Mike Rowley is Head of Education at KPMG.
If you’re an employer with a pay bill of more than £3m a year, you’re already paying 0.5% of each month’s wages on the apprenticeship levy. This is all part of the recent government drive to create millions of apprenticeships as a way of stimulating employer-led on-the-job training schemes. And it’s not just the government that thinks that there’s been long-term under-investment in employer-led training; across the General Election manifestos you could read a commitment to stimulating technical and vocational education.
It’s hardly a surprise that there’s a weight of political consensus. With the potential for Brexit to cause skills shortages, it’s essential to take workforce development more seriously. Apprenticeships are a key part of that mix, though the speed of the levy’s implementation has caused some anxiety. There’s also concern about completion rates for higher apprenticeships: are the ones we have good enough, let alone fit for expansion? But for all the focus on the here and now, have we spent enough time to examine what might happen if degree apprenticeships really take off in the future?
In the context of significant disruption in the higher education sector, what would happen if growth in apprenticeships really started to bite into the undergraduate market? Has it been considered what would happen if the number of home students attending three year campus-based degree programmes dropped by 25% or more?
Just as a businesses and their supply chains work together to understand each other’s needs and challenges when starting a new enterprise or relationship, universities must do the same with employers. In the case of apprenticeships, that means educational institutions thinking more about employers as the customer.
However, there is a patchiness in universities’ business-to-business relationships. Some are great at it, and all engage with employers in terms of graduate employability at the very least. Employers are likely to focus their judgement of quality in different ways than students, for example considering the quality of the discipline at a granular level more than institution-level measures of prestige. Overall university ratings, in research or teaching performance, which can drive student demand may be of less interest to employers focusing on price and the quality of the specific service they’re seeking out.
The apprenticeship policy puts significant power in the hands of employers to determine the kind of provision they want, and a marketplace in which they can work with the provider that best suits their needs. Universities may see an opportunity, but they need to ensure that they – and their supply chains – have the capacity, ability, flexibility and willingness to deliver to the employer’s demands.
Imagine, if you will, that employers really take to the levy. They’ve decided that they want to spend the money in a targeted way to meet their workforce skills needs. They’re going to find universities, and other providers, with which to partner and, together, offer a jointly-branded offer to prospective apprentices. For the university sector as a whole, that could well be net-neutral if the apprentice were otherwise going to do a degree, and could even be positive if the expanded vocational routes increase overall participation.
But this could also have a disruptive effect on the distribution of students across providers, study-modes and levels. If there are the same numbers of students, but more studying in the workplace – that means fewer resident on campus. It’s also likely that one of the most prominent areas of apprenticeship growth will be at master’s-level. Such a transition across all levels of higher education will mirror some of the responsive, work-focused models that we already see in further education.
Let’s further imagine that apprenticeships take hold across the board. Parents, including those who had followed more traditional routes, now encourage their children to seek out apprenticeships. The desirability of those options won’t be based solely on the reputation of the university making the award. The employer will have a significant role to play in that relationship, quite possibly one which outweighs the university.
The biggest employers – government departments, bodies like the NHS, high-street names and consumer brands – should be desirable places to work, learn – and earn – simultaneously. Taken even further, for those bigger employers, engaging more directly in delivery themselves could be an option which could take these students out of the traditional higher education system altogether.
The apprenticeship levy is likely to stay in place for the time being, and we won’t know for some time whether it provides the expected stimulus for work-based, employer-led, education and training. But given that it’s entirely plausible that it does take off, and in significant numbers, universities should give serious thought to the impacts (positive and negative) it could have on them in the medium term.
So, in summary, there are a number of key questions to consider: can you maintain quality and deliver at scale? Can you work effectively and flexibly with employers to provide tailored programmes possibly across multiple geographies? Are you clear what differentiates your curriculum offer at a granular level? Are you clear which programmes/areas make financial contributions (and so may be attractive to new entrants) and which are subsidised?
Governors, and other university leaders, should be asking whether their future planning scenarios take account of the potential for apprenticeships to cause a major shake-up for higher education. If universities are going to succeed in the future, they’ll need to ask searching questions as to whether their current ways of working are fit for purpose.