Apprenticeships in the Heart of the South West (Ben Neild)

Apprenticeships Provider Perspectives from the Heart of the South West March 2012 Ben Neild b.neild@exeter.ac.uk : 

Apprenticeships Provider Perspectives from the Heart of the South West March 2012 Ben Neild b.neild@exeter.ac.uk

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HotSW LEP & ESBs prioritising increasing the supply of apprenticeships Wanted to understand how they could support providers in doing this. Therefore needed to understand barriers / incentives from provider perspective. Methodology Semi-structured Interviews with 20 largest college & private Apprenticeship providers in HotSW. Background

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Apprenticeship are a good way of achieving LEP goals: Direct route into employment for young people Employer-led and reflect employer needs Result in recognised qualifications / occupational competence Are associated with significant wage returns, particularly: At Level 3 In manufacturing (rather than service occupations) For men ... All provides a clear rational for expansion Why expand apprenticeships?

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Government funding for apprenticeships starts in 1994. Since then: Introduction of apprenticeships at Level 2 in 2000 Introduction of adult apprenticeships in 2004 Additional of technical certificates & theoretical elements Expansion into service sector Rise in female participation. Apprenticeship expansion

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Apprenticeship Expansion V. Rapid growth 148% in 5 years. 37% in last year alone. Apprenticeship Starts, HotSW, SW & England, 2005/06 - 20010/11 (Index 2005/06 = 100)

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Apprenticeship Expansion This growth has been entirely due to growth in adult apprenticeships, particularly among 25+ group. The volume of 16-18 year old apprentices was lower in 2010/11 than in 2006/07 Apprenticeship numbers by age group, HotSW, 2005/06 - 20010/11

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75% of apprenticeships for 16-18 year olds at Level 2 – unchanged in 5 yrs 65% of apprenticeships for 19-24 yr olds at Level 2 – rising slowly 63% of apprenticeships for 25 plus at Level 2 – rising significantly Apprenticeship growth By level Apprenticeships, % by age and level, HotSW, 2005/06 - 20010/11

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‘Reshaping’ Apprenticeships, such that Level 3 becomes the level to which learners and employer aspire Broadening the range of Apprenticeship Frameworks Promoting apprenticeships in sectors where take up has historically been low Promoting take up among smaller firms Developing apprenticeships as a foundation for Higher Level Apprenticeships, foundation degrees & other forms of higher level learning. Focusing Apprenticeships in sectors where investment will make the greater economic impact. Government Priorities

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Many training providers have been around a long time. Have seen initiatives come and go. Apprenticeships are only one aspect of what providers do. Providers seek long-term relationships with employers, meeting a range of skills needs Some training will be publicly and some entirely privately funded. Apprenticeships are part of this picture, but they are not the only thing. QCF units may be more / just as attractive to employers The ability to offer a whole organisation solution is often what matters most. Can lead to cross-subsidising, taking loss-leaders etc Is a competitive market place Provider Perspectives

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Is hard to generalise about differences in approach. If had to: Colleges - rooted in communities, looking at incremental growth based on local need Private providers – fleet of foot, highly responsive, entrepreneurial etc But that is a generalisation. There are many possible models, in our market-led system. Is funding for expansion, esp 16 to 18 year old apprenticeships, also 19 to 24. Everyone is looking to expand. Providers are taking risks – over-contracting, sub-contracting, taking over other companies, to expand market share while resources are available. At the moment the issue is about market grab, because the worry is that when the guillotine comes down, contracts will be frozen at whatever the market share will be at that point. Hence the excessive number of national providers pushing into the area.... (College) The provider market place

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There are concerns about national providers moving into the area. In the past, with the LSC, there was quite a closed market with a limited number of providers. Now, it’s more difficult to talk about how you manage growth and the balance of provision. It’s a bit more of a melee. (Private Provider). For larger providers, it can be just a numbers game which can take the professionalism out as it’s driven by process. That’s what the big providers are about - assess and get out, being efficient and ticking the boxes (Private provider) There are not geographical allocations. Are some concerns about provision being drawn to heavily populated areas, where large companies, makes ‘critical mass’ and profit easier to achieve. National Providers

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Everyone wants to expand 16 to 18 apprenticeships These are fully funded and the focus of a big policy push In the longer-term, we are going to have to shift to the 16 to 18s, we know that now (Private Provider). Is demand from young people, esp with EMA going However, employer demand is not there due to: Recession Employers preferring to recruit older people with more qualifications & experience. NAS’ aspirations towards growing the 16 to 18 group isn’t that much under our control, as it’s the employers who are deciding who they want to take on (Private Provider). Young People

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Providers see some tensions between: Apprenticeships as a solution to youth unemployment Apprenticeships as vehicle for meeting employer skills needs This is visible in Access to Apprenticeships: Sometimes they make the rules so difficult. Access to Apprenticeship is aimed at people who are NEET for 13 weeks. We have people who are out of work… They would love to do it. But, oh dear, they are suddenly not classified as NEET because they are doing our Learner Responsive provision. Someone who works in the pub at the weekend also wouldn’t be eligible. And these are probably exactly the people employers would want, because they have initiative and are trying to get on and improve themselves. What it says to you is that all the Government wants to do is improve the NEET figures, not do what employers need. (Private Provider) There is however a real, perceived need for an effective pre-apprenticeship programme. There has never been a really good structured programme to lead into apprenticeships. There needs to be a more structured way of taking people into the workplace (College) Young People

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Adult Apprenticeships Unit cost is falling, so have to deliver more to retain contract value Is scope for growth, particularly from existing staff converting to apprenticeships Are some concerns about ‘brand-stretch’ Can resemble a beefed up Train to Gain Concern about long-term viability Loans for Level 3 apprenticeships considered likely to kill these. Back in the 80’s, apprenticeships were really about providing a way into work for young people, particularly in some occupations. Recent policy, which has extended apprenticeship to the upskilling of people already in employment, has changed that. This may result from chasing targets, but it’s important to remember that upskilling people in work is a valuable aim and activity, so we shouldn’t be too critical of that. (College)

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Providers have concerns about the lack of a fixed employer contribution to apprenticeships The rule is that you have to ask employers for a contribution, but it doesn’t rule out the possibility of training being provided if you don’t get one. The result is that you get cheap, poor quality providers who are basically offering to provide training for free. This is undermining the market and the reputation of apprenticeships generally. There are some providers with 100 trainees per member of staff (Private Provider) Considerable concern about ‘Accelerated Apprenticeships’ , some only 12 to 16 weeks long. I don’t understand how someone could do an Apprenticeship in 12 weeks... (private Provider) Comparing like with like is essential for the reputation of apprenticeships. You do sometimes have to ask ‘are they all of the same standard’ (College) Employer Contributions

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Is difficult to know what can be done about this in UK market-led system Some companies want to do significant amount of training in house, others v. little. Employer contributions are flexible in order to reflect this. National chains can hold contracts directly, do everything in house, or buy in some elements, e.g. NVQ assessment only. UK policy is for a ‘hands-off’, market-led system, with a lot of oversight / policing, e.g.: SASE standards – 280 guided learning hours Ofsted Inspection SFA contracts with % success rates Is a genuine push to raise standards ( esp relative to Train to Gain), in tension with desire to raise volumes fast and decrease government contributions. If the government keeps adding more and more requirements to the Framework, like personal learning and thinking skills, it’s going to make life more and more difficult. None of this is ever funded. Private Provider Quality Issues

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Providers are very focused on the need to expand at Level 3 (Private Provider) But, raising volumes is not easy: I can’t necessarily gee more employers up to get more Level 3s for young people in a certain sector. I can do marketing and mail-shotting. But if the demand isn’t there, you’re not going to deliver it. (College) You can’t just put a 16 year old learner on a Level 3 Framework that involves supervision. Higher Apprenticeships – viewed with enthusiasm and as an opportunity (particularly for colleges). However, also viewed as being something that lies in the future. Level 3 & Higher Apprenticeships

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Providers, esp. private providers, have significant concerns about: Reduced capacity of NAS, Connexions et al to provider impartial guidance and information on apprenticeship in schools; schools being reluctant to allow training providers and colleges access to discuss apprenticeship opportunities with pupils; Schools, particularly academies, seeking to expand their own vocational provision, to retail 16 to 18 year olds The number of people in this age group is falling Schools offer familiar environments, friendship groups etc , but may not offer the best training. IAG & Schools

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Some providers point to very low penetration rates in UK, esp among SMEs, as a major growth opportunity. The major developments in HotSW – Cranbrook, Hinkley, South Devon Link Road, Langage etc all pointed to as opportunities to grow volumes. The non-traditional apprenticeship areas most commonly cited as showing potential for growth – Health & Social Care, Creative & Media; Retail & Hospitality Renewables definitely cited as a growth area, but is mainly about re-skilling of those already in the certain occupations. Potential scope for links to the Work Programme. Growth Opportunities

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Develop clear processes to enable the LEP to consult with providers Make championing the uptake of apprenticeships a priority - particularly among SMEs and employers who have not delivered them before Support apprenticeship ambassadors (employers & young people) and ensure that they have access to schools LEPs have a clear lobbying role. Messages need to be taken to government on: the need for a consistent, quality access to apprenticeship programme, to ensure national providers to not take resources out of the area; to protect the interests of rural areas; and to speed up the approval of some new Frameworks. Encourage Local Authorities to use Apprenticeships to recruit and up-skilling their own staff Be clear about priority sectors / areas, and (for now at least) focus on the use of incentives and promotion to grow apprenticeship volumes in these areas. 8. Trumpet local achievements and examples of high quality apprenticeship programmes in inward investment materials Recommendations