Degree apprenticeships are meeting employer needs, and are developing skills in areas where there are shortages – why are there calls for intervention?
At one of her first speeches as the Minister of State for Apprenticeships and Skills, Anne Milton talked about the apprenticeship system moving to a “fully employer-led system”. This aspiration echoes a long-standing commitment of government from successive ministers. Her immediate predecessor, Robert Halfon, stated that the “whole purpose of the reforms” is to “put employers in the driving seat”. Likewise, his predecessor Nick Boles, identified a key principle at the heart of the apprenticeship drive being that “no one better understands the skills employers need than employers themselves”.
New kids on the apprenticeship block
At UUK we fully support the principle of an employer-led apprenticeship system. Degree apprenticeships, the new kids on the apprenticeship block, are clearly meeting this employer need with a significant number of new standards being developed at higher levels. Universities of all types and in all regions of England have invested time and energy working with employers to develop degree apprenticeships. Our research [pdf] has shown that so far, the key subject areas have been engineering; digital technology; and, leadership and management. As illustrated by the recent industrial strategy, these are all areas with recognised skills shortages that are crucial in improving productivity. Meeting the higher-level skills needs of the public sector such as nursing, policing and social work will be the next growth area. Our research also shows a strong emphasis on the value of degree apprenticeships in widening opportunities for young people, with universities citing social mobility as one of the top three benefits of degree apprenticeships.
Despite this, there appears to be an increasing chorus of concerns raised about the development of degree apprenticeships, with calls for intervention relating to the potential growth of degree apprenticeships and the impact this will have on existing providers. Mark Dawe from AELP has predicted that 50-60% of the levy could be devoted to degree apprenticeships. This article is in part to demonstrate that the level of growth, whilst rapid, has a long way to go before it reaches those sort of levels, if ever.The Association of Employment and Learning Providers (AELP), to protect lower-level apprenticeships, has recommended that they be fully funded for non-levy paying employers (as opposed to the 90% funding rate planned) and that this be paid for by raising the amount these employers are expected to pay for higher-level apprenticeships. Similarly, David Hughes of the Association of Colleges, recently expressed concern about ending up with “more and more degree-level apprenticeships” and, in particular, the “unstoppable rise of management apprenticeships”. In his view the apprenticeship levy is a “public fund”.
We have heard the Department for Education refer to the potential for “exponential” growth of degree apprenticeships as a cause for concern. However, we need to recognise that degree apprenticeships have only been in existence for a short time, so we are starting from a small base and it is difficult to predict growth yet. We estimate that degree apprenticeships represented only 0.3% of new starts in 2016/17 which, if all were in the top funding band, would be the equivalent of 0.6% of levy funding (at the most optimistic estimate). This could double every year for the next four years, and still represent just under 5% of apprenticeship starts. Indeed, recent Education and Skills Funding Agency (ESFA) research shows that of all higher level apprenticeships delivered, only 10% involved training or learning at a university. We are still talking about relatively small numbers.
The TES recently ran an article about the increase in university funding from the ESFA, adding to concerns about the impact of growing university provision. The level of funding from ESFA to universities between 2014-15 and 2016-17 increased from £12.6 million to £31.9 million. Most of this growth could be accounted for by degree apprenticeships and it represents an increase of 0.4% of the 19+ FE teaching and learning budget, to just under 1%.
What this debate illustrates is a strong focus on the concerns of providers, with some provider voices louder than others. What might be seen as an opportunity for some providers can be seen as a threat to others. There is the challenge of meeting all commitments from the levy “pot” but if the levy spend goes up the government could increase the overall budget. While higher level apprenticeships provision is increasing (with FE delivering a significant proportion of these), according to Dame Fiona Kendrick, an IFA Board member, this is not “at this moment in time to the detriment of the level ones and twos”.
The system needs to evolve to engage equally with all providers, but far more importantly to increase the focus on the skills needs actually identified by employers and then support a mix of provision to enable these needs to be met. The number of registered providers is increasing, which is a healthy sign of moving towards a more employer focused “market”, but more needs to be done.
We don’t believe that self-interested groups of providers (including us here at UUK) should be second-guessing what employers want or need. Three steps towards a truly employer-led system would be as follows:
- to have a level playing field for all providers, so that they can all meet employer demand (for example having equal representation on the Institute for Apprenticeships board and committees);
- to dramatically improve the currently tortuous ‘trailblazer’ process for approving new standards; and,
- For policy makers to resist the temptation to cut across or undermine the ability of employers to spend their levy funds on the apprenticeships that best suit their skills needs.