Many readers might have had an experience along the following lines. You’re on a call, in a meeting, at an event – and someone just happens to let slip that they are doing a postgraduate apprenticeship through their work.
Questions bubble up: isn’t this person someone in a position to fund their own studies? Or perhaps: don’t they already have a master’s degree? You might even be thinking: your manager really lets you duck out of work for training so often?
Now this is pure anecdote – and forgive me if it’s not quite as frequent as I’m assuming – but it’s proved to be a pretty powerful one as debates over apprenticeships have percolated in the press and in the back of policymakers’ minds for the last few years. Allied with controversies over supposed “MBA apprenticeships” (or more recently, MBA top-ups and management training for senior executives), it’s led fairly directly to where we are now.
The government has announced that “a significant number” of level 7 apprenticeships will be removed from levy eligibility in England. The accompanying enjoinder for employers to fund them by other means (if they so choose) is likely the death knell for most of the affected courses, given that without the incentive of levy spending they will largely look like ungainly, over-regulated and rather long bits of exec ed.
Now we still don’t know exactly what decision the government is going to take. And Labour’s moves here do have other motivations – the policy intention is to stop employers spending their allowances on (older, already qualified) existing staff, and therefore give them a free hand to take on younger apprentices at lower levels, including with so-called “foundation apprenticeships”, though there is zero detail on how this shift in employer training priorities is expected to come about.
But still – if this was the only priority, money could have come from elsewhere. The fact remains that level 7 apprenticeships have various black marks hanging over them, whether or not justified, which have made them a safe target to go after. Is it really a good use of taxpayers’ money to fund long and expensive courses of what is overwhelmingly in-work training?
Whose fund is it anyway?
A big part of the issue, however, is this sense that the levy is really “taxpayers’ money”. It isn’t – it’s half a per cent of an employer’s annual pay bill, assuming said pay bill is £3m or more. Alison Wolf’s recent report for the Social Market Foundation vividly spells out the issue here – employers have become hyper-aware of what they “owe” and are incentivised to spend it as fast as they can, a perverse incentive of the current system which has made level 7 programmes more attractive than policymakers assumed.
Much of Labour’s current skills policies have their genesis in a period when employers were not successfully deploying their own levy contributions, and there was a question of how better to direct underspends. This is very much not where we are now. And there are many employers who are not well set-up to pivot to entry-level apprenticeships (think solicitors, for example), or who are stressing their own workforce’s need for higher-level upskilling and pursuing productivity gains rather than a larger headcount.
It could be that the non-apprenticeship part of the growth and skills levy will help square this circle – employers will be able to invest in shorter, possibly more useful workforce training this way, rather than running headlong towards level 7 programmes as the only game in town. The problem is that the government has gone very quiet about this, and we have no sense of what kind of courses will be in scope here.
And much like with the employer national insurance rise, it doesn’t seem to have been thought through how publicly-funded bodies are meant to respond here – NHS trusts and local councils being big users of the apprenticeship levy, by dint of their size. If the government doesn’t want them spending their levy funds on this type of provision, is it asking them to spend cash from elsewhere in their budgets?
Caught in the middle
Stuck between employers’ wishes and government’s aims (or the imagined taxpayer investment) are those education and training providers who have poured resources into making higher-level apprenticeships work. And when we’re talking about level 7 qualifications, it’s universities that have done a lot of the running.
If you had said a decade ago that many if not most universities would be founding and scaling up teams dedicated to reaching out to employers, thinking about training needs, even coordinating levy transfers across partners and supply chains (as the Edge Foundation’s recent research found) – well, it would have sounded like something dreamed up by a think tank, a laudable ambition unlikely to ever come true. And yet, here we are.
The Department for Education and Skills England may decide to limit only a couple of standards – as the chart below shows, simply scrapping the Accountancy and Taxation Professional and Senior Leader standards would dramatically change the landscape (though we’d likely be back in the same position in a few years having a similar conversation about the Senior People Professional and Systems Thinking Practitioner ones).
But once the government starts taking a pick-and-mix approach to standards (as opposed to letting a properly independent arms-length body do so), it opens the door to it happening again and again. If there is a substantial defunding of level 7 apprenticeship standards, expect the next few years to see targets on the back of others, even at level 6 – and an accompanying disincentive for universities to keep pressing ahead seeking out partnerships with employers.
The removal from levy eligibility of standards that currently have a high uptake will have an immediate impact on those providers invested in them. Below, DK has charted apprenticeship starts by higher education institution (and a few other public bodies as they are lumped together in the DfE data, though as you may have noticed above some for-profit universities appear in the private sector category instead).
The default view in this chart shows level 7 starts in 2023–24, broken down by standards, so that you can plumb the impact on different providers of different approaches to defunding. And if you’re getting nervous about what else Skills England might fancy doing once it’s finally got the level 7 announcement out of the way, you can look at provision at other levels too.
