Employers pay up-front cost of apprenticeships

9th September 2011 at 01:00
Businesses fund trainees in return for a reduction in red tape

The country's largest apprenticeship employers have agreed to take on all the up-front costs of training in return for reduced red tape.

From last month, the first 20 employers began running their apprenticeships on a payment-by-results system, absorbing the cost of training until students complete their courses successfully, when the Skills Funding Agency will release the funds.

The new system means employers such as BT or Vodafone would take on the financial risk of apprentices failing to achieve their qualification, while saving themselves from having to make monthly reports to demonstrate that their trainees are making progress.

It is part of a series of measures, proposed by employers working with the Learning and Skills Improvement Service and the Department for Business, Innovation and Skills, designed to make the prospect of offering apprenticeships more attractive for large employers.

The 68 large businesses, which have direct funding contracts with the Government, employ 8 per cent of all apprentices, although they represent just 1 per cent of all apprenticeship employers. But since companies with more than 500 staff employ 16 per cent of the workforce, the Government believes there is room for growth.

FE minister John Hayes said: "All these things you as employers have recommended are music to our ears. Make no mistake, we will implement these changes."

He said the Department was also planning further changes to make it easier for small employers to hire apprentices.

Susan Anderson, director of public services and skills for employers' organisation CBI, said "Cutting bureaucracy will support even more businesses to become involved and these recommendations set out the right path for reform.

"They recognise that employers are primarily concerned with the day-to-day running of their businesses, and that they are committed to offering high- quality training as their reputation and business success depends on this.

"We need to maximise spending on productive training and not divert resources to deal with administration. The money saved by reducing bureaucracy should support more apprenticeship places.

"These reforms should now be applied to smaller and medium-sized companies and the providers they work with. Small and medium enterprises represent a significant market for apprenticeships and we must make it easier for these firms to access apprenticeship programmes."

The reforms also include introducing three-year rolling contracts to offer greater predictability to employers for whom the artificial boundaries of the academic year do not apply.

They also proposed reporting data to a single "portal" instead of 16 forms with duplicate information, reducing audit and inspection according to risk, and a greater use of electronic information to reduce paperwork.

Andrew Smith, group director of corporate affairs at Pinewood Studios, said it had taken two years to set up an apprenticeship programme for just one student in drapery, since the course had to be custom designed.

Mr Smith said Pinewood Studios' work with apprentices had become easier since they partnered with Amersham and Wycombe College, which helped them negotiate the system and which the company "effectively treats as an extension of human resources".

Others had fewer teething problems: Boots Opticians was able to implement an apprenticeship programme in less than a year.

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