The apprenticeship system that is used by levy-paying businesses to choose training partners and manage their apprentice payments was scheduled to be rolled out to all businesses in April next year. However, with nine months to go, the ESFA has u-turned on that decision without thinking through the consequences and the effect on business, young people and the economy.
This u-turn is anti-choice, anti-innovation and anti-competitive for small businesses looking to upskill their staff and, as such, should be explained in full.
As things stand, training organisation can apply to be on the Register of Apprenticeship Training Providers. Once they are approved by the ESFA, they are able to deliver to businesses that are using the online apprenticeship system. These businesses are levy paying businesses. They make up just 2% of all businesses in England.
However, if you want to deliver apprenticeship training to the other 98% of businesses in England you need a ‘non-levy allocation’ from the ESFA.
In April 2019, the plan was that all businesses would be given access to the online apprenticeship system, therefore giving all training organisations on RoATP an equal chance to deliver to all businesses in England. The Government’s Apprenticeship in England: Vision for 2020 outlined how this would provided a fair, open-market system, where no matter the size of your organisation, financial resources or track record, you had an equal chance to prove your training made a difference to apprentices and business performance.
It is this decision that has been reversed due to feedback on the ‘pace and scale of change’. But who provided the feedback and why will more changes to the original plan help?
Some say that these training organisations can still deliver to the 2%, but in reality a niche training provider who wants to help the local fishing fleet take on apprentices for example, is very unlikely to persuade companies in the FTSE 100 they need their training service. It is just a nonsense.
Below I explain why this decision is anti-competitive and will have far reaching consequences for small businesses, training organisations and social mobility.
This decision will continue to hamper apprenticeship starts
There has be lots of falsehoods written about why there has been a drop in starts since May 2017, with scrapping employer contributions often presented as the simplistic solution to the problem. The truth is far more complex than that – but continuing to give 98% of businesses less choice when it comes to training partners will continue to hamper this recovery.
Simian Risk, a scaffolding specialist training provider explains succinctly how the non-levy allocation is affecting skills shortages and SMEs. They demonstrate they are having to turn scaffolding businesses away, even though a Scaffolding Standard was recently approved, because they don’t have access to non-levy funding. This is crazy – how many scaffolding companies have over £3million annual payroll?
This stops apprenticeship starts and this example can be replicated 1000s of times across the country in various industries.
Delaying this decision to let all training organisations (that have already gone through an ESFA approval process) to deliver to all employers is anti-choice and will continue to hamper apprenticeships and exacerbate the skills crisis.
The decision will continue to hamper social mobility and disabled access
One of the organisation SupplyTrain supports is Little Gate Farm. This organisation gets autistic people into paid employment. They provide a job coaching facility where an autistic expert will job shadow an autistic person in a new role whilst they learn the ropes. However, they struggle to find employers that are willing to give an autistic person an opportunity, because it can take longer for the autistic person to settle in and get up to speed.
But Little Gate Farm is innovative, they see an opportunity to collaborate to offer apprenticeship opportunities for autistic people that lead to good jobs. The know the apprenticeship route reduces the initial burden on the employer and gives an employee time to learn their role and surroundings. Little Gate Farm want to partner with training providers to deliver the vocational training, whilst they provide the bespoke additional learning support.
Yet, the training providers with a non-levy allocation are predominately large organisations with set procedures. This makes it too burdensome for them to change their delivery model to support a small initiative like this – in contrast a small, agile provider could – but they can’t deliver to SMEs because they don’t have a non-levy contribution. As such, Little Gate Farm cannot find the variety of quality training partners they need to make this work.
Delaying this decision to let all training organisations deliver to all employers is anti-innovation, reduces new ways of working and will continue to hamper social mobility and access for disabled learners.
This decision will continue to stop small businesses competing as fully as possible.
There has been countless articles written over the years about the impact training has on business performance. In fact, the UK has well below average productivity levels compared to other G7 countries and this is often attributed to the lack of training we do as a nation in the workplace.
With apprenticeship standards being created all the way up to Masters’ Degree Level, small businesses with big ambitions are looking at apprenticeships for the first time. This is a great opportunity for them to take on graduate calibre staff and give them tailored, high-quality, subsidised training that will support their business become more productive, their staff more satisfied, help them grow and contribute to a thriving local economy.
However, a large employer has over 1,500 more training partners to choose from than a small employer. If you’re a small business based in Brighton, for example, and looking at Level 6 and Level 7 apprenticeships, it would be safe to say you’d look towards the two well-respected universities in the town to help you deliver exceptional degree-apprenticeships. However, although the University of Brighton and the University of Sussex are listed on RoATP, neither has a non-levy allocation.
This means, the University of Brighton, who are delivering now, can only support large companies and the University of Sussex, who are looking to develop apprenticeships in the future, will almost certainly adjust their medium-term plans to only develop an apprenticeship offer to support the businesses they have access to work with.
This is anti-competitive. It means small businesses do not have the same opportunities to access training that large companies have. They will be less able to attract the talent they want by offering to part-fund degree studies for their staff and will lose out to large companies. This will continue to stop SMEs competing as a business as fully as possible.
People will lose their jobs, not just at training organisations but small businesses too
It goes without saying that hundreds of training providers on RoATP will have made business decisions and staffing decisions based on their understanding they would have access to the whole of the market come April. It is almost a certainty training companies will close and people will be made redundant. To those people, I highly recommend understanding the opportunities to End-Point Assessing until you can once again prove your training credentials.
But it’s not just the training sector, small businesses are losing staff and trade too because they can’t access the skills they need.
This decision is paramount to a closed shop. It is exacerbating the skills crisis in specialist professions. The decision to u-turn will mean a continuation of job losses and a hampering of the UK’s own Industrial Strategy.
What next? The ESFA should explain their decision making process in full.
Apprenticeship starts are down, smaller companies don’t have access to the whole of the market and it goes against the Government’s reasoning for the apprenticeship reforms in the first place:
“Under the reforms, employers will be put in the driving seat to create new apprenticeship standards that will deliver the skills businesses and learners need to compete in the global race.“
Because of this, I believe the ESFA should explain in full what feedback they have had to u-turn on this decision and who provided that feedback. Please share this article if you agree.
If you work for a small business and want free, high-quality, impartial advice on apprenticeships please get in touch.