The 10-per-cent fee that small businesses must pay when they take on apprentices could be scrapped, according to the AELP.

Its boss Mark Dawe revealed that the skills minister is having “ongoing conversations about a change in policy” regarding the co-investment rule, in an exclusive interview with FE Week ahead of his association’s national conference next week.

Anne Milton has since said it is an issue she is seriously looking at, but wouldn’t be drawn on whether there would be any immediate announcement.

“Our big ask is for the minister to make the announcement that the 10-per-cent contribution requirement is to be removed for non-levy-payers or levy-payers who go over their levy if they are delivering level two and three apprenticeships to the under 25s,” Mr Dawe said.

“We made a proposition for a transition period to try it out until April. I don’t know if the minister will be able to do it this quickly but I know there are ongoing conversations about it, I’m just not sure if they’ll be able to announce it on Monday.

“If the minister announced that [at the AELP conference] then she would get a standing ovation and we could probably close the conference.”

The apprenticeship levy is paid by employers with an annual payroll of £3 million or more, who can then spend their contributions on apprenticeship training.

Smaller employers can also access the funds generated through the levy, although they must pay 10 per cent towards the cost of the training.

There was no mandatory charge before May last year, simply an assumed contribution for apprentices aged 19 and over.

Since last May, only 16- to 18-year-olds at employers with fewer than 50 staff are fully funded and therefore free to train.

The AELP has been heavily campaigning to remove the 10-per-cent rule as it believes it puts SMEs off apprenticeships, and is the reason why starts have fallen so much since the introduction of the levy.

Latest figures show that starts for March were down 52 per cent compared with the same period in 2017.

“That is where the numbers are being really hit – the lower levels for young people and in the SME market,” Mr Dawe said.

Ms Milton later admitted to FE Week that she is “keeping an open mind” on the policy.

However, she is “not having any conversations with the Treasury” at this stage.

“I’m working with businesses to find out what particular problems they have and a lot of it is around the understanding of what they can and can’t do,” she told FE Week. “That would apply to non-levy payers and small businesses.

“I think a lot of them don’t realise that we will pay 90 per cent of the training or maybe 100 per cent in certain circumstances.

“I am mindful that we need to make it work for small businesses and how much impact that 10-per-cent contribution has. I make no promises but we are monitoring everything.”

Ms Milton added that she is organising a roundtable event with SMEs to “find out exactly what is going on” with their experience of apprenticeships.

The 10-per-cent contribution rule is expected to be a hot topic at the AELP national conference, taking place in west London next week from June 25 to 26.

FE Week is media partner and will be live tweeting from @feweek throughout, as well as producing a supplement sponsored by NCFE with coverage from the first day.

The ESFA will manage the reforms to apprenticeships and T-levels from this September, in a “vote of confidence” from the Department for Education.

The DfE’s staff covering apprenticeships and professional and technical education will move into the funding agency at the start of the month, it was announced today.

“I am delighted to welcome colleagues from apprenticeships and technical education reform teams into the ESFA,” said Eileen Milner (pictured above), the ESFA’s chief executive.

“This move brings together work on policy development and delivery under one umbrella to better align and coordinate delivery for our customers.”

Absorbing staff with “different professional specialisms” will “enrich the agency, ensuring genuine end-to-end delivery”.

Taking full responsibility for development and delivery of two of government’s “top priority” programmes is a “huge vote of confidence in the ESFA and an exciting challenge for all of us”, she added.

The DfE said there will be a transition period with staff changes taking effect on September 2, 2018, and noted that there would be no job losses.

The number of National Health Service apprenticeship starts fell by more than a fifth last year despite a plan for rapid expansion.

Increasing the amount of NHS apprentices has been an important government goal since 2016, when health secretary Jeremy Hunt pledged to create a further 100,000 starts in the sector by 2020.

At that point, in the academic year 2015/16, the health service had a total of 19,820 starts.

However, the Department of Health and Social Care has now revealed that the number of people embarking on apprenticeships in the NHS fell by 22 per cent to 15,532 in 2016/17.

Health minister Stephen Barclay divulged the figure in his answer to a parliamentary question tabled by Tottenham MP David Lammy.

Numbers for 2017/18 are not available yet, but it is known that there has been an extremely slow take-up of nursing degree apprenticeships so far, with only 20 starts up to the end of January this year.

The government hopes that degree apprenticeships will help solve nursing shortages across the country. It is hoped that more trainees will be encouraged into nursing, as they receive wages while they train rather than having to pay towards the traditional degree route.

But NHS leaders have warned that its starts target will be missed without urgent reform the apprenticeship levy.

“Without the flexibility in the levy, to be blunt, we are not going to get there,” Danny Mortimer, the chief executive of NHS Employers, told the Commons education committee in a specially convened hearing earlier this month.

He was referring to Public Health England’s desire to get 2,400 people enrolled on the degree programme.

Overall, PHE wants “17,000 nursing associates having completed additional training” via degree apprenticeships “to become registered nurses”.

NHS Employers represents employers in the health service, and told the education committee through written submission in March that the NHS needs longer than the standard two years to use up the £200 million apprenticeship levy payments it is shelling out annually.

Mr Mortimer explained that apprenticeships are a “very expensive way of training a nurse” and current Department for Education policy does not “accept the difference between a nursing degree apprenticeship and other degree apprenticeships”.

“They will not allow us to fund the time to put in place the additional on-the-job supervision, mentoring and practice development that students need, and they will not extend the timescale for us to be able to access the levy to spend it on nursing degree apprenticeships,” he continued.

He added that nursing degree apprenticeships cost an additional £35,000 or £40,000 per student every year over their four-year duration.

Nursing degree apprenticeships were announced by Mr Hunt in November 2016, involving new nursing associate and full, registered nurse apprenticeships, lasting two and four years respectively.

A nursing associate role was also introduced, with people who complete nursing associate apprenticeships able to count it as training towards a nursing degree.

However, there had been only 20 starts on the registered nursing standard and 10 for nursing associates by the end of January.

Mr Barclay said Health Education England is leading the development of a number of new health-related apprenticeship standards which will open up pathways for several careers across the NHS. As of May, 21 new standards are ready for delivery and a further 29 are in development.

The largest college group in the country is to be dropped from the government’s final bidding round for Institutes of Technology after Ofsted hit it with a grade three rating, FE Week understands.

Two teams of inspectors were deployed to NCG last month, in a visit prompted by achievement rate concerns.

FE Week understands that they are expected to deliver an overall ‘requires improvement’ rating for the group, down from ‘good’, raising particular concerns with its leadership and
management.

Its training provider, Intraining, was subject to a separate report and is also expected to be awarded a grade three.

The ramifications of a ‘requires improvement’ are likely to be severe. For instance, FE Week also understands that NCG will now be thrown out of the final stage of the government’s competition to open an IoT.

It was one of 16 providers to make the cut in bids for a share of £170 million put aside for the institutes.

In a wide-ranging interview below, NCG’s chair Peter Lauener (pictured above left) explains that NCG’s bid was a “good model” which included a “hub and spoke involving a lot of other providers”.

However, he would not be drawn on Ofsted’s findings, nor his thoughts about the bid being dropped by the DfE, other than to say “that is not a decision for us”.

DfE guidance for opening an IoT states that a provider’s Ofsted grade must be at least ‘good’.

As revealed by FE Week last month, alarm bells started ringing at NCG after Ofsted took a highly unusual decision to extend its inspection.

Generally the watchdog would expect only to carry out a short inspection had there been no concerns. NCG was rated ‘good’ in September 2016 following a five-month standoff during which it successfully overturned a lower grade.

Intraining was also given a grade two that June.

However, overall achievement rates at NCG are well below the national average. In 2016/17, the combined overall apprenticeship achievement rate for NCG’s colleges was just 55.6 per cent, while Intraining’s was 58 per cent.

Both are around 10 points lower than the national average of 67.7 per cent, and lower than the minimum threshold of 62 per cent, according to the latest government data.

And for the all-important 16-to-18 study programmes, NCG was 4.4 points below the national average of 81.5 per cent.

It is understood that Ofsted wanted to reinspect NCG last year, but had been unable to analyse the group’s achievement rates because “data glitches” absented it from the 2015/16 tables.

Mr Lauener, who joined the group in March after retiring as chief executive of the ESFA, admitted that NCG’s achievement rates are “not where we want them to be and are not high enough”.

“We are absolutely committed to improving standards and we actually expect to see some quite rapid improvement in achievement rates in 2017/18,” he insisted.

He has “full confidence” in the group’s chief executive Joe Docherty (pictured above right), despite anticipated criticism of leadership and management from Ofsted.

“I think Joe is a first-rate chief executive,” he told FE Week. “I am absolutely confident he is the right person to realise the potential of the organisation.”

At the same time as dealing with these inspections, NCG is cutting staff numbers by up to a fifth at Intraining and its other private provider Rathbone Training in an effort to save £3 million.

The group was further shaken in April when staff at Lewisham Southwark College, a long-distance merger partner, voted to strike over pay and last week announced the free school they sponsor, the Discovery School, is to close.