Call for rethink on apprenticeship policy

The Association of Accounting Technicians (AAT) and ACCA are leading calls for a rethink on government policy on apprenticeships, after a poll of MPs found almost half (46%) believe the target of three million apprenticeships set up over the course of parliament ignores the importance of both quality and completion rate and should be modified

Mark Farrar, chief executive, AAT said: ‘It’s good to see so many MPs sharing our views, because although we have long supported the three million apprenticeship starts target, we have been concerned about completion rates and quality for just as long.’

The accountancy bodies also think that the apprenticeship levy, which comes into force this April, should be renamed as the skills levy and for levy monies to be able to be spent on high quality traineeships and other forms of training other than apprenticeships, arguing this would benefit individuals, employers and the economy as a whole.

The study commissioned by AAT and ACCA and conducted by YouGov with MPs from across the political divide, showed that almost two thirds of MPs (65%) think that the apprenticeship levy should be developed to allow funding for skills other than apprenticeships.

John Williams, head of ACCA UK, said: ‘With government unveiling a new industrial strategy, and business preparing itself for the impacts of advanced robotics, the availability of high-quality apprenticeships and traineeships will play an integral role in enabling the UK’s financial and professional services sector to continue to lead the world in the short and long term.’

However, the Institute for Fiscal Studies (IFS) has also voiced concerns that the apprenticeship levy funding system may not work as intended. In a report ahead of next month’s Budget, the think tank suggests that ‘the significant expansion and design of the new system risks it being poor value for money. Specific elements of the system could end up being particularly damaging to the public sector.’

IFS says the target of an average of 600,000 new apprentices a year in this parliament is a 20% increase on the level in 2014–15, and says that this large expansion risks increasing quantity at the expense of quality.

It is also critical of the government target for every public sector employer with at least 250 employees in England to ensure that 2.3% of their workforce starts an apprenticeship each year. IFS says this takes no account of big differences between organisations, and argues that unless existing employees start apprenticeships, the targets imply around one-in-five new public sector hires must be an apprentice.

The IFS research challenges the government case for such a large and rapid expansion in apprenticeships, saying it makes ‘wildly optimistic claims’ about the extra economic activity or earnings such investment in apprenticeships could generate.

Neil Amin-Smith, an author of the report, said: ‘We desperately need an effective system for supporting training of young people in the UK. But the new apprenticeship levy, and associated targets, risk repeating the mistakes of recent decades by encouraging employers and training providers to relabel current activity and seek subsidy rather than seek the best training. There is a risk that the focus on targets will distort policy and lead to the inefficient use of public money.’

The AAT/ACCA poll showed the majority (55%) of MPs think the big four accountancy firms are moving away from graduate recruitment towards a greater focus on apprenticeships, but 75% of MPs believe careers information advice and guidance in schools is too heavily geared towards a university education.

The vast majority of MPs (86%) believe that the views of parents and teachers need to change if vocational/professional/technical education is to gain the same recognition as academic education.

Newly released research from the UCL Institute of Education tracking 9,500 young people living in England, who were born in 1989-90 and are being followed by a study called Next Steps has concluded that twenty-somethings who pursued vocational training rather than university report being just as satisfied with their lives.

Commenting on the findings, Michael Walby, UK learning director of professional qualifications at KPMG, said: ‘With the rising cost of higher education, offering young people from more disadvantaged backgrounds the opportunity to “earn while they learn” through vocational schemes such as apprenticeships has never been more important.

‘Now the government, employers and educators must focus on ensuring quality rather than quantity in vocational choices, so it is seen by more young people, and their prospective employers, as a viable alternative to academia.’

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