Stewart Segal, chief executive of the Association of Employment and Learning Providers, writes:
As the government launches a new advertising campaign to promote Apprenticeships it is useful to review some of the issues around what is the best way to increase the numbers of Apprenticeships.
Advertising on television, radio and newspapers is a very positive signal for employers, young people and their parents but will it encourage more employers to take on an apprentice and will it make more people want to make the commitment to the programme?
Raising awareness is helpful but it will not be enough. Without the follow up from training providers talking directly to employers and the encouragement of learners to explain the benefits of training the advertising will have little impact.
In a competitive market there are many training providers that will be very keen to drive even more Apprenticeship starts. So what are some of the factors that might prevent this increased take-up?
The message in the advertising is very positive but there is a real risk that announcements about the ‘new’ Apprenticeship standards will give the impression that the existing Apprenticeship Frameworks are somehow not supported by employers. The truth is the opposite.
The current frameworks have been developed with employers and all survey results show positive responses from employers and apprentices of over 80 per cent. We must not give the impression that the changes are about ‘fixing’ an issue. So we have to manage all of the communications and not just the advertising. The Apprenticeship changes must be promoted as building on the success, not fixing a problem.
Increasing the numbers of employers that employ and train apprentices will always be the most important factor in any campaign, so the advertising should be focused on employers. Employers however will not make this commitment to employment and training without support from training providers who can explain the system and make their engagement as easy as possible. Training providers are keen to develop new employer relationships but one of the key factors acting as a barrier to expansion is the government contracting system that controls the overall budgets.
Despite the fact that the government has made Apprenticeships the highest priority for delivery there is still a complex contract management system that means training providers have to take a risk in developing new and additional Apprenticeship starts. Each provider is given a budget limit for their Apprenticeship programmes and has to apply for an extension to this budget if they are to develop new business.
Most new business with employers can take a number of months to develop so providers have to take a risk that any extension to their budgets will be there when the employer finally decides to take on an apprentice. Anyone who has worked with employers knows how difficult it is to plan when these new starts will happen.
Even within the best planning, employers change their plans due to internal projects, cashflow shortages or headcount freezes. Even when decisions are made, providers may or may not get their growth cases approved and many of us will have faced difficult situations with employers when after several months of discussions, the contract extensions are delayed and the provider cannot take the apprentices onto the programme.
For independent training providers, there are three quarterly contract performance points to manage and four points at which they can apply to the government for contract growth. Providers are only too aware of applying for growth and the risk of not delivering, so this is a tough decision to make at each of these points in the year.
On top of this providers have to manage an annual budget which is split between the first eight months and the last four because the Skills Funding Agency operates an annual budget and a financial year which is different. This cannot be a sensible way of running the highest priority programme in the UK skills sector.
Providers have to match the timing of any contract extension with the vagaries of employer recruitment plans and the availability of prospective apprentices. This creates a real risk for providers in terms of managing their contracts and managing their employer relationships. The Association of Employment and Learning Providers (AELP) has recommended a much more effective way of managing these complex budgets.
The question of whether there is more demand from employers is interesting. The government say that only 9 per cent of employers are involved in the Apprenticeship programme. Different figures are used by others including 15 per cent by UKCES and 20 per cent by DEMOS. The AELP view is that the uptake by employers is much higher than government would suggest because some employers may not have an apprentice currently but they have had one in the last year or two.
We also do not think it is realistic to expect all businesses to take an apprentice. Many businesses are single owners with one or no employees. Many of these companies have been set up as lifestyle businesses or set up to employ an individual. If we exclude these types of businesses, the participation rate is nearer the sort of figures shown by surveys such as the annual CBI/Pearson survey which shows engagement of 60 per cent of employers. However whatever figure you use, it could be increased
So if the advertising works and more employers are keen to develop Apprenticeship programmes, we need to ensure that the providers are supported to make those contacts and follow up to sell the benefits of the programme. They will only do this if the contract management system is simplified and providers are given the confidence that the overall budgets will be increased so that we can meet the demand that is out there.