Accounting Technicians Ireland and Chartered Accountants Ireland

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1 Accounting Technicians Ireland and Chartered Accountants Ireland Joint Submission to Department of Education and Skills on Apprenticeships in Ireland August

2 Background Accounting Technicians Ireland and Chartered Accountants Ireland are all island partner bodies with over 40,000 members and students across Ireland. Accounting Technicians Ireland and Chartered Accountants Ireland welcomes the public consultation on apprenticeships in Ireland. We applaud the courage to explore the concept of apprentice and we encourage this process to go hand in hand with the future development of Further Education policy by Solas, in consultation with key stakeholder Education and Training Boards Ireland. This consultation creates significant opportunities for shaping knowledge and competency across all age groups in Ireland. In stepping back to consider the best approach for a future national apprentice programme, we should consider the wider educational landscape: how the outcomes of this consultation might impact current and future FET programme delivery; the potential shifts in profile of student and trainee across FET and HE over the next 10 years and how these will need to be developed to meet the changing needs of the 21 st century; where opportunities exist for Secondary Education, FET, HE, professional body, industry and education regulator stakeholders to work together; how we can create flexible accredited, socially inclusive education and training pathways which develop individuals personally and professionally; how to embed progression and lifelong learning opportunities; how might academic and vocational progression be better aligned; what the entrance and exit points in VET may be in the future and how these need to evolve; the continued demand for second chance education; the impact of changing demographics and composition of the workforce. The current apprenticeship programme has provided an excellent pathway to industry skills recognition. While there have been a number of weaknesses in the system such as inflexibility of duration and accreditation, from apprentice intake was strong and supported industry well. This was however because of the focus on certain skills areas and there is now the chance to consider how this might be broadened to the professional sphere. With the collapse of the construction industry, apprentice registrations dropped sharply from a peak of 8,306 in 2006 to 1,434 in 2012, indicating an over-dependence on certain apprenticeships to deliver skills and employment readiness. Similarly other sectors (such as financial services and IT) have continued to expand without the responsiveness on the part of the apprenticeship schemes to these opportunities. The significant increase in unemployment highlights the need for specific interventions and new structures to address this. The current consultation is an important initiative in this regard. In 2011 it is estimated that approximately 2% of school leavers took up an apprenticeship position, i.e. 73% had a Leaving Certification qualification (NFQ Level 5). To date the apprenticeship curriculum, validated by Quality and Qualifications Ireland (QQI) as an NFQ level 6, only allows one level of progression for school leaving students. This has made the current apprentice model unappealing to school leavers from an academic and career progression point of view. We believe that serious consideration needs to be given to developing broader links so that apprenticeships can progress beyond level 6 where appropriate. 2

3 While the national apprenticeship programme has been and continues to be recognised as a deliverer of work based and academic learning we should not overlook the more traditional apprenticeship routes that have existed via professional bodies. Accounting Technician Ireland and Chartered Accountants Ireland have many decades of experience in this area and recognise the need for further development and enhancement of these routes. A state sponsored professional framework would provide a significant development in this regard. In this response we will seek to sketch out how such a scheme might work. Chartered Accountants, Accounting Technicians, Insurers, Tax Advisors, Actuaries, Life and Pensions Advisors (Financial Advisors) are among those who have traditionally been provided with on and off the job training. A combination of company work based learning and academic study via the relevant professional body provided an alternative route to third level education. Professional bodies continue to set standards for their profession while also offering NFQ accreditation. We believe there is an opportunity to put in place an apprenticeship scheme which would strengthen skills development in the finance and accounting area and the accounting technician and chartered accountant together can provide a means by which this could be done. We need clear, effective and trusted qualifications, the new apprenticeship qualifications should be clearly linked to any existing and well-recognised certification process within sectors and across professions, Richard Review UK, November Range of Occupations It is the view of Accounting Technicians Ireland and Chartered Accountants Ireland that the current apprenticeship model should be widened from the current 27 trades to include new sector apprentices such as those offered in Northern Ireland and other European countries in finance and accounting; health care; office administration; ICT; retail; sports and fitness. International financial services remain a burgeoning development sector in Ireland with a continued and strong need for accounting technician and professional accounting skills. Such a development as a statutory scheme in this area would support continued inward investment into Ireland in an area where Ireland has had an established competitive advantage. An apprenticeship should be equally available to early school leaving students; students who have completed the Leaving Certificate and adult learners who require second chance education. To learn from established apprenticeships we should take what we can from Germany s model of education which is an excellent example of clear and defined progression routes feeding into either vocational or higher education. The vocational school (Realschule etc.) offers an apprenticeship in a chosen field and a vocational qualification. The high school (Gymnasium) provides academic preparation for third level study. The range of occupational apprenticeship is breath-taking with over 300 trades and professions at a variety of skill levels. For example based on their system our early school leaving students could flow seamlessly into vocational colleges (ETBs) to complete a range of pre-apprenticeships which could then lead on to formal qualification if required. While the UK has developed over 20,000 apprenticeships in a relatively short time frame they are struggling on a number of fronts. According to CIPD/Hays Resourcing and Talent Planning Survey 3

4 2013 UK, less than a third (29%) of employers are taking on more people aged so any early school leaver programme should be created in consultation with the business sector. According to Investing for Prosperity, Skills, Infrastructure and Innovation report of the LSE Growth Commission UK, There has been a significant expansion of apprenticeships since 2010, but unfortunately these have mainly been for the over 25s in relatively low skilled, low paying jobs. There is now cross party consensus that the number of apprenticeships should be increased as a vital way to tackle the problem of low/intermediate skills. Apprenticeships need to be longer, should pay a training wage and their administration must be radically simplified. The message is clear, in the rush to combat unemployment, don t overpopulate the market with low paid, low skilled apprenticeships. The development of a National Apprenticeship Board which brings together the employer, the apprentice and the college, would work with Solas and industry to identify current and future skills requirements. Curriculum and Award According to the Office of Qualifications and Examinations regulation UK (Ofqual), July 2013, they are proposing that any qualification designed to be used in an Apprenticeship should continue to be subject to the accreditation requirement [..]The qualifications currently included in apprenticeship frameworks are taken by a substantial number of learners, are relied upon by employers and other users of qualifications and are a significant priority for the government. For these reasons we consider that qualifications currently included in apprenticeship frameworks should continue to be subject to an accreditation requirement. Obviously all occupations do not have the same knowledge requirements or learning outcomes and therefore require different apprenticeship awards and durations. We believe that certification stepping stones will facilitate learners build on their knowledge and competency. The new apprenticeship framework should provide recognised entry and exit points so that a full range of progression opportunities are on offer, up to and including degree and post graduate degree levels (Levels 1 9). Pwc Uk reports that 66% of CEO s say that developing leadership and their talent pipeline is their top priority. But only 30% feel they have access to the talent they need to drive growth in their business. And to meet the projected increase in professional and business occupations, over 3.1 million skilled new entrants will be needed by The introduction of higher, professional apprenticeships would provide learners with transferable skills which they can use in many jobs and across many sectors. Proposed Award in the area of Accountancy and Finance Back in 2009 the Fair Access Report UK (July 2009) highlighted the need for apprenticeships into the accounting profession and again in 2010 the UKCES Skills Audit (March 2010) highlighted the need for more accountants in the future. 4

5 The UK has recently introduced a Higher Accounting apprenticeship to address this demand. Northern Ireland who already have an accounting apprenticeship framework, are currently carrying out a similar review of their scheme. Accounting Technicians Ireland and Chartered Accountants Ireland is participating in the NI review and are proposing a similar higher apprenticeship model for accounting in Northern Ireland. In the Republic of Ireland employment of accounting professionals shows one of the highest growth rates among business and finance occupations. The National Skills Bulletin, 2012 produced by the Expert Group on Future Skills Needs identified accounting and finance as a sector where there are skills shortages. The report cited that the average annual growth of employment among accounting professionals was 17.9% in This was one of the highest growth rates among all the business and financial occupations. In order to address current and future demand for accounting and finance professionals we propose the inclusion of a professional accounting apprenticeship framework that will help employers meet the current skills shortages, including a lack of industry and technical knowledge and will also help them assess the competence of their accounting staff against National Occupational Standards. In the field of accountancy and finance, full qualification to professional standard can take 6 years. We recognise that not all apprentices would desire this level of qualification and there is a professional accounting qualification available to technician level. The creation of a national state sponsored apprenticeship scheme (building on the existing accounting technician and chartered qualifications) could extend from level 5 to level 9 (chartered accountant) and would represent a significant enhancement to current structures. It would facilitate the rapid training and education of accounting technicians some of whom may also wish to proceed onto chartered status. Such a structure would also facilitate funding and recognition as needed. We support a National apprenticeship programme which includes NFQ Level 5 Level 9 1 : Junior Apprentice (Level 5) Apprentice (Level 6) Senior Apprentice (Level 7) Professional Trainee (Level 8) Graduate Trainee (Level 9) (See over) 1 Seán McDonagh Submission p2 5

6 Proposed Accounting and Finance Apprenticeship Framework: Year Level Stage Exit Award 1 Junior Apprentice / Level 5 Accounting Technician Level 5 award Certificate for Accounting Technicians 2 Apprentice/Level 6 Accounting Technician 3 Apprentice/Level 6 Accounting Technician Level 6 award Diploma for Accounting Technicians and Professional membership of Accounting Technicians Ireland (MIATI) 4 Senior Apprentice/ Level 7 5 Professional Trainee/ Level 8 6 Post Graduate Trainee/ Level 9 Chartered Accountants (CAP1 to completion) & (CAP2 two subjects) Chartered Accountants CAP2 (to completion) Chartered Accountants FAE Level 7 award Level 8 award Level 9 award ACA and Professional Membership of Chartered Accountants Ireland This Apprenticeship offers an interim award at Levels 5 and a professional Accounting Technicians award (MIATI) at Level 6 in Year 3. The student may then progress to accounting Levels 7 & Level 8. Professional Chartered Accountant status (ACA) is awarded on successful completion of Level 9. This model provides all the work based learning required for both the Accounting Technicians Ireland and Chartered Accountants Ireland qualifications. The model also allows students to exit the apprenticeship programme after three years with a recognised professional qualification in accounting (i.e. MIATI) should they wish to do so. This affords them an opportunity to pursue a career in accounting without necessarily becoming a fully qualified accountant (i.e. ACA). It would then be possible for them to re-engage later in their career with Chartered Accountants Ireland in order to progress to ACA qualification. Our curriculum content is determined by ourselves in conjunction with industry. Accounting Technicians Ireland is recognised as an awarding organisation by Ofqual and its qualifications are aligned on the NFQ. Chartered Accountants Ireland s qualification is recognised by HETAC (QQI). Our awards remain relevant as they are reviewed regularly and views are sought from industry and consumers and any relevant trade or regulatory bodies. Provider and Delivery Methods The Education and Training Boards (ETBs) are the natural choice for delivery of off the job training for apprenticeships. They have the experience and the infrastructure to deliver professional vocational education. ETBs are accessible locally so that apprentices don t have the added expenses and hardship of travel. We already work in partnership with ETBs to assure our qualifications are being delivered to agreed standards. 6

7 Blended learning would be the most appropriate method of delivery for both on the job and off the job learning. Accounting Technicians Ireland and Chartered Accountants Ireland are experienced in delivering blended learning as part of programme delivery. On the job work based learning is a practical aspect to the course and face time with mentors and colleagues is important. Work based assessment can be delivered online. The off the job learning plan can also be blended where the apprentice attends class and also virtually attends online tutorials. From an IT perspective open source software such as Moodle or Blackboard is already being used in most ETB colleges and training centres. Governance Solas is well positioned to set down guidelines and manager funding requirements in relation to the development and delivery of a new National apprenticeship Framework. Staff in FÁS/Solas who already administer the current apprenticeship programme could continue to offer administration support. The ETB s are already the state s first choice provider of further education and training and the delivery of the new apprenticeship programme would most comfortably sit with them. A new National Apprenticeship Board (NAB) would be required to define any overarching strategy and to oversee the co-ordination of the programme nationally. We see the NAB having representation from DES; Solas; ETB s; ASTI; Guidance Counsellors; IoT s; any relevant professional and trade bodies and QQI. Funding If the current apprenticeship scheme is to be extended to include other occupations, there will be an associated cost to their introduction. While the current infrastructures (ETB s) can be used to deliver the programmes the overall administration costs of the new scheme will be high initially. It is possible to create a tiered industry levy for a period of 10 years for example however this should be matched with European funding such as the Youth Guarantee Scheme. Some of the state funds directed at Training initiatives for the unemployed should be redirected to support the apprenticeship scheme. Training allowances and paid training are vital to apprentices and it is recommended that for the first 3 years all tuition fees and training allowances be paid in full by the state via Social Welfare. From Year 4 the employer could pay a top up fee so that the apprentice is getting more than a minimum wage, reflecting their increased experience and knowledge. Tax initiatives for employers could be built in to the programme. Conclusion With 30% of our under 25 s unemployed we have an obligation to provide valuable employment opportunities for every young person in Ireland. A well thought out apprenticeship programme will future proof skills and create a knowledge economy we can all be proud of. 7

8 To sum up we recommend: Developing award stepping stones to ensure knowledge progression and learner potential fulfilment Increasing sector involvement in finance and accounting, IT, retail and health and fitness Creating a new governance structure to include policy maker Solas, FET provider ETBI and a new National Apprenticeship Board with key stakeholder participation. Inclusion of a New Accounting Apprenticeship framework Level 5 9 We would be delighted to meet with you to further outline these ideas should this be required. 8