Apprenticeship funding reforms 'could cost places', employers warn

6th May 2014 at 15:58

Proposed reforms to apprenticeship funding could lead to fewer opportunities for young people, a leading organisation has warned.

The government has consulted on two final options for funding apprenticeships through employers in future; either through the pay-as-you-earn system or through a new system of credits.

But the Association of Employment and Learning Providers (AELP) claims fewer employers will offer apprenticeship places if the reforms go ahead.

In its response to the consultation, the AELP says employers should instead be given a choice of how they want to be funded, which would allow them to continue outsourcing training in the same way they do now.

“In AELP’s view, the proposals do not meet the objectives, set out in last July’s consultation, of driving more employer engagement in the apprenticeship programme,” it says.

“Our concern is that instead of providing purchasing power for employers, the proposals simply create bureaucratic and costly barriers which will discourage many, especially small and medium enterprises, from recruiting apprentices.”

AELP chief executive Stewart Segal reckons moving instead to a system driven by employer choice would make a “radical difference” to the number of apprenticeships on offer.

Other organisations share similar concerns. Social business Catch22 says it is "disappointed" that the direct payment to provider model was not taken up by the government, as many of the small and medium enterprises it works with favour this approach.

In its response, adult education body Niace claims the proposals could have a negative impact on apprenticeship quality, and warns that if the funding reforms are introduced too rapidly there is a “serious risk” of it reducing the number of employers engaged with the programme.

“Careful planning is needed for the implementation, to secure current employers and to ensure that their return on investment is made clearer as their costs increase,” it adds.

The government is analysing the feedback and will report back in the near future.


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