Consultation on Funding Reform for Apprenticeships in England - Response Form

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1 Consultation on Funding Reform for Apprenticeships in England - Response Form You can or post this completed response form to: Postal Address: Apprenticeship Funding Consultation BIS/DfE Joint Apprenticeships Unit Department for Business Innovation and Skills Orchard 1, 2 nd Floor 1 Victoria Street London SW1H 0ET The Department may, in accordance with the Code of Practice on Access to Government Information, make available, on public request, individual responses. The closing date for this consultation is: 25 th September 2013

2 Confidentiality & Data Protection Please read this question carefully before you start responding to this consultation. The information you provide in response to this consultation, including personal information, may be subject to publication or release to other parties. If you do not want your response published or released then make sure you tick the appropriate box. Yes, I would like you to publish or release my response No, I don t want you to publish or release my response Your details Name: Jill Stokoe Organisation (if applicable): Association of Teachers and Lecturers (ATL) Address: 7 Northumberland Street, London W2CN 5RD Telephone: Please tick the boxes below that best describe you as a respondent to this consultation Business representative organisation Independent Training Provider College Awarding Organisation School Charity or social enterprise Individual Legal representative Local government Large business (over 250 staff) Medium business (50 to 250 staff) Small business (10 to 49 staff) Micro business (up to 9 staff) 2

3 Professional body Trade union or staff association Other (please describe) The Association of Teachers and Lecturers (ATL) response Given the recent news that there have been only 77 applications for loans for Advanced and Higher Level Apprenticeships compared to an expected figure for the year (2013/14) of around 25,000, Government action is needed immediately to review funding arrangements for higher level apprenticeships. ATL has argued that employers should pay more for work place training and these proposals are a significant move towards this. We know that employers benefit greatly from apprenticeships and should pay for them. We believe that there is an argument for co funding and Co investment and that training must closely resemble the needs of employers. ATL s preferred option is Model 2 with Model 3 being a fallback position. We are aware that Doug Richards recommended Model 2 and that the UK Commission on Employment and Skills (UKCES) also supports this model. However, as part of Model 2, we would want guarantees that: apprentices would be paid at least the national minimum wage, that no apprentice should undertake unpaid work and there should be a minimum duration for all apprenticeships (this is ATL policy); the funding should follow the apprentice, given that apprentices move around and don t always stay on the same programme. ATL assumes that these proposals will apply to all apprentices in whichever age group. The following points outline why we think that Model 2 could be advantageous: Putting funding through the tax system would represent a commitment to long term stability as the tax system is not and cannot be subject to constant change in the same way that a standard government budget can be. It would allow employers to be more certain of the system over the long term and allow them to plan and invest on this basis; The proposal to fund through PAYE where the employer commits to employing an apprentice provided they met quality apprenticeship standards. These would be broader than just quality training and could include aspects such as decent pay, conditions and opportunities to progress into a secure job. A move to tax would hardwire apprenticeships into business behaviour, in the same way that maternity pay is hardwired into current business practice. Tax changes have been shown to be an extremely powerful mechanism to influence employers (the example of R&D tax credits is the 3

4 clearest example). Every employer pays payroll tax and is used to claiming reliefs via the payroll, most obviously statutory maternity pay and statutory sick pay. A key advantage of this approach is the reach it could provide to SMEs, although many would argue that SMEs would be unable to access the scheme and that micro businesses would not have the resource to use the PAYE system; Decisions about tax and investment are made at a senior level in most businesses, while skills and apprenticeship decisions are not. A shift to tax would position investment in apprenticeships alongside other investment decisions. ATL has concerns about various aspects of the direction of government policy as outlined in the funding proposals. These are: quality becomes a much more significant issue if funding goes through employers. There is always a tendency for employers to want what is most relevant to them rather than the broader and more transferable aspects that would be important to the apprentice and the country. Quality will have to constantly watched; apprentices pay and conditions: none of the models discuss this although the UKCES paper points out that these need to part of any new arrangements and Model 2 gives opportunities for these issues to be raised. bureaucracy: compliance and quality assurance and control come down to audit and paper work. If the aim is to simplify apprenticeships for employers, this is unlikely to be an outcome of any of the new proposals. However we are in favour of bureaucracy if it stops fraud and ensures quality; that larger companies will benefit the most; the price of the apprenticeship could be dictated by the employer; all the models are top down, mechanistic and traditional and this isn t for the best; should the new system be piloted and would space be built in to allow this? the proposals may work for colleges with larger employers but not smaller; are we confident that the right mechanisms are in place to be able to implement any of these proposals? there is Ofsted pressure on providers; reliance on an on line system. There have been some issues with Government on line IT systems which often fail and require significant investment and, there will not be enough time to implement it; the prices imposed by employers could drive down quality. Further comment: whichever model is chosen, the key nexus is for the system to be simple and direct; could the existing good provision be retained during the phasing in of the new system as there is a worry that good provision could be lost; there has been no direct reference to the employer ownership pilots how have the lessons learnt from that been incorporated; pathways are important and we need to ensure that apprenticeships are seen as jobs, not only training programmes; any new funding system would have to be easy to use and access for SMEs; 4

5 the system needs to be future proof (eg 15 years) and be focussed clearly on the world of work; apprenticeships need to link more into schools, careers service etc. There has been some poor vocational delivery in the past so apprenticeships have been difficult to sell to parents. Thank you for taking the time to let us have your views on this consultation. We do not acknowledge receipt of individual responses unless you tick the box below. Please acknowledge this reply 5

6 Crown copyright 2013 You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. Visit write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or This publication is also available on our website at Any enquiries regarding this publication should be sent to: Department for Business, Innovation and Skills 1 Victoria Street London SW1H 0ET Tel: If you require this publication in an alternative format, or call BIS/13/1071RF

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