Concerns grow over apprenticeships

Jez Abbott
Monday, January 27, 2014

On the government’s ongoing plans to reform apprenticeships, training guru Jonathan Ledger has cautionary words for printers toying with training: “Be careful what you wish for.”

The managing director for print training provider Proskills UK and the National Skills Academy for Materials Production and Supply is worried about one of the central proposals that will have an impact on a whole host of areas, from standards to mentoring. This was first kicked around in 2012 and is currently under consultation (see box). 

That proposal is the idea to switch funding for apprentices from training providers and colleges to employers, and Ledger says: “It’s fine having control, but control and responsibility are different things: can the printer handle such a burden of bureaucracy? As always there are two sides to this argument.”

The government says the changes will generate many more apprentices and give employers more control. The other side, stated recently by a training expert in The Guardian, is that those changes risk an 80% drop in apprentice numbers. 

Ledger insists employers already invest heavily in apprentices – up to 80% of the cost, including wages.

But the burden hinges on the method of payment. This is still to be decided, but will probably be offset against a printer’s tax bill or national insurance. Most employers aren’t set up to manage funding this way and don’t have an HR person, let alone a department. Ledger insists several printers have contacted him “saying this will be a nightmare”. 

Training providers are also unlikely to sleep easy. More competition is needed to drive up efficiency in the way training in delivered, admits Ledger. Providers are dependent on government funding but margins are tight and a few providers have already gone under because funding didn’t cover their costs.

More will follow them, he believes: “It could mean de-investment in skills, as employers with the money choose to deliver more training themselves rather than use the people who are perhaps best able to deliver it. A lot more training providers will go out of business. I’m not sure there’s a clear winner, apart from the government.

“It is shoving some of the burden back into the workplace, while tax allowances are easy to erode. So I guess investment in training will decrease. The real losers will be SMEs, who won’t be able to buy training as cheaply as a provider or large company dealing with lots of apprentices. Those organisations have economies of scale and purchasing power. 

“But more than half of apprenticeships are through SMEs and 80% from companies with one or two apprentices. For the likes of Rolls-Royce, it’s probably right up their street. For the average-sized business, however, it’s not good and having to claim back what you’ve spent creates nasty cashflow issues.”

BPIF operations manager for training Andy Bracey agrees: “The concern, not just for us but the Association of Employment and Learning Providers, is that the proposals may thwart training. It looks like payment will be through tax credits, not direct, and employers would also have to have Ofsted checks – a bureaucratic nightmare that could deter them from taking apprentices on.”

Proper provision

KCS Print in Launceston, Cornwall, has four apprentices trained through the BPIF. Managing director Terrye Teverson is happy for print-specialist training providers to get the money. But when colleges have neither the skills nor the kit, and when tutors sometimes don’t even turn up, she has an issue.

“If it’s a general college down the road, I think it’s better to give the money to the printer direct – if nothing else it recognises the downtime that inevitably goes with training. I have also seen a lot of training budgets hived off on college bureaucracy with no return to industry. Sometimes you learn more in the workplace than you do with bums on seats and that should be recognised in funding.”

Training provider Learn2print education director Jon Bray will have to take on more admin staff to chase up companies for payment. Companies, meanwhile, dread the added burden, he says, following talks with several clients including Crown Packaging. The Skills Funding Agency, which struggles to keep tabs on 2,000 training providers, will have no chance with 130,000 employers, he adds.

UPM Shotton, which has around 15 apprentices and is accredited by the Institute of Engineering and Technology, may have found a middle way. Process control and engineering supervisor Sam Hubbard says her company is a government ‘trailblazer’ for apprenticeships and is focusing on standards. Colleges and training providers in the North West have been excellent, she adds.

“But on funding, it could be that larger companies take over some of the burden of training for SMEs, who may find it hard to offer apprenticeships, in return for some of the training funds. Amounts would depend on what was being offered by us.”

However the situation is resolved, Ledger says the current confusion is overshadowing the core message about apprenticeships, which is ease of access to training. Around 80% of training comes from providers “banging on doors of employers”. They may be driven by need for funding to survive, but it’s a proactive stance not reactive, he argues. 

“What incentive will they have now? And how will apprenticeship training shape up with the percentages reversed and with only 20% of training coming through proactive employers? You will have to make up the remaining 80% difference through employer enthusiasm.” 

Timetable for training

In July 2012, the Department for Business Innovation & Skills announced plans, including direct funding, to enable employers to buy apprenticeships training

Consultation on changes to training ended in October 2013 and a further technical consultation to hone specifics is due shortly

Business secretary Vince Cable said: “Employers are best to judge what training is worth investing in. These reforms give them power make sure their skills are relevant to the company” 

UK Commission for Employment and Skills chief executive Michael Davis said: “We must return apprenticeships to their founding principle – a
contract between the apprentice and the employer” 

But Institution of Engineering and Technology head of policy Paul Davies said: “SMEs negotiating alongside larger employers may need to form a consortium to have their voice heard and negotiate what training should be given to apprentices”

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