I’ve just seen a marketing flier from a provider of higher education that said ‘hello employer, come and spend your £15K apprenticeship levy allocation with us!’ Okay, I freely admit I am paraphrasing, but this illustrates my key point: if there is an information gap then someone will fill it. And not always with the facts.
It’s true that the noise around degree apprenticeships is very loud right now. But the amount of concrete information we have feels tiny compared to the amount of attention these new products are receiving.
So, first let’s consider the facts.
What do we know?
1. The Government wants more of them
The Government wants 3 million apprenticeships to start in this parliament. There is no target for degree apprenticeships.
Even so, Nick Boles, Minister for Skills, is clear that we will see a push to increase them, noting that ‘there are currently too few higher and degree apprenticeships; we would like to see many more of them.’
2. They are real jobs
Degree apprentices will work 30 hours a week and receive a salary. In other words an apprenticeship is a real job.
They will learn around workplace commitments. Modes of study currently range from block release to distance or blended learning. Apprentices will achieve a full Bachelors degree, sometimes within 4.5 years.
3. The levy will generate £3 billion per year
The apprenticeship levy will generate £3 billion a year by 2019-20 and is intended as a sustainable means to fund the training of the future workforce.
It will take effect from April 2017 at a rate of tax equal to 0.5 per cent of the wage bill of any employer whose salary costs are £3 million or more a year.
Employers who pay the levy will see the money they have paid for English apprenticeships appear in their digital account. They will be able to spend it on apprenticeship training —but only on apprenticeship training— and will be able to get out more than they put in.
4. The rules are different for smaller organisations
We expect SMEs to receive funding for apprenticeships in the same way as they do now. Government estimates that not all companies that pay the levy will use up all the money in their digital accounts, leaving money to go around.
Last week the Skills Minister referred to a new target for public sector organisations employing over 250 people in England. If confirmed, they will be need to employ at least 2.3 per cent of their staff as apprentices.
5. HEFCE funding for high cost subjects will still be available
There is a rumour that the HEFCE high cost funding top up is not available for degree apprenticeships. We confirm it is available for qualifying subjects.
6. There is no tuition fee
Apart from the advantages of paying no tuition fees, degree apprenticeships may suit those who prefer to learn in an applied way, who can commit to working and learning for four or more years, and who will not feel they have missed out on campus life and the social side of being at university.
7. Quality regulation is a top priority
Quality regulation is currently done through the Quality Assurance Agency (QAA) for higher education institutions and Ofsted for further education colleges.
This is a short-term agreement, intended as a sticking plaster. No further decision has been made on quality, but there is widespread awareness that we need to find a long-term solution that works for higher education providers of degree apprenticeships.
So much for the facts. But, not surprisingly, there are still many questions without clear answers.
Not least the extent of demand for degree apprenticeships among providers is still taking shape.
The Skills Funding Agency (SFA) report increasing interest from universities, with 37 now formally on the Register of Training Providers, but they say the majority still seem cautious. HEFCE is funding the University Vocational Awards Council (UVAC) to offer expert advice to all providers.
This year UVAC visited over twenty higher education institutions and 63 per cent of those who succeeded in getting SFA funding allocations received help from UVAC. This is practical and gets us off the starting blocks, but we are pressing for more support and specialised incentives before the levy kicks in.
The Government is doing some research into how universities are responding. This will help to understand what providers currently think about apprenticeships and how likely they are to get involved in degree apprenticeships. It will also inform policy design, future support and next steps.
But what about employers? Will the levy change their behaviour? Given the significant sums arising from the levy, we expect some employers to begin to choose apprenticeships over other recruitment and training options.
The THE reported last week that graduate recruitment will flatten off and apprenticeship recruitment will increase by 23 per cent. Reports from the SFA agree. They are currently meeting large employers and finding significant interest in apprenticeships at all levels.
40 per cent of the new Standards coming through for approval are at the higher levels. This demonstrates clear employer demand, and opens up new opportunities for providers who decide to take advantage of the new demand, but could present a threat to those who decide not to engage.
Who is choosing a degree apprenticeship over a traditional undergraduate degree? This is such a new product and we have limited data on the student population.
Of those 1000 enrolled on courses this year we know a third are 25+ years old, a third are 19-24 and a third are 18 year old entrants. All are employed, but we do not know how many of these already worked at the employer and have joined the apprenticeship as a means to upskill, and how many are being recruited directly onto apprenticeships programmes, in a similar way to graduate schemes.
And what of that institution which is mistakenly marketing £15,000 worth of apprenticeship levy tuition? Let’s face it, I admire them getting on the front foot and in the absence of clear information it’s easy to do.
My understanding of the rules is that the £15,000 mentioned in the Spending Review is a threshold that applies to potential payers of the levy: if your paybill is £3 million or over, HMRC will give you £15,000 grace before they collect the tax: in effect they will let you off the levy if your employees’ salaries total between £3,000,000 and £3,015,000.