More than £104 million in apprenticeship levy funding has been spent by businesses on putting senior managers through master's degree apprenticeships, often MBAs, since 2017, Tes can reveal.

Tes analysis of Department for Education data on monthly apprenticeship starts by framework or standard shows that between August and November 2019 alone, there were 2,324 levy-funded starts on the level 7 senior leader apprenticeship standard – an apprenticeship where students gain an integrated master's degree. 

Each of these places attracted up to £18,000 of levy funding, which means as much as £41,832,000 of levy cash was spent on this standard in that time.

Some critics argue that funding should go towards younger apprentices and tackling skills shortages.

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Boosting apprenticeships

The apprenticeship levy, introduced in April 2017 to boost apprenticeships, is paid by all large UK employers, and the amount paid can then be used by those businesses to offer apprenticeships to existing or new staff. Small businesses can also attract funding by co-funding apprenticeships – paying 5 per cent of the cost with the government using levy funding to pay the rest.

Universities have identified the opportunities this provides in particular on degree apprenticeships – with experts fearing businesses would spend their levy money on staff training for already senior staff.

There are currently over 100 universities on the Education and Skills Funding Agency’s register of apprenticeship training providers.

According to the government’s data on apprenticeship starts, there have been 5,795 levy-supported starts on this level 7 senior leader degree apprenticeship standard since 2017-2018.

That means £104,310,000 of direct levy funding has been spent on putting people through senior leader master's degree apprenticeships in less than two and a half years. This does not include government part-funding for a further 581 starts not directly levy funded, for which levy funds are used, taking the total spent to over £114 million. 

The senior leader (degree) standard, according to the Institute for Apprenticeships and Technical Education (IfATE), is for “professional strategic leaders in the private, public or third sector and all sizes of organisation, who lead, manage and direct organisations”. Specific job roles, the IfATE says, may include senior leaders, section leaders, executives, directors, chief operating officers and chief financial officers, along with chief executive officers and chief information officers.

In January, a report by education think tank EDSK claimed employers had used up over £550 million of levy funding on what it viewed as rebadged management training and professional development courses for more experienced employees in a bid to use up their levy pot. Yesterday, Labour’s shadow education secretary, Angela Rayner, hit out at “city banks taking tens of thousands of pounds intended for apprentices and using it to help investment bankers add master's degrees to their CVs”.

There have also been calls to limit levy spending to apprenticeships at a lower level or for younger staff – linked to expected funding shortages over the coming year.

David Hughes, chief executive of the Association for Colleges, said there were two areas of concern around the large sums spent on apprenticeships for senior leaders. “The first is that the increase in high-level apprenticeships is draining what is essentially a fixed pot of money dedicated to apprenticeships every year and taking opportunities away from young people looking to start their careers,” he said.

“The second is whether these meet the agreed focus for the apprenticeship programme. The reforms set out that apprenticeships should be targeted only at those who are new to a job or a role that requires sustained and substantial training. We need to investigate further as to whether these senior leader degree apprenticeships meet that definition: I don’t know if they do, and nor I suspect does the government.” 

Mr Hughes added: “I am particularly worried about the increasing numbers of 16- to 18-year-olds who are missing out on an apprenticeship because the funding is not available.”

Shadow skills minister Emma Hardy said most incentives to create apprenticeships seemed to encourage higher-level apprenticeships attracting a lot of levy funding.

“There’s definitely a place for that and I’m not against that, but how can we encourage business to encourage someone on a level 2?" she asked. "Especially the traineeships that are done at colleges for the NEETS [those not in education, employment or training] who wouldn't be anywhere near ready to take on a level 2 apprenticeship, what happens to them?

"Could you open up so you can use more of the levy for younger employers? Could you use more of the levy for disadvantaged learners? We need to give businesses that extra funding to say, 'That person is going to need that pastoral support, they are going to need more support with English and maths, and learning how to learn.' At the moment, the way it’s set up, the incentives appear to be at the other end of the scale and it’s how to rebalance that.”

Employer-led apprenticeships

Mark Dawe, chief executive of the Association of Employment and Learning Providers, said apprenticeships had to “provide unconstrained entry points into employment which will vary from employer to employer, and job to job”.

“For many, level 2 is vital; however for many other employers it could be any other level up to level 7 or a range of levels," he said. "The apprenticeship reforms were designed to be employer-led and this should continue. Employers must be free to spend their levy in line with their business strategy and workforce planning, and on those who they feel would benefit from additional training through an apprenticeship.”

He said degree apprenticeships help to widen access, drive progression, improve retention and change employee perceptions. “In essence, degree apprenticeships are at the beginning of a journey, with employers likely to have a blended approach with degree apprenticeships complementing alongside rather than replacing traditional graduate recruitment programmes. 

"Degree apprenticeships, particularly but not exclusively in the public sector, have allowed those including the over-25s to get a degree when they otherwise would not have been able to do so due to falling short of normal degree entry requirements, or due to financial constraints and personal commitments.

“However, encouraging this cannot be at the expense of the 98 per cent of companies that are not levy-payers. The government must commit to an additional £1.5 billion to support [small and medium-sized enterprises (SMEs)] while maintaining the freedom for the levy payers to use their levy on apprenticeships the best way they see fit.”

One of the universities offering a senior leader master's degree apprenticeship (MBA) is the University of Sunderland. A spokesperson for the university told Tes it had two cohorts per year, accommodating between 15 and 20 levy-paying students per cohort.

“The levy has been instrumental in opening up the potential of those on the programme. It is critical for them to grow and develop to drive the UK economy forward,” the spokesperson said. “SMEs seldom invest in this type of development for their employees, hence the levy has opened up opportunities for them drive growth.

"The programme has been designed with employers for their employees, co-creation of the content, and with the intention to maximise the employees’ individual development. The feedback has been exceptional, both from the attendees and the employers.

“The employee is being upskilled with a greater strategic insight, enhanced leadership skills, and changed management capability.”

A spokesperson for the Institute for Apprenticeships and Technical Education said: “Higher-level training plays an important role in changing the perception of apprenticeships.

“The vast majority of apprenticeships are still at levels 2 and 3. Since the apprenticeship reforms began, over half a million people have started on the new higher-quality apprenticeships at all levels.”

A Department for Education spokesperson said: “We continue to monitor the effectiveness of our apprenticeship reforms to ensure they are having the desired impact and represent value for money. Higher, level 6-plus and degree apprenticeships offer individuals a choice over the pathway that’s right for them.”