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Apprenticeships: funding reforms 'won't be a burden', pledges minister

Skills minister Nick Boles has pledged that apprenticeship reform will not place extra burdens on small businesses.

There have been concerns that plans to put apprenticeship funding into the hands of employers could have an adverse effect, particularly on small and medium businesses, who are particularly worried about cash flow and bureaucracy.

But speaking to TES today in his first interview since being appointed skills minister in July, Mr Boles said the government was listening to concerns.

“We are certainly not going to rush into any reform that imposes either financial, administrative or bureaucratic burdens on small businesses or that puts them off getting involved in apprenticeships,” he said.

The minister and his team are currently looking at responses to a consultation on the matter that suggested two options for putting employers in control; either through the pay-as-you-earn process or a new system of credits.

In August, the government sought to address some of these fears, confirming that the payment system would work for small businesses and would be fully tested before launch.

Employers will not have to meet the full cost of training up front but can “draw down” government funding, it said.

This week prime minister David Cameron pledged to boost the number of apprenticeships to three million by the end of the next parliament if the Conservatives form the next government.

But with much of the growth likely to come from small businesses, there have been renewed warnings that the current proposals are a barrier to entry for many.

Mr Boles told TES: “Bluntly, we are only going to achieve our goal when there are more employers offering apprenticeships than currently do so.

“We are not going to get that growth from existing providers, so it’s absolutely critical we make it an attractive and straightforward system to operate.

“I hope it’s crystal clear that we are not going to do anything that makes it either financially or administratively burdensome and off-putting to small and medium-sized employers.”

Mr Boles said the government would find a solution, but warned that an effective funding model “may take a little longer to come up with”.

A spokesman for the Association of Employment and Learning Providers said the minister’s commitment was a “welcome development”.

“Our view is that the answer lies in giving employers a choice over whether they want to be directly funded or for the funding and administrative responsibilities to be handled by their chosen provider. Often small employers are only employing one or two apprentices and therefore to them it makes sense to outsource the burden to the provider.”

The Association of Colleges (AoC) said many FE colleges have been “happy” to carry the administrative burden for smaller local employers when it comes to apprenticeships and absorb the cost from their overall apprenticeship funding.

But Teresa Frith, senior skills policy manager for the AoC, said colleges fear the new price-competitive system will make these apprenticeships comparatively more expensive than those delivered to larger employers, who can handle administration directly.

“It is hard to imagine how the government will be able to strike an effective balance between guarding the public purse and keeping administration to a minimum in the new system,” she said.

“AoC will, of course, support its members to ensure that the system is workable for all employers and apprentices.”

See next week's edition of TES for more from Nick Boles.

 

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Apprenticeship funding reforms 'could cost places', employers warn - May 2014

Apprenticeships: funding concerns remain despite government statement - August 2014

 

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