Fears are growing that the government’s move towards employer control of apprenticeship funding – a key aspect of the Richard Review – could result in a drop in the overall number of apprentices trained just as output starts to pick up.
The review sought ways to make training in FE colleges match employers’ needs more closely, by giving them the option to purchase training, or pool their purchasing power to set up their own courses.
The review also proposed that employers make contributions to the cost of training – around 30% for 19-plus apprenticeships and 15% for 16-18-year-olds.
But there are fears that the mechanism proposed would not increase responsiveness or drive up quality but would add to SME employers’ admin burden and upfront costs.
A consultation on the proposed shift closed on 1 October. The industry was asked to comment on three funding arrangements:
- direct payment, where businesses register apprentices, pay for the funding upfront then claim government funding back through a new online system.
- businesses pay for training upfront, then access government funding through their PAYE returns on completion of the training.
- a provider payment model, a variation on the current model. Government funding continues to be paid to colleges or training providers, but they can only draw it down when they have received the employer’s 15-30% financial contribution.
Beatrice Orchard, head of communications at the Federation of Master Builders, said: “We’re really worried about a system of funding that will mean significantly more upfront costs for them and a large amount of administration to reclaim the money.
“We’ve said, there needs to be a choice – for larger employers that do want control over the funding, that’s fine. But given that, in our industry, the biggest investment in apprentices comes from SMEs – up to 60% of all apprentices are employed by firms with fewer than 10 employees – there needs to be the choice to keep working with their local college.”
According to the FMB, the number of people starting construction apprenticeships has already fallen by 34% between 2007/8 and 2011/12.
Christine Townley, executive director of the Construction Youth Trust, shared these fears. “If the bureaucracy builds up for employers, it could curtail the number of places. It’s fine for larger employers that employ directly, but how will small companies be able to cope with all the bureaucracy imposed on them?” she asked.
There had been suggestions that SMEs could form training groups, using government funding to purchase training at FE colleges of their choosing.
But Orchard said there was little to guide SMEs on the content of courses or the quality of teaching available at different colleges.
In its submission to the consultation, the FMB said: “In the construction industry, SMEs are the biggest investors in apprenticeship training. If employers are required to pay more towards training purchased from a provider than they do currently, many will be put off taking on an apprentice in the future. Small and micro business owners work on site all day and have few office support staff to help source, compare and purchase training from providers and claim back any funding available.
“Large employers are less likely to be put off by the higher upfront costs and additional bureaucracy of a direct funding system. However, construction industry employers of all sizes will struggle to influence the content and delivery of training without a clear system of quality assurance or kite marking of apprenticeship training providers that is recognised and understood by employers.”
