The government's "hands-off" approach to apprenticeships has allowed some training providers to rake in huge profits and failed to ensure that employers are paying their way, according to a major report released this week.
The criticisms follow an investigation into apprenticeships by the Business, Innovation and Skills Select Committee of MPs. Adrian Bailey, the committee's chairman, warned that the programme "needs clarity, oversight and... to demonstrate that it is providing value for money", and that many areas require "closer scrutiny, careful monitoring or even complete reform".
The report states that despite the outcry over provider Elmfield Training's 36 per cent profit margin on government-funded apprenticeships, revealed last year by TES, the problem has not gone away. "We are deeply concerned that both the minister and the Skills Funding Agency have adopted a hands-off approach in respect of the profit levels and value for money of training providers," the report states.
"We were particularly troubled that the minister appeared unconcerned about value for money given the 36 per cent level of pre-tax profits achieved by Elmfield Training and the statement by the chief executive of Elmfield Training that the government paid out too much money," it adds.
The committee also argues that some employers fail to invest substantially in their apprentices, instead relying on government funding under the guise of offering "in-kind" contributions. "This practice suggests either that the quality of training is being compromised in order to reduce costs or that too much public money is being spent on training that the employer should be funding," the report says.
"This practice poses a substantial risk both to the quality of training and the apprenticeship brand with apprentices and employers being the ultimate victims."
The report calls on the National Apprenticeship Service (NAS) to produce a "robust methodology for valuing employers' in-kind contributions in the future". It also asks the government to define an "overarching strategy and clear purpose for the apprenticeship programme".
Schools, the MPs add, should be forced to publish the number of students who go on to become apprentices. They argue that the NAS should be handed statutory responsibility for raising awareness of apprenticeships within schools.
Shadow FE minister Gordon Marsden questioned whether the NAS had the necessary "capability or capacity" for the task. He added: "The committee is right to call for apprenticeships to be a pathway to new skills, rather than merely the accreditation of existing ones, and to recognise the crucial role of independent careers advice in schools in raising young people's awareness of the vocational options open to them."
Post-16 minister Matthew Hancock said he would "consider carefully" the report's suggestions. "(It) rightly celebrates the sharp rise in the number of apprenticeships, and steps taken to improve their quality, but there is more to do," he added.