Almost three quarters of training providers are unhappy with the amount of non-levy apprenticeship funding available, claiming it is “insufficient” to meet demand from small businesses.

A new AELP survey, published on the second day of its national conference in London, reveals that the apprenticeship money set aside for SMEs this year is vastly lacking.

The government has allocated up to £650 million for the 15 months between this January and the end of next March – a major fall on the £1 billion that was available to small businesses in the previous 12-month period.

And in order to get their hands on a portion of this year’s cash, providers had to endure a shambolic procurement process – which saw some defunct providers winning contracts while ‘outstanding’ ones missed out. Several small providers simply went out of business.

None of these findings come as any surprise

Seventy-three per cent of the 246 providers who responded to AELP’s survey complained the £650 million fund is “insufficient”.

There are several other serious issues to resolve in the roll-out of the government’s apprenticeship reforms.

Seventy-seven per cent still believe that employers are struggling to understand and engage with the new apprenticeship system.

Meanwhile, 72 per cent said there are not enough new apprenticeship standards in place, and 82 per cent do not think there are enough end-point assessment programmes available.

The Institute for Apprenticeships introduced its “faster and better” process for approving standards earlier this year but AELP’s survey reveals that 60 per cent of providers are still doing the bulk of their training under the old apprenticeship frameworks.

Only 27 per cent have been able to move the majority of their provision to standards.

Just 11 per cent of respondents said the apprenticeship reforms are generally going well.

“None of these findings come as any surprise as we’ve been feeding back similar anecdotal evidence for months from regional meetings to ministers and officials on why apprenticeship starts have been dropping so sharply,” said AELP boss Mark Dawe.

“But while AELP remains supportive of the apprenticeship policy, the levy itself and standards, the survey results do underline the sheer scale of the challenges and the urgent need to make changes to the way that the apprenticeship reforms have been introduced.”

Seeing these concerns borne out in black and white goes “a long way” to explain why the latest official set of apprenticeship start numbers are over 50 per cent down on a year ago, AELP believes.

Over half of providers are changing how they deliver apprenticeships in response to the reforms.

Fifty-five per cent are moving their provision across to a different sector or occupational area, while 53 per cent are seeing their delivery switch over more to the large levy-paying employers.

Additionally, 42 per cent say the reforms are prompting them to run more higher-level apprenticeship programmes in response to employer demand.

Mr Dawe said the switch to higher-level apprenticeships is “good for the programme’s reputation, but we have to get the balance of provision right from level two to levels six and seven”.

“As the recent AELP policy submission showed, it’s vital for a post-Brexit economy and social mobility that lower level provision isn’t abandoned and this means getting the way it’s funded right,” he added.

“This is why AELP is calling for an immediate suspension of employer contributions for 16- to 24-year-old apprentices at levels two and three by non-levy payers or those employers that exceed their levy.”

AELP has over 900 members who serve 380,000 employers across the country.

The results of the early monitoring visits to new apprenticeship providers are “concerning”, Ofsted’s deputy director for FE has said, after a quarter were given ‘insufficient progress’ verdicts.

Paul Joyce (pictured) hit out at the newcomers in his speech at the AELP conference today, asserting that apprentices “deserve better than that”.

“Our monitoring visits to new directly funded providers are designed to give an early assessment of the quality of provision,” he told delegates.

“I have to say that the outcomes to date are concerning. Around a quarter of the judgements inspectors have awarded have been ‘insufficient progress’ – meaning that providers are making slow progress and the demonstrable impact on learners has been negligible.

“Apprentices deserve better than that.

“This is a concern to me and Ofsted continues to work closely with the Department for Education and the Education and Skills Funding Agency to discuss and agree arrangements for the quality monitoring of these new directly funded providers.”

Numerous new providers have failed to come up to scratch over the last few months – including Mears Learning, Key6 Group, Mooreskills, and Apprentice Team.

Perhaps the most damning report was for Key6, whose training Ofsted described as “not fit for purpose”.

The ESFA banned it from delivery, but this only lasted for two months.

Mr Joyce pointed out that the monitoring visits show a “really mixed picture in relation to quality”.

“It has been pleasing to see some new providers making significant progress and apprentices receiving high-quality training that develops substantial new knowledge, skills and behaviours that are beneficial to them and their employers,” he said.

“In the best examples, apprentices and employers are extremely complimentary about the high-quality training, excellent resources and the support and guidance provided by experienced training provider staff.”

However, it is “less pleasing to see existing employees with almost all the knowledge, skills and behaviours required for the apprenticeship being recruited as apprentices and a train-to-gain, assessment-only programme delivered”.

“Or where the quality of training provided is simply not good enough, where training is not well planned or coordinated and where apprentices and employers feel let down,” he continued.

“Wherever inspectors come across this substandard provision, they will have no hesitation in reporting insufficient progress.”

Speaking to FE Week after his speech, Mr Joyce said he is expecting a policy announcement “imminently” in relation to intervention at these failing providers.

“We continue to talk with the DfE and ESFA about how best to monitor the new apprenticeship providers,” he said.

“That is in terms of our resources and conversations in terms of their intervention policy as a result of our judgements.

“Those negotiations are continuing, progressing well, and I am expecting the DfE to make a policy announcement imminently in relation to their intervention policy, and I do hope to hear very soon about the additional resources we are likely to get to carry out more monitoring visits.”

FE Week revealed last month that the watchdog will soon be given as much as £7 million to visit every new apprenticeship provider.

Critically, it will also have the final say over quality, after the skills minister Anne Milton admitted in May to the education select committee that it wasn’t clear who was accountable for quality at these new providers.

Issues with the 10-per-cent fee that small businesses must pay when they take on apprentices have been “noted”, but there will be no announcement on a rule change anytime soon, the skills minister has said.

There was a lot of anticipation over whether Anne Milton would scrap the fee altogether during her speech at the AELP national conference this morning, after she told FE Week she was “keeping an open mind” on the policy last week.

She did not rule out binning it, but told delegates she is not sure the co-investment is the real reason for the sluggish apprenticeship starts numbers.

“I’m sorry I’ve not made any big announcement but I see this conference as an important opportunity to gather your thoughts and feedback,” Ms Milton said.

“Co-investment for 16- to 24-year-olds, noted.”

Addressing the policy again in a Q&A session following her speech, she said: “What one battles with and all governments do is to demonstrate causality.

“I think that is a hard thing here. If you took away the 10-per-cent co-investment there would be less money in the pot to do apprenticeships. You get less apprentices for your money.

I’m sorry I’ve not made any big announcement

“But it is about demonstrating causality and that us the key for me. When you have a lot of other factors out there it is quite hard to demonstrate.”

AELP boss Mark Dawe hit back at Ms Milton’s claim.

“Providers take the 10-per-cent hit so there would be no impact on numbers,” he said.

“Numbers are a concern but at the moment it is from lack of demand and we need to change that.

“We will be in almost daily communication on this matter.”

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.

We will be in almost daily communication on this matter.”

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.

FE Week is media partner at the AELP national conference 2018. Follow @feweek on Twitter for live updates.

Mark Dawe asking @AnneMilton for end to the 10% apprenticeship co-investment. But since publishing my editorial many have said they agree it shouldn’t be scrapped. https://t.co/YdLNPJcVYD #aelpnc18 pic.twitter.com/9y4Nkftp5N

— Nick Linford (@NickLinford) June 25, 2018

Basically, here @AnneMilton keen to say she’s not sure the 10% co-investment really reason for sluggish starts. Struggling with determining ‘causality’. #aelpnc18 pic.twitter.com/53CTzIAqpa

— Nick Linford (@NickLinford) June 25, 2018

Learndirect has a new owner, after striking a deal with entrepreneur Wayne Janse van Rensburg for his firm Dimensions Training Solution to take the reins.

But it remains unclear how many jobs will be saved at the troubled provider, as government income beyond July will be limited to Learndirect Apprenticeships Limited (LDA) which began recruiting apprenticeships last May.

As previously reported by FE Week, PeoplePlus Group Limited had been in talks with the owners of Learndirect, Lloyds Development Capital (LDC), but it is understood this deal fell through early last week.

LDC then turned to entrepreneur Wayne Janse van Rensburg with the offer of a deal.

Mr Janse van Rensburg is the Managing Director of the Stonebridge College Group, which supplies Learndirect with a Virtual Learning Environment known as PEARL.

Stonebridge College Group includes Dimensions Training Solution (DTS), a training provider that Mr Janse van Rensburg purchased in 2015.

Within just a few days the Education and Skills Funding Agency had approved the change in ownership of LDA on the Register of Apprenticeship Training Providers.

A deal could then be struck in which LDC would financially support a DTS business plan to own and run Learndirect.

It is understood that the deal means DTS will take ownership of Pimco 2090, which includes the subsidiary companies of Learndirect Centres Limited, Learndirect Limited and Learndirect Apprenticeships Ltd.

Speaking exclusively to FE Week, Wayne Janse van Rensburg said: “The acquisition of Learndirect has protected the future of the Learndirect group and its learners and apprentices.

“We have the building blocks through which to deliver a service of the highest quality and respond to the ever changing face of the skills and apprenticeship market.

The LDA brand will remain, as it is well respected by our employers and recognised as the brand of the largest dedicated provider of levy apprenticeships in the country.”

A new code of governance will be unveiled today at the Association of Employment and Learning Providers’ annual conference.

The code, which is still in draft and out for consultation, sets out the principles the AELP believes any independent learning provider should adopt in order to conduct its business in the best interest of its trainees, employers, key stakeholders and funders.

It has been developed by Dr Sue Pember (pictured), director of policy at HoLEX, and former Ofsted inspector Karen Adriaanse, in partnership with AELP, which is encouraging all its members to adopt the code.

“The governance of many independent training providers has much to commend and it is been a major factor in their growth,” said Mark Dawe, AELP’s boss.

“However the sector recognises that there is always room for improvement and this is why it has come together to produce this code.”

With independent providers delivering government-funded training worth £1.8 billion every year, good governance “helps ensure that funds are well spent, are focused on government priorities and are delivering high-quality teaching and learning for the benefit of employers and learners”.

“Adoption of the code should not limit innovation in guidance or stifle the dynamic nature of ITPs for which they are renowned,” he continued.

Dr Pember, who is also an FE Week contributor on governance, will present on the code during her speech at today’s conference.

“Effective governance is a major contributor to the success of a business and the sector’s reputation as a whole,” she said.

By adopting the code, providers are “signalling a willingness to enter into a new era of governance with an energy and commitment to ensure the very highest standards for their stakeholders”.

The code is based on the seven Nolan principles of public life: selflessness, integrity, objectivity, accountability, openness, honesty, and leadership.

These principles provide an ethical framework for the personal behaviour of a provider’s board members and leadership.

It incorporates a number of expectations of good governance, including putting the trainee, apprentice and employer first, and providing strong strategic leadership and challenge to the senior team.

The code is designed to apply to all independent training providers which deliver publicly funded skills programmes on behalf of the government.

Its development was supported by the Further Education Trust for Leadership.

Dame Ruth Silver, FETL’s founding president, said the new code “should have a direct impact on the quality of skills training because it can make a real difference for providers of all sizes”.

The code touches on the following principles:

• Putting the trainee, apprentice and employer first
• Promoting high expectations and ambitions for trainees, apprentice and staff
• Listening to trainees, apprentice employers and staff
• Promoting inspirational training, teaching and learning and assessment
• Creating a safe environment for trainees and apprentices to train, learn and develop
• Providing strong strategic leadership and challenge to the senior team
• Demonstrating accountability to all stakeholders, including publishing accurate and timely information on performance
• Ensuring the achievement of equality of opportunity and diversity throughout the organisation

The Institute for Apprenticeships has been told to “get its act together” after it emerged that its panel of apprentices has gone nearly 10 months without actually convening.

The panel is made up of current or recent apprentices who are supposed to discuss issues from the learner’s perspective and raise them with the main IfA board.

But a Freedom of Information request has revealed that the panel has only held four meetings since its launch last March, with the most recent being on October 12.

This is being viewed as a snub both by the chair of the parliamentary education select committee and the leadership at the National Union of Students, which has led calls for greater learner influence over the IfA.

The next meeting is not scheduled until July 4 – which will mean there’s been a gap of nearly 40 weeks between meetings. During this time, the IfA has launched its “faster and better” promise to speed up its processes and policies, while many issues from the apprenticeship reforms have emerged.

“It beggars belief that during this crucial time for boosting apprenticeships, the IfA panel could be so conspicuously abdicating its responsibility to hear the voices of apprentices,” said the chair of the education committee Robert Halfon, who set up the panel during his time as skills minister.

“The IfA need to get its act together and make far greater effort.”

The NUS’ vice president for FE, Emily Chapman, described the gap as “deeply worrying”.

“At a time when they should be listening to the needs of apprentices more than ever this is simply not good enough,” she continued.

A spokesperson for the IfA did not manage to explain why it has taken so long for the apprentice panel to meet since its last meeting.

“The institute’s apprentice panel is peer-led and the members can set the frequency of the meetings,” she said.

It was revealed last month that the skills minister, Anne Milton, had still not met the panel more than 12 months after it was established.

Ms Chapman said the IfA and the minister must be “clear about how they’ll make sure the board will take the views of the panel seriously”.

The IfA has recently appointed a host of new members to the panel, but their identities have not yet been released.