starts”.

The move follows last week’s education committee hearings, which left the government red-faced after ministers admitted they were confused about who had ultimate responsibility for policing apprenticeship quality.

Officials from the ESFA and Ofsted, along with Ms Milton, faced a barrage of questions from committee members about the ESFA’s decision to lift Key6 Group’s suspension.

Mr Halfon believes this undermined Ofsted.

“I think the relationship between the ESFA and Ofsted over quality is quite difficult to define and I think we need to define that more clearly,” Ms Milton admitted.

At the same hearing Paul Joyce, Ofsted’s deputy director for FE and skills, revealed the watchdog was still waiting to hear if it would be given extra resources to tackle the massive increase in providers it will have to inspect.

He told MPs the issue had been “raised for several months now”, and although the DfE was “very receptive” it had yet to provide Ofsted with any more resources.

FE Week understands the inspectorate has asked the department for an additional £7 million, which – if granted – would be a significant increase on its current FE and skills spend.

According to a report published by the National Audit Office on Thursday, looking at Ofsted’s inspections of schools, the watchdog spent £10 million on inspecting FE and skills providers in the 2017-18 financial year.

That’s a drop of £4 million, or almost 30 per cent, since 2010-11.

The number of providers Ofsted can now investigate has shot up since last May, when the apprenticeship reforms came into effect, after remaining steady at around 1,000 for the seven previous years.

The figure now stands at 2,543, including all those on the register of apprenticeship training providers and those with an adult education budget allocation but not on the register.

A spokesperson for the DfE said it is “in active discussions with Ofsted about their resources and potential extra inspection demands arising from the increase in the number of registered providers of apprenticeships”.

Ofsted’s early monitoring visits, announced by chief inspector Amanda Spielman last November, were intended to sniff out “scandalous” attempts to waste public money.

Their introduction is believed to be a result of growing concerns around the number of untested training providers that had made it onto the register, and which therefore had access to huge sums of public money.

Same money, more problems: The provider explosion

The number of providers who can now be visited by Ofsted has increased dramatically since the apprenticeship reforms last year.

But the education watchdog’s resources haven’t kept pace with the soaring numbers.

Before the register of apprenticeship training providers was first published, in March 2017, provider numbers had remained at around 1,000 for seven years.

By May last year, that number had risen to 1,589 – including all main or employer-providers on the register, and those with an adult education budget allocation but not on RoATP.

Just three months later it topped 2,000, and the figure now stands at a whopping 2,543.

Meanwhile, Ofsted’s budget for FE and skills actually fell during that time.

According to a National Audit Office report into Ofsted’s inspections of schools it spent £12 million on inspecting the FE sector in 2015-16, £11 million in 2016-17 and £10 million in 2017-18.

And, according to Ofsted’s own accounts, by 2019/20 its overall resourcing budget will have shrunk by 30 per cent since 2010.

This cuts were made in spite of concerns at the highest levels that its resources didn’t match the providers it was being asked to inspect

FE Week reported in January that Ofsted chief inspector Amanda Spielman had discussed the issue of resources with DfE permanent secretary Jonathan Slater last year.

And Paul Joyce, the inspectorate’s deputy director for FE and skills, told MPs at last week’s select committee hearing that he’d been in discussions with the DfE for “several months” but had yet to secure a commitment for extra cash.

“At the moment, the single biggest thing that worries me is the monitoring of the new provider base that we are seeing and our capacity to do so,” he told MPs.

The education secretary is sticking to the 2020 start date for T-levels – even though his own permanent secretary has asked to delay it until 2021.

The revelation came in a ministerial direction published this afternoon by the Department for Education.

“As things stand today, it will clearly be very challenging to ensure that the first three T-levels are ready to be taught from 2020 and beyond to a consistently high standard,” wrote Jonathan Slater in a letter to Damian Hinds, dated May 17.

As the DfE’s accounting officer, he is required to “consider the regularity, propriety, value for money and feasibility of public spending,” he continued.

“If these were the only considerations, you are aware that I would advise deferring the start date to 2021 in order to mitigate the feasibility and consequential value for money risks.”

But he conceded that Mr Hinds could “quite legitimately decide” to stick to 2020, on the basis of the “high priority that the government attaches to the programme in light of the urgency of the task of improving technical skills”.

“In this case, I need a formal written direction from you,” he continued.

In a response dated May 24, Mr Hinds wrote that he was “able to draw on a wider range of considerations than the guidance to accounting officers, and I am convinced of the case to press ahead”.

None of the advice he has received “has indicated that teaching from 2020 cannot be achieved”.

“The delivery of T-levels in 2020 is focused in a measured way on a small number of TlLevels in a small number of providers,” he added. “I want us now to put all of our collective weight behind delivering these T-levels to begin in 2020.”

T-levels have been designed to increase the prestige of technical qualifications, as match for A-levels.

They were originally intended to come in from 2019, but in July last year the skills minister Anne Milton announced they had been put back to 2020.

A subsequent announcement in October revealed that pathways in just three subject areas would go live in the first year, with the remaining subject routes launched by 2022.

But there have been worrying signs of slippage in this timetable.

There is no sign yet of the government response to the T-level consultation, promised in early May, while providers that bid to deliver the new qualifications in 2020/21 will find out a month later than planned if they’ve been successful.

The consultation ran from November 30 until February 8, and a response was expected from the government in “early May”, according to its own guidance.

Providers that submitted an expression of interest to the Education and Skills Funding Agency to deliver T-levels in 2020/21 were originally told they would be notified on April if they’d been successful, along with confirmation of how many students would qualify for teaching that year.

However, in a response to a parliamentary question the skills minister Anne Milton revealed that providers will now be notified by the end of May.

Sir Gerry Berragan, chief executive of the Institute for Apprenticeships, has voiced concerns about the “worryingly tight” delivery timeline for the first three routes at an Ofqual conference in March.

“The last thing we should do is start the first three on the wrong footing and give them a bad reputation,” he said.

His views are particularly significant as the IfA is set to take over responsibility for administering T-levels later this year.

Sally Collier, Ofqual’s chief regulator, also spoke about the “ambitious” timeframe and the “risks” it carried at the same event.