The Apprenticeship Effect: Winners and Losers in the FE Training Market

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In all of the changes to the apprenticeship system in England it seems that for most of the stakeholders concerned the news – should it all come to pass as planned – is only good.

For employers and potential apprenticeship candidates there is more support, more choice, more security, simplified systems, greater benefits…

“In short,” says Nick Boles, former Minister for Skills in a letter to the Skills Funding Agency at the end of 2015 outlining funding priorities, “we are putting more power in the hands of service users, instead of service providers. This is exactly as it should be.”

For training providers the picture is a little more nuanced.

The good news is that there is more money available. The bad is that there are some substantial hoops to jump through to get it. As yet they are the only stakeholder group in the triumvirate of learner-trainer-employer to have really had to make any substantial operational changes.

Survival of the fittest

Right from the start the pack has been divided into clear winners and losers, thanks to the new Register for Apprenticeship Training Providers. Those who failed in their bids to join the register are no longer eligible to receive funding for the delivery of apprenticeships, effectively putting them out of business or forcing them to re-emerge as sub-contractors.

Of course no organisation has been barred from the list on a whim, and the register is there to protect employers and apprentices – ensuring that they get the highest quality training and the assurance that the provider has the financial stability to see the contract through. However, the impact has been drastic and immediate for some, with major apprenticeship provider

First4Skills going into administration last week, leading to some 200 redundancies and leaving 6,500 apprentices anxiously awaiting details from the National Apprenticeship Service of alternative provision and transfer arrangements.*

Radical change required in a short period

Even for the winners – those who have successfully made it onto the register – the task of adapting to change has been and continues to be of Herculean proportions, and let’s not forget, even when change is for the longer-term good, it is nearly always painful in the short-term for those at the coal face.

Not only are there curriculum changes as they move from frameworks to standards to consider (and let’s not forget that these are intended to be agile to meet the evolving needs of business), there are changes to the amount of funding they receive and how it is allocated (rather than a set amount, the provider will have to negotiate within a band set for the specific standard), there are new systems to get used to and new responsibilities such as the sourcing and management of the end-point assessment (on behalf of the employer they will contract with an assessment organisation from the SFA’s Register of Apprenticeship Assessment Organisations – although it is down to the employer to choose the AAO).

A year seems a long time when you’re at the start of it, with 365 lovely days lying ahead. But if you think of that as only 1680 hours per employee (based on working 7 hours a day, 5 days a week with 4 weeks’ holiday) it doesn’t add up to all that much - especially when you are still engaged in “Business as usual”. And the bigger the organisation, the harder the task. It’s like turning a car ferry: with something so big any change of direction is going to be shudderingly slow and meet with a lot of resistance – and it needs all hands on deck.

“It’s crucial that providers are ready…”

“The Government’s reform and growth aims for apprenticeships offer significant opportunities for providers, positioning apprenticeships as the biggest part of the vocational market…. It is crucial that providers are ready to respond to this new demand and use the coming months to prepare to develop and deliver the 'off-the-job' training needed for the new employer-designed standards.”**

But did the Training Providers all get the memo? And assuming they did, did they get it in sufficient time to prepare? Many would argue not. As the Association of Colleges’ report into the Apprenticeship changes and their implication for colleges states: “The apprenticeship reforms will have a profound impact across all areas of a college’s activity.” This report was released in May 2016, only one year ahead of the ‘go-live’ for the new system, suggesting that only a few months ago the majority of Colleges were still only just embarking on their journey.

Some training providers have managed to get ahead of the curve. The Activate Learning Education Trust (a Multi-Academy Trust), which operates several colleges in Oxfordshire, for example, has restructured its business into two parts – Activate Apprenticeships and Activate Business School – in direct response to the changes. This enables them to take advantage of the increased funding stream and in the words of Chief Executive Pablo Lloyd: ‘help businesses and apprentices take full advantage of the new system.’

However, it’s difficult to determine from the current data and information currently available, how many organisations are so far advanced in their preparations.

In late 2015, (only 15 months ago) the then Skills Minister Nick Boles chastised delegates at the Association of Colleges conference for not taking more of a share in the apprenticeship sphere, leaving the lion’s share instead to Independent Learning Providers (ILOs). Indeed a report by FE Week at the time estimated that on average only 27% of Colleges’ adult skills budget for 2015/16 was being spent on apprenticeships against around 60% elsewhere. ***

Guided by a gentle hand?

Shortly after this, the Skills Funding Agency tackled this problem by partitioning the budget into grant funding of £1bn specifically for apprenticeships and an Adult Education Budget (AEB) of £1.5bn. This already ensures that Colleges will need to increase their focus on apprenticeships if they want to access this pot of funding.

Training providers have been further funnelled towards providing apprenticeships by the new policy not to automatically renew Adult Education Funding for Private Training Organisations when it comes up for renewal in July 2017. Private Training Providers will now have to submit to a tendering process (where FE Colleges will not). This is apparently the upshot of a change to EU Law, but with the Levy funding requiring no such tender (so long as the Training Provider is already on the ROATP) it does seem to be channelling many ILOs towards offering apprenticeships above alternative routes of vocational education.

Need help to get ready faster?

The Skills Funding Agency published a new article to their blog last week entitled ‘Don’t bring policy and delivery closer together – make them the same thing’ as part of a series of blogs they have released about the process that has gone into creating the Digital Apprenticeship Service (which is fascinating from a project management perspective, and wonderfully transparent, even if it is not always essential reading). In it,
he author, James Reeve, a Senior Policy Advisor for the DfE says of the apprenticeship service: ‘we didn’t have long to deliver it. There wasn’t time to get it wrong – so we invested in doing it right.’

While the article probably wasn’t intended as a spur to training providers, it does feel almost like a biblical allegory. It seems to be saying ‘Yes, we know it’s a tight timeframe, and a big ask. But you can do it if you’re agile (in the sense of the methodology) and you invest in the right expertise. If the pace of change means that you simply cannot resource everything internally, why not see how Pearson could help?

Find out more about the New apprenticeship standards

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