THE AUGAR REPORT: IMPLICATIONS FOR EMPLOYERS WITH APPRENTICES

The independent panel report of post 18 Education & Funding

Richard Marsh at Kaplan Financial has written this thought provoking blog

Implications for employers with Apprentices (England only)

Most of the headlines have understandably been about the potential reduction in University fees (down to £7,500 PA) and the increase in the Student Loan repayment period (from 30 to 40 years).

However there are also some very crucial recommendations regarding Apprenticeships.

NB these are just recommendations but it is a Government commissioned report which was ‘welcomed’ by the PM and so we would expect it to be a clear indication of policy direction.

Government knows best?

The report lists criticisms of the pre 2017 apprenticeship system, specifically its failure to give employers what they need “ The main criticisms were…it was not driven by or even responsive to the needs of employers (pg145) “

Yet it then goes on to recommend that if funding becomes limited ** it should be restricted to those industries listed in the Government Industrial Strategy.

Recommendation 5.1 “If funding is inadequate for demand, apprenticeship funding should be prioritised in line with Industrial Strategy requirements” (pg 152)”

How could this work in practise? Each new government will reset the strategy and some areas ie the West Midlands also have a local strategy as well as the national one.

• Are they suggesting that before they make plans – employers and school leavers should consult the latest Government Industrial strategy to see what courses might be fundable in 2 years’ time?
• And that the Government knows better than employers what skills they will need in the future?

The inherent policy advantage of Apprenticeships is their link to the real economy – and the fact through it that employers decide what skills they need.

Help ** The money is running out!

PG 148 “we understand that demand is increasing and the full levy amount is likely, in the near future, to be spent”

This is a very vague supposition and not backed by any analysis.

Recent Government figures paint a different picture:

In the 12 months from February 2018 to January 2019, the most recent month for which data are available, £2.36 billion in levy funds were paid into employers’ apprenticeship service accounts. .And in the same time period, a total of £523 million of payments were made from apprenticeship service accounts to cover training costs for learning (DFE April ’19)

And as per the DFE published table below, the vast majority of levy funding (77%) was spent on level 2 and 3 courses (combined) and just 9% on level 6 & 7,,,

This amount is increasing but hardly represents a crisis.

The published Government Apprenticeship vision is still that, by 2020:

Apprenticeships will be available across all sectors of the economy and at all levels

Not so long ago very senior civil servants were being lauded for undertaking Degree apprenticeships themselves – completely in line with the policy.

The end of ‘Publicly funded Graduates’ as Apprentices

In 2017 the Apprenticeship reforms decreed that anyone could do an apprenticeship as long as they were i) legally employed and ii) would benefit from the Apprenticeship programme.

This meant that employers could align Apprenticeships to job roles and begin corporate programmes without fear of exclusion.

However recommendation 5.3 Page 153 states that:

“Funding for level 6 and above Apprenticeships should normally be available only for apprentices who have not previously undertaken a publicly supported degree.”

This would mean an employer not only has to exclude employees in Wales, Scotland and Northern Ireland from development, but also anyone who has done a University degree in the UK.

This ‘rule’ was dropped 2 years ago as it was as impractical as it is unfair.

• Assumedly people who studied elsewhere (EU, USA?) will be allowed to do Apprenticeships here as their degree was funded by another ‘public’
• Why draw the level at level 6? Ie anyone who did a level 5 HND will be ok just not a level 6 course holder
• Will a Graduate be able to do a level 4 course but not level 7?

Most importantly is it saying that an unemployed person who obtained a degree in an outdated industry 20 years ago, cannot now be supported to retrain in a growing industry… who does this help?

 “We need more level 4 and 5 skills”

 Nobody would object to their being more level 4 and 5 courses and Apprenticeships.

However:

• this seems to overlook the fact that Level 6 and 7 courses usually start at level 4 and finish at level 5. So they already provide level 4 and 5 training.

Adding a level 5 exam just adds complexity and an unnecessary break.

Comparing our qualification profile to other countries’ as the report does is not helpful in this instance.

And;

2) as the report notes in its introduction – you get what you pay for***

• Average funding rates for level 3 Apprenticeship standards are £514 per learner per month
• Average funding rates for level 4 Apprenticeship standards are £487 per learner per month

Given the increased delivery costs at level 4 (staff and equipment) where is the incentive for training providers to provide the level 4 technical training that they say is a priority?

And lets not forget that we have tried loans for Apprentices before and it did not work.

*** level standards average ‘cap’ / average duration

Richard Marsh

Kaplan Financial