Over £1bn already wasted on ‘fake apprenticeships’, claims former adviser to skills ministers

Around £1.2 billion has been “wasted” on “fake apprenticeships” that have taken up half of all starts since the apprenticeship levy was introduced in May 2017, according to new research. 

The study by think tank EDSK goes on to recommend that apprenticeships should be for level 3 only, while standards at level 2 and degree-equivalent courses should be defunded. 

This is the third report into the apprenticeship system by EDSK director Tom Richmond (pictured), a former senior adviser to previous skills ministers Nick Boles and Matt Hancock, who told FE Week with this latest publication: “We have the full two years of data on the levy and we can now see exactly what is happening. 

The apprenticeship levy is now descending into farce

“In the past, I have looked at the foundations of the reform and the history and what might have happened.  

“Now we can see, and I don’t think anyone has done this analysis before, who is being supported, what is being supported and why it’s being supported.” 

What he has found is that the levy is “descending into farce” because employers and higher education providers are “abusing” it by “rebadging existing courses and degrees for their own financial gain”. 

He said employers have used up over £550 million of levy funding on rebadged management training and professional development courses for more experienced employees. As a result, the most popular apprenticeship in the country is now becoming a ‘team leader / supervisor’ – accounting for almost 1 in 10 apprentices. 

This will be of no surprise to FE Week readers, as this newspaper has warned about the unstoppable rise of management apprenticeships since 2016.

A further £235 million of levy funding has been used to deliver various “low-skill and generic jobs” that are now counted as an apprenticeship, including working on a shop checkout and serving drinks in a bar. 

The most “surreal” example of a rebadged apprenticeship Richmond could find was the level 3 sporting excellence professional, which challenges learners to “competently perform the professional sport in which they train”. 

“In other words, the apprentice will be playing sport,” Richmond writes. 

He also highlighted a new cabin crew standard that has a minimum duration of 12 months for training, whereas airlines are currently advertising cabin crew training – not through the apprenticeship route – that lasts just three-weeks. 

Meanwhile, he says, universities rebadging bachelor’s and master’s degrees as apprenticeships have used up £450 million of the levy to date, even though these degrees can already be funded through the student loan system.

Richmond said they’re allowing employers to draw on huge amounts of levy funding to use courses like the level 7 ‘accountancy/taxation professional’, which spent £174 million since 2017 by claiming to cover a number of different accountancy and auditing roles.

A member of the Commons Public Accounts Committee, Layla Moran, said she had “serious concerns” about the government allocating one provider up to £40 million in nine months to teach this controversial management consultancy apprenticeship, following FE Week analysis in March 2019.

Richmond isn’t the first person to flag these issues: Ofsted chief inspector Amanda Spielman warned in 2018 that existing graduate schemes were being “rebadged as apprenticeships,” and the National Audit Office reported last year “some employers use apprenticeships as a substitute for training and development that they would offer without public funding”. 

Richmond’s report, entitled Runaway Training, recommends rebranding the apprenticeship levy as the technical and professional education levy to incorporate all work-based learning from level 4 to level 7.

The term “apprenticeship” should be newly defined and restricted to training at level 3 only, which should be fully-funded by government like A-levels. 

It adds that Ofsted should be made the sole regulator for any apprenticeships and technical and professional education, including provision in universities. 

<a href=httpsfeweekcouk20181204ofsted annual report warns apprenticeship levy being spent on graduate rebadging target= blank rel=noopener noreferrer>READ MORE Ofsted annual report warns apprenticeship levy being spent on graduate scheme rebadging<a>

Currently, Ofsted and the Office for Students (OfS) share responsibilities for inspecting apprenticeships, with the latter monitoring higher levels, a decision Richmond says is “hugely problematic” as the OfS has “no expertise” in the area and does not have the power to enter premises to conduct on-site inspections. 

An OfS spokesperson said the watchdog’s “quality assessment process” includes “on the ground quality and standards reviews”. 

“We also have clear powers to require information, set specific conditions and impose sanctions if providers fail to meet rigorous standards,” she added. 

The report is being released ahead of an expected budget from the Treasury next month and the later spending review, which will set the apprenticeship budget for the next five years. 

It also comes at a time of increasing pressure for the levy: after the Institute for Apprenticeships and Technical Education predicted the levy would be overspent this year and the National Audit Office expressed concern about the financial sustainability of the apprenticeship system, the DfE’s top civil servant warned of “hard choices” that needed to be made. 

A Department for Education spokesperson said their reforms “mean apprenticeships are better quality”, lasting for a minimum of 12 months with at least 20 per cent off the job training. 

She added that legislation introduced in 2017 meant an apprenticeship had to meet set criteria and the minimum quality requirements. 

A spokesperson for the IfATE said it works “closely with thousands of employers as well as many other stakeholders to make high quality apprenticeship standards available across the whole economy”.

“This has led to a broader variety of apprenticeships up to degree-level being available to employers, a far better reflection of the nation’s skills requirements than if apprenticeships were limited to level 3,” he added.

Sector reaction

Sector organisations have reacted strongly to the report, with Association of Employment and Learning Providers chief executive Mark Dawe stating that Richmond “sounds like a scratched record”. 

He said apprenticeships “should be available to employers of all sizes to access to the full range of apprenticeship programmes from level 2 through to level 7”. 

“AELP totally rejects his claim that the new level 2 standards in England fall short of the International Labour Office definition of a ‘proper apprenticeship’ and the caricatures used bear no resemblance to the reality of what is actually being learnt by the apprentice,” Dawe added. 

University Vocational Awards Council chief executive Adrian Anderson believes EDSK has “got the wrong end of the stick,” as the apprenticeship system is about “enabling employers to invest in their staff to increase productivity”. 

David Hughes, the chief executive of the Association of Colleges, warned that “simply stopping level 2 apprentices will not solve the problem; in fact it would risk shutting some of the most vulnerable people out of education and training”. 

“Problems also exist at the highest levels – MBAs and other high-level training being rebadged as ‘apprenticeships’ need to be examined,” he added. “Their growth has been at the expense of chances for younger people looking for their first opportunity in the workplace.”

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  1. Philip Gorst

    A very good article that reflects what training providers at the sharp end have been saying even before the apprenticeship levy was launched.
    The system is broken beyond repair. Employers know what skills they needs, by and large. They want to grow and prosper, create wealth and jobs that are sustainable in the long term.
    Why government ministers think they know better is beyond me. The levy system was forced upon employers with no thought of how it would ‘work’, and any comments were dismissed by the government because the government wanted to change work based learning for political reasons without any thought of failure. This hubristic approach has seen good providers leave the industry, good provider colleges run into financial trouble, and employers becoming ever more disillusioned by the whole system.
    In my opinion, level 2 qualifications are where the money should be spent – many young people who have failed at academic study have been helped by Level 2 access. Not everyone is born with natural skills. When will those who decide policy ever learn?

  2. This is again people who have no knowledge of the compliance placed on the employers, training Providers and the Apprentices. Yes go back 18 months ago and we had problems but indeed as an Industry you have to do it right or you do not stay in the Industry that long.

    People do not make the Industry better by doing this sort of scare mongering.

    • Sophie Gray

      The purpose of the levy was to build skills for the UK economy. If businesses are helping people at all ages and all levels, to develop skills and careers using the National education system, how are these deemed as ‘fake’? What Tom is suggesting is that someone, who had no opportunity to get a degree when they were younger because of their social demongraphic, is still deprived of the opportunity to do so when they are in the world of work. If ESFA wanted to take a command and control approach they should never have badged Apprenticeships as being ‘designed by Employers’. I can only dream that policy makers will stop scapegoating, and start respecting that businesses are working with the rules we were provided and that if this is beneficial to people’s careers and the skills of the nation then we’re doing well.

  3. This isn’t really surprising to anyone that works with Apprenticeships or even works a a large employer. Companies try to make as much profit as possible so clearly if they are paying the Levy they are going to offset as much of their existing training as they can by re-badging them as apprenticeships. Who can blame them.

    Its as if the Government has no idea how companies operate (or is working fro them). The sugar tax has been another similar debacle. Predictably the companies distributed the cost over their sugar free and sugar ranges and decreased both product sizes hurting consumers and providing no price differential between the “healthy/unhealthy” options.

    If you want more “real” apprenticeships you need to directly fund them stop needlessly complicating things for providers.

  4. “Meanwhile, he says, universities rebadging bachelor’s and master’s degrees as apprenticeships have used up £450 million of the levy to date, even though these degrees can already be funded through the student loan system.”

    Yes, but that completely ignores the difference between an apprenticeship and a degree – yes, you can do a funded degree using a student loan but the apprenticeship offers the opportunity to work in a role relevant to the qualification being studied. Not all degree programmes offer a placement and certainly not for the full duration of the qualification.

    This article highlights some relevant points (such as rebadging of programmes that are not really “apprenticeships”) but appears to be a scaremongering exercise targeting the industry yet again. If the ESFA wanted provider (or agency) led apprenticeships then they had the opportunity to leave it as such when standards were introduced – they made it employer led so if there are issues with apprenticeship programmes that have been approved as standards then that responsibility sits with those signing the standards off.

  5. Graham Ripley

    My perspective is that of a former college Chair and a former bank exec reporting at board level.

    As with the general escalation of maximum university fees, the effects of the levy simply reflect a natural commercial response which politicians seem unable to grasp. Perhaps the world of business and human nature is beyond their experience.

    Employers have a duty to their shareholders to minimise cost and maximise return. I am sure HE providers seek to attract students.

    If the scheme allows for the legal and valid creation of apprenticeships that provide such benefits to their organisations then they are duty bound to exploit them.

    Without comment on the equity of this behavior one way or the other, rather like the taxation of profits, it is for the creators of the rules (eg politicians and civil servants) to anticipate consequences and regulate outcomes.

  6. Chris Bradley

    I have now been working in this sector for 25 years having prior to that worked in industry for 20 years.

    For 25 years the government and so called “experts” just say the same old things using different words and phrases. I am sure I heard the phrase “world-class” before somewhere!!
    Policy churn is what is happening here and has for at least the 25 years I have experienced.
    Where do they get these people from. I note the experience of the author of this report has never actually worked directly in the area of apprenticeship delivery.
    I do tend to agree however with much of what is said however some elements are totally off the mark and potentially quite damaging.
    I also hold the view that the government is probably disappointed in how much they will retain as another form of tax revenue.
    I don’t believe there are thousands of 16-18 year-olds out there up in arms that they can’t get onto an apprenticeship programme.

  7. Rick Hough

    This has become a joke. Here is part an advert for an IT apprentice in Knutsford, Cheshire:
    Desired skills

    Solid knowledge of data communication and networking internet protocols, such as TCP/IP, Ethernet and Serial interface standards, Change Management, and Active Directory

    Ridiculous, what young person is going to have solid knowledge of anything. This apprentice is going to be an older person struggling for work and being mugged off for just under 2 years, after which they are to be dropped for the next mug.