Exclusive: Universities exploit apprenticeship levy to create market in cut-price MBAs

By Jonathan Owen on 04 May 2018

Dozens of new MBA apprenticeship courses are set to be announced in the coming months

Universities are set to make millions from a new market in cut-price MBA courses paid for by the apprenticeship levy, Tes can reveal.

Dozens of universities will be launching MBA apprenticeship programmes in the coming months, in response to demand from firms looking to spend their levy on polishing the skills of existing management.

Companies ranging from investment management firms to insurers and organisations such as the Ministry of Defence are already sending staff on MBA apprenticeships.

£18,000 for an MBA

More than 1,400 people are expected to enrol on the courses in the next 12 months, according to a Tes survey of more than 100 universities on the government’s register of apprenticeship training providers.

Almost half have decided to provide MBA apprenticeships, with at least 40 courses scheduled to be up and running over the next year alone.

The expansion of the new courses has been prompted by the government's confirmation, in February of this year, that the levy can be used to pay for £18,000 per person doing an MBA apprenticeship.

Universities are set to make millions out of the new programmes. Total revenues are projected to exceed £26 million in the coming year alone. This represents around £1 in every £100 raised by the levy this year.

MBA apprenticeships have been attacked by leading figures in politics, education and business who fear that investing in enhancing the career prospects of existing workers comes at a cost to those young people looking for their first job.

Former government adviser Tom Richmond, now senior research fellow at the Reform think tank, said: “MBA apprenticeships do not meet any historical or international definition of an apprenticeship because they are a form of professional development, not occupational training”.

Charlie Mullins, managing director of Pimlico Plumbers, said: “Rather than having a proper apprentice or an apprenticeship for skills, they are just seeing a loophole and abusing it. It’s outrageous.”

Jon Richards, head of education at the union Unison, commented: “The spirit of apprenticeships is being flouted by companies using government money to fund MBAs for staff who already have degrees”.

Loophole in the system

One MBA apprenticeship provider, Aston Business School, admits that it is helping companies to do just that. A spokesperson for the business school said: “We are currently working with employers to enable non-apprenticeship executive MBA students to transition to the executive apprenticeship MBA.”

Petra Wilton, director of strategy at the Chartered Management Institute, said: “The new senior leaders’ master’s degree apprenticeship fully meets the spirit of the government’s apprenticeship reforms”.

She described the levy as “a skills investment plan that enables UK employers to access the higher-level skills and knowledge needed for their managers”.

A spokesperson for the DfE said: “We are implementing apprenticeship reforms to continue to improve the quality of apprenticeships at all levels…and through our reforms we hope to see a broad range of standards across sectors and occupations.”

This is an edited version of an article in the 4 May edition of Tes. Subscribers can read the full story here. To subscribe, click here. To download the digital edition, Android users can click here and iOS users can click here. Tes magazine is available at all good newsagents.