Written evidence from the Federation for Industry Sector Skills and Standards
Note for the Public Accounts Committee on Apprenticeships October 2016
There were a number of key areas identified in the National Audit Office report which we take as the starting point for our short response to the request for written submissions to the Public Accounts Committee. We have gathered our contribution around 7 themes. We have not represented here the earlier evidence that we submitted again but rather provided some additional thoughts and potential questions for the committee.
We are concerned that there are no explicit linkages between the Apprenticeship programme and the Government’s economic policy (particularly those policies designed to improve both productivity and exports). The Apprenticeship programme has traditionally been demand led, which means that the government don’t purchase places by sector but allow employers to determine in which roles, on which frameworks and which apprentices they want to employ. The levers available - funding rates for example can drive greater numbers in for example STEM areas. This approach in the past and in the proposed funding rates now is more a reflection of the cost of training than a reflection of Government Economic Policy. While we recognise both are important there should be an explicit recognition of the economic importance of certain Apprenticeship standards to the economy through a statement of £ Government input in addition to the cost of training. However there are risks associated with this approach as it assumes that accurate forecasts and predictions of future labour market demand can be made.
The levy being introduced on the 1st April focuses on firms based on the size of their pay bill which means that the shape and sectoral mix of the programme is likely to be determined in favour of the job roles of employers who pay the levy, which is not the same as what is the ‘best’ mix for productivity gains.
Working with and using sectoral labour market insights could help in determining the optimum sectors, and levels of training. Sector Skills Councils can with their unique insight help the Government.
Questions
We agree that 3 million apprenticeship starts on its own is not a genuine measure of success, although it does ensure a certain degree of focus on apprenticeships as opposed to other forms of training. It should be coupled with a set of qualitative targets (see 1 above) linked to both economic impact, completion rates and to the views of Employers and Apprentices. Data is also now available to track and monitor apprentices progress in terms of employment and wage change over time. So the government should consider a wider range of measures than a simple numerical target.
The target for public sector organisations plus an ambition to increase the proportion of BAME apprentices are also welcome.
In addition to the overall target for the Parliament, this should also be broken down into annual milestones too.
No specific thought appears to have been paid to the cost to Employers in time of implementing the new system. In the Framework system there was little bureaucratic action for the Employer, with most of the bureaucracy being dealt with by the training provider, in the new system there is a significant amount with one Employer stating that it meant they had to take on two new staff. This could be built into the impact measures of the programme.
Questions
The SFA and Apprenticeship Unit traditionally get a yearly budget for communications activity, which has to be bid for separately each year. We would urge the government to agree a budget for the duration of the parliament through to 2020 to ensure that the messages can be grown and built on over the next 4 years and to provide stability and certainty of funding
We also believe that local, regional and sectoral networks have a role to play in communicating and advertising apprenticeships so any communication strategy should ensure those partners can play an active role in communication such as LEPs, Chambers of Commerce, Sector Skill Councils and Training Providers as well as National Organisations like NAS and the SFA.
Questions
The clearance and approval process for standards and assessment plans is taking some 12 – 18 months and much longer in some cases. Whilst we agree that the final decision should be taken by ministers we believe that allowing individual sectors or industries to pre-approve standards before submission to the Minister would be one solution. It would allow for a timelier and sectorally managed/ employer owned response to Trailblazer groups and would help to avoid proliferation of standards.
By allowing for example a group of engineering employers to review standards / merge similar ones by using an agreed occupational map within and across their industry would lead to fewer and more transferable standards. It would also ensure that employers got the same message which is not the case in the current approvals process. With trailblazer groups putting in a set of standards but getting conflicting feedback from their relationship managers on what is acceptable.
Also the guidance documents continue to change and as we move into delivery of the new programme there needs to be stability with regards to the rules. We hope that the commencement of the new Institute for Apprenticeships will provide for some stability in the new financial year.
Questions
The common inspection framework is a relatively blunt tool. Ofsted inspection needs to take into account that delivery in an adult setting or a workplace will inevitably be different to inspection in a school setting, so it needs to recognise the context of the delivery. Ofsted inspection is also primarily at the organisation level and not at the level of the Apprenticeship standard, which is the level of detail required by Employers and apprentices. Another issue with the new Apprenticeship standards is that many of them are not reliant on qualifications nor do they have any set content or curricula. It will therefore become increasingly difficult for Ofsted to assess progress on programme or distance travelled.
As a result the outcomes become increasingly important including the apprentices and Employers view of the training they have received, we are aware that it is difficult to get learners who have finished their courses to fill in a formal survey. However trip advisor type approaches to give instant feedback would be a useful way of capturing learner views.
The current certification system could email a short survey to all completing learners and Employers seeking their views. This would enable a more disaggregated approach.
Questions
As an external organisation we do not have a detailed understanding of the board, governance, risk and risk escalation programmes in the former Dept for Business Innovation and Skills nor the Dept for Education. However what is clear from the outside is that each of the separate policy areas seems to have been developed in isolation rather than as a whole system. There appears to be a lack of comprehensive systems analysis that meant that decisions required have been taken in a linear approach – one by one – rather than having a clear understanding of the interconnected nature of the whole apprenticeship system.
One such example is the fact that whilst there are over 300 approved and published standards, only 145 of these apprenticeship standards appear in a list of those ‘ready for delivery’, and of these there are only 38 standards which have an approved apprenticeship assessment organisation listed on the register to deliver the end point test. Also there have only actually been starts on 37 apprenticeship standards to date, so 2,480 recorded starts (as per the DfE August 2016 Statistical Release). This shows that given the first standards were approved and published around November 2014, the reform programme has taken far longer than originally expected.
At the same time there have been a series of consultations on funding over the past 3 years with funding moving from loans, to vouchers to a co-investment £1/£2 model and finally to a levy system. The context for all of these changes is that with around half a million starts per annum on the existing framework programme and only just over 2,000 starts on the new standards there is a programme of framework close down at the same time which poses a real threat to delivery of the 3 million starts.
The current Framework system has lower unit costs than we expect the new standards system to have. While some of the inflation in the system is due to improved quality and the higher level mix of Apprenticeship standards, we are unsure what if any work has been undertaken to examine cost inflation.
Questions
We have provided on several occasions and to different civil servants our thoughts and concerns around the potential for fraud and gaming in the reformed apprenticeship system. The diagram in the NAO report is a condensed version of the information that we provided that sets out a number of ways that employers, training providers and apprenticeship assessment organisations could interact in the new system to maximize their financial return.
We understand that the SFA have a group dedicated to reducing fraud in the new system to ensure that the funding rules and levy arrangements militate against any such behaviour. Our concern is less about outright fraud but more around the way in which the new system might be ‘gamed’ so providers working within the rules but not within the ‘spirit’ of the reforms.
Whilst we understand that it is very difficult to get evidence of the ways in which different players might interact we believe it is in the interest of safeguarding government funds that more time and energy should be dedicated to this strand of work.
Questions
3 October 2016