First year of apprenticeship levy has been ‘woefully inadequate’ says select committee

28 Feb 2018 By Emily Burt

Apprentices let down by ‘bureaucratic’ standards and poor-quality training providers

Apprentices have been feeling unsupported and isolated since the introduction of the apprenticeship levy, members of the House of Lords said at a select committee hearing yesterday (27 February), as the government's flagship policy to encourage entry-level hiring heads towards its first birthday.

Experts and parliamentarians discussed the dramatic fall in the number of apprenticeship starts since the introduction of the levy in April 2017, claiming that a significant number of apprentices were being let down by inadequate training providers and a ‘hit and miss’ approach to quality.

Under the levy, all UK businesses with an annual payroll bill of more than £3m have been required to pay an apprenticeship levy of 0.5 per cent, intended to fill skills gaps and provide new routes into the workplace by investing in technical education.

However, the scheme has seen a rocky first year, with a lack of awareness of the levy among businesses, reports of employers and providers fiddling costs or writing the levy off as a tax, and a plunge in the number of apprenticeship starts. The latest figures from the Department for Education revealed a 35 per cent drop of apprenticeship starts in November 2017 alone, compared to same month in the previous year.

Speaking at the economics of higher, further and technical education select committee, chair of the Institute of Apprenticeships Antony Jenkins described the shift to the levy and new apprenticeship standards as a ‘significant transition’, which would take time to become effective.

“Is this simply transitional, or have we got something very badly wrong?” Lord Kerr pushed committee witnesses. “A number of colleges have said the job of setting [apprenticeship] standards is extraordinarily bureaucratic. If that is partly the reason for the transition lasting a long time, should we be worried that the introduction of the levy has produced a higher cost to businesses but reduced the number of apprentices?”

Dr Hilary Steedman, senior research fellow at the Centre for Economic Performance, described the fall in starts as “worrying, but not surprising”, and called on the government to abandon its target of reaching three million apprenticeship starts by 2020, saying the focus should be on quality rather than quantity.

”While we don’t want opportunities for young people to be restricted in any way, some young people on apprenticeships are not being well-served, and they deserve better,” she said.

Figures released by education regulator Ofsted at the end of January revealed that the proportion of students being taught by inadequate providers had increased to 20 per cent in 2017. Almost half (40 per cent) of apprenticeship providers assessed by the regulator required improvement, while 11 per cent were deemed ‘inadequate’. Concerns about standards in the sector have persisted, and almost imperilled LearnDirect in the summer of 2017.

“A huge proportion of providers are failing to achieve a good or outstanding rating, which would never be tolerated in the university sector,” Lizzie Crowley, skills adviser at the CIPD, told People Management.

“There needs to be a refocus that ensures the providers delivering the training are giving a quality offer – two out of five apprentices surveyed by Ofsted said they have received no training at all. There needs to be a clampdown on people abusing the system, and ensuring that we boost the quality of training and training providers.”

Speaking at the select committee, Labour peer Lord Alistair Darling described the existing apprenticeships scheme as a “strikingly hit-and-miss affair”.

“There are some very good schemes, especially if you work for a well-established good company, but in other parts of the country where you don’t have that combination or [have] smaller providers, it’s going to be hit and miss,” he said. “An awful lot of people are not going to benefit from the training and the additional skills that I thought the apprenticeship scheme was meant to be about.”

A report published in January by the CIPD, which assessed the early impact of the levy, found that just 17 per cent of levy-paying employers supported the existing system, while more than 53 per cent would instead prefer a broader training levy.

“The architecture of the whole system seems to be woefully inadequate,” Darling said. “Everyone has a finger in the pie but no one is in charge, and if you look at it from the viewpoint of the apprentice, who feels they are being given an inadequate training service, they have nowhere to go.”

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