Post Augar, what will it take to reform degree apprenticeships?

The Augar panel’s assessment of apprenticeships – specifically degree apprenticeships offered at levels six and seven – is unlikely to come as a surprise to those following a number of reviews and inquiries into them over the past six months.

However, now we have a rich body of analysis, we should consider the steps that will correct the course of the degree apprenticeships scheme – the implementation of which appears to have significantly deviated from its originally intended purpose. As growing evidence demonstrates, it is unclear whether the scheme is fulfilling the potential of individuals pursuing this pathway nor in addressing the significant labour market challenges faced in the UK.

The problem is well understood

The panel observes that there is both a low number of apprenticeships in the priority areas identified in the Industrial Strategy, and a small number of apprenticeship starts at levels four and above – the higher technical levels that are crucial to the economy’s skills needs (p.150). Apprenticeship starts at level six, which include those that amount to a degree apprenticeship, make up less than 4 percent of all apprenticeship starts. (p.152).

On the other hand, they observe that the number of level six apprenticeship starts has grown rapidly in the last two years – from 1,700 in 2016/17 to 10,900 in 2017/18 (p.153). However, this may not be cause for celebration given the emerging concerns about employers rebadging existing professional developments as apprenticeships to claim apprenticeship funds and the implications of these practices on the public purse. There is now the combination of concerns that relate to quality of the apprenticeship model and the risk to the public purse, in addition to not being able to produce the sufficient quantity of talent for priority sectors – a kind of triple edged sword.

The Augar report’s analysis also needs to be considered in the context of two other pieces of useful analysis.

First, findings from the inquiry led by Policy Connect’s Higher Education Commission into degree apprenticeships from earlier in the year highlighted that degree apprenticeship vacancies are most likely to be in close proximity to employment and education hotspots. A widely quoted observation from this report: “at its worst, those from Norfolk would have to travel a distance which is twelve times as far as someone from Hammersmith and Fulham,” is a reminder that the scheme may not be the great leveller of social mobility that it was hoped to be. The Office for Students backed this up in a policy brief, showing that in 2016-17, only 13 per cent of young people from the most disadvantaged backgrounds were taking up apprenticeships.

Second, are the concerns expressed by the National Audit Office (NAO) – which is worried that should demand pick up for degree apprenticeships (in the way they appeared to between 2016/17 and 2017/18), that there will be insufficient budget for the scheme to meet its objectives. The NAO also points to the absence of evidence to demonstrate that the initiative is delivering value-for-money, given the poorly defined measures of the impact of degree apprenticeships on economic productivity.

Notwithstanding the early stages of the rollout of this scheme, it is unclear how the success of degree apprenticeships is measured and whether an alternative approach will deliver better results for employers, students and the market.

Making sense of the Augar reforms

Matching supply and demand

The review identified a significant mismatch between the priorities of the industrial strategy and current apprenticeship starts. Given the significance of the industrial strategy, stronger collaboration between BEIS and DfE is essential to ensure the scheme meets employer demand. Despite the government’s attempts to create such an alignment, the panel concludes that the current implementation of degree apprenticeships is failing on this measure.

However, the report only calls for government to “monitor” how this progresses. The roles that Local Enterprise Partnerships, Combined Mayoral Authorities and Local Industrial Strategies could play are all overlooked. Recommendation 5.1 – “if funding is unable to meet demand, then areas of the Industrial Strategy should be prioritised” – contradicts other parts of the report. The complex implementation of such an approach would be entirely bureaucratic, represent a departure from an ’employer-led’ system, and drifts toward economic planning – all things which the report, explicitly or implicitly refutes.

Arrangements for SMEs

The failure to adequately meet small and medium sized employer (SME) demand is rightly called out in the review. While just 1.7 per cent of businesses are levy payers, four times as many level six and above starts have been made by big businesses. Described as a complex and bureaucratic system for SMEs to navigate, these findings are consistent with the Education Select Committee, Policy Connect, EPC, Lords Economic Affairs Committee and the FSB.

The report is right to call for a review of the barriers that SMEs face. However, it should have gone further in its recommendations to reform contract awarding, especially as it suggests that the current pattern of uptake is the result of a ‘tangled’ and ‘flawed’ process, failing to reflect employer demand. 63 per cent of degree apprenticeship standards have no or just one provider that is available to deliver to non-levy payers; a call to urgently bring non-levy payers onto the Apprenticeship Service would have finally brought an end to a baffling system which has left proven providers unable to deliver to local businesses.

Defining the desired audience

One of the more controversial recommendations of the report calls for zero levy funding for level 6 and above apprentices who already hold a degree – which raises the question of who degree apprenticeships are intended for? Much of the policy design deferred to employer demand, but now it seems that we’re not happy with how and where employers are recruiting their apprentices. This recommendation is doubtless a response to the dominance of management degree apprenticeships – and while the push back from businesses is understandable, it is right to call out the potential usurpation of apprenticeships by well qualified and socially mobile individuals.

Given warnings from the NAO of an overspend, we should be clear on who we believe the policy is intended to benefit. While the review is clear on who they should not be for, it fails to call on the government to set specific social mobility targets. The Government should make this clear, setting out clear plans for social mobility in terms that can be measured, just as the OfS has recently introduced a number of targets to eliminate equality gaps at universities. This should sit alongside broader efforts to equalise any geographic inequality of opportunity.

Simplifying regulation

It is understandable that the Office for Students (OfS) and Ofsted both have a shared interest in the success of degree apprenticeships. After all, apprenticeships have long been the regulatory domain of Ofsted. However, degree apprenticeships are also delivered by those primarily registered with the OfS and concern level 6 and above qualifications. Perhaps it is time for a fresh debate about whether the appropriate regulator is one that follows the type of provision being delivered or the identity of an institution.

One response to “Post Augar, what will it take to reform degree apprenticeships?

  1. Three observations. First, the apprenticeship levy was introduced without clear policy objectives but we should remember they came from the then Chancellor, George Osborne, whose concern was low productivity rather than social mobility. Addressing low productivity through enhanced human capital is a long term strategy not a quick fix. Second and this is a consequence of the first, no monitoring or evaluation has been put in place to assess progress. If you do not know what the purpose is, its impossible to tell if things are going well or badly and perceptions of this depend upon the differing perceptions of their rationale. Third, there is good empirical evidence that a significant part of Britain’s productivity problem is a consequence of poor management so it makes eminent sense to have apprentice managers, who by definition of their role, will require study at higher levels. Underlying much of the discussion is an assumption that management education is a waste of time, that apprenticeships are for technical disciplines and should be confined to lower levels of learning.

    In my view we are looking at this issue from the wrong end of the telescope. The apprenticeship model, where learning combines the classroom and the workplace should be the standard for all vocational subjects, including management, rather than the exception.

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