'Fake Apprenticeships' & the levy ...

What are ‘fake apprenticeships’?

At the start of the year, the think tank EDSK (Education and Skills) released a report exploring the apprenticeship levy. The report suggests that the apprenticeship levy has led to ‘fake apprenticeships’.

In the report, Tom Richmond, the director of EDSK, singles out three different types of fake apprenticeship. Each of these relates to a way that the apprenticeship levy may have been misused, implying that it has not been invested in training to help young people into their first jobs or first experiences in the workplace. This report claims that ￡1.2bn of apprenticeship levy funding since 2017 has been allocated to so-called ‘fake apprenticeships’.

The types of ‘fake apprenticeship’ highlighted in this report are as follows:

1)    Low Skilled Generic Roles

These roles are basic low skilled jobs such as working in a shop checkout or serving drinks in a bar. These jobs offer minimal training and very low wages. This is as when an individual (of any age) is employed as an ‘apprentice’ for the first year is entitled to earn ￡3.90. Then after one year if the apprentice is aged 19 and over, they are then entitled to earn National Minimum Wage. Therefore, there may be an incentive for firms to hire individuals as apprentices as they will be entitled a lower wage. This is as well as, the incentive of branding something as an apprenticeship to receive funding from the apprenticeship levy.

2)    Management and professional development training courses

As funding from the apprenticeship levy is received on a first-come-first-served basis, employers will be incentivized to find ways to receive funding as quickly as possible. This has meant many employers have drawn levy funds by rebadging current employees professional management training as apprenticeships, rather than setting up apprenticeship programmes for young people.

3)    Degree Apprenticeships

The report suggests that these are essentially a rebranded graduate scheme. This follows an Ofsted report last year stating: ‘graduate schemes are in essence being rebadged as apprenticeships’. This is particularly due to a rise in Level 7 apprenticeships which mean you gain a qualification equivalent to a masters degree. A key example of a level 7 apprenticeship course is an ‘accountancy/taxation professional’ course, which has used ￡174m of the apprenticeship levy funding. The report suggests that employers are likely to brand these programmes as ‘Degree Apprenticeships’ as employers can receive up to ￡27,000 in funding for each apprentice. Another inappropriate training course which has been labelled as an apprenticeship, is an ‘Academic Professional apprenticeship’. These ‘apprenticeships’ have been designed by 23 Higher Education institutions including the University of Oxford and typically would require a PhD to be accepted onto the scheme. Therefore showing that this is nowhere accessible for young people looking to enter their first job.

Tom Richmond goes on to outline policy recommendation for the government relating to their apprenticeship policy strategy in the report. Richmond concludes that there is sufficient evidence that the apprenticeship levy has failed and that the government must make changes to improve apprenticeships available in the UK.

Sector response to ‘fake apprenticeships’ and the EDSK report (from FE News)

A number of the education sector Chief Executives reject the findings in this report and entirely reject the idea of ‘fake apprenticeships’. Chief Executive of University Vocational Awards Council (UVAC), Adrian Anderson, describes the report as being ‘ill judged and ill informed’. He also highlights that the ‘apprenticeship levy was introduced because employers in England were under-investing in the training and development of their new and existing employees’.

However, the Director of ABM UK suggest that the apprenticeship levy has been ‘more about up-skilling than apprenticeships’, with the suggestion that businesses must be forced to attract young people to apprenticeship. David Hughes, the Chief Executive of the Association of College, mirrors this idea and agrees with the report when it suggests that there is an urgent need to update funding for apprenticeships, and the underlying way that apprenticeships work. Moreover, he highlights that apprenticeships should be opportunities for young people’s first entrance into the workplace rather than employment positions at a much higher level. Joe Dromey, Deputy Director of Research and Development, indicates that the apprenticeship levy seemed the right thing to solve the issues in the UK of falling employer investment in training in recent decades which lags behind other advanced nations.

The final key takeaway from the sector experts highlighted that level 2 apprenticeships will be essential for fill the skills gap left in UK following Brexit. This is as, level 2 apprenticeships require the lowest level of qualifications and skills, and these job roles will suffer from a skills shortage following migratory control, which is expected after Brexit.

References:

FE News. 2020. ￡1.2 billion wasted on ‘fake apprenticeships’ - Sector Response to EDSK 'Runaway Training' report. [Online]. Available from: https://www.fenews.co.uk/fevoices/40130-1-2-billion-wasted-on-fake-apprenticeships-sector-response

Richmond, T. 2020. Runaway training: Why the apprenticeship levy is broken and how to fix it. EDSK. [Online]. Available from: https://www.edsk.org/wp-content/uploads/2020/01/EDSK-Runaway-training.pdf