Govt risks wasting £600m of apprenticeship cash on ‘rebadged’ training courses

The introduction of the levy around this time last year has actually diminished the quality of apprenticeships, with the government now running the risk of dishing out £600m on courses that are incorrectly labelled as apprenticeships, Reform has argued.

Almost 40% of the apprenticeship standards approved by the government since 2012 fail to reach the international or historical definition of an apprenticeship, the think tank has claimed, with many roles officially counted as apprenticeships including “low-skill and often very short training courses.”

The report, ‘The great training robbery:  Assessing the first year of the apprenticeship levy,’ found that these roles include serving customers in a delicatessen or coffee shop, performing basic office administration and serving food and drink in a restaurant.

Reform has also warned that employers are using the levy to “rebadge” existing training courses as apprenticeships in order to shift the cost of training onto the government, with the most obvious examples of this relabelling found in leadership and management skills.

These so-called mislabelled courses are consuming over 20% of the funding available for newly-designed apprenticeships, and the think tank has calculated that in 2019-20, if there is no reform, the government will spend £600m on courses that are incorrectly labelled as apprenticeships.

Additionally, the research found that in the six months after the new apprenticeship levy was introduced (April to October 2017), the number of people starting an apprenticeship fell by 40% compared to the previous year, with a similar downward trend noted across November and December.

However, speaking to PSE earlier this year, apprenticeship minister Anne Milton said this was because companies were still getting familiarised with the new regulations and consider where to invest their money.

But the think tank stressed that employers have become increasingly critical towards the levy, primarily due to the burdens associated with accessing the funds, as well as identifying and selecting training and assessment providers. A “substantial increase” in bureaucracy has also led to business groups branding the levy “disastrous,” “confusing” and “broken.”

As a result, Reform has made a series of recommendations, including scrapping the target for three million apprenticeship starts by 2020 to ensure that focus is placed on quality of apprenticeships over anything else, as well as removing the 10% employer co-investment towards the cost of training to avoid businesses disengaging.

It also argued that the exam regulator Ofqual should be made the only option for quality-assuring the end-point assessments for apprenticeships, to ensure that standards are maintained.

Tom Richmond, senior research fellow at Reform, said: “At present, the apprenticeship levy is too complicated for employers, focused on too many inappropriate forms of training and as a result is unlikely to deliver value for money.

“The government urgently needs to get rid of these poor-quality apprenticeships to provide more opportunities for young people to train as genuine apprentices while saving hundreds of millions of pounds in the process.”

A Department for Education spokesperson responded to the report: “We want to see people of all ages and backgrounds getting the excellent training they need to succeed in a wide range of jobs, and we are changing the apprenticeship system to do just that.

“Our reforms have fundamentally changed what apprenticeships are, as we made it a requirement that all apprenticeships must be real paid jobs lasting for a minimum of 12 months, with at least 20% off the job-training.

“Quality is at the heart of our reforms, and the apprenticeship levy is an important part of that – creating sustainable investment in skills training.”

Top image: Highwaystarz-Photography

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