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More measures needed to assess the success of apprenticeships

30 November 2016

The Public Accounts Committee report says that Government must broaden the range of measures it will use to evaluate its apprenticeships programme.

Report findings

In the report, the Committee concludes it is unclear how the Department for Education will monitor success in important areas—among them the programme's ability to meet the needs of employers.

It finds that while apprenticeships are considered "a key way of developing skills and improving productivity", the Department's only real measure of success is to facilitate 3 million new apprenticeship starts between 2015 and 2020.

The Committee warns it is not clear how the Department will monitor whether the programme is improving opportunities for under-represented groups and "has yet to establish the fairest and most effective way to support people from all backgrounds into apprenticeships".

Unclear how the apprenticeships programme address "emerging industries"

It is also unclear how the programme will address the needs of emerging industries, as well as skills shortages around Brexit and in other major government programmes "such as High Speed 2 and implementing the entitlement to free early years education and childcare".

The Committee urges the Department to report on a broader range of success measures, including "whether apprentices move on to higher apprenticeships, whether successful apprentices benefit from increased earnings, and whether the programme is delivering improved access to under-represented groups across all occupations".

Government is making significant changes to support delivery of the apprenticeships programme, such as enabling groups of employers to design a new set of apprenticeship standards and—from April 2017—employers with a pay bill of over £3 million per year paying 0.5% of that pay bill as an apprenticeship levy.

Concerns that new levy "may incentivise some employers to exploit the system"

The Committee highlights slow progress in the development of new standards and is concerned the new levy "may incentivise some employers to exploit the system, for example by artificially routing other forms of training into apprenticeships or hiring apprentices as a way to avoid paying the minimum wage".

It calls on the Department to take a lead in fully identifying the risks associated with potential abuse of the system "and ensure that they are addressed from the start".

The Committee also urges the Department to do more to communicate the value of apprenticeships to potential apprentices, schools and careers services, as well as their value to Small and Medium-sized Enterprises.

Chair's comments

Meg Hillier MP, Chair of the PAC, said:

"There is a crucial distinction between quantity and quality—one the Government must not neglect as it pushes ahead with changes to the apprenticeships system.

Businesses, apprentices and taxpayers in general will not consider this policy a success simply because the Department for Education has hit its take-up target.

The Government must demonstrate it is delivering real value throughout the programme and, where weaknesses are identified, address them promptly.

Such fundamental measures as whether apprenticeships are meeting the needs of employers and the wider economy, or enhancing the prospects and earning power of apprentices, must be properly monitored.

In our view the apprenticeships programme can only achieve maximum value if it raises skills levels, closes skills gaps and promotes diversity.

It is therefore concerning that there are no specific targets for increasing gender and age diversity across occupations.

Our Report highlights the potential risks of the new levy system being exploited and will expect the Government to show leadership in safeguarding against these.

It must also clarify the intended role of the new Institute for Apprenticeships, not least if and how it will consider the views of trade unions in regulating the quality of apprenticeships.

We are concerned to learn the timetable to have a comprehensive set of new apprenticeship standards in place has slipped three years to 2020.

Poor planning has been the poisoned root of many projects examined by our Committee.

The Government needs to get the details of this programme right now or risk failing the many people it is intended to support."

Report summary

Successive governments have considered apprenticeships to be a key way of developing skills and improving productivity.

The Department for Education is managing the early stages of a complex transition process to make the apprenticeships programme more employer-led, including introducing a levy on larger employers and asking employer groups to design a new 'standard'—a statement of the skills and knowledge to be acquired—for every apprenticeship.

The Department's only real success measure is to facilitate 3 million new apprenticeship starts between 2015 and 2020.

Large numbers of new standards "may be confusing"

The process for introducing the new set of apprenticeship standards appears to be slow, and the large number of new standards likely to be developed may be confusing for some sectors and employers.

We are concerned that the introduction of the levy may incentivise some employers to exploit the system, for example by artificially routing other forms of training into apprenticeships or hiring apprentices as a way to avoid paying the minimum wage.

This would diminish the potential benefits of the programme and damage its reputation.

Further information

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