The Apprenticeship Levy Risks Quantity Over Quality

A government tax, the apprenticeship levy, aimed at creating three million apprenticeships is at high risk of repeating historic mistakes and damaging apprenticeship training credibility say industry professionals and the Institute for Fiscal Studies.    

The apprenticeship levy, due to start in April, is a 0.5 per cent tax on all employers with a wage bill of £3 million or more. It is expected to raise £2.8 billion by 2020 to pay for apprenticeships. A think tank report by the Institute for Fiscal Studies (IFS) warns the government has “failed to make a convincing case for such a large and rapid expansion in apprenticeships” and alerts of “wildly optimistic” claims for how much extra earnings could be generated by the investment in apprentices. The policy, the IFS adds, could create “considerable risks to the efficient use of public money.”

Fashion Enter, FashionCapital’s sister company, is Britain’s leading provider for the Fashion and Textiles Apprenticeship programme. In 2013 Fashion Enter was awarded The Tick Mark of Excellence by Creative Skillset for its training standards provision and is now an accredited Showcase Centre through ABC Awards due to its high standard of excellence attained in training at all levels. CEO of Fashion Enter, Jenny Holloway comments:

“The apprenticeship levy is due to be implemented this April, the government imposed this two-years ago so we all knew it was coming. Employers who have a payroll bill of over £3m will have to pay 0.5% into an apprenticeship pot but they can then use the money to fund their own apprenticeships. The principle is fundamentally sound if the employer understands what apprenticeships are out there from quality training providers.  What is not so sound is the phasing out of the frameworks (the apprenticeship qualifications) in favour of standards. These standards are not qualifications as such and they have to be devised by a minimum of 10 employers who are nationwide, all different sizes and committed to employing apprentices. Now try and get 10 very busy employers around a table to agree the specification for the jobs, write up the EOI (expression of interest) send to BIS and keep everyone updated…for free! There’s no money to do all of this work.

“My fear too is that employers may think that they will be able to run their own training schemes but if this is the case how will the quality of education and teaching be maintained? Fashion Enter was asked to trial apprenticeship schemes years ago by Creative Skillset and we did this with ASOS.com. I personally had to go to night school for 4-years to become a teacher, an assessor and an IQA.  (I’m now training to be an External Verifer.)  It nearly pushed me to the edge but I knew that if we were going to excel at quality education and training then you need to know exactly how to be the best…that’s why our standards are so high today but will other employers feel the same way?”

The IFS think tank adds that spending on apprenticeships will only increase by £640m and warns about the dilution of quality of other types of training that will possibly be re-branded as apprenticeships.

Liberal Democrat business spokesman Lord Foster of Bath said: “It’s time the Government came clean and called the apprenticeship levy exactly what it is – another payroll tax on business. The new tax has nothing to do with ensuring British business gets the best trained, most skilled staff. It’s simply a way of the Government meeting its own unnecessary targets, at the expense of other forms of training.”

Neil Amin-Smith, one of the authors of the think tank report, said: “We desperately need an effective system for supporting training of young people in the UK. But the new apprenticeship levy, and associated targets, risk repeating the mistakes of recent decades by encouraging employers and training providers to re-label current activity and seek subsidy rather than seek the best training. There is a risk that the focus on targets will distort policy and lead to the inefficient use of public money.”

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