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I know a dead parrot when I see one…

The government’s intransigence over the slump in apprenticeship starts has bordered on comedy. But the reformed system of skills provision is not bereft of life, just stunned, believes Mark Dawe

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Government references to the target of 3 million apprenticeship starts have become conspicuous by their absence. After another month’s worth of woeful data, ministers now say that quality is more important than quantity. The target has assumed the “dead parrot” mantle for our sector.

In many ways, it’s a real shame because the parrot’s beautiful plumage took the form of potentially thousands more social mobility opportunities for young people; employers were to benefit, too, from a better skilled and more productive workforce in the face of Brexit’s labour-market challenges.

Whatever people’s views are on the merits of setting numerical targets, everyone should be concerned that the numbers are way down on previous years. Some 290,500 apprenticeship starts have been reported so far for the first three-quarters of the 2017-18 academic year, compared with 440,300 and 384,500 for the same periods in 2016-17 and 2015-16 respectively; that’s a decrease of 34 per cent and 24.5 per cent.

Level 2 starts are now more than a half less than what they were two years ago, while apprenticeship opportunities for young people have fallen by a third, which can only be described as a national disgrace. In other words, the social mobility agenda has taken a major battering from the poor implementation of the levy reforms, which were actually meant to increase opportunities overall. Whatever happened to David Cameron’s “genuine” choice between university or apprenticeship?

It is staggering that we find ourselves in this position when the levy is accruing £2.6 billion of revenue, which makes the total apprenticeship budget £1 billion larger than it was previously. It is also difficult to understand why ministers put their lack of response to the falling numbers down to the reasons for the falls not being easily identifiable – the “causality” as they put it, which sounds like something out of an old episode of CSI.

Members of the Association of Employment and Learning Providers (AELP) were very clear about the reasons in the survey results released at our national conference in June. Maybe it is because they showed that it is a combination of flaws in the design of the reforms, rather than one overarching one, that the government has been so hesitant to act.

Rebalancing the system

Nevertheless, the survey confirmed that the co-investment requirement for small and medium-sized employers (SMEs) is a very significant factor behind the fall in starts. This is why the AELP has been seeking an immediate suspension of employer contributions for 16-24 apprentices at levels 2 and 3 by non-levy payers or those employers that exceed their levy. However, judging by the parliamentary written answer that shadow skills minister Gordon Marsden received last month, level 2 apprenticeships are not regarded as important or of high quality by the government, despite the obvious need for them in the service sectors most affected by Brexit.

If ministers have thrown in the towel on the 3 million target, we still need to think about an apprenticeship funding system that acts as a driver for social mobility as well as improving workforce productivity.

This means a better-balanced design that increases the number of opportunities at all levels, restores the historic engagement of SMEs in the programme and reverses the 34 per cent drop in starts for young people.

The government has the opportunity to achieve a better balance when the next phase of reform starts in March 2020. While all non-levy employers could still join the levy payers on the digital apprenticeship service, for smaller employers, the provider must be allowed to be their “agent”.

All registered providers must be allowed to deliver to all employers, but within a managed environment. And we must avoid another painful, failed procurement exercise for apprenticeship providers.

The AELP’s view is that balanced provision can be achieved by introducing an increasing scale of co-investment requirements that starts at zero for level 2, rises to 10 per cent for level 3 and then escalates up to 50 per cent for level 7. This can be accompanied by a set of financial incentives that can be turned on and off to support particular learner cohorts, levels, geographical areas or sectors. One example would be an incentive to encourage progression from level 2 to level 3.

We can restore the previous start numbers without lowering quality if the new standards are funded fairly. A managed transition in April next year will only work if the register of apprenticeship training providers is a genuine list of quality providers. The Education and Skills Funding Agency needs to use its autumn “refresh” of the register to consider why 30 per cent of the 2,600 organisations on it have not delivered any apprenticeships, and to respond to Ofsted’s concerns about the capacity and quality of some new providers.

Together, a measured approach to funding and the quality of the supply base would get the apprenticeship reforms back on track.

Mark Dawe is chief executive of the Association of Employment and Learning Providers