Impact of Apprenticeship Reforms update 2/3/18

In her recent webinar, Anne Milton shared her belief that the acquisition of new standards will pick up pace with the number of Apprenticeship starts following suit.

In contrast, data published last week highlighted that only 27,000 individuals started an Apprenticeship in November (All Ages All Levels) in England, significantly lower than the level of starts in September (61,300) and October (37,000).

Locally, GMLPF through its Health and Social Care Forum, has been mapping out with members the impact of Apprenticeship reforms on starts in the health and social care sector, over a 15 month period spanning November 2016-January 2018. This is an ongoing piece of work and a snapshot of the data generated currently reveals the following:

  • Volatility
    The market has been highly volatile since Feb 17 with huge demand in March and April 17 and then again in December 17 – these dates preceding the introduction of the reforms in May 17 and new Standards being introduced in January 18
  • Downward trend in starts
    There is a general downward trend in the number of starts. Over the 15 month period an average of 66 individuals started an Apprenticeship each month. The average for the first 4 months of the period covered by the survey was 68.75. Over the period May to October 17 the average number of starts each month was 20. Over the period May 17 to January 2018 it was 33 which is, in broad terms, a 50% reduction in the number of starts.

Impact of Apprenticeship Reforms: What GMLPF Members Say

OVERVIEW OF RESPONSES FROM APPRENTICESHIP PROVIDERS TO GMLPF MEMBER SURVEY
RECRUITMENT OF 16 TO 18 YEAR OLDS
Comparing figures for May to Sept 16 and May to Sept 17
WHY THE DECREASE?
Employer confusion over reforms
Employers not recruiting 16 to 18 year olds because they aren’t job ready
Complex in-company procurement processes
Lack of Government advertising to employers
20% off the job element putting employers off
RECRUITMENT OF 19+
Comparing figures for May to Sept 16 and May to Sept 17
WHY THE DECREASE?
Employers reluctant to co-invest
Employers confused over reforms
Employer attitude to Apprenticeships changing
20% off the job element putting employers off
Employers putting staff on other courses with alternative funding eg adult learning loans
LEVY PAYING EMPLOYERS
WHY?
Employers finding it difficult to identify who is responsible for their levy
Employers opting to treat levy as a tax rather than additionally investing in wages & training
Employer confusion over reforms
20% OFF THE JOB
EMERGING TRENDS
The adult social care industry has rejected the Apprenticeship Offer so recruitment has collapsed
Harder to offer training opportunities to 19+
Employers frustrated with reduced choice of providers due to public sector levy procurement
Some sectors object to 20% off the job element; others like hairdressing & construction don’t
Some employers making staff pay for
10%
PROVIDER RESPONSE – GOOD PRACTICE
Educating employers, promoting incentives, stimulating demand
Streamlining apprentice enrolment process to reduce costs
Being flexible over 10% payment eg spreading payments
Widening provision offer to access bigger markets
GMLPF:
THE VOICE OF LEARNING PROVIDERS IN LIVEPOOL CITY REGION

GMLPF and ESFA meet to discuss local impact of non-levy allocation cuts

GMLPF chair Debbie Tagoe and Paul Johnson, Head of Provider Management at ESFA met on Friday to discuss the impact of cuts in Apprenticeships allocations for non-levy paying employers.

Impact

The board, staff and members of GMLPF are concerned that the reduced Apprenticeships allocations announced recently will have an adverse impact on:

  • Training providers: financial insecurity; redundancies; business closure with subcontractors especially at risk
  • Employers: Less funding available for Apprenticeships; fewer providers to choose from; limited niche provision; ultimately less involvement by SMEs
  • Young People: fewer providers/SMEs offering Apprenticeship opportunities; increased NEET
  • Apprenticeships: credibility of brand undermined; achievement of Gov’t targets unlikely

Business As Usual

Debbie put these concerns to Paul Johnson who made it clear that the ESFA are urging providers to proceed with business as usual.

He emphasised that providers should:

  1. Ensure you have read the document New non-levy apprenticeship starts for the period May 2017 to December 2017 sent out by the ESFA earlier this month thoroughly. You will see that some of the concerns that have been raised by GMLPF members are in fact addressed in this document
  2. Check your levy/non-levy allocation is correct by applying the method laid out on page 5 of New non-levy apprenticeship starts for the period May 2017 to December 2017. If you believe that there are discrepancies in the data used to calculate your allocation, you must contact your business manager immediately to discuss putting a business case forward by 31st May

Any GMLPF members who have already contacted their business manager regarding discrepancies and not heard back are asked to inform Debbie Tagoe. Paul Johnson has offered to chase up responses for GMLPF members.

Reassurances

He offered the following reassurances:

  • Allocations DO NOT include carry-in funding. Carry-in allocations will be issued in July (for learners starting before 1 May) and December (for new starts between May-Dec 2017) Providers should be reassured by the fact that current and future carry-in allocations will be based on assumption of 100% achievement rate.
  • ESFA are fully committed to funding high quality apprenticeships and will continue to do so as indicated on page 7 of New non-levy apprenticeship starts for the period May 2017 to December 2017
  • Providers who have a sensible approach to recruitment ie focussing on high quality apprenticeships in quantities which are demonstrably manageable in relation to their organisational resources, will be in prime position for growth allocations.

Calculated risk likely to be best approach
GMLPF concludes that the message coming from the ESFA is that providers who will be successful under the new funding arrangements are those who continue business as they have always done, taking a sensible, realistic approach to recruitment.

Whilst it may be an understandable kneejerk reaction in response to perceived cuts in funding, it seems likely that providers who reduce their operations or who step back from subcontracting will find themselves saddled with a restrictive delivery model that will not allow for growth when the opportunities come along shortly ie July and December  

As with any industry sector, it is the businesses that take calculated risks in periods of uncertainty that are most likely to succeed

Raising awareness of impact of funding cuts

GMLPF remains committed to raising awareness of the negative impact of any funding cuts on providers, businesses, young people and the apprenticeships brand. This is outlined in our infographic cuts to non levy funding May 2017 which we encourage members to share with MPs and via social media.

Foundation for ongoing relations with ESFA

We are greatly encouraged that following Debbie Tagoe’s meeting with Paul Johnson, he is keen to further develop relations with GMLPF. He congratulated GMLPF on our evidence-based approach to outlining impact of cuts on providers, informed by the statistics gathered from our recent online member survey. He has indicated he would like to start a piece of work with GMLPF post-election on benefit realisation of apprentices, looking at local case studies.

Adult Education Budget

In addition, Paul Johnson confirmed that announcements about procurement results for the Adult Education Budget will be made after the election.

 

 

 

 

Non Levy Payer Allocations for Providers

Recent notification of allocations for training providers supporting non levy paying employers have left many GMLPF members in a very vulnerable position. 

GMLPF Board and staff are currently developing communications materials to raise concerns on behalf of members.

In the meantime, below are links to Mark Dawe’s letter to Justine Greening, and a background brief/call to action from AELP.

Mark Dawe Letter to Justine Greening

AELP brief/call to action

 

Final guidance on Apprenticeship Reforms released

The Government has now released the final guidance on the changes to the Apprenticeship programme that it has been consulting on over the past few years.

Concessions

Following consultation and pressure from the sector, the Government has made some concessions including:

  • Allowing levy paying employers 24 months to use levy contributions instead of 18 months
  • An extra 20% for providers of the funding band limit to support the training of 16-18 year old apprenticeships
  • £60m available in the transitional first year for providers to support training of those from the most disadvantaged areas
  • Watering down of the proposals on the new Register for Training Providers to allow sub-contracting to continue in its current form for those with less than £100,000 worth of delivery

GMLPF will be doing some analysis and guidance for members in the coming week or so.

Links to the latest guidance including funding rules can be found below:

Apprenticeship changes
https://www.gov.uk/government/collections/apprenticeship-changes
Draft funding rules
https://www.gov.uk/government/publications/apprenticeship-funding-and-performance-management-rules-2017-to-2018

Urgent for all providers

All providers must take note that the Register of Apprenticeship Training Providers is now open. If you want to be involved in the delivery of Apprenticeships from May 2017 it is crucial that you look at the application process guidance that is now available via the link below.

https://www.gov.uk/government/publications/register-of-apprenticeship-training-providers-application-instructions

Webinars: Register Now for more Reform updates

GMLPF’s next webinar will summarise what we know about the Register and the registration process. If you are not already booked on, you can do so via the link below

November webinar

2nd November 2016 https://attendee.gotowebinar.com/register/7296016491931207684

December webinar

6th December 2016 https://attendee.gotowebinar.com/register/8941236631846967299
This will revisit the Levy and Apprenticeship Funding guidance now that the final information has been released.

Apprenticeships reform leaflets for members

GMLPF has produced 2 leaflets explaining Apprenticeship reforms to employers. The first outlines how the Apprenticeships levy affects large employers, and the second explains how the reforms affect SMEs.

The leaflets have been produced specifically for GMLPF members to use with their existing employers or new prospects.

Limited supply available – to order please email gareth@gmlpf.net or pavlina@gmlpf.net

apps-reform-smes

apprenticeships-levy

 

Statistical First Release update Oct 16

The Skills Finding Agency has released provisional data for apprenticeships starts during the 2015/16 academic year.

The data for Liverpool City Region gives us a mixed picture:

  • Apprenticeship starts were down in the region over the last 5 year period. This is due in the main to the temporary introduction of Advanced Learning Loans for those aged 24+ who want to do an Apprenticeship at level 3 or above. 2013/14 figures for starts show a small rise when SFA funding was resumed for this market segment.
  • The level of starts across all age groups for the last 12 months has increased in the City Region by just 1.17% as can be seen in the graph below

apprentieceship-starts

  • Breaking down figures for the last 12 months by borough, we note that there is a decline in starts in Knowsley, Liverpool and Sefton. Most alarmingly the data shows us that in Knowsley the number of starts declined by 3.2%.
  • Halton, St Helens and Wirral all saw increases in the numbers of starts over the last 12 months. Wirral top the list with an almost 6.5% increase.

apprentieceship-starts-borough

The Government meanwhile continues to push its 3 million Apprenticeship starts target, as referred to during the Conservative Party Conference this week. It is clear from the figures above that some dramatic changes are needed if the City Region is to do its part in achieving this target.

Historically, the proportion of the general population who are of working age has been higher in Liverpool City Region than the national average. This means we have always ‘punched above our weight’ in terms of our contribution to national Apprenticeship start figures. I am concerned this may no longer be the case as other areas of the country catch up.

My other concern is that these figures reflect ‘all-age’ starts. When the statistics are published with age breakdowns, it is quite possible that the lion’s share of starts will be made up of the 19+ cohort.

Something to bear in mind as we continue to work together to drive up the numbers of young people and employers involved in Apprenticeships.

 

Gareth Jones
Apprenticeships Strategy Manager
gareth@gmlpf.net