Conclusions and recommendations
Government policy
1. The
Committee welcomes the Government's commitment to raising skills
in the workplace through the apprenticeship programme. (Paragraph
25)
2. Our
evidence suggests that the apprenticeship scheme continues to
lack clarity and purpose in the longer term. Employers, apprentices
and other stakeholders remain confused about the overarching objective
of the scheme. We therefore recommend that the Government defines
an overarching strategy and clear purpose for the apprenticeship
programme. Only then can the public and Parliament effectively
monitor progress against the outcomes the scheme is intended to
achieve. (Paragraph 26)
3. The
National Apprenticeship Service has accepted that its priority
in the past has been increasing the number of apprentices and
the number of employers taking on apprentices. However, many of
our witnesses have argued that the success of the apprenticeship
scheme cannot and should not be measured by numbers alone. We
are encouraged that NAS is now putting greater emphasis on quality,
but are concerned that three of its five priorities for 2011-12
remain focussed on increasing the number of apprenticeship starts.
We recommend an urgent review of the objectives and priorities
of NAS with a view to justify a focus on achieving quality outcomes
in both the objectives and culture of NAS. There must be appropriate
measures of output for each objective. Therefore we further recommend
that qualitative information (such as quality perception, apprentice
satisfaction, public awareness and employer support) also be collected
and published alongside more traditional statistics. We discuss
and recommend further on this later in the report. (Paragraph
27)
Defining an apprenticeship
4. It
is generally agreed that a single definition is needed to clarify
the apprenticeship brand and enable effective regulation. For
that reason, we recommend that the Department formulates a formal
definition of an 'apprenticeship'. It is important that employers,
apprentices, regulators and the Government have a common understanding
of what is meant by an apprenticeship, and what is not. While
we understand the need for flexibility (for example in the area
of duration and past experience), an 'umbrella' definition should
include the following elements:
- Full-time employment;
- Accreditation and a measure of educational
gain;
- Independently accredited work based
learning;
- Independently accredited off the
job training;
- Competence based skill development
programme;
- An employer led design;
- Opportunities for progression; and
- A minimum duration agreed by industry
sectors.
Furthermore, any definition should state
clearly that apprenticeships are for developing skills not simply
for the validation or consolidation of existing skills. (Paragraph
33)
Delivery and funding
5. While
we welcome recent efforts to improve the administrative processes
for apprenticeship training for employers, we are concerned that
the funding chain remains unnecessarily complex. The sheer number
of organisations involved works against the efficient allocation
of funds. We therefore recommend that the Department provides
a simpler and more efficient delivery system. (Paragraph 41)
6. We
note the concerns that the funding structure (of 100 per cent
public funding for 16-18 year olds and 50 per cent for 19-24 year
olds) may bias firms towards employing younger apprentices and
unfairly disadvantage older applicants. However, there is a lack
of empirical evidence and analysis to substantiate these concerns
and it is disturbing that the Minister does not have this evidence
to hand. We therefore recommend that the Department provides a
detailed assessment of the impact that the funding structure has
had on the take up of apprenticeships by age group. That assessment
should specifically address the following four issues:
- The actual cost to businesses of
employing apprenticeships of differing ages and experience;
- Inequality perpetuated by the funding;
- Barriers to progression through
the scheme; and
- Disproportionate impact on specific
sectors. (Paragraph 52)
Perception of apprecticeships
7. While
we welcome the efforts of NAS to strengthen the apprenticeship
'brand', we cannot ignore the evidence that the perception of
quality may have been damaged in some sectors, which has in turn
undermined those efforts. NAS must not trade off between numbers,
quality and brand. We therefore recommend that NAS produces a
longer-term strategy outlining how it intends to maintain and
improve the apprenticeship brand in tandem with its other objectives.
(Paragraph 60)
Engaging apprenticesPreparing
for apprenticeships
8. During
our inquiry we saw a number of excellent apprenticeships schemes
run by business. However, despite the fact that many apprenticeships
lead on to degree courses, they are not always promoted in schools
as an equally viable route to a career as 'A' levels and university.
Furthermore, these routes are often intertwined with students
moving between the two. This may be because schools are measured,
primarily, by 'A' level attainment and the number of university
places gained by each academic year which forces teachers to concentrate
on the academic route. This needs to be changed. We therefore
recommend that alongside the number of university places gained
in an academic year, schools should also be required to publish
the number of apprenticeship starts. (Paragraph 68)
9. We
acknowledge that the inclusion of apprenticeships in careers advice
is legislated for in the Education Act 2011, but we have found
that awareness and resources in schools and colleges remains lacking.
We recommend that the Department for Education does more to assist
schools in the promotion of vocational training in the curriculum
(for example by providing literature, training to teachers and
information for careers advisors). It should also ensure that
any changes to the secondary curriculum will put proper emphasis
and value on pupils taking a vocational route in their careers.
The time and resources that institutions dedicate to 'UCAS applications'
compared to preparing students for vocational training illustrates
the scale of the problem. Success will be measured when schools
and colleges place vocational and academic progression on an equal
standing in terms of the both the level and quality of resources.
(Paragraph 69)
10. Given
the widely held view that NAS should have more involvement with
learners through schools, we were disappointed by the Chief Executive's
apparent lack of enthusiasm, citing the Education Act 2011 and
telling us that NAS was not statutorily responsible. The National
Apprenticeship Service should be a familiar name, known to all
students and teachers as an authoritative source of information
about apprenticeships. We recommend that NAS is given statutory
responsibility for raising awareness of apprenticeships for students
within schools. This should include some quantifiable measure
of success with which to gauge the student awareness of apprenticeships.
(Paragraph 74)
Equality, diversity and accessibility
11. While
we were encouraged to hear that the National Apprenticeship Service
does take diversity into account, the statistics show that it
remains a significant problem. We welcome the work conducted by
NAS into diversity, and recommend that it is given specific responsibility
and accountability to raise awareness of apprenticeships among
under-represented groups. This should include a responsibility
to promote the advantages of diversity directly to employers.
We believe that the apprenticeship programme should be an inspiration
and beacon of best practice to the wider economy, demonstrating
the advantages of greater diversity at all levels of industry.
(Paragraph 80)
Engagement with large businesses
12. We
were encouraged to hear about the high level of support that the
National Apprenticeship Service offers large businesses and the
apparent success it has had in this area. We recommend that NAS
continues to support large employers to engage with the apprenticeship
programme, and in particular to use their positions to support
local schemes and encourage connected smaller businesses (for
example those in their supply chains) to become involved in the
programme. We also recommend that the Government actively highlights
and celebrates examples of good quality apprenticeships taking
place in large businesses to extol the benefits to other employers.
(Paragraph 86)
Engagement with small and medium
sized businesses
13. While
80% of apprentices are employed in the SME sector, the major growth
in apprentices is in the retail sector. The SME sector in the
UK represents a huge untapped potential market for apprenticeships
but unlocking it requires far greater focus and resources. Whilst
there are already strong links between training providers and
SMEs it does not go far enough, and does not engage SMEs which
are harder to reach. We therefore recommend that NAS engages local
bodies such as LEPs and local Chambers of Commerce to target those
companies. Equally, the Department must recognise that NAS will
require some additional funding for this to be successful. We
will monitor this area of activity closely and will expect NAS
to publish quarterly reports on the number of new SMEs it has
brought into the apprenticeship programme. (Paragraph 93)
Reducing bureaucracy
14. We
note the recent announcements by the Department of measures to
reduce bureaucracy, particularly for large businesses. However,
we have heard that this has not been matched with action. Businesses
still consider bureaucracy and the perception of 'red-tape' to
be a major barrier to employing an apprentice. We recommend that
more work is done. Specifically, we recommend that the attitudes
and perception of employers, in terms of bureaucracy, are closely
monitored by the Department. NAS must engage with businesses of
all sizes specifically to hear how they could more easily engage
with the scheme. It should report its findings as a matter of
urgency. (Paragraph 99)
Alternative models to support SMEs
15. We
have heard that a significant number of small and medium sized
employers have struggled to engage with the apprenticeship programme.
We are encouraged to hear about innovative delivery models designed
to rectify this. We recommend that both Group Training Associations
and Apprenticeship Training Agencies continue to be supported
by NAS. However, care must be taken to ensure that the quality
of learning experience is not jeopardised. We support NAS's recent
initiative to set up a Recognition process and National Register
for ATAs and recommend that NAS is given formal responsibility
for promoting ATAs. It is important that all alternative delivery
models are actively monitored and NAS should assess the success
of such models not only by the level of employer engagement but
also by the quality of the apprentices' actual learning and the
subsequent conversion rate from such apprenticeships to full-time
employment. (Paragraph 115)
16. We
are encouraged to hear that private industry is introducing new
models of training. Specifically, we have heard about the practice
of large employers utilising and supporting their supply-chain
to supplement their apprenticeship programmes. NAS has told us
of its support and contact with large businesses and we recommend
that, in its dealings with such businesses, it promotes the benefits
of this model by encouraging large employers to support SMEs in
their supply chain using apprenticeships. (Paragraph 118)
Government initiatives
17. We
support recent efforts by the Government to increase employer
engagement through the 'Employer Ownership Pilot' and the 'SME
Incentive Bonus'. These initiatives are in their infancy and we
do not wish to tinker with the content of either policy at this
stage. However, over time they will need to prove higher levels
of employer engagement and value-for-money. We recommend that
clear criteria for success are published so that they may be objectively
scrutinised and that full value-for-money reviews are conducted
into both of these schemes after 18 months. (Paragraph 129)
18. We
recommend that the Government encourages the employment of apprentices
in its procurement contracts. While we concede that some flexibility
is required (for example around the sector and nature of the work
contracted), we recommend that Central Government, Local Government
and other publicly funded bodies should seek to achieve at least
one additional apprenticeship for every £1m awarded through
public procurement as a benchmark. We have been told by the TUC
that this is current policy in some construction procurement arrangements.
Furthermore, we recommend that the current recruitment practices
of prospective contractors (in terms of apprentices) is a factor
which is taken in to positive consideration when the Government
is considering bids for any public contract. (Paragraph 133)
19. In
terms of using public procurement to incentivise apprenticeships,
the Minister told us that he was determined to push this as far
as possible "within the constraints of the law". We
recommend that in its response the Department sets out how it
proposes to resolve any legal issues preventing the Government
from attaching requirements for apprentices in major public procurement
projects commissioned by itself, local government and publicly-funded
bodies. (Paragraph 134)
Quality
20. The
burden on employers must always be a consideration when imposing
such regulation on the industry. Overall, however, we agree with
the bulk of evidence, that the balance between industrial burden
and apprenticeship quality in relation to employment criteria
has been found successfully by the Government. (Paragraph 140)
21. We
support the introduction of statutory standards (SASE) and the
improvement to quality that they appear to have brought to apprenticeships.
However, 18 months after their introduction, it would be appropriate
to properly examine their impact. We therefore recommend that
NAS reviews the impact of the implementation of the standards
on training quality, regulatory burden and framework availability.
We further recommend that it consults across sectors to assess
the regulatory burden and suitability of the regime across the
economy. (Paragraph 144)
22. It
is important that employees have functional skill levels of literacy
and numeracy to match those of our international competitors.
However, this should not disadvantage the ability of specific
groups to access training and accreditation. To that end, we endorse
the principle that transferrable and core skills should be part
of apprenticeship framework. However, we recommend that the 'functional
skills' regime be reviewed by the Department twelve months after
their introduction. The Department should consult with industry
to review the recruitment of apprentices and we recommend that
it reports on whether the introduction of 'functional skills'
has unfairly discriminated against any group of apprentices (for
example those in a specific sector) from completing a framework.
If it is proved to be so, we recommend that the Department works
with industry to develop alternative models of providing such
training. The development of functional skills should be a feature
of, not a bar to, apprenticeships. (Paragraph 149)
23. We
have been cautioned that the learner experience is complex and
hard to quantify. The Government has promised to improve access
to objective and comparable information relating to training providers.
We recommend the Department sets out its timetable for delivering
this information. (Paragraph 153)
24. While
a minimum duration is not a substitution for a quality framework,
we support the Department's recent announcements of a minimum
12 month duration for all apprenticeships frameworks. However,
we are concerned that this policy may have unintended consequences.
We therefore recommend that the Government closely monitors this
requirement and the impact on take-up of more talented apprentices
(who may feel held back by the policy) and older learners (who
may be dissuaded from training). (Paragraph 162)
25. The
UK's workforce should be given the opportunity to become as highly
skilled as possible and we support the Government's drive to increase
the number of Higher and Advanced apprenticeships. However, the
apprenticeship scheme must reflect the demands of sectors in terms
of job roles and skills demanded. We recommend that the National
Apprenticeship Service works actively to encourage progression
with employers. We also recommend that the Government works with
Sector Skill Councils to ensure that, while they remain rigorous,
Higher and Advanced level apprenticeships are accessible to all
those who have the potential to complete them. Frameworks should
be sufficiently flexible not to disqualify such apprentices from
progressing. Specifically, the Department should review the appropriateness
of framework requirements such as, for example, to have had management
experience. (Paragraph 169)
Value for money
26. The
issue of additionality and deadweight loss is key to calculating
the value-for-money of any publicly funded project. It is especially
pertinent to the funding and provision of apprenticeships. While
we were encouraged by the Department's recent Research Paper and
the Minister's words on this subject, there is a need for more
detailed analysis to be done to better quantify the issue. The
Department's own research bemoaned the lack of quality data and
it is clear that a significant amount of money is being spent
on areas where additionality has not been proved. We therefore
recommend that the Government, as a matter of urgency, forms a
clear strategy to rectify this through the collection and analysis
of the necessary data. (Paragraph 181)
27. While
we were encouraged by the progress made since the NAO's recommendation
to improve the targeting of public funding, it is clear that more
work needs to be done. Transparency is key in the allocation of
investment, particularly if some are to be given preference over
others. It is especially important that fixed criteria for preferential
funding are published and adhered to so that businesses and individuals
have no doubt that the funding is fair, evidence based and attainable.
The Minister and Department have been unambiguous that funding
should be focussed on 16-24 year old apprentices and advanced
(and above) frameworks. We welcome this clarity and, despite the
recent Industrial Strategy, recommend that the Department now
identifies which 'growth sectors' will benefit from focussed funding
at a much more specific level. We further recommend that these
sectors are reviewed annually to ensure that public funding is
consistently being allocated to those areas where economic benefits
are greatest. (Paragraph 193)
28. We
have heard that, despite fairly high levels of media scrutiny
on the topic, some training providers continue to offer their
services to employers without seeking employer contribution of
any kind. This practice suggests either that the quality of training
is being compromised in order to reduce costs or that too much
public money is being spent on training that the employer should
be funding. This practice poses a substantial risk both to the
quality of training and the apprenticeship brand with apprentices
and employers being the ultimate victims. We recommend that the
National Apprenticeship Service, as a priority, produces a robust
methodology for valuing employers' in-kind contributions in the
future. (Paragraph 200)
29. We
further recommend both that employers be required to publish an
annual statement of their contribution to the training provider,
and that training providers be obliged to report a statement of
contributions and costs to the SFA. This statement must include
an account of the value of any in-kind contribution using the
methodology proposed above. In addition, we recommend that an
annual audit is conducted of a representative sample of employers
and training providers to assess the scale of the problem. (Paragraph
201)
30. We
are deeply concerned that both the Minister and the Skills funding
Agency have adopted a hands-off approach in respect of the profit
levels and value for money of training providers. We were particularly
troubled that the Minister appeared unconcerned about value for
money given the 36 per cent level of pre-tax profits achieved
by Elmfield Training and the statement by the Chief Executive
of Elmfield Training that the Government paid out too much money.
We are encouraged that the Government is now more aware of these
issues and has reviewed the rates to take account of efficiencies
and economies of scale that allowed training providers to make
substantial savings, and therefore excessive profits, from receiving
a flat rate of public funding. We recommend that the Government
takes a more active approach in the future and constantly reviews
the profit levels of training providers as an indicator of potential
risks to efficiency. (Paragraph 209)
31. We
are surprised that the Government, through the Skills Funding
Agency, paid £40m for what was essentially an untested product.
The quality of training providers is assessed by Ofsted and we
recommend that such assessments be a pre-requisite for every provider
who is bidding for more than £6 million of Skills Funding
Agency money (which would have covered the top thirty contracts
last year). Training providers must be incentivised to aspire
to provide the best quality training. To that end, we recommend
that quality training providers (i.e. those who receive grade
1 or 2 from Ofsted) must be first in line when it comes to allocation
(and subsequent reallocation) of public money. (Paragraph 213)
32. While
the practice appears to be widespread, we do not believe that
it is desirable for training providers and awarding bodies to
be owned by the same group or individuals. The Government should
look critically upon this serious issue. To that end, we are encouraged
that the regulator Ofqual is conducting a wide market review,
which the Skills Funding Agency expects to include an assessment
of the issues surrounding combined ownership of training providers
and awarding bodies. We look to the National Apprenticeship Service
and the Skills Funding Agency to work with Ofqual to ensure that
this review is successful and comprehensively deals with this
specific issue. We accept that the practice of joint ownership
is not unusual but learner experience is key and should not be
put in jeopardy by conflicts of interest. Robust mechanisms must
be put in place to prevent any conflict of interest impacting
the learning experience of the workforce. We recommend that, if
the Ofqual review does not cover this, the SFA conducts a more
focussed review on the impact of competing incentives, the risk
to quality and brand perception arising from this practice. (Paragraph
218)
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