Select Committee on Economic Affairs Fifth Report


CHAPTER 6: Employers: marginalised at the end of a long chain of administration

78.  Apprenticeship improves the nation's skill base and, for many of those who benefit, enhances earnings and life chances. However, the employer's role in what should be the apprenticeship partnership is currently that of a passive partner in a process of which the average apprentice employer has only limited understanding.

79.  Apprenticeship is—or should be—a unique public-private partnership. Three actors contribute—employer, apprentice and government—and all stand to benefit from a successful partnership. Witnesses stressed that procedures for the administration of government funding of apprenticeship had the effect of marginalising employers (Unwin and Fuller Q 77; Ashton p 173). In the case of apprenticeship funding, the administrative chain separating policy from practice on the ground is a long and, we would argue, dysfunctional one.

Management of funding

80.  Government funding for the training component of apprenticeship is administered by the LSC. The LSC managed the funding of a wide range of education and training activities on behalf of the DfES. Planned LSC expenditure in 2006-07 was just under £10 billion. Table 5 sets out the range of activities funded by the LSC and the share of each in the total budget.

TABLE 4

Planned Learning and Skills Council Expenditure 2006-07
Budget Line
Planned expenditure
2006-07 £000s
Percentage of total
School sixth forms
1,871,098
19
16-19 Further Education
2,863,200
30
Work-based Learning (apprenticeship)
1,080,325
11
19+ Further Education
1,932,858
20
NETP (Train to Gain)
230,000
2
Personal and Community Development Learning
210,000
2
Learners with Learning Disabilities and/or Difficulties
157,662
2
Learner Support Funds
198,249
2
University for Industry/LearnDirect
176,332
2
14-19 Skills and Quality Reform
425,792
4
Capacity and Infrastructure
64,244
1
LSC Capital
468,800
5
Total Departmental Expenditure Limit (DEL) expenditure
9,678,560
100

Source: Learning and Skills Council Priorities for Success 2006-2008 October 2005 Table 3

81.  Apprenticeship constitutes only 11% of the total funding activity of the LSC, while other 14-19 learning (school sixth forms and under 19 Further Education) accounts for just under half of the total. Apprenticeship is, therefore, a relatively small part of the total range of the LSC's activities, both at national and local level. We consider that this distribution of post-16 funding is unbalanced and that there should be a substantial shift of resources away from other post-16 provision in favour of apprenticeship.

82.  Perhaps because the budget for apprenticeship is relatively small, responsibility for ensuring that apprentices are found and funded is passed on from the national LSC to 'training providers' via local LSCs. The term 'training provider' covers a wide variety of organisations and businesses, some of which are not-for-profit and include Chambers of Commerce and some Group Training Organisations. Some Further Education Colleges provide apprenticeship training. A small number of large employers contract directly with the LSC to receive funding to train apprentices.[50]

83.  Each local LSC (LLSC) is allocated a share of the total funds available for apprenticeship training. Training providers in each LLSC then bid for a share of the funds available in their area. Professors Unwin and Fuller told us that the reliance on training providers to "make apprenticeship happen" dates back to the model adopted 25 years ago to launch the Youth Training Scheme:

"The providers sit at the heart of the VET [vocational education and training] system and concentrate on securing the number of apprenticeship placements (still referred to as 'starts' in the DfES and LSC statistical databases) identified for them by their local LSCs. These numbers are based on the annual PSA target set by the Treasury and not on the needs of businesses for apprentices. As such, many employers have no connection with the qualification requirements of the VET programme as they are handled by the training provider." (p 21)

84.  Employers who are not approached by training providers to take apprentices will not know that apprentice places are sought in their area unless they take steps to inform themselves. Employers who do wish to take on an apprentice and to access government funding for training must normally approach a local training provider in order to access the funds held by that provider for apprenticeship places. We heard from a Cheshire company with long experience of employing apprentices that would-be apprentices who have identified a company that is prepared to offer an apprenticeship must also first find a training provider who can make the funding available. (Eric Johnson of Northwich Ltd pp 206-207)

Employers not sufficiently involved

85.  We heard evidence from a number of sources on the marginalisation of apprentice employers. The Institute of Directors told us: "… we have to get better involvement from employers in delivering that apprenticeship once the [apprentice] has started and too often employers are not engaged enough in making it work from their end". (Q 168)

86.  Mr John West considered that "to some extent the training provider 'gets in the way' between the firm and apprentice, and—as well as relieving the firm of paperwork—actually also relieves it of responsibility and involvement". (p 40)

Advantages of employer involvement

87.  In dual-system countries—but also in the Netherlands and New Zealand where apprenticeship provision is more similar to the UK—employers play a central role in providing and managing apprenticeship (Ashton p 174.). The experience thereby accumulated becomes training expertise which benefits apprentices and the business concerned. In the UK, the employer is all too often the passive partner who 'takes on' an apprentice when approached by the training provider but is not required to assume any responsibility for the training of the apprentice or for the outcome of the apprenticeship.[51]

88.  Both apprentice and employer lose out in this process. The apprentice does not benefit sufficiently from the potential of the working environment for teaching and learning. The employer fails to develop a capacity for in-house training which could be of long-term benefit to the business.

89.  The DfES failed to build connections between key partners in apprenticeship—schools, young people and employers. The current procedures for providing apprenticeships have the perverse result of discouraging employers from taking responsibility for apprentice training. The use of intermediaries to negotiate apprenticeships with the LSC on behalf of employers should have been a transitional 'learning' stage, leading to employers taking full responsibility for the recruitment and training of apprentices. Instead, these arrangements have become entrenched, preventing employers from developing the structures and capacity to train young employees.

90.  Employers should be at the centre of all apprenticeship provision. In our view, all funding for apprenticeships—the current average yearly spend per apprentice is £3,250—should, within five years, be re-routed directly to employers. Employers would then sub-contract any off-the-job training or other services which they did not themselves provide. This direct financing would act as a powerful incentive for employers to provide more places.


50   In a Parliamentary Question of 16 April 2007 (Col 286w), the DfES was asked: "What percentage of apprenticeship training providers funded by the Learning and Skills Council were employers in each year since 1997?" The Minister replied: "Data on Apprenticeships and Advanced Apprenticeships are collected on the Learning and Skills Council's (LSC) Individualised Learner Record (ILR). The table shows the percentage of apprenticeship training providers funded by the LSC that were 'private organisations in their own right' or 'other private organisations'. Included within these proportions are employers whose main business activity is the provision of education and training. We are unable to separately identify such employers." (our italics) Back

51   Adult Learning Inspectorate, Annual Report of the Chief Inspector 2005-06, Health, public services and care, p 4 Back


 
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