The Department for Education’s reforms to the apprenticeships programme are failing to deliver on their aims, the parliamentary public spending watchdog has said, in a report that says government cannot hope to meet its target of having three million people take up apprenticeships by next March.
The Public Accounts Committee has urged the DfE to “realign” the programme with the objectives it had when it first launched in 2013, to boost productivity, encourage employers to invest in training and increase access to opportunities to people from disadvantaged social groups.
In a report today, PAC said that the programme was not only on course to miss its key target, but that it also risked leaving people with lower skills because of the way employers had responded to the introduction of new standards system.
Employer-designed standards were brought in as part an overhaul of the apprenticeships programme in 2017 to replace the existing qualifications framework, which is being phased out and will end completely in 2020-21.
The 2017 reforms also introduced an apprenticeships levy – a fund larger businesses must pay into, that they can then use to fund apprenticeships they run. Employers with a paybill of more than £3m pay into the levy, which they can use for training, along with a 10% top-up from the government.
But the PAC report noted that the number of people taking up new apprenticeships, known as “apprenticeships starts”, fell by just over a quarter after the levy was introduced.
The number of new starts has since begun to climb again, but is not rising enough to counter the 26% drop, meaning the department will miss its target for three million apprenticeship starts by 2020, the MPs said.
They were also sceptical about how some businesses had responded to the new standards regime.
At the moment, employers can decide whether to train apprentices using the new employer-designed standards or the previous qualifications framework, and more than half of apprenticeships are now started on employer-designed standards.
The report welcomed the increased focus on quality that the reforms had brought, but said some employers were using apprenticeship funds to pay for professional training or management courses that they would otherwise have paid for themselves.
“We remain to be convinced that this is the best use of the available funding in terms of adding genuine value to the economy,” the committee said.
The report also warned that higher-level training accounted for a higher proportion of standards-led apprenticeships than qualifications-led ones, which meant that the number of opportunities for people with lower skills to become apprentices was decreasing. It urged the department to assess whether there are enough apprenticeships at a level that is accessible to school leavers or other workers fewer skills.
It should also set “more stretching” diversity targets, said the report, which criticised the DfE’s “unambitious” goals to recruit BAME apprentices and those with a disability or learning difficulty – which are lower than the proportion those groups make up of the working population.
The committee’s also repeated previous warnings about the future cost of apprenticeships. The DfE underspent its budget for the programme in 2017-18 because of the post-levy drop in starts, but its spending is expecting to rise dramatically because employers are favouring higher-cost apprenticeships.
The average cost of training an apprentice according to the new standards regime is around twice that under the previous scheme, and PAC repeated the NAO’s warning that employers’ preference for the higher-cost option could pose a threat to the “long-term sustainability of the programme”.
Committee chair Meg Hillier said the lack of progress towards the government’s 2020 target had “disrupted the direction” of the apprenticeships programme.
“The way the programme is evolving is out of kilter with the department’s objectives: opportunities for people with lower skills are diminishing and apprenticeship starts in disadvantaged communities has fallen.”