A new approach to funding apprenticeships will provide better value for money so that people can benefit from the training opportunities on offer and progress in their careers, says Anne Milton
I have spoken a lot about the important changes we are making to improve the quality of apprenticeships in this country. One of the biggest changes has been to introduce apprenticeship standards – new, high-quality apprenticeships replacing the older “frameworks”. I’m really pleased that the number of people starting these apprenticeships has increased by almost 1,000 per cent in the last year. Of those starting apprenticeships only 2.5 per cent were on standards this time last year, and now it’s over 40 per cent.
Apprenticeship standards are designed by employers themselves. By putting employers in the driving seat, we make sure that apprentices receive the training they need and make sure people have the skills businesses are crying out for, so they can get on and grow their career.
Since its creation in April 2017, the Institute for Apprenticeships has been responsible for managing the development of these new apprenticeship standards. Their work includes advising me about the right funding level for each new standard that is approved.
As more and more standards have been created, the Institute has been learning what a quality apprenticeship looks like. They have also been looking at how we can make sure apprenticeship training provides value for money.
In February the Institute introduced a new approach to recommending apprenticeship funding bands as part of its Faster and Better programme. This approach means a wider range of evidence will be used to help decide what funding band to recommend. It also means standards are decided more quickly, so that there are fewer delays.
I have also made changes to the funding band structure, increasing the number of funding bands to 30, and narrowing those bands.
But all this positive change means that there is now a difference between how older and newer standards were allocated funding bands.
Our intention has always been to review standards regularly, to make sure that they remain fit for purpose and that there is a fair approach, no matter when a standard was developed. That is why I asked the Institute to review the funding bands of 31 standards, in line with their new approach and using the new 30-funding band structure.
Over the summer the Institute has been working with trailblazer groups of employers to review these 31 standards. They have applied their new funding approach to recommend to me what they think the right funding band is for these apprenticeships.
This means for some of the apprenticeships, the funding band will remain the same, as the original funding band still represents the best value for money. Others will see their funding band increased, if evidence suggests the original band was set too low. And for others, the funding band will be reduced.
Once the IfA have confirmed the outcome of the review to trailblazers, changed funding bands will be available on the IfA’s website and on the apprenticeships funding bands page.
I have asked the Institute to continue its work to bring all standards into the new 30-band structure. The Institute will lead reviews on further standards over the rest of this financial year.
I think that it is right that we price all apprenticeships fairly, whether they were developed first or last. As the apprenticeship market develops, I will keep working with the IfA to make sure we get this funding right. We want people to benefit from the amazing opportunities apprenticeships offer, get the fantastic training providers give and get on in their careers.
Read more: Major slash in store for apprenticeship funding rate bands
The overwhelming message we are hearing from employers and training providers is to let the new funding system settle down and not to apply further change. A stable funding system is required to give employers and training providers the confidence and certainty to invest in skills and training programme development.
Making funding cuts is simply creating uncertainty and therefore holding back that much needed investment. Also, lower funding bands will only ever have a negative impact on the quality of programmes which has to be at the heart of the apprenticeship levy reforms. Quality and inpactful programmes are what will drivevtge productivity and social mobility agenda. The planned changes are simply working against this desired outcome.