Employers should lead new apprenticeship system, review finds

30th November 2012 at 00:00
Firms could control funding, design and assessment of training

Employers should be put in charge of almost all aspects of apprenticeships through a new system of funding, qualification design and assessment, the Richard review has recommended to the government.

Entrepreneur Doug Richard, commissioned by the government to investigate how to improve employer engagement in apprenticeships, has proposed that funding should go directly to companies through a system of tax credits, much like an existing system for subsidising research and development investment.

Employers would be able to commission whatever training they chose from a list of approved suppliers, but would only receive the full payment if apprentices completed an external assessment at the end of training.

Mr Richard argued that such a system would give employers greater control but also require many to invest more financially, as they would have to bear the up-front costs. He said the risk of driving away small businesses could be eliminated if training providers agreed to defer fees until the subsidy was paid.

"There's no worth to what you don't pay for. We need employers to be paying for it so that they ask, is this training providing good value for money? Right now, they're not asking that question," Mr Richard said.

Graham Hoyle, chief executive of the Association of Employment and Learning Providers, whose members deliver most apprenticeships, said he supports the idea of employers taking control of apprenticeships. But he warned that the majority of apprentice employers and training providers are small businesses. Neither side would have the cash flow to wait and claim funding via the tax system, Mr Hoyle said, adding: "Once we have a system that puts a cash-flow problem in, you're putting in a major barrier to business success."

All apprenticeships should also be redesigned by employers directly, instead of standards being set by the sector skills councils, which "have not done a good job", according to Mr Richard. The government should hold competitions to establish a single approved apprenticeship qualification in each occupation, created by a leading employer, he recommended.

"We're looking for sector leaders to step up," Mr Richard said. He added that he has extensively canvassed business support, and his proposals fulfil much of the wish list of employers on apprenticeships.

The Confederation of British Industry is backing his central proposals on funding and qualification design. "Businesses are best placed to understand their own training needs, so it's right that employers should have a greater say in apprenticeship design and which training is funded," said Neil Carberry, director of skills and employment policy. "By putting employers in the driving seat, we can ensure that government funding for training is more closely aligned with the needs of industry and future job creation.

"To make sure that all firms can access the training they need, it's rightly recognised that we need a simple, accessible funding system, and businesses will welcome the idea of a skills tax credit."

The assessment of apprenticeships should be overhauled in three key ways, the review recommends: it should be independent of the training provider; it should include representatives of employers in the industry; and it should largely take place at the end of the course.

Mr Richard criticised the continuous assessment of existing apprenticeships. "An apprenticeship's goal is training, not assessment. We seemed to have turned this on its head," he said.

The recommendations also aim to prevent employers from taking apprenticeship funding to train staff for jobs in which they already have extensive experience. In one example, East Riding College and Humber NHS Foundation Trust put a 60-year-old with 40 years' experience as a chef but no qualifications through a level 2 apprenticeship in food production and cooking.

Instead, Mr Richard wants to define an apprenticeship as a programme for new employees or for staff taking on new roles that require substantial, long-term training. He also said that the minimum duration should be maintained and a requirement for off-site learning introduced.

Teresa Frith, Association of Colleges skills policy manager, said colleges agree with the report "in the main", but suggested that there is a risk that employers who do not have good relationships with colleges could restrict their access to funding.

"Doug Richard's recommendations focus on the importance of the employer and we are keen to see colleges brought closer to both the apprentice and the employer. Our experience suggests that the stronger the direct relationships, the better the experience for all. However, there is little clarity on how this relationship will be managed or formed," she said.


- Redefine apprenticeships so they apply only to people taking on a new job that requires substantial training.

- Emphasise assessment at the end of the apprenticeship.

- The government should hold competitions among employers to design each apprenticeship.

- Assessment should be independent of the training provider and involve employers.

- All apprentices should achieve level 2 in English and maths.

- Strip out unnecessary prescription about delivering apprenticeships and encourage diversity.

- Make off-site learning mandatory and introduce a minimum duration.

- Give employers apprenticeship funding through the tax system to incentivise them to monitor quality.

- Open up government data on available apprenticeships to ensure it is widely disseminated.

- The government should promote apprenticeships, perhaps through a university-style "milk round".

Photo credit: Alamy

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