Weekly Newsletter 5.12.2024

From Optimism to Clarity: What’s Next for Apprenticeships?

Last week’s Federation of Awarding Bodies (FAB) conference left me feeling cautiously optimistic—something I didn’t expect going in. Charlotte Bosworth (Innovate Awarding), David Gallagher (NCFE), David Hughes (AoC), Ben Rowland (AELP), and Rob Nitsch (FAB) all spoke of encouraging conversations with new ministers following Labour’s election win. It’s clear there’s potential for real progress, but like many in the sector, I’m still left with big questions about how these policies will actually play out for those of us delivering them on the ground.

Some key updates from the week:

1. Apprenticeship Facts & Figures:

   • Starts are up 0.7%, achievements up 9.8%, but participation is down 2.1%.

   • Under 19s make up 23.2% of starts.

2. Get Britain Working White Paper:

   • £240m in reforms with a focus on joining up skills, health, and employment.

   • “Youth Guarantee Trailblazers” led by metro mayors will launch in 2025.

   • An ambitious goal: 2m more people in work by reaching 80% employment.

We know Skills England is on its way, along with foundation and shorter-duration apprenticeships, and a rebranded Skills and Growth Levy. But we don’t yet know how Skills England will operate, what shorter apprenticeships will actually involve, or how much funding will shift away from existing apprenticeship programs.

Like many of you, I’m eager for more detail. While I share the optimism I heard at the conference, those of us responsible for delivering these changes need clarity—and soon—so we can make the most of the opportunities ahead.

EDUCATION POLICY

Removing Level 7 Apprenticeships to Reallocate £240 Million Budget

The recent proposal to phase out Level 7 apprenticeships from levy funding could unleash substantial financial resources for broader training initiatives. Data shows that if these plans materialise, approximately £240 million may be redirected towards the expansion of an adaptable growth and skills levy, aligning with Labour's aspirations for a diverse training ecosystem. Since the apprenticeship levy commenced in 2017, spending on Level 7 programmes has surged from £12 million to £238 million, illustrating the growing significance of these high-cost apprenticeships. However, Level 7s, accounting for around 10% of the apprenticeship budget, have contributed to financial strain.

Representing significant cost-saving potential, the removal of these apprenticeships is predicted to promote more sustainable budget management. Predominantly offered in accountancy, taxation, and senior leadership, these apprenticeships have prompted both support and concern, particularly noted within the NHS and council sectors where under-25 participation is strong. Some argue that if these apprenticeships are truly valued, employers will self-fund them, paving the way for a new funding landscape without the heavy reliance on government levies.

Strategic planning is urged by the Association of Employers and Learning Providers, who recommend a phased withdrawal to mitigate market instability. They warn that sudden policy changes could disincentivise employers toward workplace training commitment. As policymakers aim to realign the levy’s focus, the projected £4 billion in receipts highlights the ongoing debate about the most effective use of these funds.

ECONOMICS & TRAINING

Apprenticeship Funding Cuts Threaten Economic and Community Growth in Wales

Apprenticeship funding cuts in Wales risk major economic losses, warns a report by the Centre for Economics and Business Research. Key sectors like healthcare and construction face setbacks, with a 14% budget cut causing a short-term Gross Value Added (GVA) loss of £50.3m, rising to £215.7m long-term.

The impact hits Wales' most deprived communities hardest, worsening inequalities. CollegesWales and NTFW urge the Welsh Government to restore funding, vital for equipping public services, supporting businesses, and driving economic and social recovery. Cutting back jeopardizes Wales' vision of a stronger, greener, fairer future.

EDUCATION SECTOR

Higher Education Regulator Focuses on Financial Stability Amid Pressures

The Office for Students (OfS) has paused registering new higher education providers and granting degree awarding powers until August 2025 to focus on supporting financially vulnerable institutions. The move impacts 18 institutions seeking registration and 20 aspiring for degree powers, while extending time-limited degree rights to ensure continuity.

Amid predictions that 72% of providers could face deficits by 2025-26, smaller and specialist institutions are particularly at risk. Phillipa Pickford of OfS highlighted the need to prioritize resources for safeguarding students in struggling institutions.

Critics, including Independent Higher Education CEO Alex Proudfoot, warn this decision may hurt institutional sustainability and call for government action to ensure the OfS fulfills its responsibilities. Despite the backlash, the OfS remains focused on addressing financial challenges and protecting students.

EDUCATION POLICY

Youth Guarantee to Enhance Apprenticeship Opportunities for Young Workers

The UK government has introduced new employment reforms, highlighting a commitment to enhancing opportunities for young individuals. Under the proposed "youth guarantee," those aged 18 to 21 in England will have access to apprenticeships, training, or educational programmes, while those refusing to work may face benefit reductions.

During discussions at Peterborough College, apprentices expressed concerns about low apprenticeship wages. Poppy Ludgate, a 22-year-old carpenter's apprentice, pointed to the significant pay drop she experienced transitioning from retail. Despite recognising the value of apprenticeships in career exploration, she urged improvements in pay structures, emphasising the financial challenges of living on a reduced income.

Szymon Olszewski, an engineering apprentice, echoed these sentiments, advocating for better quality training and facilities. He noted a trend among his peers choosing practical apprenticeships over university to gain hands-on experience without accruing debt. Kendall assured that the government is committed to fostering these opportunities, citing substantial investment in Cambridgeshire and Peterborough to support at-risk youth.

Paul Bristow, a former Peterborough MP, underscored the necessity for training to lead to tangible employment results, hinting at potential pitfalls in implementation without sufficient information. The reforms reflect a broader strategy aimed at reducing youth unemployment and ensuring productive, skilled futures.

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