Ten Urgent Reforms Needed to Transform the Apprenticeship

Friday 08 June 2018
The Chartered Management Institute and British Chambers of Commerce have unveiled a 10-point plan to make the apprenticeship levy work for all
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The Chartered Management Institute and British Chambers of Commerce have today unveiled a 10-point plan to improve how the government can implement the Apprenticeship Levy. Both organisations are united in their agreement that investing in apprenticeships is essential to tackling the UK’s technical and professionals skills gaps and boosting business performance. However, they acknowledge that ‘urgent reforms’ are needed in the apprenticeship process.

The recommendations, authored by CMI chief executive Ann Francke, and Dr Adam Marshall, director general of BCC, come in the wake of a fall in the number of apprentices who have started schemes since the introduction of the Apprenticeship Levy in April 2017.

The decline occurred in spite of nine out of 10 managers surveyed by CMI in February stating that they support the idea of the Levy in principle.

“We are both concerned that unless the government makes some changes, and indeed, business makes some changes, there’s a very real danger that there’ll be a loss in confidence in what apprenticeships can do,” says Marshall.

“Britain is an 80% service-based economy. The critical skills gaps are in management and leadership skills, digital skills, then advanced engineering skills. The Levy is designed not just for young people but for all workers at all levels,” explains Francke. “This policy is in its inception, and executed well has the potential to drive up British productivity.”

Suggesting that stakeholders look to trailblazers such as the NHS’ use of a Chartered Manager Degree Apprenticeship to boost Care Quality Commission ratings from ‘needs improvement’ to ‘outstanding’, Francke adds: “You do have some providers doing some very innovative things, and the government should showcase these employers in some way. The Apprenticeship Levy is also fulfilling its promise of social and economic mobility when it’s been implemented correctly.”

Francke and Marshall have focused their recommendations for reform on five asks of government and five asks of employers. These are outlined below:

5 Asks Of Government To Reform Apprenticeships

1. Transform The Skills Landscape

The government must ensure that everyone benefits from the Apprenticeship reforms, and help private, public and third sector employers get the transformational change in the quality, and quantity, of technical and business skills that they need in the workplace. Better technical, management, digital and data skills are vital to both our manufacturing and services sectors. Re-skilling and up-skilling existing employees must be a key part of the solution.

2. Listen To Business – Transform The Levy

The complex and restrictive Apprenticeship Levy rules that ‘make it feel more like a tax than an incentive to invest in skills’, should be relaxed. For access to quality training, funding bands must reflect the true cost of provision. For many employers, the Levy has displaced budgets for other essential forms of skills development, risking future growth and productivity, so other accredited quality training should be included in the scope of the funds. Focus for employers must be placed on return on investment. Reforming the Levy now will re-engage employers and help boost skills development across sectors and local communities.

3. Provide Efficient, Single Point Accountability

The system should be made simple and transparent, with a single accountable agency. The Institute for Apprenticeships should be resourced to bring forward apprenticeship standards more quickly and take on end-to-end responsibility for the successful funding, execution and monitoring of apprenticeships policy. Employers –not civil servants – should set and approve standards. There should be a single body responsible for external quality assurance, to build trust and reduce cost and complexity for employers.

4. Measure The Impact, Not The Target

Business wants people with the right skills to fill job vacancies, and this means getting access to quality training, at the right time and in the right location. Businesses must commit to investing more in the training and development of its people, and education providers must work with employers to find effective ways to measure return on investment, but we need the information, the flexibility, the funding and the training provision in place at a local level. The government should support the drive for quality over an arbitrary numerical target – this is the way to improve social mobility and productivity and close the skills gap that threatens the UK economy.

5. Keep The Process Joined Up, Stable And Consistent

Constant tinkering and changes in policy and funding is bad for businesses and learners. The government should work with employers to get the apprenticeship reforms fit for purpose, and then keep the system stable, consistent and joined-up across the Industrial Strategy. To boost competitiveness and productivity, business needs apprenticeships and other quality forms of in-work training at all levels in the workforce. Higher-level degree apprenticeships should be encouraged to improve participation, social mobility and narrow the gender pay gap.

5 Asks Of Employers To Reform Apprenticeships

The CMI and BCC have identified how employers can help improve the effectiveness of the Apprenticeship Levy too.

1. Get Involved And Informed And Tackle Your Skills Needs

New Apprenticeships, designed by business for business, are a great way to bring young people into the workforce and to re-skill and up-skill existing employees at all levels in the organisation – including leadership and management. Employers should find out about the new apprenticeship standards for their sector, how to recruit apprentices and how to access funding and high-quality training for their teams.

2. Find Flexible Ways To Manage Training

Apprenticeships combine work and learning, helping staff to do their job better. For some firms, off-the-job training can be difficult to manage, but it does not mean an employee has to have one day a week off work. The best work-based training not only helps the trainee, but if well planned can also add immediate benefit to the employer. Employers should work with their training provider to identity sensible, flexible and creative training opportunities – including online workplace training, work-based assessments and other time that you invest in developing an apprentice.

3. Commit To Long-term Investment In Skills

We in business have to acknowledge that the majority of firms have been underinvesting in skills for decades, leaving the UK far behind our international competitors. Employers across most regions and sectors are finding it increasingly difficult to recruit skilled people. All businesses can play a part in fixing the skills crisis. Employers should ensure they have access to the skills needed now and in the future by investing long-term in the training and development of the workforce. Skill development is strategic – it must be part of company strategy.

4. Embrace Wider Workforce Planning

Apprenticeships are open to everyone in the workforce, helping train existing employees, returners, older workers and young people starting their careers. Management and leadership, digital and data, and a broad range of technical standards are being developed for firms of all sizes and sectors. Employers have a choice to work with private providers, universities or FE colleges – there’s more than one route to success.

5. Measure The Benefits

Better skills, productivity, staff retention and employee engagement are just some of the benefits of investing in apprenticeships. Whether you are a Levy payer with training money to spend, or an SME seeking government funding to support your people development, apprenticeships can deliver significant benefits for a business. Employers must ensure they get the maximum gain from your investment in skills by working with government, training providers, and professional bodies like CMI and Chambers of Commerce.

For more information on Apprenticeships click here.