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Apprenticeship funding bands to be reviewed

Apprenticeship funding bands to be reviewed

More standards face IfA funding review to ensure ‘value for money’, as Ofsted warns levy cash ‘not spent in intended way’

4th December 2018, 5:16pm

FErret

The apprenticeship levy was hailed as a game-changer, which would turbo charge the training programme and bring in billions of pounds of investment.

The reality hasn’t matched up to the hype. While the monthly figures for apprenticeship starts show numbers have stabilised in recent months, they are still way down from before the levy came in.

Another question that has come to the fore is: how is apprenticeship funding actually been spent? The main growth area in recent years has been in higher-level apprenticeships: the number of learners starting a higher apprenticeship has been growing by around 10,000 apprentices a year since 2011-12.

The higher, the better?

There are two issues which arise from this. First: is this the best use of money, when level two starts have actually dropped from 78,500 to 62,000 in the last year?

“We are concerned that in many cases, levy money is not being spent in the intended way,” says Ofsted’s annual report, published today. “We have seen examples where existing graduate schemes are in essence being rebadged as apprenticeships. This might meet the rules of the levy policy, but it falls well short of its spirit.”

Second: what does this skewing of apprenticeships towards higher-level courses - including management programmes - mean for the costs of the programme? After all, they are often far more expensive to deliver than low-level apprenticeships.

Stretched budgets

Figures presented to an event for employers last week by Robert Nitsch, the Institute for Apprenticeships’ (IfA) chief operating officer, suggest that the £2.2 billion apprenticeships budget for 2018-19 is set to be overspent by some £500 million - with the shortfall rising to £1.5 billion by 2020-21.

If this comes to pass, the consequences would be most severe for small businesses which do not contribute towards the levy - their funding had been expected to come from the cash left over from large, levy-paying employers.

Today, the IfA announced it is to review the funding bands for 30 more apprenticeship standards in ensure they provide “value for money for employers and taxpayers”. This comes on top of 31 standards reviewed earlier this year. Two of these - the apprenticeships in gas engineering, and engineering design and draughtsperson - are currently funded to the tune of £27,000 - the top funding band. By the time the review is completed next summer, expect funding levels for several of these apprenticeships to be cut.